Industry changes can bring
succession issues to your door
when you don't expect them.
Like many retail and service
businesses, the travel industry
has been consolidating into
larger corporate groups, which
share back-end operations,
marketing campaigns and
purchasing power. Stand alone,
independent outfits find it hard to
compete against these national or
Six years ago, Mary Shields
worked for an independent travel
agent in Milford on Auckland's
North Shore. While she didn't
own it, Shields was an integral
part of the business. But she
had ambitions. However, when
she was ready to take a step into
business ownership, she faced
two problems. First, in the small
community of Milford, there
wasn't enough room for two travel
agencies. "I didn't want a situation
where I was simply walking out
and taking files clandestinely,"
So instead, Shields took a
deep breath-and bought out the
business that had employed her.
"It meant a clean break. I took
the customers, phone number
and fax with me across the
road. It was ideal-if expensive.
Competition was eliminated, and
there was no bad feeling."
So far so good. But Shields
could also see the larger industry
trend towards consolidation. So
instead of waiting for a group
to put her out of business, she
joined up, with House of Travel,
New Zealand's largest travel
"I'd known [House of Travel
founder] Chris Paulsen from
an earlier job with an airline. I'd
always thought if I did go out on
my own, House of Travel would be
the way to go."
With an existing House of Travel branch already in nearby Takapuna, Shields didn't raise her hopes of becoming a House of Travel franchisee. "But then House of Travel approached me to see if I'd be interested," she says.
House of Travel operates a 50/50 joint venture approach to its franchises. Franchisees like Mary benefit from the enormous buying power and marketing reach that the big brand can play.
Not all franchises are created equal and Shields has advice for any business owner looking to buy into one: "investigate the franchise very carefully. Make sure the model is right long-term and you have trust in that hierachy. A solid line of communication is essential."
"Work blimmin' hard," she adds. "Your franchise brand will carry you to a certain extent, but you do have to market within your own community. People don't shift their brand loyalty very easily, they have to feel very comfortable with the new brand."
It seems to be working for Shields. This year House of Travel Milford's value has increased five-fold since opening.