Fully describe the business's activities?
Franchised Vehicle Service Centre in Durban CBD, that is manager run & has operated for 5 years. It offers vehicle maintenance & service (including diagnostics) through its manager & 3 technicians, as well as, head office assistance if required.
How long has the business been established?
5 years, although the Franchise has been in operation for 18 years
How long has the owner had the business?
The Franchisor has owned this Franchise Centre from inception & it is now being offered to the market - as he only sells branches that he has proven success with & that an "owner" can then grow (noting that hands on ownership will definitely bring better results - than him managing 8 branches)
How does the business operate on a daily basis?
Call- / walk-ins, have their vehicles analysed, problems diagnosed, quotes submitted, & then corrective work commenced. The manager/assistant order stock as required for each job, although common spares are kept on hand. Work is normally paid for in cash or Cr Card.
How are the clients attracted to the business?
Past service; referrals; prominent building position, branding & signage; flyer distribution; the Franchisors website marketing; & business development with referring Co's; all ensure a steady stream of local business.
Does the business have any contract work?
No - but having registered with Insurance Co's & Fleet Maintenance Co's, brings in about 10% of turnover - with their payments being 14 days from Invoice
What competition exists?
Numerous competitors exist but with this Franchise focusing on vehicles that are out of service plans, their Franchise Brand & Reputation assists in being one-up on those vehicle centres that are not aligned to the vehicle brands.
What are the seasonal trends?
Sept/Oct/Nov are normally the busiest, while Dec/Jan/Apr tend to be the quietest
Is the business VAT Registered?
The Franchisor & its branches which are under one CC are VAT registered, so this branch/Franchice Centre with a turnover of over R2m pa would be bought as a going-concern out of the CC and into a the Purchasers new Co (which would register for VAT).
What VAT documentation is on file?
All VAT documents are on file
Are there up-to-date Management Accounts available?
Since the AFS include the Franchisor & its branches which are under one CC, Management Accounts, supported by Bank/Invoice/Pastel computer reports will prove the turnover of R2m pa & Net Profit of R144 000pa (inclusive of the managers salary - which could go to the new owner). This Report has the annual figures averaged throughout the year, but MA's will show monthly variations.
What is the total staff complement?
6 staff all fully employed (between 6 months to 5 yrs): Manager , assistant (invoices/ spares etc), 3 technicians/mechanics (A+ & 2 x RSA repair shop assistants ) & cleaning lady. Head Office would take any staff not required by the new owner - eg manager as the new owner will manage the business himself.
How involved is the Owner in running the business?
The present owner (the Franchisor) only overseas operations from Head Office (including financial aspects), while the in-branch manager manages the centre.
When does the current lease end?
The current lease ends in April 2018, for the 321m2 @ R24 464 pm, with an 8% escalation clause & renewal options available. Note that the above rental differs slightly from the financial portion of this Report as the later is averaged over a year, which includes some of the pre-escalation (8%) rate. Excellent positioned & branded building on a main thoroughfare, yet on the edge of the Durban CBD for easy access.
What are the trading hours?
M-F 7H30 - 17H30 SAT 8H00 -13H00
What are the main assets of the business?
Various jacks, diagnostics, benches, tools, reception furniture & computer - all are valued at a second hand sale price of some R200 000 (noting that they enable a annual turnover of some R2m ++ pa easily, are in good condition & fully paid-up).
A Franchised Centre that has 5 years of trading/market establishment/brand building/business development/word of mouth & referrals under the belt. This ensures that the hard work is complete & growth pushed by an " owner", with Franchisor support, will lead to increased profits.
Only that presently it doesnt have a hands-on owner apart from the Franchisor who sits at Head Office - so better performance & increased profits with a hands-on-owner are a certainty
Better controls, client / partner relationships, & profits, through an on-site-owner, while the new owner can also push business development with surrounding businesses on a face-to-face basis (which doesnt occur)
That other franchised vehicle centres (rather than independents) establish in the area, which probably is unlikely due to THIS businesses 5yr lead in this area.
What is the reason for the sale?
The Franchisor has owned this Franchise Centre from inception is now offering it to the market - as he only sells branches that he has proven success with !
Why is this a good business?
Good Sale Price vs Net Profit, considering it is a Franchise that has 5 years of trading/market establishment/brand building/business development/word of mouth & referrals under the belt, & is manager run (keep the manager or increase your profits if you manage it !).
What is the price plus stock and the net profit?
Excellent Franchise Sale Price of R320 000, excl stock which should be in the region of R10 000 (while the rest is ordered as & when required), against a proven Net Profit of R144 000pa (inclusive of the managers salary - which could go to the new owner).
Annual Turnover Amount between R 500 thousand and R 6 million