Fully describe the business's activities?
This business comprises of a Supermarket with a Tops liquor store.
How long has the business been established?
Well established business.
How long has the owner had the business?
For how long has this business been part of the current franchise?
The business has been part of the Spar team for many years and they are very pleased to be associated with the brand.
How does the business operate on a daily basis?
This is an Owner managed business.
How are the clients attracted to the business?
The Location of this business. A sought after and valued brand. Service Levels. Range offering in line with LSM requirements. Well Established. Well known in Community as a Destination Store.
What Advertising/Marketing is carried out?
A comprehensive advertising and marketing plan is in place and adhered to.
What competition exists?
Most of the major players have representation in town.
What are the seasonal trends?
Sales are generally consistent with an Easter and December high, but no substantial seasonality impact. Winter is always slightly more quiet than the summer months.
What community involvement does this business have?
This business plays an active role within the community and through the involvement with schools, community projects etc.
Is the business VAT Registered?
What VAT documentation is on file?
All required documentation is available for the Due Diligence.
Are there up-to-date Management Accounts available?
What Balance Sheet and Income Statements are available?
Latest up to date.
How could the profitability of the business be improved?
The introduction of new concepts will impact on profitability. The profitability of the business is within the budget. There is an opportunity for the Buyer to acquire additional Tops outlets within their entity.
What is the total staff complement?
Approx 60 permanent staff.
Give a breakdown of staff/ functions/ length of service?
The full management reporting structure will be supplied when required.
Do any receive special perks or incentives?
Staff receive a year end bonus. All are given uniforms. Staff receive a one month credit facility for personal purchases.
Are they on contract?
All staff have contracts and are permanent employees. Not all are full time employees.
Do any have management potential?
A structure is in place, comprising Managers and Supervisors etc. There are staff who display promotional ability.
How involved is the Owner in running the business?
The Owners operate the store on a daily basis.
When does the current lease end?
The current lease is 5 years and is renewable.
What is the annual escalation %?
8% linked to the inflation rate.
What are the trading hours?
In line with all major supermarket trading hours.
What is the square meters of the business?
Total business is approximately 2,000 square meters.
Is a copy of the lease available?
Do you require a licence?
All required licenses are in place. The liquor license will be transferred to the new Owner.
What lease deposit and/or other surety is required?
1 Months rental deposit and 1 Months rent in advance as per the lease.
What are the main assets of the business?
Refrigeration, Fixtures and Fittings, Machinery etc.
Are any items not included in the sale?
There are consignment fridges in place within the Supermarket and within Tops.
What is their overall condition?
Since a revamp was completed a while back all assets are in good working order.
Do any require repairing?
General maintenance is ongoing and no repairs are required to any of the equipment.
How have they been valued ?
Owners second hand value.
Which assets are on lease/HP and with whom?
Only the checkouts with the software are on lease.
Will Seller settle or Buyer to take over?
The Buyer will need to take over the lease on the checkouts and the software as part of the business operation.
Are copies of agreements available?
Yes, all related documentation is up to date and available.
Are they presently insured?
All assets and equipment on lease are insured.
This is a well established business and ideally located for the community that it serves. Attractive pricing together with the correct product ranging ensure a strong value offering for the customers. A strong cash business with KVI's being well merchandised and well priced. Store sales are not affected by competitors "deep-cut" specials or promotions. Management reports prove the financial health of the business.
As with all successful businesses of this size and nature, ongoing staff training is necessary. There is always a likelihood of increased competition within the town.
An opportunity to increase the trading hours. There are regular promotional opportunities that generate incremental sales. Introduction of new concepts.
With well executed management principals in place there are no obvious threats that exist.
What is the reason for the sale?
After many years spend successfully in this business the Owner feels that it is time to explore other opportunities.
Why is this a good business?
This business is well established and in touch with their customers needs. The staff are all long serving and well trained being from the community that form the customer base. With a new operator, this business may well show incremental profitability. The liquor store too has a very loyal following with highly motivated and well trained staff. The Brand Owners permit the Operator to buy out other liquor outlets and re-brand them.
What is the price plus stock and the net profit?
The business is priced at R19,000,000. Stock varies around the R4.8 M mark. Annual profit is in the region of R4.6 Million before Owners Drawings, interest or tax. A minimal joining fee is payable to SPAR.
Notes to the potential Buyer
As this store is part of a large and leading brand, the Buyer will need to be qualified and approved by the Brand holders Head Office. This will necessitate a one on one meeting with the Head Office management team. There are certain stipulations by Spar that need to be addressed such as a notary bond being issued. Joining Fees. Compulsory training for new Owners. The financial accounting for an initial period needs to be completed by a Spar appointed accounting practice. There are general Rules and Regulations associated with the brand. Prior to the commencement of the Due Diligence process, or the release of confidential information, the potential Buyer will need to present Proof of Funds to the Seller and to Spar Head Office.
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