Smart50 rank: 32
Revenue: $18,300,000
Growth: 55.91%
Founders: Franz Madlener, 42; Jacky Roberts, 44
Based: Victoria
Employees: 81
Industry: Retail trade
Website: www.villaandhut.com
It's been a big year for home wares franchise Villa & Hut and its founder Franz Madlener. In June, listed brands management company Allied Brands bought the chain for $1 million, and assumed $1.8 million of the company's debt.
It was a pragmatic decision. The difficulties in obtaining finance had made expansion very hard for the chain. "Banks. Hate them. Seriously," Madlener says.
It's been a long journey for Madlener, who started Villa & Hut in 2000 and was one of the pioneers in the area of ethical shopping.
"Ten years ago, this sort of retailing was leftfield and fringe - today it's foundational. Ten years later it is actually harder to stay in front than it was to get in front."
But Villa & Hut has done an excellent job of staying ahead of the pack. It posted revenue of $18.3 million in 2008-09 and has achieved average annual growth of 55.91% over the past three years.
Madlener believes the next big trend in franchising is a shift in the power balance towards franchisees, who will demand a high level of service and attention from franchisors.
"We reached a ‘tipping point' with our franchisees, a point where our ability to service and grow our existing network and build new relationships was no longer being serviced properly," Madlener says.
"The final straw was a call one day from a prospective franchisee who said: ‘It has taken me five calls to track you down. If this is what its like for me to try and give you my money then I would hate to think what its like to try and get some help'. He had a very good point."
Madlener says franchisors need to be prepared to give their franchisees a bigger say in the growth of a chain.
"Franchisees are now looking to see what role they actually get to play in the business they buy. They are realising that too many franchise businesses out there are no more than a glorified job and management investment, where they get to decided nuthin'," he says.
"This is becoming a big deal, as many new franchisee entrants want to know that at the end of the day, they can make decisions in their business."
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