Please note, this information is provided on the understanding it will be treated as confidential and is not to be disclosed in whole or in part to any other party without the prior consent of Poppies Group Limited.

Poppies Group franchise opportunities – Introduction

Thank you for your interest in a Poppies Franchise.

The philosophy that underpins Poppies approach to bookselling is based on making the customer experience personal and unique, both in terms of the setting and the products on show. That every Poppies store has its own personality is deliberate, each is a personal space for both the owner and their customers with total focus on traditional values of unobtrusive service and providing space for readers to discover great books and share conversations about the books we love.

Poppies Remuera store has been an icon for over 35 years and provided the concept for the Poppies franchise and business system was launched in 2008. Today there are Poppies franchise stores in Remuera, Hamilton, Havelock North and New Plymouth, each with its own exclusive trading territory and customer base.

In today’s fast changing world the business of bookselling and the future of the traditional print book is the subject of wide speculation, nowhere more-so than in the industry itself. The ‘book’ is now more accessible than ever through a range of formats and booksellers everywhere are engaging with new technologies to meet the needs and expectations of their customers. The number of new titles published in the English language exceeds 100,000 per year, adding to the over 5 million titles already in print and available for purchase today.

The major chain booksellers in New Zealand have adopted a commodity store approach to managing their book offer, adding more and more peripheral product to their total range in an attempt to draw in more customers; but the outcome has been to alienate true booklovers and confuse ‘price’ with ‘value’. 

The opportunity for Poppies businesses in this changing environment is to nurture the pleasures of book ownership and to engage with customers who have a passion for reading and for sharing that passion. 

What Poppies Franchise offers you:

Assistance in finding the right location, premises, ordering opening stock, shop fit and layout. 

Right at the start, fit-out guidelines enable franchisees to put their own stamp on the look and feel of their store furnishing, wrapped up with Poppies branding elements, trademark signage and stationery templates.  

In selecting opening stock, the point-of-sale computer inventory system is your key management tool, and extensive assistance is available in selecting opening stock.  Poppies excellent relationship with suppliers provides opportunity to negotiate trading terms. For new store start-ups, Poppies will endeavour to secure extended payment terms and extra discount on opening stock, therefore relieving pressure on your cash-flow. 

Once established, franchisees are encouraged to negotiate directly with supplier representatives for improved buying terms on a case by case basis.  

The Franchisor will provide ongoing support including financial advice, assistance with ordering, marketing and advertising, website content, store newsletter and maintaining publisher and supplier relationships. 

Poppies enables owners to access selected publisher warehouses to hand-pick end-of-line and reduced price specials to sell as remainders. Across the network stores have built an excellent reputation for the quality of their hand-picked Sale Books. Chain bookstores by comparison rely on allocated assortments selected by Head Office. 

The relationship between the Franchisee and the Franchisor is extremely transparent and the vision is to have a family-type organisation that enjoys a supportive positive working relationship. To that end, the Franchise network has been constructed so that the Franchisee can achieve maximum earnings, unlike some Franchises that are heavily geared towards the Franchisor.

Rather than go through a Franchisee Application process, followed by rigorous interviews, your signature on a plain-English confidentiality agreement will give you access to Poppies baseline financial information up-front so  you can  evaluate the Franchise concept and whether it is right for you, before proceeding to interview stage. 

Poppies provides you with a self-assessment questionnaire that poses key questions about your motivation, commitment and expectations in regard to owning your own business within a franchise structure. At the formal interview stage Poppies will again revisit your responses and work through any further questions to aid your deliberations.

Poppies relationship with Westpac Franchise business division provides a no obligation introduction to business financing options and a simple process for assessing your personal financial position in preparation for discussions with your nominated bank about set-up funding and working capital.

Owning a Poppies is a lifestyle choice, the business is yours to manage and grow, and ultimately the lifestyle you achieve is a reflection of your efforts and the belief you have in yourself and the Poppies core values.

Poppies foremost requirement is that you are a serious reader and book lover: the intimate nature of the shop means owners must be knowledgeable and enthusiastic readers in order to be able to advise customers and successfully grow the business. Your ability to connect with readers of all ages in your catchment is vital to establishing your store as their bookstore of choice.

Poppies Group provides a financial model which shows a range of scenarios from conservative to ambitious and provides a realistic expectation of Franchisee earnings.  This will be discussed in detail at a later stage but in the meantime generic costs are set out as an indication:

 

Initial Outlay

  • Franchise Fee: $30,000 – covers joining fee, Poppies IP and branding, new store set up assistance, training on operating and inventory management systems, cashflow planning, a fully functioning website and an exclusive trading territory.
  • Stock: $60,000 +  (determined by size of premises and season) Poppies benchmark = minimum stock weight of $480excl gst per sq/m (off peak)
  • Shop Fit-out: $60,000 – $90,000 (dependent on size and condition of premises)  - approx. $450 per sq/m
  • Legal costs: use of professional services (legal and accounting) are covered by each party individually

 

Ongoing Costs

  • Franchise Royalty: 3% of gross sales revenue, paid monthly.
  • IT: Monthly subscriptions for CirclePOS system and Nielsen Bookdata 
  • Marketing: Local initiative on marketing and paid advertising recommended at 2%of gross revenue. Social media required time resource but has minimal additional cost.
  • Supplier Invoices: varies according to ordering levels - monthly ‘open-to-buy’ budget guidelines are  reflected in the Poppies Cash-flow model, which includes seasonal adjustments
  • Rent: location is critical, and rent varies according to location – target range should not exceed 12% of projected gross revenue. Lease terms are typically for a 6 year term (eg: 3+3 years or 2+2+2) A share of rates and building maintenance costs together with provision for rent reviews will form part of your tenancy agreement and Poppies recommends you take independent expert advice when negotiating your lease. 
  • Wages: Poppies is an owner operated business and the level of owner drawings will be reflected in how well the business is meeting its financial goals. The expectation is for the owner to work  on site 5.5 days per week, with an indicative 0.2 to 0.4 FTE (8  – 16 hours p/w) additional staffing if required and once the business can support the cost. Seasonal adjustment for trading peaks needs to be built in to annual plan.
  • Core Operating Costs (other): target for maximum 10% of gross revenue. Includes: power, telephone & broadband connection, online stock management systems (CirclePOS, Nielsen Bookdata), courier, Booksellers NZ membership, insurance, shop stationery, rubbish/recycling, petty cash, etc. 

Your accountant can advise on personal expenses that can be offset against the business, and other tax concessions.

Summary

In brief, Poppies can remove much of the stress and minimise the risk of starting your own bookstore. 

With Poppies tried and proven business formula, best practice operating systems, on-going mentoring, industry connections and collegial networking, the attributes and commitment you bring will be enhanced all the way from first steps right through to the time you decide to move on.

I hope this has provided you with some useful information and insights into how Poppies can help you make your bookstore dream into a successful business. Please feel free to contact me anytime.

Once again, thank you for your interest. 

 

Kind Regards

Tony Moores
Director, Poppies Group Limited 
5 Evelyn Road, Howick 2014  Auckland
tony@poppiesbooks.co.nz
tel: 021 828 818