If you have ever doubted the power of networking, then the origins of the $100 million-plus sale of the Fastway Couriers franchise will help to change your mind.
Richard Thame, Fastway CEO, was a keynote speaker at the Franchise Management Forum 2016 where he treated attendees to the inside story on the NZD$125 million (AUD$117 million) sale of the Fastway franchise network to international logistics group Aramex.
The sale, finalised in January 2016, is one of the largest of its kind in the franchise sector in recent years and has set Fastway up to take it business to the next level in the fast growing and rapidly changing parcel delivery market.
Richard used the Forum setting to recount the groundwork that led to the landmark Aramex sale, which originated from a chance networking encounter at an international conference.
Coming to grips with a market transitioning from business-to-business to business-to-consumer delivery, driven by the huge growth of online retail shopping, Fastway needed to quickly become retail experts and to do so attended every industry conference they could find.
This led Richard to a conference in China, one that he now admits he wasn’t too sure what he was going to get out of given the language barriers. But it was at this conference that he met an executive from a big Middle Eastern based company called Aramex and they got talking, stayed in touch and the rest, as they say, is history.
Fastway was on the lookout for an international partner to provide much-needed access to capital to compete with the big postal networks and other competitors, while Aramex was looking to establish a presence in Australia.
There were lots of immediately obvious synergies and opportunities, including that Fastway could also service Aramex as a customer in Australia. However, it was when they got to the stage of doing a deal that the real work started, according to Richard.
“When selling a company, an enormous amount of work goes into it behind the scenes,” he said. “You need a team that you can trust, as you have got to get on with your day job as well. What we thought would take three months, took six months.”
After this six month process, the sale of the Fastway Couriers franchise network to Aramex was finalised. Richard said the Aramex deal delivered a fantastic result for the shareholders of Fastway, a company that started in 1983 with one man and van in New Zealand.
He said communication was crucial in explaining the sale to the 1,200 Fastway
franchisees, comprising both regional depot owners and courier owners in
Australia and New Zealand.
“People were nervous but our franchisees stuck to us like glue,” Richard said. “Arame also helped by coming out to do a roadshow and speaking face-to-face with our franchisees.”
Initial nervousness has now turned to excitement as franchisees see for themselves the benefits that the Aramex deal is now delivering to them through valuable access to an extensive international network, including Aramex as a customer, and renewed investment in Fastway’s depots, technologies and people.
Richard said Aramex has now given Fastway the scale and capital to compete with the industry’s biggest players, while still maintaining its commitment to
“Our mission is to delight the customer at the door, to give them a better
experience of ordering online,” he said.
With the continued growth and evolution of online shopping trends, the reinvention of postal networks and the large number of new start-ups and ‘disrupter’ entrants in the delivery market, Richard said competition is at an all-time high. However, he points out that many of the new threats are just platforms and don’t have any capital, depots or delivery vans, which puts Fastway at a competitive advantage.
“All franchise businesses face new threats and if you don’t understand them, you have to go and find out,” he said.
Having recently steered Fastway through a successful sale process, these are Richard’s five key learnings for executing a change of ownership in a franchise business:
- Make sure it is a good cultural fit
- Respect for the brand being purchased
- It has to make competitive sense
- The owner can also be a customer
- The review of a potential buyer is a six-month process