COMPANY OVERVIEW

Harvey Norman Holdings Limited is a public company that is listed on the Australian Securities Exchange Limited (“ASX”), whose principal activities primarily consist of an integrated retail, franchise, property and digital enterprise.

Australian Franchise System

Harvey Norman® operates under a franchise system in Australia and consistently delivers an unparalleled retail offering to Australian consumers with an extensive product range, cutting-edge technology and market leadership in key product categories.  Harvey Norman Holdings Limited grants franchises to independent proprietors under three leading brand names: Harvey Norman®, Domayne® and Joyce Mayne®.  The proprietors sell products in the following categories: electrical goods, furniture, computerised communications, bedding and manchester, kitchen appliances, small appliances, bathroom and tiles, carpets and flooring.

Harvey Norman:

The Harvey Norman® brand name is a retail icon throughout Australia with 57 franchised complexes in New South Wales, 1 in the Australian Capital Territory, 37 in Queensland, 38 in Victoria, 17 in Western Australia, 10 in South Australia, 6 in Tasmania and 2 in the Northern Territory.  Brands sold across the 168 Harvey Norman® franchised complexes throughout Australia are market leaders in the core audio visual and technology segment.

Domayne:

The Domayne® brand name was launched in May 1999 and currently has 12 franchised complexes in New South Wales, 1 in the Australian Capital Territory, 3 in Queensland and 2 in Victoria.  Domayne® franchised complexes offer a contemporary range of furniture, bedding, computer and electrical products.

Joyce Mayne:

The Joyce Mayne® brand name was acquired in July 1998 with 7 stores of which 6 were converted to Domayne® franchised complexes in May 1999.  As at 30 June 2016, there were 6 Joyce Mayne franchised complexes, 2 in New South Wales and 4 in Queensland.

The Culture of the Franchise System:

The culture of Harvey Norman® is multi-faceted and difficult to define because of the nature of the franchise system.  Often a company will take in facets of the personality at the top. The founders of the company, Gerry Harvey and Ian Norman (who sadly passed away on 29 May, 2014), are entrepreneurs and that spirit is embedded in the proprietors.  However, that is where the likeness ends because if you were to go from franchise to franchise, you would find a different style of management with each proprietor and, therefore, a slight difference in culture.

As most of the proprietors live close to their franchised complexes, they tend to develop close ties to their local community.  Many proprietors have children in the local schools, as well as family living close by.  The very nature of the franchise system means a portion of the proprietor’s earnings and turnover is spent in the local community.  An example of this is when a customer purchases an air-conditioner.  The unit is delivered from the franchised complex to the customer, in most cases by a local transport company, and is installed by a community-based installer.  The proprietors support their local sporting clubs, schools and charities and they work closely with the local media and businesses.