Luxottica has developed two franchise models giving optometrists an opportunity to build their business and take advantage of Luxottica’s extensive business support infrastructure.
When Luxottica announced franchising opportunities across the brand networks of OPSM, Laubman & Pank and Budget Eyewear in May this year, optometrists were eager to see how they could benefit from a partnership with the optical market leader.
Chris Beer, Chief Executive Officer of Luxottica Australasia, SE China & South Africa, said: “For optometrists seeking to build a successful business from the profession they are so passionate about, this is the perfect opportunity. The support of an established and respected brand will give potential franchisees the biggest head start that they can have.”
Matching the Individual With the Right Opportunity
Luxottica says it is committed to the development of the optometry industry and is proud to have the only truly documented succession and development plan for optometrists through all stages of their career.
Recognising that the skills and goals of each optometrist differ, Luxottica provides a range of options which align with individual skills and operational focus for graduates, employees and now franchisees
Recognising that the skills and goals of each optometrist differ, Luxottica provides a range of options which align with individual skills and operational focus for graduates, employees and now franchisees.
Mr Beer says: “Franchising is a long-term incentive for our own optometrists as it opens the way for them to secure equity and participate in the growth of the stores they consult in,” he said.
“We are also aware of large numbers of independent optometrists who are now considering exit strategies for their own business. Many of these would consider some form of equity partnership with Luxottica as a way to realise the value built up in their businesses.”
Rather than taking the ‘one size fits all approach’ Luxottica has developed two franchise models – the Optometry Franchise Model and the Full Format Franchise Model.
Both models provide business partners with Luxottica’s unique product assortment channels, the world class EyeBiz laboratory and extensive business support infrastructure, from marketing and merchandising through to training, and comprehensive IT and financial systems. However, the key difference between the two models is the level of investment and the level of risk.
Optometry Franchise Model
Through this franchise model, the optometrist owns and operates an optometry practice within an existing Luxottica store, allowing them to focus on their practice while Luxottica focuses on dispensing. Unlike other licensing models, this model also allows the franchisee to benefit from growth in dispensing and capital growth as well as the security of a franchise. Some of the key benefits to franchisees include:
A Collaborative Bonus
Linked to the growth of the dispensing side of the business Luxottica is providing a collaborative bonus to franchisees.
The ‘Optometry Franchise Model’ relies on each optometrist working with the store manager to monitor and address key customer needs. The collaboration should contribute to store performance and, as such, each franchisee will be entitled to share in the growth in the dispensing business.
This will be recognised through two components linked to dispensing growth:
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Bonus Part 1: a return on any incremental uplift in dispensing sales, calculated yearly (or for new stores incremental over the feasibility model).
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Bonus Part 2: an annual bonus equating to a return on a percentage of the eyewear sales at the time of the agreement.
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Bonus Part 3: an annual bonus equating to a return on the Pool Total. The Pool Total is the aggregate sum of Bonus 1, Bonus 2 and the Pool Total from the previous year and this accumulated total will be paid out at the conclusion of the term.
Capital Growth on Sale of Franchise
Each franchisee will be entitled to sell the franchise at the conclusion of the term. As the value of the sale will be linked to the turnover of the optometric business at the time of the sale, it allows for capital growth.
No Royalties
One of the great things about this model is that there are no royalties to be paid. Nevertheless, there will be contributions to a marketing fund that will be used to create greater brand awareness and help to drive further growth, and of course, the normal operating expenses associated with running your own business.
This is a lower risk model that offers a number of revenue opportunities that all compound in returns. The model offers reward for effort, a return on investment, links optometry and dispensing and it allows for capital growth.
“This franchise model is perfect for those optometrists who are looking for more involvement in their business and the security of a franchise, without the commitment of a full store franchise said Mr Beer.
Full Format Franchise Model
Other optometrists, however, may be ready to enter into a full franchise arrangement. Luxottica’s ‘Full Format Franchise’ model encompasses both the optometry and dispensing aspects of the business, allowing the prospective franchisee to take a holistic approach to owning and operating a branded Luxottica store and practice.
This opportunity would be implemented via the establishment of a ‘Greenfield location’, the conversion of an existing Luxottica company owned store or the conversion of an independently owned store to the Full Format Franchise model.
Also, Luxottica has established key relationships with banks to facilitate the funding for the right operators. Under the Full Format Franchise agreement, each franchisee will be required to pay a once off franchise fee of AUD$35,000 and will need to fund the costs of establishing or acquiring the business. These costs, and network financial performance, will be discussed in detail through the recruitment process.
Other Benefits
In addition to Luxottica’s business support infrastructure, franchisees also have access to the world class EyeBiz laboratory. EyeBiz is the largest optical laboratory in the Southern Hemisphere, servicing all of Luxottica’s retail outlets and producing 55,000 lenses a week.
Equipment at EyeBiz includes the very latest in technology, but the most important feature of the laboratory is the underlying IT systems that are used to manage workflow, work in progress and relay information back to the retail stores.
Supporting Luxottica’s optometrists’ professional and career development is also a key priority for the business. Luxottica’s Institute of Learning (IOL), led by Dr. Peter Herse, is rapidly emerging as a leading centre for continuing optometry education and learning in Australasia, ensuring Luxottica’s optometrists continue to refresh their essential skills.
The IOL supplies distance learning CDs, seminars, workshops and an in-house optometry magazine, Illuminate, to optometrists who want to specialise their career path with the right educational tools.
In fact, the IOL has delivered in excess of one million OAA accredited continuing education points to Australian optometrists.
Where to From Here
Luxottica is providing a unique opportunity for optometrists who are ready to take the next step in their career. The decision to enter into any business partnership is one that must be taken seriously and with consideration for the benefits to both parties.
Mr. Beer says: “You need a shared philosophy on how the business is run, a similar set of values, based on integrity, and a joint commitment to creating a profitable enterprise. Obviously, these things should not be taken lightly, or rushed. But if it feels like the time is right for you, let’s talk”.
For further information, contact Russel Klugman, Group Business Development Manager, Luxottica (AUS) 02 9815 2711 or (AUS) 0413 744 730 E: [email protected]
