A Perth couple who lost everything after their franchisor went bust have built a successful business on the strength of their reputations. Christopher Niesche reports.
When the Granny May's gift and card chain imploded in 2001, Perth-based franchise owners Lawrence and Sandra Boyle lost everything they had worked for.
“We had absolutely nothing,” says Lawrence, who says he and his wife lost two stores and franchise agreements worth over $1 million. “The only thing we did have was our reputation.”
Leveraging off 15 years' experience each in retail, the couple regrouped and quickly started a new chain, Wild Cards and Gifts.
“We had built some outstanding relationships with suppliers, with our fellow store owners in that group and with their landlords,” Lawrence says.
Over the past decade they've grown the business to a national chain of 46 stores with an annual turnover of $35 million.
The couple chose the business name Wild – they say it's easy to market with phrases such as “it's time to go Wild” and “we're Wild about you”.
Unusually, they didn't open any stores themselves, and instead immediately started offering franchises to former Granny May's shop owners. Six took up the offer immediately, and out of the ashes of Granny May's the couple had the beginnings of a gift and card chain.
Faking it 'til you make it
But with no money they needed help from suppliers.
“All we had was a credit card with a $5000 limit,” says Lawrence. “We went to a bag supplier and we went to a uniform supplier and said 'we can't pay for these, but we'd love you to order them and we need enough to get us through the next six months; can you trust us?'”
Possibly the most difficult thing was appearing to be more confident than we were in the first 12 months.
The suppliers agreed, and 10 years later still supply the group.
“Possibly the most difficult thing was appearing to be more confident than we were in the first 12 months and appearing to have a very solid vision,” says Lawrence.
“We made it up every day,” adds Sandra.
But 12 months in, they had organised seven more stores to open in the coming year and were more confident about the group's future.
Taste of failure, and success
“That fear of failure at first is what's kept us going and involved, in that we know what failure tastes like and we know what success tastes like,” says Lawrence.
The pair – neither finished high school – say the secret of working successfully as husband and wife is to have clearly divided responsibilities. Lawrence is in charge of structure and planning, while Sandra takes care of product selection and marketing.
Sandra says one of the main difficulties the fledgling business faced was not having a well-known brand. “We were known in the industry but the brand wasn't.”
With no budget for marketing, they concentrated on driving sales through promotions at their stores, such as competitions and in-store appearances.
“We worked very hard with every [shopping] centre management to make sure that every opportunity was taken advantage of,” says Lawrence.
A weakness of the card and gift sector in the past has been that it relied too much on the four main gift giving seasons of Christmas, Valentine's Day, Mother's Day and Father's Day, which each have only a short selling season. So Sandra has tried to base the business more around occasions such as birthdays, weddings and anniversaries to even out patchy sales.
The card and gift sector has shrunk over the past decade, through what Lawrence says is “leakage” to gift vouchers and experiences offered by websites such as Adrenalin and Red Balloon.
“Rather than going to a shop and selecting a present, a lot of people are taking the easy option,” he says.
Countering the online threat
Wild Cards and Gifts is countering the threat of all-hours online shopping by opening its own online store later this month.
To keep its franchisees happy, the company is giving them a 10 per cent rebate on every order, based on how close they are to where the order was placed and where it will be delivered.
“If we want our stores to provide the group with email addresses to connect with people, we believe they should get something in return for that,” says Lawrence.
Indeed, the couple also invests heavily in good relationships with their franchisees, and say that unlike some other franchise operations, they have never had any major disputes with their store owners.
Lawrence says from the outset they charged lower franchise fees than their competitors - now 4 per cent of turnover compared with nearly 10 per cent that some competitors have charged.
They help with the set up and attend every store opening.
“To us if someone is spending $300,000 to $400,000 of their money to get a card and gift store with our name on it, we want to get to know the people,” says Lawrence.
They also share a lot of information with franchisees about how the overall business is performing.
“We decided that by every Tuesday lunchtime everyone would get a report showing every possible metric of this business,” says Lawrence.
“Sometimes we show growth and sometimes we don't on various programs, but we're always transparent so nobody could think we have anything to hide.”
The group has a philosophy of being easy to deal with, and aims to be the preferred business partner of franchisees, suppliers and landlords. “Everyone wants an easy boat to row these days and the easier you are to work with the more people remember you and come back to you,” says Sandra.
Sandra and Lawrence Boyle's five tips for entrepreneurs
1. Keep it simple – it's not building rocket ships, so just to the basics incredibly well
2. Be transparent – more information will stop people assuming the worst
3. Use collective wisdom – franchise holders and suppliers can also provide insight into a business' future direction
4. Learn from competitor's mistakes – a lot of businesses have good ideas, but execute them poorly
5. Continuously evolve – come up with one or two major initiatives for your business every year