Franchisee Information

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1 MODERN, SPACIOUS, EXECUTIVE ACCOMMODATION For further information Peter Davis Phone: Franchisee Information

2 OPERATIONS AND SUPPORT JOINING THE FAMILY Once your application has been accepted you will be guided through start up and running of your business with the help of our team and the Astra systems. Owning an Astra Apartments Franchise is a hands on commitment. A franchisee starts out with training on the job, an operations manual and hands-on experience. You will be guided through the setup of your initial apartments, handling your first enquiries and bookings and using the system effectively on the job. There may also be advice on which equipment to buy, guidance on staff employment, help on choosing the right location, rent negotiations and so on. We have a wealth of experience in territory management and operations. If you become a franchisee, our team will guide you through the initial training and provide ongoing support and training whilst you are setting up your business. You will be assisted with operations including: choosing apartments, furnishing apartments, setting up utilities and connections, client development, improving operational effectiveness and efficiencies by adopting best practice. Much of the training is live and on the job - there is no better way. What s more, you have access to training and guidance whenever you need it. The Astra Apartments Property Management System is an integrated booking, client, invoicing and operations management system. It helps to plan your day and organise your activities support your business. Astra Apartments commenced operations in Since then it has grown into a national franchise operation accommodating executives who work for many of the most respected companies from Australia and around the world. Unlike other accommodation providers, Astra Apartments specialises in providing full-sized, furnished residential apartments for medium to long stays with average length of stay being 6 weeks (industry average for hotels and serviced apartments is 2-3 nights). A critical difference to the big chains is that Astra Apartments provides modern, spacious, executive apartments, whereas apartments provided by competitors are often smaller. Also, unlike most accommodation providers, Astra Apartment s portfolio of apartments can be grown incrementally meaning lower capital outlay and growth can be funded from cash flow. Today Astra Apartments has 15 franchise territories located in many of Australia s prime central business districts providing over 100,000 room nights to our valued corporate clients each year. Each territory is owned and managed by a passionate team of professionals. They have created a strong brand amongst global relocations management companies, international corporate travel managers and travel organisers for blue-chip clients. Business growth provides opportunities for new franchisees to join our family. With a tried and proven business model, supported by a central marketing engine and an effective cloud-based business management system, the right person can enjoy the exhilaration and benefits of owning and growing their own business, with the benefit of a trusted brand name supporting them each step of the way. You don t need to have worked in hotels or serviced apartments to become an Astra Apartments Franchisee, but you do need experience running or managing a business and dealing with clients in a corporate environment. You need to be prepared to work in and understand the business from the ground up in the early days, but the rewards and opportunity that open up to you make it a very worthwhile challenge. Astra Apartments is lead by Peter Davis and Tom Jeavons-Fellows, both experienced professionals with a dedicated focus to make Astra Apartments the accommodation choice for travelling executives in all the major CBD s of Australia, and to provide a framework allowing Franchisees to achieve their business and personal ambitions

3 LOCATION IS KEY MARKETING TO HIGH QUALITY CORPORATE CLIENTS Marketing plays an integral role in the ongoing support you will receive from Astra Apartments as a Franchisee. The marketing team constantly manage and optimise Astra Apartments marketing and promotional activities. We know which marketing tools are most effective in reaching prospects and clients, and how best to get a message to our target market. PROMOTIONS We find and implement innovative ways to engage with new and existing clients at national, state and local levels, such as business travel shows and conferences. COMMUNICATIONS We generate positive local and national brand awareness and presence through newsletters and social media platforms, such as Facebook, LinkedIn, YouTube, Twitter, Google+ and Instagam. ONLINE DIGITAL We ensure Astra Apartments website is as engaging and informative as possible to convert enquiries to bookings. Search engine marketing and search engine optimisation achieves and maintains buoyant natural search rankings. ADVERTISING We raise awareness of the Astra Apartments brand through strategic online and print advertising. Over 75% of room nights are booked by returning Bookers and another 7-8% are booked by referrals. The overarching objective of marketing efforts is to generate high quality leads which in turn become very loyal repeat Bookers in multiple locations. Our clients are segmented into corporate direct Company Bookers, Corporate Travel Managers, Global Relocations Managers and Government. Below represents just a few of our high profile clients. PERTH Central Locations Across Australia s Major CBD s Our serviced apartments are convenient to corporate headquarters and close to transport links. Shops, cafes and supermarkets are within easy walking distance of our fully furnished apertments BRISBANE SYDNEY CANBERRA MELBOURNE STELLAR SERVICE. OPTIMUM COMFORT. Each furnished apartment is private and spacious with modern interior styling, clean lines and high quality finishes. We have every detail covered to ensure guests enjoy a work-life balance in a home away from home experience. Astra Apartments understands what business executives need when they travel, and also understands that people who manage executive accommodation need a personalised and convenient service they can rely on. That s why national and international clients value Astra Apartments high standard offering, ease of doing business and the peace of mind they gain from booking with us. Clients have asked us to expand our footprint to include regional, national and international locations. Astra Apartments is a corporate accommodation provider. Our clients need their medium to longstay staff to be conveniently located close to their places of work and transport networks. Accordingly, all our apartments are located where there are office blocks, commercial centres, industry hubs and public services. Having started in North Sydney in 2001, our urban footprint now extends to over 400 serviced apartments centrally located in the commercial districts across Australia s major CBDs. New territories exist in: Darwin Greater Sydney Newcastle Wollongong Adelaide, Auckland Wellington AND MORE 08 05

4 TESTIMONIAL A Proven Business With Flexibility ROGER AND KERRY HARMES RHODES, NSW Buying a franchise had never been on the horizon for Roger or Kerry. However, after nearly 30 years in international banking that took their family from the UK to Japan and then Australia, they decided that it was time to leave the corporate rat-race and establish a business of their own. With Sydney s commercial and infrastructure growth rapidly spreading west, they felt confident enough in the structure and support the company offers Franchisees to invest in their own Astra Apartments territory. They chose the up and coming suburb of Rhodes. After only twelve months of operation, Astra Apartments Rhodes already has 15 apartments on its books, all with very high occupancy. Demand has predominantly come form the local business park where blue chip clients such as Nestle, Alcatel Lucent, HP, Unilever and Ikea operate. Our involvement as Franchisees has been fantastic from day one. While I never initially gave much thought of working in hospitality, or owning my own business, the nature of Astra Apartments as a solid operator with strong client relationships, means we have had a steady flow of bookings and plenty of support for us to manage the growth. Roger says the benefit from being associated with an established, reputable brand adds instant credibility, complemented by great support from the network of fellow Franchisees to advise on dealing with all manner of situations. The relationship with Head Office is really important as it can be very difficult to get your foot in the door with major accounts. Having the support of Business Development to represent us with Asia s biggest relocation companies is a great help. The cloud-based systems have been developed to allow us to work very effectively wherever we might be, providing responsiveness and making it easy to control a dynamic environment. It has been great to adopt the proven business model that Astra Apartments has in place, but with freedom to be innovative and add a personal touch. If you ever need assistance or mentoring, you can tap into the Astra Apartments knowledge base any time you re not exposed to risks of being inexperienced or out on your own. THE BENEFITS OF BEING A FRANCHISEE WITH Investing in a franchise gives an individual the chance to build a successful business with minimised risk. Of course there is never any guarantee of success, either with a franchise or an independent business, but the presence of tried and tested systems, a brand, and experience in trading creates something of a shortcut in establishing a business for franchisees. The rigours of establishing a business from scratch are considerable and in a franchise there is a wealth of experience to draw on that can ease the process. Astra Apartments is an attractive franchise proposition on many fronts, including: 1. Relatively low initial capital outlay. There is no store fit out cost or equipment to purchase. Just the initial franchise fee, legals and capital to pay for bonds and furniture of the first apartments. With a growth rate of 1 apartment per month you should be cash flow positive within 18 months Opportunity for high earnings and to grow a business of considerable value. With 30 apartments and annual revenues in the region of $2 million, you should be making an operating profit margin (before interest and tax) of 15-25%. Astra Apartments is a low overhead business. One full-time person should be able to manage a 25-apartment territory. The Astra Apartments inventory model means that capacity can be flexed up or down to meet demand. The business model allows you to manage your life, unlike a shop or other business to consumer enterprises where you are tied to opening hours, you can manage most of the business activities around other commitments The cloud-based property management system can be accessed anywhere. You can respond to client enquiries and manage the business from anywhere in the world. Many of our franchisees manage operate remotely and use part-time staff at the apartments. Franchising allows you to compare your business performance with other businesses in the network. You can identify areas to improve and learn how others achieve the outcomes you want.

5 A GROWING NICHE SECTOR The serviced apartments sector in Australia has shown the strongest performance over the past decade compared to other accommodation providers including hotels and motels. Serviced Apartments Key Statistics over the next five years through by an annualised 3.0% exceeding $3.4 billion by the end of Industry Revenue Growth ($ Million) TESTIMONIAL Work Life Balance Emma Culley Perth, WA $3.0 billion Revenue % Annual Growth % Annual Growth As a busy mother with four children, Emma Culley was looking for a business opportunity that not only provided the opportunity to generate good income but but one that that was also flexible around her family commitments. The current revenue of the Serviced Apartments Industry in Australia is close to the $3 billion mark in While the industry is well positioned among the other accommodation options, a strong Australian dollar and cheap international airfares have been pressuring the industry demand. Even though these factors were quite impactful, the industry has still shown a solid increase by annualised growth of 2.3% over the last half a decade. This increase is supported by the realisation by leisure and business travellers of the convenience and benefits of serviced apartments compared to hotels and motels. Falling Australian dollar and increase in inbound tourism is expected increase industry revenue Source: Serviced Apartments in Australia, Ibisworld Industry Reports, May 2015 The assignment worker population is growing too % of the global workforce is now working on projects outside their home countries, and this is pushing serviced apartment usage. There s a lack of skilled labour in certain areas too, so Astra Apartments are housing the expertise brought in to fill the skills gap. Astra Apartments s clients operate in a wide range of industry sectors including IT, infrastructure, government, finance and professional services. Global mobility is increasing and so is the need for high quality staff to be relocated to projects or visit different locations. Emma opened the Perth franchise in June 2012 and grew the business at a rapid rate to meet demand, hitting 20 apartments within 7 months. She said I was worried about getting bookings initially, but it was not a hard sell as there were existing Astra Apartment clients with accommodation requirements in Perth. All the big travel bookers know and respect the Astra Apartments brand. She recalls It was a great start as the economy was booming in WA at the time. I got a lot of support from Head Office and fellow Franchisees, who had the answer to all my questions and just provided all the tips and tricks to manage the tasks at hand. Perth now has over 30 apartments occupied with employees from a blue-chip client base. What is really reassuring to me is that even though mining has taken a downturn, the Astra Apartments business has held up very strongly. Emma really values the flexibility that running an Astra Apartments franchise offers. The rapid growth rate was really demanding early on, but now I have a stable business and have allocated tasks to part-time administrators. I can now flex my time and manage my family commitments. I often work on the run and remotely, which can mean getting some admin done while sitting in the school pick up line, or fulfilling an urgent task while on family holiday, she says. 04

6 Have you got what it takes? TABLE OF CONTENTS 3 Joining the Astra Apartments family 4 A growing niche sector 5 Location is key We ve created a business model underpinned by a system that will support business success. But it s a business model that relies on Franchisees to be energetic, people-orientated, accountable and committed to working within our franchise system framework. It helps if you have previous experience as a successful business owner, or have worked within a mediumlarge corporate enterprise, because running an Astra Apartments franchise requires people demonstrating focused application and a track record of success. A critical key to success lies in the partnership between the Astra Apartments business and our Franchisees, which must ensure each location is operated by the right Franchisee. Our assessment process works to ensure the partnership will be long-lasting and rewarding for both parties. The process gives both parties the opportunity to fully understand whether the partnership is right for both Franchisor and Franchisee. This means both parties have the right to terminate the application without reason at any time. Astra Apartments has a rigorous Franchisee recruitment process. Not only is our brand at stake but we need to ensure that every Franchisee in the network has the maximum likelihood of success. We look for the following attributes in potential Franchisees: Passion, commitment and drive to succeed Financial security to fund the growth of the business Strong customer service ethic and people skills Good business administration skills Business development and sales acumen, preferably in the business to business market place Structured and well-organised, paying attention to the details If you think that Astra Apartments is the right career choice for you, the next step is to complete an application form. 5 Stellar service. Optimum comfort. 6 Testimonial - Roger and Kerry harmes 6 The benefits of joining Astra Apartments Initial Costs* INITIAL FRANCHISE FEE This covers start up training costs provided by Astra (not including travel and accommodation) $50,000 - $100,000 + GST LEGAL FEE Payable to Law Firm $2,500 + GST STAMP DUTY May be payable on the documentation. Stamp duty laws vary from State to State so you are encouraged to obtain independent legal advice. 8 Marketing for high quality Clients 9 Testimonial Emma Culley Establishment Costs* Ongoing Fees 10 Operational support 11 have you got what it takes to be an Astra Apartments Franchisee 11 Initial and ongoing costs RENTAL BONDS AND FURNITURE 4 weeks rent plus cost of furnishings and fit out $9-15,000 per apartment To qualify for an Astra Apartments franchise, you must have sufficient working capital available to you, the amount of which will vary depending on the size and maturity of the business as well as other factors. GROSS SALES ROYALTY MARKETING LEVY 8% of Gross Sales plus GST (payable monthly in arrears) 2% of Gross Sales plus GST (payable monthly in arrears) 8% 2% * Initial costs and establishment costs may vary depending on a number of factors. Note: The information provided in this brochure is current as at January Astra Apartments reserves its rights to vary any of the conditions or terms contained herein. 11