The Juice and Smoothie Bar industry in Australia is fruitful and booming, with 4.4% projected annual growth and generating $459.4 million in revenue. This rapid growth has shown no signs of slowing down. But what is the driving force behind this? The answer is found in our change of attitude towards the importance of healthy and holistic living. More Australians are becoming health conscious and focusing on overall well being, a trend that began in the early 2000s. With this trend continuing to drive industry growth, there has never been a better time to jump on board the juice and smoothie bar bandwagon and crush the industry.
To help, this article will explore three legal considerations when opening a juice bar or smoothie bar in Australia.
Have You Considered Franchising?
Today, the largest player in the Australian market is Boost Juice Bars. They continue to dominate the industry with store numbers increasing by more than 40% over the past five years. With its dominance in the juice and smoothie market, Boost Juice Bars has shown how a franchise network can be run smoothly and successfully.
There are many advantages of franchising like:
- working with the support of the franchisor;
- drawing on their pre-existing relationships with suppliers; and
- gaining their established brand recognition and goodwill.
The franchise business model consistently proves to be the most effective way to achieve growth and profitability in a relatively short period. This dramatically reduces the risk of failure compared to starting up a new business on your own.
The largest players in the Juice and Smoothie Bar industry exist as franchises, Boost Juice Bar being one of these. Accordingly, they can license the franchise name and business model. Becoming a franchisee presents a relatively easy way to enter the market. Moreover, franchisors usually have pre-existing relationships with fruit suppliers. Given the seasonal nature of demand for juices and smoothies, the ability to control stock and inventory is critical and presents challenges of its own. In this way, an established franchise model is likely to be not only able to forecast better stock levels but also avoid unnecessary stock waste.
Know which key terms to negotiate when buying a business to protect your interests and gain a favourable outcome.
What Are Your Leasing Arrangements?
Rent and leasing costs for juice and smoothie bars can tend to sit on the higher end of the scale. Indeed, most successful juice and smoothie bars are located in highly concentrated areas, including:
- shopping malls;
- airports; and
- metropolitan centres.
Given the majority of business operators do not outright own their shop fronts, many businesses lease out space to operate. Furthermore, many juice and smoothie bars save on rent costs by operating out of booths and pop-up stalls compared to traditional shopfronts.
Additionally, it is not uncommon for commercial leases to lock businesses into 5-10 year lease arrangements. This can be intimidating when you are first starting out. From fit-out obligations to exclusivity clauses, it is important for you to have a leasing lawyer review your lease before signing the agreement.
Continue reading this article below the formAre You Employing Part-Time Staff?
Wages account for a significant share of costs for juice and smoothie bar business owners. Common for the retail industry, many employees working for juice and smoothie bars are on a part-time working arrangement. As an employer, you need to recognise that part-time employees receive the same minimum entitlements as their full-time counterparts. This means you will calculate sick leave and holiday leave based on how many hours your employees work each week.
Each employee must sign an employment contract outlining details such as their:
- employment status;
- hours of work;
- pay rate; and
- classification level.
The Fair Work Act 2009 sets out the rights available to employees, including the number of hours part-time employees can work per week. You may also elect to have full-time employees or casual employees. The options are fruitful.
Key Takeaways
The future for the Australian Juice and Smoothie market remains bright and fruitful. Boost Juice Bars are a prime example of this success and the ongoing transformation of Australians’ attitudes towards health consciousness and overall well being. As the juice and smoothie market continues to grow and coupled with operators diversifying their product range, it has been projected to flourish over the next five years. Opening a juice or smoothie bar is a big investment. Therefore, make sure you understand your legal obligations before you enter any agreement.
For more information on the process of setting up your juice and smoothie bar business, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
Frequently Asked Questions
With any franchise model, the franchisor can license the franchise name and business model. Accordingly, becoming a franchisee presents a relatively easy way to enter the market. Instead of starting a business from scratch, you can rely on the existing model and brand reputation of an existing franchise.
As a retail industry, your juice or smoothie bar will greatly benefit from employing staff. After all, it is unlikely you can keep up with the potential demand of your business on your own. Hence, hiring staff through an appropriate employment agreement is beneficial.
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