Monday, 21 June 2004

Franchise Fever

Speaker: Janine Allis
Janine Allis, CEO and Founder Boost Juice

Two and half years ago Australian born, Janine Allis decided to put theory into practice. Janine loves anything that makes life easier and is also an advocate for healthy living. Living a hectic urban lifestyle in Melbourne, Janine understands first hand the demands life can put on people.

Boost Juice is now an extremely successful franchise business and the fastest growing juice bar chain in Australia. Janine decided on a franchising strategy to aid the expansion of the Boost Juice brand, but more importantly getting like minded people into the business that have an ownership in their own Boost Juice.

"The franchisees are dynamic, inspirational people who have fresh ideas and new energy. We recruited like-minded people who shared our energy and enthusiasm. I believe that for Boost Juice to be successful, everyone involved must share the passion and the rewards."

Transcript

This is an edited transcript of the address given by Janine Allis, CEO, Boost Juice, to AFR BOSS CLUB in Melbourne on June 21, 2004

I'm not here tonight to talk to you as a guru of business. I'm simply telling you what I've learnt in the last four years and my experiences in creating a business. It may not work for everyone but, hopefully, with any speaker that you go to, whether it's here or somewhere else, if you get one or two points that can help you and assist you in what you're doing, then it's time not wasted.

So I'd just like to go through basically the Boost Juice story. Tonight we're going to talk about, how Boost started, creating a culture which is obviously really important in actually creating a successful business, a can-do-anything attitude, and having the attitude to actually overcome any obstacles, and something which I still struggle with, but I'm certainly getting better at it, is life balance.

First, I'd like to talk about how Boost Juice started. What you find out when you read about entrepreneurs is that everything they touch doesn't necessarily turn to gold. And not everything you do works the first time.

Now, what I found was that my husband and I, we had a business with a friend called Stealth Productions and we did the Asian mind game by Chin-Ning Chu. We also did a book called Love Cheques.

We had this great idea once, and this was going to be a killer. This was going to make us millions. And this was a touring company ….

So, we did try a few things, then when I'd just given birth to our third child, I was really quite hungry for, "What can I do now?" I didn't want to work any more for someone else. So we were continually trying new things.

In actual fact, Boost Juice wasn't even the first juice bar. The first juice bar I did with my husband was a juice bar called Sejuice on Chapel Street. But in the end, we sold out and I took the intellectual property and created Boost.

It was a really interesting time because there wasn't any real juice industry here, so there was no product, there was no anything. In the end, I convinced Sara Lee to stop their productions and make a yoghurt just for me. And "Trust me. It'll be big. Trust me," I kept saying. "Yes, we've heard that before, Janine," they said.

So we worked with them to actually develop our yoghurt.

One of the common questions is - Why did we franchise?

Well, one of the things I realised quickly is if we wanted to grow quickly we needed to have people in the business who actually had the ownership for it. And at that time we couldn't have possibly afforded to hire the quality that we could as a franchise. There's actually nothing like having everything on the line to make a business work as well.

So, we decided that instead of doing the company model, which some of the other juice bars and other industry has done, we decided on the franchising. We didn't have to franchise. So what we were able to do is absolutely get the quality of the people, not necessarily the quantity.

There was an interesting point my husband came home to me and said, "Honey - I've got 20 sites. I've just signed up with Westfield." I had eight months to build them. So it was a really interesting time because we either had to go, "Do we sell more of the company to be able to fund it, or do we sell our house to actually be able to fund it?" Sometimes when you are at the top of the cliff, you either jump off or you actually turn around and go back. So we ended up jumping off .We sold the house. We bought out a minor shareholder and every other penny went into the business as a loan or as capital.

Then there’s the Geoff Harris story. Geoff is a 20 per cent shareholder and a director of Boost. He approached me and said: "I've seen your concept, Janine, and I believe it has wheels." He is a co-founder of Flight Centre, an incredibly successful and generous man, and I would say he is one of my key mentors in helping me to learn what I need to know to be able to take this company to where it needs to go. Geoff has changed the direction of Boost. He has the tools from his 20 years at Flight Centre.

Two years ago we went out for dinner and we celebrated the fact that we turned over a million dollars a year. We were absolutely chuffed - a million dollars, those six zeros - but in the last, probably in the last eight months we've turned over well over a million dollars a week. So that's a hell of a lot of smoothies and juices.

This is an interesting comment, and it is something that has worked very well for me in creating a successful business. I didn't actually know enough to know I couldn't do it. If I went to a crusty retailer and said, "Look, what I'm going to do is I'm going to open a juice bar and in four years' time I went about 100 of them, if you don't mind, and I want to turn over - gee, I'd like to turn over about $75 to $80 million and I'll do it in four years," the crusty old retailer would have told me, "You're mad, Janine. It can't be done." And, you know what? It wouldn't have been done because I would have told myself I couldn't do it.

But I didn't know enough to know that I couldn't do it. So if anyone is starting business and you have everyone telling you that it can't be done, then maybe just listen to yourself first.

Creating a culture is something that we work very hard on. We're not there yet, but it is something we continually work on. And it's really important: success or failure depends on the people. When I think about the mistakes I've made at Boost, 99.9 per cent of them have been people related. It has been hiring the wrong person in the wrong role.

It is all about the people 100 per cent. I've got an absolutely amazing woman that's been with me for coming on to two years, and her name's Jacinta and she is absolutely my gatekeeper.

I imagine Jacinta standing with a knight's outfit with a very sharp sword on a plank outside the castle, and she will not let anyone into my business or our business, as she would say, that is the wrong type of person. We do not tolerate mediocrity. We just don't. We all do it. We all go, "You know what? We're busy. We can't be bothered retraining. Let's just - oh, they're fine. They take a position." In actual fact, the best decisions we have made is the people who are not with us, not the people who are with us.

She is amazing with the franchisee she either lets in or doesn't let in.

We place a lot of accountability in our staff, and with the accountability also goes responsibility, and we give them that as well. It's actually okay to make mistakes, but we really give them a purpose and let them free to do the rest.

The other thing: someone said to me once, they said, "Look, you know what, Janine, there's no such thing as the wrong employee. It's bad training, it's bad systems, it's bad leadership."

That is rubbish. There is absolutely - they may not be the wrong employee but they could – but there is a wrong employee for the wrong company, and the quality that we want, or the quality that anyone should want, is the people that have the right work ethics and integrity and the honesty.

How do you do it? How do we actually create this culture and keep it fun? Because, look, at the end of the day you're at work a long time and if you're not enjoying it, well, you shouldn't be there.

We have reward and recognition nights, which are designed to be fun. We give people a clear goal and a clear direction. We talk about profit centres. This is definitely a Geoff Harris one. What he does at Flight Centre and what we do at Boost is we break the whole business down into little businesses.

And don't be frightened to change, if necessary. What we're finding now is, as we're going from one stage to another stage, what we find is that our business is changing from 20 stores to 100 stores to 120 stores to 170 stores, which we'll have at the end of the year. We're a different company. We've got to change.

An example- we basically have a company that's a combined company and franchise structure. We are definitely separating the company so we have literally two companies, but it's constantly trying to make your company, no matter how big it is, as small as it can be.

So, really, in essence, for this section, it really is about the gatekeeper. It is that knight that stands in front of that castle and makes sure that no-one gets into your business that hasn't got the right culture.

Actually, you know what? It doesn't matter how much education you've got; it doesn't matter how much money you've got; it actually gets down to an attitude. You cannot teach attitude. It's something that people come with.

It's all about achieving your goal but you have to have clarity of the goal. So, we do a lot of goal setting, we do a lot of top fives, a lot of all those type of things to really get clarity.

We don't accept in our business, "I want to." "Janine, I want to get that store opened but," "I want to, you know, make the profit more but." It's that word "want" is a terrible word. You can say instead, "I will get the store open. I will make the necessary profit." It is actually all about your attitude. We don't tolerate "can't."

There is actually a solution to every single problem, and "That's not my job" doesn't exist. In a company, a fast-growing company, everyone has to be absolutely incredibly multi-skilled and everyone has to be prepared to pitch in when necessary.

Now, I'll tell you a little bit about myself. I didn't necessarily have mentors. My parents weren't necessarily business owners who didn't come from multimillion dollars who could say to me, "Janine, here is a couple of hundred thousand. Go start a business." There wasn't - so, there wasn't anyone around me at the time that actually said, "You can do, you can" – and, look, in fairness, actually, they did say, "You can do anything," but, however, my mum was rapt if I actually achieved secretarial status.

I left school at 16 and 10 months so my education in business has come on the run. We went to - we recently did a - I'm sure you read in the paper an acquisition of Viva Juice, and, you know, I never acquired anything before but, you know, you sit in a room with probably thousands of dollars worth of lawyers and tax advisers and accountants and you sit there and you're learning from them.

And one of the things that I have as an attitude is I don't care if they think I'm stupid. I will absolutely ask every question and continue to ask the questions until I know exactly what - that I understand fully what is going on. So it hasn't really made any difference that I haven't necessarily done a degree.

The key thing is to be willing to start from wherever you are, and what I mean by that is, it actually doesn't matter what happened yesterday. It actually matters what happens today going forward. It actually matters what you do with how you change your mind and how you think going forward, not yesterday.

Without question, if nothing else, there will be problems in a business. We always keep the eye on the goal and keep moving forward. It's like - again, it goes back to that road trip. You know, you get in the car, you start it, you'll have bumps in the road, you'll have U-turns, you'll have Y-intersections. That's business. That's life. But you absolutely make sure you've got the goal in sight, and if you've always got the goal, you'll absolutely achieve it.

I look at everything I've done - every mistake I've made as a course.

And I think the key thing, which I'm sure there's a lot of leaders in this room, and it's something that drives me nuts and I'm sure it's relatable, is the responsibility. If you take responsibility for everything you do. How many times do people come to you and go, "It wasn't my fault. It was Sue's"; "It wasn't my fault. It was Mary's"; "It was the computer"; "It was the fact my car broke down." It's actually all about taking responsibility for yourself, and we give our staff accountability and, at the end of the day, the responsibility.

And what that does is, it gives you an enormous amount of power because if everything is your fault, you can fix it. The second that it is not your fault, the second that it's someone else's fault, you sit back and go, "Well, really, there's not much I can do about that. It was their fault."

The final thing that I'm going to just talk to you about, and we're nearly there, is life balance. It's something that I haven't got quite right yet but I'm certainly getting closer and close to it, but it's something that I find is very important, and I think that no matter what you do in - as a career or as a business or anything else, it's something that I think that we should always stop and consider, and I also think we are better husbands, wives, mothers, employees, leaders, workers, if we do have a life balance.

This is something that I work on. It's important that you set yourself up so that you make sure you actually do have as much life balance as possible. In the office, the first thing I did was buy a large toy box and a TV and made sure I had a spare computer for my children to come in and do homework.

You may be thinking that, "That's all right, Janine. That's great. You live within, you know, two minutes of your work and you have your own business. You know, my business certainly won't allow me to do that." And you're right. I do have this freedom because I've created that freedom, but we've all got choices.

One of my valued employees in our corporate council, Kristy Baravelli, came to me the other day and went, "I love working here," she said, "because now I have choices." She said that, "In the corporate world, if I had a baby, I couldn't have the flexibility that I know that I'll be able to get at Boost." So her choice, so she could have a career and she could have life balance, was to work for a company that actually will actually be accommodating for that and also that it won't be a hindrance for her going forward.

So, really, it is about the choices you make. I'm actually a real firm one on "Don't give up your coping mechanisms." I play netball on a fairly regular basis, and what I find is that if I stop doing it, because that's one hour a week that I focus on nothing else but a ball coming at me and it's such - you just need - it's whether it's the drink with the mates, it's whether it's the drink with the girls, it's whether it's netball or gym or running or whatever it is, we tend to say we're too busy to go to our netball, or our sport, or our for the ball, or whatever our coping mechanism is, but don't give up your coping mechanisms. You can actually always find time to it. If you really want something, I'm a firm believer that you actually can have it. You just have to create it.

I wanted everything. I did want a husband and a children, I wanted my creative pursuits, but, you know, I set my priorities. At the end of the day, it's all about setting your priorities and not giving up your coping mechanisms and making sure you put yourself in situations that opportunities will come towards you.

Recap. In essence, Boost was a simple vision without the limitations we place on ourselves. As I said before, I didn't come into Boost with years and years of business experience but I did come into Boost with the right attitude. I came to Boost with a problem-solving attitude and I came into Boost with an ability to learn very quickly and learn from my mistakes very quickly.

You've got to get that gatekeeper. If it's not you, find someone in your business that is the person that will not let anyone into your business that does not have the values and will let only the greatest people into your business. Maintain the focus on your goals.

Every six months we go for a strategic retreat. We've actually got one coming up this weekend, and we also have - and yearly we have - so, twice a year we catch up. Now, we actually do. We go, "Okay, how many stores are we going to have, what are we going to do and what are we going to achieve?" And it's really interesting every year to have a look what you've done. Because we set our goals, we actually not once haven't met them, and I think setting your goals and maintain your focus on the goals no matter what happens is a great tool. And, really, at the end of the day it's life balance and setting your priorities, which, again - I'm just about there but it's something that I think we could all work on.

So, that's basically it. So, I thank you very much for the time you've taken to listen to me. Thanks.

Questions:

Q: What did you have as your vision at the start? Did you know that you were going to get this far in four years? How clear was your vision at the start?

MS JANINE ALLIS: Look, that's a very good question. I think with - what we did in the first year is we said we wanted at the end of the financial year, we wanted 100 stores at this financial year. So you actually set a goal and then once you actually set your goal, you then go, "Well, okay, that's great as a target. How are we going to get there?" So we hired a leasing person. Then we required another person to help that leasing person. Then we hired - so you actually are actively going, "Okay, how many have we got? How many more months have we got to go?" So you are constantly driving and, "What else can we do?" And you'll go through the papers.

The other thing that was a challenge for us was we were never were prepared to take a site that wasn't a great site. So, really, with our strategy with moving forward, we actually want to eventually be known as the umbrella over health. We want to be known as the health business more than a smoothie and juice business, and that's really where our priority goes. And so you use, "Okay, what sort of media are you talking about? Are we talking about do we push smoothies and juices or you push health?" So everything you do - once you actually know your goal, all the things that you do can actually direct so you eventually will achieve that goal.

Q: Fabulous story and just absolutely terrific what you've achieved in a very short time. Janine, I'm just wondering where to from now? Where is your strategy leading and are you, in fact, looking at expanding overseas?

MS JANINE ALLIS: Absolutely, world domination is high on the list. We are actively looking at international markets. What I've also learnt is that even though we've clearly moved very quickly, many a great Australian company has gone overseas and actually basically not become a great Australian company. So we are going in to the other markets with a lot of research.

We recently went to the States and did more research, so we're really doing our due diligence.

One of the other things is I try and surround myself with people that have done it before. There's a wonderful lady called Lesley Gillespie, who's from Bakers Delight, who has been enormously generous with her information, and they have actually done the right thing and the wrong thing in international markets, and the right thing they've done, and they are doing an incredible – they're an incredible success story in the Canadian market, but they spent eight months researching before they entered that market, and have made a huge success.

So, with where we're going, as I said before, I definitely want to be an umbrella over the health market, whether that's in smoothies and juices, whether that's Boost superstores, which incorporate body, mind and spirit, whether that's Boost health bars, which we're looking at launching, but we will be over the health market in Australia and overseas.

What you find when you travel overseas is how small Australia is - we are only 20 million people, and in the States that's not even a State, you know. So we are very small, so the opportunities are enormous, but you need to go in with the right people, again.

Q: You talk about the United States. China seems to be hot on everybody's lips, and I'm sure it has been mentioned to you time and time again. Is that the sort of area you'd be looking at, South-East Asia or are you thinking in terms of Europe or the US?

MS JANINE ALLIS: What we're doing is we're trying to find the absolute best market for us. Every market has its own challenges. Every market has its own advantages and disadvantages. So part of our due diligence process is actually going through and making sure that when we go into a market, first of all, you get your money out, and, second of all, that it is absolutely the right market for this juice and smoothie bar and that we have the infrastructure to be able to grow safely into those markets.

Q: I work as a stylist in the film and television industry and I'm currently starting a small franchise business. I'm just wondering if at any stage selling your house and starting a new business and bringing your business into your house creates any emotional changes in your body and did it affect any business decisions that you might have made at this stage?

MS JANINE ALLIS: I didn't find any – it didn't create any business decisions. At the time, I had obviously, you know, little children at home and a little child at primary school. So to be at home when they walk in at 3.30 was actually really important to me. Did I just end up despising my house and despising particular rooms of it? Yes. Because you never, ever get away from it.

So, one of the advantages of moving out was actually you can actually go home and your home is your sanctuary, and the other disadvantage was the fact that my children couldn't see me when they walk in the door. So, you have to - look, there's positive and negatives for all of it but certainly that's what I found.

I think that one of the things the reason that Boost is a success is the passion that I have for the business. And Boost isn't just me. Boost is a long line of fantastic people that work with me. It's my husband; it's - you know, it is my design and development team; it is my HR team; it's every part of the business that makes Boost Boost; it's not just me. I just happen to be the person standing in the front.

Q: What makes a good gatekeeper and is it their qualifications, their personality, their skills?

MS JANINE ALLIS: Yep, it's all of that. The key thing that makes a good gatekeeper is their care factor. They actually have to care that the people that come into the business are the right people, and it's their passion is also what actually makes a great gatekeeper, and also their honesty and integrity. One of the greatest strengths of my gatekeeper is that she, like myself, can happily turn around and go, "I don't know. Can you explain that to me?" So, you know, it is about not looking stupid, not being intimidated. You just ask the questions really at the end of the day.

Q: I saw a small business show on Sunday morning (about) Tossers Salad Bars. And I was just wondering if you've opened any stores yet and, if so, where, and will you be franchising and what your direction is?

MS JANINE ALLIS: Sure. Tossers, we've got two stores. We've got one in Liverpool Street in Sydney and we've got in Australia Collins. The product is absolutely excellent. We are finding some problems with there, because what I'm finding is that a lot of leasing guys are English, and apparently Tossers in England is a little bit harsher than Tossers in Australia.

So what we found is we had this fantastic site in Perth, and one of my problems was that he said, "I'm not having my building called a Tosser building." So we've kind of rethought that. So, with our growth strategy with it, we are, again, relooking at possibly rebranding it just so we're not coming across the Englishmen that won't let us through the door.

Q: Do you get a lot of feedback from consumers?

MS JANINE ALLIS: An enormous amount. It's fantastic, actually, because it's really fantastic to have someone to say, "You know what? I waited too long and I had a really crap smoothie and I'm never coming again." And then you reply to them and go, "You're absolutely right. That was unacceptable," because we believe it's unacceptable. That's why we've got a guarantee in there to say, if you do not experience this service, let us know and we'll fix it, and we absolutely let people - they let us know and we absolutely fix it every time.

So, when you - you find, though, when you are replying to say, "You are right. This will never happen again. Here is our free passes. Please try us again. We'll be good," every single time without fail they'll reply back and go, "Thank you for your response. You know, this is what makes Boost great."

Q: It's a credit to you that no matter which Boost juice store we go to, we wouldn't have a clue if it's company owned or franchised, and I think it would be great for us to understand, you know, how you choose a franchisee and how you keep them trained up and, you know, as part of the whole philosophy.

MS JANINE ALLIS: Sure. The recruitment process is - we're very, very transparent. On the website you have basically answers to 90 per cent of the questions that people have asked, including how much it costs or – everything. So the transparency is there. The second thing people - we've got to do is you get a lot of tyre kickers, where they just want to know a little bit but they're not sure.

So the process to get through us is actually quite intense. So they have to fill out an 18-page questionnaire. Once they fill the 18-page questionnaire, they've got to write a $3,000 cheque and send it in the mail to us. Then we will make a phone call to them. And if they pass that stage, then they go to another stage. There ends up being five stages before they get an approval, and only 7 per cent actually get through.

Now, what's great about that is that we get the cream of the cream of anyone who wants to get in business. So which enables - we can, you know, try our hardest to make sure that every experience is a great one because we've got people who are passionate about the Boost experience.

Once they're in the system, they have a three-week training program. After they've been trained, they then go into their store, and they go into the store with one of our people to actually work with them in the store. And then we have audit programs. We have mystery customers every month to make sure that the service and the quality is as high as it could possibly be, and there's a short audit, there's a long audit, there's audits everywhere, really. And it's because really what's important to us is the brand is everything.

People - some people don't really see the value of what the brand is, and it's just everything, and the brand means that if you have a bad experience at the Jam Factory one, you're going to walk right past the Bourke Street store. So it's to makes sure that every single experience people get, if we get it wrong we fix it quick and when we get it right, they come again.

Q: My question is also on franchise but slightly more sort of commercial. Obviously, with your current success you have the financial capacity to alter the model and also you've just taken Viva on which was 100 per cent corporate owned, and I understand moving that to franchise. So outside of maintaining the quality you've maintained, what is the rationale behind that, given that financially you would be in a position to alter the model or have a split model?

MS JANINE ALLIS: I think the mix is really important because the people – the franchisees that we've got, as I said, in the system are really passionate people who actually really do work and live their business, and you can't buy that. Our company stores and managers are fantastic and we do work on them, but that is something that we work very hard on and we have getting better and better at. But with the ownership of the store it's very important.

Some of the things we do as a strategy is we think clusters are very important, and so Boost - when our company stores try and have clusters. In Sydney we have a Bondi cluster of Bondi Junction plus Bondi Mall. In Melbourne we have a CBD cluster and - so we do try.

We found that the manageability of stores works best if you've got them in a small group, very much like the Starbucks-type model as well. So with the franchising of the Viva stores, and they've not all been franchised - some of them are remaining company - it really is about clusters and whether it fits into our company strategy or it's a franchise strategy.

Q: With all small businesses or developing businesses, how important do you see the front man or front woman in your particular circumstance, one that can deliver the message?

MS JANINE ALLIS: I think any business - if you've got the culture or the passion or the heart below the top level, then you're hitting your head against a brick wall. Unless that person, the CEO, the founder, managing director, that person who's running the company, has got the heart for what they want to achieve, you will never get it to the store level where it needs to be. So the answer to the question is: it's everything to have that person, who has to be a great leader, and that person has to have courage because sometimes . Sometimes we don't want to make the hard calls and we don't want to disappoint people, but the leader has to have absolute courage and they have to have heart and compassion but also the ruthlessness. You actually owe it to the people that you work with to make sure that you don't settle for average.

Q: Naomi Webber, Boost Juice Bars. I'm actually going to ask you a question which I think a lot of people think of and maybe are a little bit apprehensive about asking, but what makes you believe that Boost isn't a fad?

MS JANINE ALLIS: Ah, good question. Naomi is my CFO, my Godsend - one of my absolute stars, and I didn't set her up for that question. It's a question that is asked a lot, and you see companies coming in and out. What we have got – and we're very, very fortunate in this model - is to have actually a snapshot of the American model. The American model has actually been going for 14 years, and we are able to actually keep an eye on it.

Last year it had a growth of 30 per cent, and, so, really, what we're in is - and that's what I said: we're not going to be known as smoothies and juices; we're actually going to be known as health, because the wellness category - anyone in the wellness category at the moment is actually finding phenomenal growth, and the reason being is that we're actually becoming more and more - particularly in the Australian market we're becoming more and more educated on what we eat and how we live and what we do.

So, I think that with regard to the fad, I don't think health is a fad and, again, we're fortunate enough to have a look into the future, which is the American model.

Q: I've got a question in regards to the financing of the business. You mentioned selling your home, et cetera, to pour it into the business and then obviously you franchised out. Did you attract other financing from investment banks or private investors to help the business grow or was it predominantly what you did with the house, and that was it?

MS JANINE ALLIS: It was mainly from the money that we lent to the company.

No-one has actually just put money in it. We've been very fortunate. It's been a very cash-positive business. So even though I'm very careful and try and always look to the future, we've never really needed additional capital. So it's been a very – a cash-positive business.

Q: Okay. So it's basically money from the business. It's just been reinvested back into the business?

MS JANINE ALLIS: Correct. One of the things that we've done and we've committed to as a board is that we're not taking one cent out of this business for five years. So it doesn't actually matter to my personal finances whether the company is worth one million or one billion dollars. It doesn't give me one more cent extra.

Every single cent - when I told – when I spoke earlier about treating every business as a baby, it's still four years old. It's just learning to walk. You know, every cent that we make stays in the business to grow the business.

Venue

Park Hyatt, Melbourne