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Annual turnover

  • Mandate: 33068
  • Added: 03 May 2019
  • AFS
  • 619

Franchise Cell Phone Business

Gauteng, Johannesburg
Mandate 33068
Added 03 May 2019
R 650,000* ZAR
Stock: R 50,000
Assets: R 105,500
R 32,827 ZAR
Hetta du Preez
Aldes Novare

This franchise cell phone & accessories store is conveniently situated, on the Westrand. This opportunity will be hard to improve on with its Payback Period of only 20 months and an ROI of 60%

R 650,000* ZAR
Stock: R50,000
Assets: R105,500
R 32,827 ZAR

This franchise cell phone & accessories store is conveniently situated, on the Westrand. This opportunity will be hard to improve on with its Payback Period of only 20 months and an ROI of 60%

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Fully describe the business's activities?
The business operates as a Franchised cell phone business and also offer the services of an Internet Cafe & Coffee Shop. It is situated in a strip mall on the west rand next to a major chain store.

How long has the business been established?
Since 2004.

How long has the owner had the business?
The owner started the business 14 years ago.

How does the business operate on a daily basis?
Clients visit the store for the purchase of cell phones and/or accessories. They offer New Contracts and Upgrades on the cell phone network. The business generates income from the sale of airtime; phone sales; cyber cafe; accessories; repairs; upgrades; sim cards and new cell phone contracts.

How are the clients attracted to the business?
The store is well positioned and visible in the same shopping complex for ±14 years.

What Advertising/Marketing is carried out?
Very little advertising is done by the store itself, but the corporate brand spends huge money on advertising.

Does the business have any contract work?
The business has a large number of cell phone contract clients supporting the business.

What competition exists?
In the immediate shopping centre, there is no other competitor and the nearest competing store is some 2,5km away.

What are the seasonal trends?
March to July is average months but the business starts to peak from Aug to Dec. annually.

Is the business VAT Registered?
The business is a registered VAT vendor.

What VAT documentation is on file?
None, the seller will make information available during a due diligence.

Are there up-to-date Management Accounts available?
We have management accounts for the 12 months ending Feb. 2019.

What Balance Sheet and Income Statements are available?
2017 & 2018, but this business is registered in a company which also hosts another business of the Seller, which is not for sale at the moment. Extracts of the financial statements will have to be done by the accountant should it be required. The Franchisor will be able to confirm the turnover and cost of sales.

What percentage of the business is cash/credit?
Cash payments represents 70% of sales and credit cards 30%.

What is the age analysis of the debtors book?

How could the profitability of the business be improved?
Direct marketing to business clients in the area.

Is Seller finance available and for what amount?
None. The seller expects to be paid in full on the effective date.

What is the total staff complement?
3 permanent staff members and 1 casual.

Are they on contract?
The 3 permanent staff members have signed employment contracts.

Do any have management potential?
One of the staff members are with the business for a long time and is considered the "Manager" although he does not necessarily have the title of a manager. The seller spends ±3-4 hours per day at the business and relies on this staff member to take control when he is at his other business. It is highly recommendable and will be a great incentive to consider to appoint this person as the manager of the store.

When does the current lease end?
The 3-year lease commenced on 1 Sept 2017 and expires on 31 August 2020.

Is there an option of renewal & what period?
There is a renewal option in the lease.

What is the annual escalation %?

What are the trading hours?
From 8:30 am to 18:00 6 days a week. Closed on Sundays.

What is the square meters of the business?

Is a copy of the lease available?
We have a copy of the lease on file.

Do you require a licence?
No licence is required, but the purchaser must be approved by the Franchisor.

What lease deposit and/or other surety is required?
To be negotiated but it will at least be a minimum of 1 month.

What are the main assets of the business?
Mainly computers, printers and furniture.

Are any items not included in the sale?
All of the assets as per the Asset List on file is included in the sale.

What is their overall condition?
Very good. The store has been revamped at a cost of R400 000 and is overall in an excellent condition.

How have they been valued ?
The value of the assets are as per the Seller's valuation.

Which assets are on lease/HP and with whom?
Only the credit card machine.

Will Seller settle or Buyer to take over?
Buyer will have to take the contract over or enter into a new one with another service provider.

Are they presently insured?
The business and assets are comprehensively insured.

-Very strong brand franchise cell phone store. -In existence since 2004.

-Little to none advertising. -It is a highly competitive industry.

-Marketing to businesses in the area.

-None specifically identified.

What is the reason for the sale?
Seller has another business and do not have sufficient time to spend in and on this business.

Why is this a good business?
You will have to go far to find a better offer than this franchised cell phone store of a leading brand, well positioned and well priced.

What is the price plus stock and the net profit?
Asking price is R650 000 including stock, which at time of the listing was R50 000+ Net Income before owner's drawings, depreciation and tax are ±R32,827 average p.m. for the period 1 July 2018 to 30 June 2019.

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