Fully describe the business's activities?
This beauty salon offers services such as gel and acrylic nails, nail art, pedicures, waxes, facials, lashes extentions and tinting and massages. They make use of four of the most popular and quality products.
How long has the business been established?
The franchise group was started in 2003. This store opened in 2008.
How long has the owner had the business?
The owner started the business 11 years ago.
How does the business operate on a daily basis?
Regular and new clients book appointments for beauty treatments. The salon also sells gift cards.
How are the clients attracted to the business?
The franchisor advertise. This is a well known brand and it is situated in a very good spot in a popular shopping mall.
What Advertising/Marketing is carried out?
The franchisor does the marketing.
Does the business have any contract work?
The salon sells gift cards and offers loyalty points.
What competition exists?
There are many beauty salons in the area. This is a well known brand which ensures regular clients. The salon had 6,234 existing clients and 839 walk in client for the year ending December 2018.
What are the seasonal trends?
December months are busier and the winter months are slower.
Is the business VAT Registered?
The business is not yet VAT registered. We have excluded VAT from the figures as a new owner will register for VAT.
What VAT documentation is on file?
Are there up-to-date Management Accounts available?
Monthly figures are available.
What Balance Sheet and Income Statements are available?
AFS for the year ending December 2018 are on file. We have the management figures from January 2019 to June 2019 on file.
How could the profitability of the business be improved?
Employ more therapists.
What is the total staff complement?
The total staff compliment is 8.
Give a breakdown of staff/ functions/ length of service?
1 receptionist 2 beauty therapists 4 nail technicians 2 cleaners (1 work Monday to Thursday and 1 Friday to Sunday) There is a manager which will open and close and very familiar with the business.
Do any receive special perks or incentives?
Basic salary and 10% of the sales and services.
Are they on contract?
The staff has signed employment contracts.
Do any have management potential?
The owner is considering a manager who worked at the business before and would like to come back. This manager will open and close and knows the operations of the business well.
How involved is the Owner in running the business?
The owner is involved daily and sees to the ordering of stock and financial matters.
When does the current lease end?
The current lease ends in November 2021.
Is there an option of renewal & what period?
3 year lease with an option to renew.
What is the annual escalation %?
What are the trading hours?
Monday to Friday 9am to 6pm, Saturdays 9amm to 5pm and Sundays and Public holidays from 9am to 3pm.
What is the square meters of the business?
Who is the Owner/Landlord?
Will be made available to a serious buyer.
Is a copy of the lease available?
A copy of the lease will be made available during due diligence.
Do you require a licence?
Enter into a new franchise agreement, or de-franchise.
What lease deposit and/or other surety is required?
R102,500 rental deposit for the Landlord.
What are the main assets of the business?
Salon equipment as per the asset list.
Are any items not included in the sale?
All assets as seen on the asset list are included.
What is their overall condition?
The assets are in good condition.
Do any require repairing?
The owner see to maintenance when required.
How have they been valued ?
Which assets are on lease/HP and with whom?
All assets are unencumbered. The seller will settle all outstanding debt on the effective date.
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Are copies of agreements available?
Are they presently insured?
The business and its assets are comprehensively insured.
Well known brand Established for 11 years Regular and walk-in clients Situated at a busy entrance with major tenant in a popular mall Award winning franchise
No real weaknesses apart from a slight drop in turnover during winter.
Employ more therapists. There is space for 3 more nail technicians The franchisor has done a deal with Edgars group cub cards allowing customers to pay for treatments and products with their card. This card is backed by ABSA Bank and any deals during the month get paid by the 6th of the following month. This will ensure an increase in sales and ticket value, especially for the products.
No real threats are identified, although the economy is tight the sales remained stable.
What is the reason for the sale?
The owner is packed up and ready to move to the UK.
Why is this a good business?
Well established business. The store has won many award as top franchise in the group in the Gauteng area. A new owner will have the choice to de-franchise and save on monthly royalties of R12,000 per month.
What is the price plus stock and the profit?
The selling price is R1,400,000 plus stock at R50,000. The average net profit is R60,000.
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