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Who Is Rod Young Executive Chairman Of Cartridge World?
Up close and personal with Rod YoungBy LIZ LEE
Cartridge World executive chairman Rod Young thinks there is much room for growth in the ink and toner refill retail business in particular in emerging economies where the cost of doing business has gone up.
“I DON’T know if you realise but the cartridge you have has ink in it that is more expensive than Chanel No. 5,” the executive chairman and global chief executive of Cartridge World Inc says of the value of the printing product that is so ubiquituous in white collar workspaces.
Rod Young, heading the leading ink and toner refill retailer, thinks there is much room for growth in this business, in particular in emerging economies where the cost of doing business has gone up.
Cartridge World is divided into two main divisions opening retail locations for refilling and collection of old cartridges as well as passive retailing which involves advising businesses on how they could save on printing costs.
“We have helped companies save between 30% and 40% printing cost by appropriate choice of printer and cartridges,” Young says.
He admits that 80% of the market in Malaysia uses original equipment manufacturing, which means they do not refill their cartridges but buy new ink cartridges. But he is not perturbed by the numbers.
Although Cartridge World’s market share in Malaysia is only a fraction of 1%, he notes that there is growth potential.
The company has opened eight stores since 2006 with a target to open another 15 stores by the end of this year and 32 stores within the next three to four years, concentrated in the Klang Valley.
“In the United States, we represent 25% of the market of refilling stores and still have the opportunity to grow five times there,” he adds, hoping to have 2,500 stores by 2018.
Cartridge World has not been without its challenges in the competitive technological era. In order to encourage customers to buy new ink cartridges to replace used ones, instead of refilling them, many printer brands have developed chips to link cartridges online to keep tabs on how ink is being used.
In response to that, Cartridge World found a way around it, protecting its business and enabling customers to continue refilling ink instead of buying new cartridges all the time.
“Technology is always changing and the chips were designed specifically to prevents ink refilling at Cartridge World,” Young says of the original equipment manufacturers strategy, “But we’ve developed new chipping technology and remanufactured the cartridges.”
Using the good mode
Young, who was in town for the Asean Franchise Expo & Symposium, says that unlike many franchise brands which expanded when there was no effective operational model in place, Cartridge World has proven its model to work.
“We see franchise in Cartridge World as a human resource strategy, it’s about finding quality people who are going to be ambassadors of our brand,” he says, emphasising the importance of getting those who can do a better job than the paid managers.
“We don’t want people to buy themselves a job, these are serious operations,” he says, “We are looking for motivated operators who see the opportunity this business brings to them and want to build an asset for the future or their families. It’s not our job to make them successful.”
Young adds that the expectations of a franchise operator is to achieve a return on its investments within two to three years. For the RM125,000 franchising fee for an operator to start a Cartridge World business, Young says the business should bring in RM45,000 earnings in the first year and RM75,000 the following year.
“It’s not a fast start-up business,” he admits, adding that with the current low market share he believes there is a considerable upside as the franchise gains traction locally.
“It’s been fairly modest growth in the early years in Malaysia as we have been establishing the business, changing the technology, sourcing the products and servicing the market. Now that we’ve proven that the business model is working we’re expanding to that targeted 32 stores,” he adds.
Aside from expanding in Malaysia, Cartridge World is also looking to tap into other Asian markets like Thailand, Vietnam and South Korea.
“The franchise business is very strong because it reduces the risk of going into a business. In the every society across the world I’ve worked in, people want to put a roof over their heads, food on the table and provide education for their children which sometimes employment cannot provide,” he says.
Young believes that there is a strong entrepreneurial demand across the globe as it has been proven that franchising is three to five times more successful than if a person went into business on their own.
He thinks there will be more and more growth in franchising as people are more sophisticated about consumerism and brands, referring to brands for assurance. “The biggest brands in the world are built through franchising.”
“We find that independent operators are having greater difficult to build brand with the complexity of business and media,” he points out, “While branded franchise networks are attracting more potential entrepreneurs.”
To highlight this point, he notes that there have been record numbers of delegates and participants at franchise conferences recently.
A twist in fate
Young’s journey into franchising started with a fortunate turn of plans when he decided to leave his job security in favour of a tried-and-tested business.
Looking at only his academic background, none would have guessed he would be an entrepreneur for life. In his early adult life, he already graduated with an electronics engineering degree, specialising in X-ray nuclear medicine and ultrasound, and earned a radio isotope handler’s licence.
“My father ran taxis so at one stage I owned a taxi as well, I had a taxi licence and that taught me a lot about people, let me tell you,” he shares.
When asked whether he ever saw himself an businessman growing up, he jokes: “I still don’t know what I want to do when I grow up.”
“How I got into franchising was when I was looking to earn more income and took a part-time in the franchise of a sports equipment business,” he said of his venture when he was 21.
Soon, he was earning more as a part-timer than he did full time. “I ended up quitting my job at Philips-Siemens in Sydney and starting this business. My parents were horrified that I was forgoing a good job and my bachelor’s degree.”
Starting with zero knowledge about franchises, the engineer instincts in him told him to follow the business formula to get an expected result.
He followed and ended up owning the business in Sydney, Canberra and Tasmania before the company offered him the opportunity in the late 70’s to sell his operations and go to America and help them run part of their operations there.
Young then formed a joint venture to bring the business into the United Kingdom market.
“That gave me my firs exposure to how market react across those markets and there is a lot of similarities,” he says.
He came back to Australia in 1993, venturing to Melbourne where he grew a heat and smoke detector business and eventually sold it.
Young also started a franchising consultancy which he sold in 2000. “I never thought I’d sell the business but I was given a offer I couldn’t refuse,” he chuckles, “Then I played some golf and went to the Olympics.”
Thereafter, people started approaching him for advice on franchising and that was how Young became a franchise business consultant.
In the late 90’s, Young assisted the Malaysian Prime Minister’s office to establish the franchise development department. He chaired the first franchising conference in Malaysia.
Incidentally, his wife is also Malaysian, of Polish Australian-French parentage, whom he met in Singapore while negotiating to win back the rights to an Australian jewellery business’ Asian portfolio.
“She cooks a lot of Malaysian food – all of the curries, and she’s a wonderful Malay and Indian chef,” he reveals.
Franchise businesses have now become part and parcel of the Young family, with his son being involved in franchise selection in Australia and his brother in another franchise.
“When my brother was made redundant, I asked him to join a franchise,” Young says, “He was in the railways and ended up being an ice cream franchisee and is very well at it.”
Young currently runs a business and legal consultancy called DC Strategy in Australia, advising companies globally.
Supportive of his expertise in franchising, he is endorsed by the Franchise Council of Australia to deliver education modules in the University of New South Wales Accredited Franchise Executive Program and is a visiting professor at Beijing Normal University, China.
He is also the board member of the Indian Franchise Association, and develops content and presents parts of the US International Franchise Association Certified Franchise Executive Program in the United States.
Factfile
BORN: Oct 4, 1949 in Sydney
PERSONAL: Married with three children
HIGHEST QUALIFICATION: B.Eng in electronic engineering
CAREER: Global CEO of Cartridge World; franchising expert
FAVOURITE FOOD: His wife’s beef rendang
FAVOURITE PLACE: My beach house in Macmasters Beach, North Sydney. I’m neighbours with Russell Crowe.
VALUES: There are four things I try to do: Finish what I started, turn up on time, say please and thank you, do what I said I would do.
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