Bakers Delight’s Roger Gillespie 40 years on: “Be clear on what your business is”
Bakers Delight is one of Australia’s high profile franchise stories. And Roger Gillespie is as passionate as ever about the brand he co-founded with his wife Lesley 40 years ago.
Today their daughter Elise and her husband David Christie run the Australian and New Zealand business; son Aaron heads up the north American operation.
The bakery network numbers 650 outlets across Australia, Canada, New Zealand and the US. In Australia alone the business directly employs more than 400 people, with a further 8000-9000 bakers and sales staff employed under the brand.
In this interview with Inside Franchise Business Executive Roger Gillespie considers business growth, dealing with underperforming franchisees, and staying focused. Just don’t mention retirement…
IFBE: Congratulations on the 40 years of Bakers Delight, it’s a major anniversary. What are your key reflections when you think back over the four decades?
RG: It’s been a lot of fun, a lot of challenges, a lot of highs and lows. We’ve got to know a lot of wonderful people – suppliers, franchisees, staff. It’s been wonderful.
When we started out we wanted to provide a living to the family. Then we got another opportunity, and another one. Then we thought, why not franchise? It really took off after that.
IFBE: What is your best tip for business longevity?
RG: You’ve got to stay focused. Of course, it’s ok to say stay focused, but what do you focus on? You have to be clear on what your business is. Keep it as simple as possible. That’s increasingly difficult as things get more complex, new laws come in, computerisation makes things simple but it’s a never ending story. Work out what you should be focused on.
IFBE: What are the main lessons learned that have made you and Lesley a success as franchisors, retailers and business owners?
RG: The biggest thing we learned is that you can’t do everything yourself. You have to let go and empower other people.. That was an early lesson and it let us expand. If we waited for everything to be perfect we’d still be in the first store in Hawthorn.
It’s a series of compromises but it’s not about being sloppy, it’s not ‘near enough is good enough’. You can still chase perfection.
You have to be focused on the franchisees winning and growing, and staying satisfied. The objective is to keep as many franchisees performing as well as they can, running their business to the maximum capability. That is the most you can ask for.
For some their maximum is less than what the business requires. So you have to gently move franchisees on. It’s hard when you come across it the first time, then you realise it’s like pruning a fruit tree to let it grow. Often, you realise the person who needs to be moved on isn’t happy anyway, and they’ll be better off out of the business. Sadly, they don’t always get all their money back, though some do get more.
The sooner the better to have the tough conversation – you can’t leave a bad situation to get worse. Often [in franchising] it gets left too long, franchisors act too late and it becomes more challenging. If you see a problem, fix it.
IFBE: How have you maintained family values within the business given the size of the operation?
RG: We’re a collection of families. We have two branches running it, Aaron in north America, Elise and David here.
And most franchises are run by family units. It’s about keeping that feeling – it’s part of who we are, as a business. It’s worked for the last 40 years, and we’re confident for the future. It’s been one of the long term keys to our success, if it works, make it better, if it’s not working, stop doing it.
In business, a lot of people try to reinvent the wheel but you have to work your way in a logical order. It’s building where you are today, not where you’ll be in three years. You have to plan but people don’t join the dots – they are dreaming of the future, while Rome burns.
You can’t be a $500m business next year if you’re doing $50m this year. It won’t happen overnight – it might in tech, but not in the retail footprint. But you might get to $55m next year and it might be $500m in a few years.
IFBE: Are you still doing one day a week in the business?
RG: At breakfast we read yesterday’s sales figures and we get excited. One of us will click on the profit statements – we might spend an hour over breakfast looking at them. Is that business?
In Australia and New Zealand our weeks finish on Wednesday, Thursday is the end of the week in Canada. That’s two wonderful mornings [looking at the figures], that’s not work.
I don’t know when we work. We have other business interests and we’ve tried to divide the year into three – business, philanthropy, family and holidays. There’s no calendar, it’s just a broad sweep.
We’re very interested in the business, so often on holiday we’ll do a road trip and visit the bakeries and future sites. It’s been a fun thing to do. I haven’t retired, I’m just doing things differently. If you’re able to ease out slowly, I think it’s a blessing.
IFBE: What’s the key to establishing and learning to work with a board?
RG: It’s tough. Your needs change from time to time. One of our board members has just retired after 10 years, and we’re appointing a new member with years of multinational experience and that will help us with future growth plans. You need to have someone with the right set of skills.
We have two directors based in Canada, one is our son Aaron, one a local business man whose skills and longevity have been very valuable to reflecting on key decisions.
The board has to work together and not too closely with management, not do management’s job but be a sounding board. When someone wants a view, they can ring a board member and get feedback. You don’t want the board member following up every week.
IFBE: How important has corporate social responsibility been to Bakers Delight?
RG: The Breast Cancer Network is celebrating 20 years partnership with us this year but we don’t do it for that [CSR] reason. We support it because we can, it’s worthwhile, we like working with them. It’s a mutually beneficial relationship.
A lot of companies want to tick the box and find a charity; we did it 25 years ago, and it didn’t work. We did it in Canada and it didn’t work. It has to be a natural fit, where both beneficiaries and benefactor get on well and enjoy a solid working relationship.
A lot of franchisees work separately on the Pink Bun Campaign. It’s a good community. We have fundraised $20m over 20 years for BCN. They’ve moved closer to us to work with marketing, they’re almost part of the organisation. We never talk about it in CSR terms.
IFBE: Bakers Delight has a strong presence in New Zealand and Canada, yet in today’s terms for a business of this size that’s a fairly modest spread. What’s been the thinking behind this measured approach?
RG: We’re slow and steady. We stumbled in Canada without competent people but we finally learned how to do it. We’re on a strong growth trajectory and keen to exploit the potential. Sales and profits are better than Australia per store, the future is bright.
We can have 500 to 1000 in Canada, we don’t know how many in the US. We just opened our second store in Connecticut. North America is a huge market. We want to exploit the potential.
But there is still plenty of potential in Australia and New Zealand, and there are plenty of franchisees hungry for growth.
Brad Peatling is just as enthusiastic now as 30-odd years ago. And Wayne Price who has also been with us since the 1980s has five stores and is just opening his sixth.
IFBE: What advice do you have for business owners looking to franchise?
RG: Be clear on why you want to expand. A lot of people start franchising because they can’t manage what they’ve got. Ask yourself, why do I want to be a franchisor? Why will it be better? Do I believe the franchisees can make sufficient return on capital, and will there be significant business profitability over the long term. If you can’t get that, you can’t in all conscience franchise.
There has to be an underlying commitment for franchisees otherwise you are just creating liabilities.
IFBE: What’s your view on the franchising sector right now, and how do you think the proposed changes to the Code make a difference?
RG: I worry about the burden being too much. It might be counter-productive because a franchisee won’t want to spend the money with their lawyer. They should have thought it through a bit more. Because of a few rotten apples we all have to suffer and the unexpected consequence could be worse.
One thing I would say, we have to be careful we don’t put too much emphasis on a Code being the save-all. Since the disclosure documents became so long,, people don’t read them. You can’t cover up for dishonesty with a Code. You have to have integrity.