Top fast food franchise in busy mall with excellent cash flow
Reference: 24604
Business details
Price:
R1,025,000
Average profit:
R43,036
| Sector: | Food |
| Stock: | R25,000 |
| Price excl. stock: | R1,000,000 |
| Total assets: | R313,500 |
| Monthly turnover: | R243,107 |
Western Cape
Interested in buying this business?
Summary
This well established fast food franchise is located in one of the busiest malls in the greater Cape Town area. It serves over the counter as well as deliveries and still has a lot of room to grow for the hands on owner/operator
1. History Background
Fully describe the business's activities?
Pizza fast food franchise, Retail over counter and deliveries. Franchise Pizza take away located in the Food Court of a very busy Mall in the Helderberg/Winelands area. They take orders via telephone and over the counter and do deliveries. Head office does the research, development and marketing strategies
How long has the business been established?
8 Years
How long has the owner had the business?
13 Months
2. Present Market
How does the business operate on a daily basis?
The business operates during the opening hours of the Mall. There are 2 managers, 1 per shift. In the income statement it is assumed, that the buyer replaces 1 manager
How are the clients attracted to the business?
Local and national marketing. The brand is very well known and is first choice for a lot of employees in the Mall
What Advertising/Marketing is carried out?
National marketing through franchisor. Franchisee does extensive additional marketing (sms, flyers, in-store specials, vouchers system for Mall employees - every 6th meal is free)
What competition exists?
Panarotti's, although they only offer sit down service
What are the seasonal trends?
Higher sales during holiday periods
3. Financial
Is the business VAT Registered?
Pending
What VAT documentation is on file?
Pending
Are there up-to-date Management Accounts available?
Yes
What Balance Sheet and Income Statements are available?
Nothing yet (first financial year ends Feb 2012)
What percentage of the business is cash/credit?
100 % cash and credit card
What is the age analysis of the debtors book?
N/A
How could the profitability of the business be improved?
Better management and controls with owner/operator; push deliveries: this franchise does only 16 % of turnover with deliveries, brand average is 33%
Is Seller finance available and for what amount?
Yes - up to 25 %
What is the payback period?
24 months
What is the ROI?
50%
4. Staffing
What is the total staff complement?
11 permanent staff incl. managers, additional casuals for weekend and deliveries
Give a breakdown of staff/functions/length of service?
2 managers, 2 cashiers, 7 kitchen staff
Do any receive special perks or incentives?
managers get (irregular) incentives
Are they on contract?
Yes
Do any have management potential?
Yes
How involved is the Owner in running the business?
At the moment 3 morning shifts per week. It is proposed that the owner is more hands on and replaces 1 manager
5. Premises
When does the current lease end?
At the moment on a month-by-month basis until the Centre Management decides on the refurbishment
Is there an option of renewal & what period?
N/A
What is the annual escalation %?
N/A
What are the trading hours?
10am - 10pm 7 days a week
What is the square meterage of the business?
60 sqm
Do you require a licence?
No
What lease deposit and/or other surety is required?
3 months rental
6. Assets
Is a full asset list on file?
Yes
Are any items not included in the sale?
No
What is their overall condition?
Good
Do any require repairing?
No
How have they been valued. ?
Fair market value
Which assets are on lease/HP and with whom?
N/A
Are they presently insured?
Yes
7. S.W.O.T. Analysis
Strengths?
Brilliant Franchise in very busy mall. A lot of regular clients, who work in the Mall and get a special.
Weaknesses?
Renovation has to be done in conjunction with the new Mall concept (costs +/- R 150,000). This expense has been considered in the asking price. Owner is only involved part time.
Opportunities?
Push delivery business, offer loyalty card system
Threats?
Outstanding lease agreement
8. Reason For Sale
What is the reason for the sale?
Owner wants to pursue different business opportunities
9. Conclusion
Why is this a good business?
Top brand with very good location in one of the busiest Malls in the greater Cape Town area with loyal customer base and excellent cash flow
What is the price plus stock and the net profit?
R 1,000,000 (incl. R 313,000 assets) + R 25,000 stock; NP 43,000 per month
