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Swimart waives $45k joining fee in bid to expand network

Tuesday, 20 December 2011 | By Michelle Hammond
Pool and spa franchise Swimart is waiving its $45,000 joining fee for independent operators prepared to rebrand as a Swimart store, as it seeks to grow its network from 65 to 100 stores.

 

Swimart managing director Chris Fitzmaurice says starting up a greenfield site in the pool industry often requires “quite a bit of capital”; a major deterrent for prospective franchisees.

 

“If you were to establish a new pool store, you’re not likely to break even for the initial couple of years of trading – it would be a couple of years before you start to drive an income,” he says.

 

“For a lot of people entering into franchising, it’s their first foray into business. Traditionally, they are a little uncomfortable with investing money into a business where they don’t see a return for a period of time.”

 

“[But] in our industry, you have to prepared to forego an income for a period of time.”

 

Rather than attempt to lure first-time franchisees, Swimart decided to ramp up its recruitment strategy by focusing on independent pool store operators.

 

“What we’d noticed in the industry is that a lot of independent pool stores seem to be struggling to grow their business… They become a local pool store and that’s about it,” Fitzmaurice says.

 

“A few years ago, we did a quick survey of the industry based on the knowledge we had. We became confident our stores turn over more than the average independent pool store.”

 

“Given our difficultly in establishing start-up franchisees in new territories, it made sense to us that independents who were finding it difficult may be interested in joining us.”

 

Swimart currently operates 65 stores across Queensland, NSW, Victoria, the ACT and New Zealand. However, it is aiming to grow its network to 100 stores within five years.

 

Fitzmaurice says independent operators who join the Swimart network will not be required to pay the $45,000 establishment fee, although there are ongoing service fees and marketing fees.

 

“In the first year, they will not be required to pay the franchise service fee but they are required to pay the marketing contribution. It’s around $10,000,” he says.

 

According to Fitzmaurice, independents are expected to contribute to the rebranding process, the cost of which depends on the size of the operation.

 

“There is a necessity to have your store easily identified as a Swimart store… We’re prepared to offer financial assistance in that area,” he says.

 

“For some stores, the conversion cost may be zero. The bigger the operation, the higher the cost. A standard store, with two vehicles on the road, will probably pay up to $5,000.”

 

Fitzmaurice says while the offer is ongoing, it does depend on how successful it is.

 

“If there’s a good response, we’ll continue to offer it. If nobody takes it up, we would have to review the offer and reconsider it,” he says.

 

Fitzmaurice points out that independents are not the only ones who will benefit, with incentives also on offer for first-time business owners.

 

“They are required to pay the initial franchising fee but there is a waiver of the ongoing fees for a longer period of time,” he says.