John Tamihere: Make mine a triple with sprinkles on top

Speech to Mr Whippy NZ conference

Kia ora and thank you for inviting me to speak here tonight. For some reason when the media discovered that I was going to be speaking at a Mr Whippy conference it caused much hilarity, but in all seriousness I think it is a great opportunity to congratulate a small business success story that particularly highlights the benefits of franchising in New Zealand.

The fact that the journos immediately knew what Mr Whippy was is proof of just how successful a brand Mr Whippy is. As one of New Zealand's oldest and best-known franchises you can boast brand awareness among 97 per cent of New Zealanders - a level of brand recognition that most businesses would give their right arm for.

As people involved with the Mr Whippy operation yourselves, I probably can't tell you too much about the Mr Whippy history that you don't already know, but for the benefit of a wider media audience out there, I should point out that Mr Whippy has been serving ice-creams in New Zealand for 40 years now.

Sadly there were way too many kids in our household when I was growing up to make a visit to the Mr Whippy van a financially feasible thing, but every Kiwi kid is familiar with the Greensleeves tune that means Mr Whippy is in the neighbourhood.

Mr Whippy first arrived in New Zealand in 1964, having already been established in the UK and Australia, and it expanded rapidly here throughout the 1960s and 70s.

While over the years Kiwi's lifestyles have changed dramatically, Mr Whippy remains a national icon, representative of New Zealand's outdoor lifestyle and family values. Mr Whippy is up there in New Zealanders' memories of Kiwi summers with jandals, barbies, the beach and the bach.

While lifestyles have changed, the Mr Whippy business has also adapted, under the stewardship of changing owners, to meet changing demands, and that flexibility to meet change will ensure future generations continue to enjoy Mr Whippy products.

In 1989 the Mr Whippy organisation was restructured as a formal franchised system, and today there are 36 Mr Whippy franchisees operating from Northland to Christchurch.

In recent years the Mr Whippy franchise has embarked on a growth strategy that has seen a brand awareness campaign, five new vans on the road, and the establishment and planned expansion of Mr Whippy outlets on fixed sites.

Mr Whippy produces an amazing 400,000 litres of soft serve ice cream a year - and that volume is growing all the time.

While the changes have transformed Mr Whippy into a thoroughly modern business (and I can recommend logging on to the Mr Whippy website to play Greensleeves on the on-line piano) it has also recognised that holding on to some of the fundamental values of the brand are just as important.

I was fascinated to learn that Mr Whippy has trademarked its Greensleeves tune and red, white, pink and yellow colour scheme, and, according to the website, the tune and colour scheme are "aggressively defended". I don't know if aggressive is a word most people would associate with Mr Whippy, but I guess that is part of the realities of modern business.

Of course Mr Whippy has retained its community and family-oriented focus, and that is reflected in its sponsorship of the Warriors (and goodness knows, they need all the help they can get) and Variety, the children's charity.

Mr Whippy is a great example of the benefits of combining best modern franchising practices with the heritage and success of a longstanding brand.

New Zealand overall is clearly a business environment well-suited to franchising. According to the 2001 Franchising Association of New Zealand survey of franchising, there are currently more than 14,000 small businesses in this country trading as franchises, in industries from retail to fast food, home services to business-to-business.

New Zealand has one of the highest ratios of franchises per capita in the world, with over two-thirds of all franchise systems being home-grown. Prime examples include Fastway Couriers, Stirling Sports, Robert Harris and Green Acres.

The survey shows 16 per cent growth per annum of franchise start-ups in New Zealand, with 768 new units opening in the 12 months prior to the survey. Overall respondents reported an impressive 20 per cent increase in turnover from last year's survey. The total number of franchising systems operating in New Zealand is about 300, with estimated turnover at around $10 billion, and the number of people working in the franchise sector was estimated at around 70,000.

And franchises have a very good survival rate: the average failure rate of franchised units is less than 6 per cent within 3 years, which compares very favourably compared to businesses overall.

Only 16 per cent of franchises surveyed did not consider that the franchise provided a good return on investment for the franchisor (6 per cent for the franchisee), with 31 per cent of respondents rating their system as "excellent" and 46 per cent as "above average".

The survey confirms the upward trend for franchising in New Zealand, with growth in new systems, turnover and employment.

The Franchise Association of New Zealand supports franchise holders in a number of ways, including bringing together franchisors, franchisees and other interested groups to facilitate learning and sharing information for the benefit of the sector, and to encourage high standards of conduct through its Code of Practice and Code of Ethics.

Sector-wide support like that no doubt contributes to the high level of success within the franchise sector, and I would like to congratulate the Franchise Association on the very good work it does, and the contribution that is making to the success of New Zealand businesses.

This Government recognises that to have a thriving economy that delivers for all New Zealanders, we need successful businesses that can contribute to sustained economic growth. Our vision for what we want small to medium enterprises to be is:

Well-run, innovative and world-class business.

Well-run businesses:
• Work closely with customers and suppliers, developing new products and services, dealing with customer complaints and assessing customer satisfaction.
• Have good and productive relationships with stakeholders and employees - they reward staff for good performance, and protect them as a critical asset through good employment and health and safety practices
• Are active in creating and developing business networks or linkages with other firms
• Demonstrate good leadership - they provide a clear view of the business in the future

Innovative businesses:
• Seek to compete on innovation - they develop new and improved products, services and processes, rather than simply try to compete on cost
• Recognise that what is in demand today may not be the same in the future
• Are prepared to learn from others and invest in innovative activities, such as R&D, training and new technologies

World-class businesses:
• Have a global mindset
• May export a product or service - may not export, but provide world-class intermediate goods and services, to our world-class export companies.

These are the businesses that will enable the next generation of New Zealanders to enjoy living standards that are among the highest in the world.

So I would like to thank New Zealand businesspeople like yourselves for showing that innovation and attitude that is so crucial to the success of our economy, and of all New Zealanders.

Recently I undertook a series of 24 Small Business Day events throughout the country. These events were designed to improve communication with small businesses, so that the government could hear first-hand what the concerns of small business are, and, most importantly, what factors drive their success.

The report-back to Government from the Small Business Days is still in process, but I hope to see some initiatives flow from those events that will go a long way to making doing business easier for business.

The Small Business Days were a truly inspirational experience -it was wonderful to see the huge commitment being put in by businesspeople up and down the country, and I believe we need to applaud that commitment from our business sector more often. So thank you again for inviting me to speak this evening, and a big round of applause to you all here tonight as businesspeople - long may the sounds of Greensleeves be heard in Kiwi neighbourhoods.

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