Aldes Business Brokers

Summary

Leading the way into the future, this well established franchise group is on the verge of massive expansion and growth throughout S.A. As from November all new buildings in South Africa will be green buildings, as new energy efficiency building regulations come into effect. Having been established since 2005 and currently with 30 established Franchises, they are at the forefront of their industry. New Franchisees required across South Africa.

1. History Background

What is the Franchise opportunity about?

This Franchise was launched in response to a need for a focused and professional Solar Geyser and Heat Pump consultancy specialising in developing solutions in both the public and private sector. Developed in 2005, our national franchise division has grown to 30 owner-managed offices and currently enjoys a 33% market share. This franchise introduces consultation and installation of water heating systems and Heat Pumps to both the Public and Private Sector. These solutions vary from client to client dependant on individual needs.

How long has the Franchise group been establised for?

Established since 2005

How many existing franchisees are there in the group and for how long have they been operating?

There are currently 30 existing franchisees in South Africa.

In which provinces/ areas are the existing franchisees located in?

Existing Franchises are located in, the Western Cape, Gauteng, North Coast, Garden Route and other areas.

2. Present Market

How are the clients attracted to the business?

Some of the reason that clients are attracted to this Franchise are as follows :- Chosen to Represent home owners insurance for Geyser Failure (Absa, Nedbank and Santam) First Carbon Neutral solar water heating company in SA Largest Owner managed network in Africa 6800 successful residential Installations since 2006

What Advertising/Marketing is carried out?

This groups brand development includes an ever increasing web based referral system whereby potential clients will be encouraged to request a quote from you directly based on the location of the enquiry. Once a competent national network is established an aggressive national multimedia campaign will commence educating the public to the advantages of the groups Solar Solution.

11. Franchise Agreement Terms and Financials

How are Projected turnovers and profits calculated?

The projection on this mandate has been based on installing 15 units per month with 1 team operating. Other projections are available on the Disclosure Document.

What is the Franchise joining Fee?

Joining fee is R57 500 excluding VAT.

What is the monthly royalty, management and marketing fees? Are these fees based on turnover or a flat rate?

There is a fixed monthly Brand Management Fee of R3 300 (linked annually to a 10% increase) for the on-going business support. Brand management fee shall commence 30 days after signature of contract.

What extra marketing and advertising should a franchise budget for?

Franchisees should also set aside a marketing budget to advertise within their franchise area.

12. Asset and Stock Purchases

What assets are included in the purchase price?

Upon purchasing a franchise you will receive the following :- Operations and procedures manual. Eskom DSM registration. Franchise Territory License. Corporate Identity. Rights to the Franchise Brand Mechanism. Franchise installers Licence and Certification. Company Email Address.

Is stock supplied with the initial franchise setup (if applicable?)

No stock is included in the initial franchise setup.

Will stock purchases be solely from franchisor in the future or can the franchisee pruchase from other suppliers?

Stock purchases are solely to be purchased from the Franchisor.

13. Management Services, Staff and Training

How many staff members are required to successfully operate the franchise?

3-5 staff members will be required. 1x Strong Admin; 1x Sales manager; 1x Technical manager, 2 installation technicians (1 Plumber and 1 Electrician). Franchisee owns and manages.

What training is provided for new franchisees and staff members? Is there a cost associated with this?

Included in the initial fee and prior to commencing operation, initial training will be given by Head Office. Technical, Business and Marketing training will be updated on a regular basis enabling all concerned to keep abreast with current market trends. Head Office will also ensure that all partners are capable to carry out their business operations with adequate knowledge and develop their business from a marketing and administrative viewpoint.

Where will training take place and for how long?

Training will take at Head Office premises in the Western Cape and will last for 4 days.

What support and backup is offerred to the franchisee?

Full backup and support is offered by the experienced Head Office team.

Does the franchise have to be owner operated?

Yes, franchise to be owner operated.

14. Leases and Number of Franchises per Province

What premises are requires to operate the franchise?

Due to the nature of this business, a successful Franchise partner will be required (within 12 months) to have a business/Retail premise; 100m and thus we do not recommend you operate this business from a home office. The Franchisee will also require the following :- SOR (Simple Office Retail). Dedicated Business Fax And Telephone Line. Answering Machine. Suitable Branded Vehicle (Hyundai H100 or similar). Broad Band Internet Access (Hi Speed). Franchise Experience Centre (recommended).

15. Requirements to Purchase a Franchise

What skills and background is the franchisor looking for in a prospective franchisee?

Concern for the Environment Positive Mental Attitude Technical Aptitude Confident and Independent A Strong Understanding of Sales and Marketing Entrepreneurial Nature Emotionally Intelligent and Motivated A Strong Team Player Express an Owner/ Operator Mentality Unencumbered Capital

Is there any industry regulations or licenses needed to operate the franchise?

Yes, the Franchisor will take care of that from the initial fee paid.

16. S.W.O.T Analysis of the Franchise Group

Strengths?

Well established group with 30 existing franchisees across South Africa. Local manufacturing. First Carbon Neutral solar water heating company in SA. Largest Owner managed network in Africa. Industry rebates and discounts. Have been awarded the insurance industries work to replace all failed electric geysers with solar for ABSA, NEDBANK and SANTAM?.this is a great contract and will ensure new franchisees have a base of work outside of their own sales and marketing resource.

Weaknesses?

No weaknesses have been identified, as long as potential Franchisees follow the guidelines and procedures that have been set in place there will be no room for weakness.

Opportunities?

From November, all new buildings in South Africa will be green buildings, as new energy efficiency building regulations come in to effect. The regulations will apply to all buildings in which people either live or work, including social housing, office buildings, schools and hospitals. The standards will include the installation of solar water heaters, insulation to minimise heating in winter and cooling in summer, energy-efficient heating, fitted air conditioning and mechanical ventilation systems.

Threats?

The possibility of relevant competition emerging in the market place is very limited at present. In the event of future local involvement, this group does not see any problems since the available market is so large that any competition would merely stimulate the demand for their services. This would pre-empt coexistence within the industry in order to uphold and maintain the highest possible standard.

17. Purchase Price of the Franchise

What is the full purchase price of the franchise (incl VAT)?

R57, 500.00 ex Vat. (Fifty seven thousand, five hundred Rand) subject to increase each quarter. Upon completion of due diligence from both parties, the investor will be required to pay the Franchisor a deposit of 10%, to secure the territory license after which the Welcome Pack will be emailed to you for your perusal. The balance will be required by Head Office 15 working days prior to commencement of the induction training

Does the franchisor offer finance?

No Finance is offered by the Franchisor.

How many months working capital will the franchisee require?

Between 3 to 6 months will be required.

When will a franchisee be able to start drawing profits from the franchise?

Between 3 to 6 months, depending on availability.

How much unencumbered cash is needed from prospective franchisee?

Full purchase price is required as well as sufficient working capital.