For many franchisees the  cost of the actual fitout will  be the deciding factor of  the economic viability of  the franchise system and  whether or not they are able to finance the start up costs. 

Wayne Billings

Over the years I have been asked many  times the same question by different franchisors, “What can we do to reduce the  cost of the fitout?”  

This is an obvious question for a franchisor  to ask their fitout partner, but not often an  easy one to answer. There are many things  that need to be considered with every  component that goes into the fitout, but  the top three would be Quality, Price and  Procurement. 

QUALITY

From fittings, fixtures, equipment to  finishes, everything needs to be the right  quality to uphold both the design integrity  and the franchisors’ brand image to deliver  the customer experience over the time of  the lease. This doesn’t necessarily mean  it has to be the best quality money can  buy, but it has to be the right quality for its  chosen purpose. 

PRICE

There’s truth in the saying, “Look after  the pennies and the pounds will look after  themselves.” If the individual components  that go into making up the fitout are  overpriced or over specified then it’s no  surprise what the final fitout cost will look  like against the budget. At Shape we do a  lot of work identifying areas of potential  reductions in component prices and making  our clients aware of the options, working  together to maintain the intent but minimise  the cost. Price point is always going to go  hand in hand with Quality, which is why I  would always put the right quality ahead of  a cheaper option; otherwise it’s just a false  economy. 

Procurement

Whatever the selected item is, it needs to  be available in the required time frame,  the right quantity and in many cases to be  available over time for future stores. It is  difficult to manage specified items with  long lead times from overseas suppliers  in a 6-8 week fitout program. Shipping  

delays etc. create unnecessary uncertainty  for all involved and added pressure on an  impending opening date. All these things  need to be considered for each individual  component. 

It’s not always the case that taking the  cheaper imported option is the best option. 

When we start to look at the joinery and  furniture components that go into an  individual fitout and in many cases, the  significant cost they carry to the bottom  line it is often tempting to look at a cheaper  imported product. While this is done  successfully for some products, it’s not  often the case for retail food tenancies or in  particular Quick Service Restaurants.  

Why? There is a high priority to keep  the operational needs of the system to  its proven formula. Ovens, fryers, grills,  refrigeration and washing facilities are  required to be positioned to allow for  a practical workflow. What’s left of the  tenancy is the opportunity to create the  customer experience. As most tenancies  will differ in size and shape this is where  the joinery and furniture items will need  to bend and mould to fit both the space and  the design intent. If we look at the three  criteria previously mentioned you will start  to see some grey areas over the viability  of procuring and importing a product  manufactured offshore at a cheaper price. 

The drop in quality of the finished product  is reflected in the price point, which is the  only positive I have found in my personal  experience with this. Procurement can be  a nightmare with a lack of control of the  production run as well as shipping hold ups  and problems through customs. Once that’s  been negotiated there is the risk of damage  during transport and then the added  concern of manufacturing errors. If that’s  the case then its modifications to a brand  new unit, more than likely at the closing  stages of the fitout. 

That said, there starts to become some real advantages with choosing a locally manufactured product and partnering with a fitout company that has a quality and competent manufacturing capability. Quality is definitely going to be far superior. Price may be a little higher but given the risks of the cheaper option the value is by far better and procurement is a one sided argument.

There are also a number of other advantages to using locally manufactured joinery and furniture. The use of recycled materials including bricks and timbers has been very popular in recent times and while creating some great ambience and character to many fitouts, it also has a significant positive impact on our environment. What used to go into landfill at a rapid rate is now being picked apart, salvaged and reused and often the recycled product is far better quality than what is currently available.  

 

The local economy is supported by people supporting local manufacturing. Manufacturing in Australia peaked in the 1960’s at 25 per cent. Today this sits below 7 per cent and with big companies like Holden packing it in, the situation looks like getting worse. It’s now more important than ever to support local manufacturing and Australian made products.  Research and Development is a Key Area.

At Shape Shopfitters we spend a lot of time working with our partners developing exactly what it is they require from particular joinery or furniture items. This can be anything from the look and feel of the material being used to the practicality or functionality of a specific item. Small samples are always easier to look at, re-work and approve before investing in a custom designed piece therefore avoiding a potential costly mistake. This service can only be provided  by a local manufacturer particularly given  the tight time frames that this is normally  undertaken in. 

In my opinion there is a definite advantage of maintaining a high level of  manufacturing capability locally at Shape.  It provides a far better service to my clients  allowing me deliver the highest quality  product in the shortest time. It allows me  to continue to develop products to suit their needs and it gives me 100 per cent control  over production and delivery. To me, that’s  the power of local manufacturing. 

Wayne Billings is the founder and  Director of Shape Shopfitters P/L and  has spent the past 17 years developing  Shape’s local manufacturing capabilities.  He is focussed on partnering with  retail food franchisors and producing  outstanding results while delivering  exceptional service. 

Shape are one of Australia’s largest retail  food shopfitters and excel at producing  iconic tenancies. Shape have completed  hundreds of fitouts and continue to work  with many major retail food brands  Australia wide. 

For more information contact: 

P: 03 9432 1044 

W: www.shapeshopfitters.com.au