Fully describe the business's activities?
A family restaurant serving a range of convenience meals located in a busy mall on the lower South Coast. The franchise rights and liquor license are held in the name of a private company.
How long has the business been established?
The business was established in 2002 but has been in its current location since 2010
How long has the owner had the business?
The owner has operated the business since 2010
How does the business operate on a daily basis?
Being part of a national franchise the menu is fixed. Menu items are prepared on site by grillers or softserve personnel and served by waiters. The business has three separate seating areas: a smoking area of 23msq. metres, a children's play area of 70 sq. metres, a balustrade of 12 sq. metres and the remaning 90 sq. metres is seating for non smoking customers.
How are the clients attracted to the business?
The business is located in a high traffic area in a busy mall. The mall itself is located in a thriving new business node in a major town on the KZN South Coast. In addition, the franchise advertises extensively in local and national media.
What Advertising/Marketing is carried out?
National and local media campaigns are conducted for which the franchisee is charged a 7% royalty and a 5% marketing fee, based on sales revenue.
Does the business have any contract work?
What competition exists?
There are a number of eating options available in the mall. However, the business is uniquely positioned to attract a broad audience through its media message, menu options and the look and feel of its decor.
What are the seasonal trends?
Seasonal peaks are periods coinciding with the Easter and Christmas holidays
Is the business VAT Registered?
The business is VAT registered. The VAT number is 4070263035
What VAT documentation is on file?
All necessary VAT documentation is on file and will be made available to a qualified buyer
Are there up-to-date Management Accounts available?
Management accounts are available to a qualified buyer
What Balance Sheet and Income Statements are available?
The Balance Sheet and Income Statement will be made available to a qualified buyer
What percentage of the business is cash/credit?
What is the age analysis of the debtors book?
How could the profitability of the business be improved?
Implementation of a delivery service will increase revenue as customers appreciate the convenience Brand activations at schools utilising currently available promotional tools Increased advertising spend
Is Seller finance available and for what amount?
What is the payback period?
What is the ROI?
Who is the bookkeeper/Accountant?
Rianet Matison of RM Accountants email: email@example.com Phone: 0399732440
What is the total staff complement?
The total staff complement is 30 contract personnel and approximately 10 casuals employed over busy periods
Give a breakdown of staff/ functions/ length of service?
12 kitchen staff dedicated to hot or soft serve food preparation; 2 managers; 3 scullery workers; 13 front office personnel such as waiters, cashiers and runners
Do any receive special perks or incentives?
The average rate is R18.25 per hour paid monthly. Staff get at least one day off per week and get accumulated leave. Managers are also paid monthly but at different rates. Managers receive 18 days leave per annum.
Are they on contract?
All personnel are on contracts
Do any have management potential?
1 waiter has management potential
How involved is the Owner in running the business?
The owner visits the business between 2 and 4 times per week. He spends between 4 and 10 hours per visit at the store
When does the current lease end?
The current lease expires in 2022
Is there an option of renewal & what period?
There is an option to renew for 5 years
What is the annual escalation %?
The annual escalation is 8%
What are the trading hours?
In the regular season the trading hours are 7.30 am to 5.30 pm. In peak season the hours are 7.30 am to 7.00 pm On Sundays off peak the hours are 7.30 to 4.00pm
What is the square meters of the business?
The area under lease is 210 sq. metres of which 23 sq. metres is a smoking area, 70 sq. metres is a play area and the remainder is seating for regular customers. In addition there is an area demarcated outside the balustrade of 12 sq. metres which is also used for seating. Note that a 2500 water tank is installed in the restaurant to cover emergency water shortages There is also a staff toilet in the restaurant enhancing productivity The mall has a generator able to maintain full power throughout the mall when required A misting system has been installed to ensure customer comfort on hot or humid days
Who is the Owner/Landlord?
Is a copy of the lease available?
A copy of the lease will be made available to a qualified buyer
Do you require a licence?
A business license is required and must be renewed each year at the UGU municipality; The liquor license is in the name of the holding company to facilitate easier transfer
What lease deposit and/or other surety is required?
A rental deposit of R 220 000 is required
What are the main assets of the business?
The restaurant was revamped 2 years ago at a cost in excess of R1 million. The main asset of the business is the franchise brand name and the high traffic location. An asset register detailing all assets of the business will be made available to an approved buyer
Are any items not included in the sale?
1 workstation 1 ice machine 1 chest freezer
What is their overall condition?
All equipment is in sound working order and is regularly serviced. The extractors are regularly serviced as required by the landlord. As noted, the front of house has been refurbished two years ago and is in excellent condition.
Do any require repairing?
How have they been valued ?
Owners best estimate Ice machine R50 000 POS and work station R150 000
Which assets are on lease/HP and with whom?
No assets are on HP
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
1) Awareness and positive perception of brand franchise 2) High traffic location 3) Essential infrastructure - water tank in store, generator in mall 4) Mall location in fast developing business node 5) Business is held in a private company. Transfer of shares will include liquor license so any concern over liquor license renewal is eliminated 6) Established line of credit with franchisor results in favourable terms on ingredient purchases (30 days versus 7 days)
1) Typical seasonality of the South Coast - heavy dependence on Easter and Christmas holiday period 2) Rental quantum is significant
Implementation of a delivery system will broaden appeal and increase volumes and profitability Activations with schools and other institutions comprising the target market Increased local advertising campaigns
Appeal of other restaurants
What is the reason for the sale?
The owner owns another restaurant in the same franchise group which is located in his home town. Overseeing the operation of the restaurant described above and the travel time involved is taking away time he wishes to spend with his family.
Why is this a good business?
Proven franchise system with excellent record of restaurant traffic generation High awareness and appeal of the brand name Excellent high traffic location Purchase of holding company eliminates risk of liquor license not being renewed
What is the price plus stock and the net profit?
R 3 316 000
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