Industry Focus

FRANCHISING Hanging overheads Resource efficiencies are one of the keys to a successful franchise. Whether you are a retailer, service provider or manufacturer, understanding and managing your input costs is vital WORDS: JACKIE NEVILL Over the past four years, Australian businesses have had to stomach a huge rise in energy costs, about 70 per cent in some cases. The majority of this is from the upgrade of Australia's electricity network—the power poles and wires—which are close to 50 years old. The carbon price paid by the large suppliers added another rise to bills. These escalating costs are forcing franchise businesses to re-examine the way they consume energy. Ted Stedem, CFO at KFC, says the business has identified more than a dozen initiatives to improve energy productivity, eliminate waste and reduce usage. 10 Industry Focus Firstly, KFC logged power consumption in its stores to get a picture of where and how energy was being used and to identify opportunities for cutting back. As a result, all new stores now have 100 per cent LED lighting, which creates a 50 per cent saving in power use and massive maintenance savings. New technologies to optimise efficiencies in HVAC (heating, ventilation and air conditioning) is currently rolling out in stores and, according to Stedem, could save about 5 to 7 per cent on energy costs. All new equipment will be first reviewed for energy consumption, and all new stores will be LEED (Leadership in Energy and Environmental Design) certifiable. KFC East Maitland (pictured), was the first store submitted for LEED certification. Communication with stores has also been key. "Giving stores access to better information on their power use has resulted in year-on-year reduction of almost five per cent," says Stedem. Matthew Muller, CEO of Westpac's Davidson Institute, says energy-efficient equipment can save significant costs over time, but businesses still need to examine closely the effects of such an investment. A break-even analysis can help identify how much sales will need to increase by to cover it, or how long before there's a return on it.

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