Aldes Business Brokers

Summary

The first franchise was opened in Gauteng in 1982. This particular franchise was opened 18 months ago and has already become a" house hold" name.They are famous for their ribs, burgers,salads, serving lunch and fast food dinners to clients living a fast paced life!!!

1. History Background

Fully describe the business's activities?

Delicious food, large portions, personal service and affordable prices are synonymous with this business and have been the success behind the concept. Their CUSTOMER IS KING" is their motto and all staff are trained to regard the customer as "KING", for without customers there would be no business. Friendliness, personal service and spending an extra minute to advise the customers on the extensive menu must be adhered to by all staff dealing with customers.Joining Fee of R30 000 including Vat. Franchise Monthly Royalty Flat Fee of R3000pm.

How long has the business been established?

The first franchise was opened in Gauteng in 1982. This particular franchise was opened 18 months ago and has already become a" house hold" name.

How long has the owner had the business?

The current owner is operational for the past 18 months.Advertising is left up to the business owner as each store has unique clientele with unique marketing requirements.

2. Present Market

What type of clientele is attracted to the business?

The target market is : The younger generation, school children, teens & people on the "go". Ratio of clientele regularly visiting the premises: 60% white and 40% ethnic clientele. Clientele is attracted to this business through advertising , portion size & low prices.

What makes this business unique?

This is the ONLY take away within a 5km radius.Many other smaller businesses are situated around this take away allowing people to purchase commodity items such as water , pharmaceuticals , groceries, alcohol ,laundry etc. on a regular basis.Hosting a variety of fast food products at economical prices.

How does the business operate on a daily basis?

They are famous for their ribs, burgers, serving lunch and fast food dinners on a daily basis to the local residence as well as from other suburbs within range.

What Advertising/Marketing is carried out?

The franchisor does not provide for NOR requests a fee for any advertising. Advertising initiatives are encouraged and have in the past taken on the form of flyers, newspaper and radio advertisements. But for this particular store the "knock & Drop" advertising is the most popular and most effective.

Does the business have any contract work?

Yes.They have a contract with an "opencast mine company " to deliver meals to the overtime workers.

What competition exists?

Competition is always great for business & keeps service standards high and prices affordable ,HOWEVER there is no Direct competition for this business in the area! Clients get tired of the same old food and look forward to something different and nice surprises.This "take away" outlet caters for the health conscious individual watching their calorie intake!!!

What are the seasonal trends?

On average, this specific shop operates on a food cost of approximately 55%.These figures may vary somewhat according to factors such as operational control, staff costs, rental, etc. But as for seasonal trends this business is busy over the weekends whilst business is slower during the week. Mondays & Tuesdays are quiet days. February is a quiet month. Perhaps some other marketing strategy can be administered on those quiet times.

3. Financial

What type of marketing has proven to be most effective?

The " knock and drop" is the best way of advertising for this type of business. Local Advertising is very costly and less effective. Posters at schools and colleges will attract this" target market".

Is the business VAT Registered?

The business is in the process of being VAT registered.

Are there up-to-date Management Accounts available?

Yes there are up to date management accounts available on request. (to serious buyers only)

What Balance Sheet and Income Statements are available?

12 months Balance Sheets and Income Statements are available.

What percentage of the business is cash/credit?

60% Cash and 40% credit card.

How could the profitability of the business be improved?

Profitability may be increased by : 1.Obtaining more contracts from the surrounding mines. 2.Deliveries to flats & hostel dwellers. 3.Contracts with Guest houses, Schools ,Colleges & Lodges. 4.Cater for business functions.

Is Seller finance available and for what amount?

No Seller's finance is not available.

4. Staffing

Is training / bursaries available to the staff?

Yes.The main Franchisor provides Training to all staff members before they start working. Ongoing training for staff members.

What is the required criteria for the new owner of this business?

Criteria for New Owner: 1.Be a "MIND YOUR OWN BUSINESS" person. 2.Prepared to WORK A SEVEN (7) DAYS WEEK. 3.Must have EXCEPTIONAL PEOPLE SKILLS. 4.Be willing to LEARN AND ADOPT PROVEN WAYS. 5.Be willing and able to ADHERE TO THE Franchisors OPERATIONAL STANDARDS 6.Have the BRAND'S BEST INTEREST AT HEART IN ALL ASPECTS OF OPERATIONS 7.Maintain AT ALL TIMES A STANDARD THAT IS EXPECTED from the Franchise STORE !

Give a breakdown of staff/functions/length of service?

8 Staff Members 2x Griller's R2650 & R3675 2xToasters R2340 2x Chipper's @ R2650 2x Salad Makers @R2340 1x Scullery lady@R2340 1x Cashier@R2650

Do any receive special perks or incentives?

The Casher receives an incentive bonus monthly if the " daily cash register" balances.

Are they on contract?

Yes, all staff is employed on contracts done by an HR Company.

Do any have management potential?

Yes, the one Griller has great potential of becoming a Kitchen Manager.

How involved is the Owner in running the business?

The owner is currently fully hands on daily from opening to closing time.

5. Premises

Is there an option of renewal & what period?

Yes a option for renewal is available for the period of 3-5 years. 10% escalation.Current lease expires in 2015.

What are the trading hours?

Trading Hours Monday - Saturdays: 10am to 9pm Sundays: 11am to 8pm.

What is the square meters of the business?

124m2.

Is a copy of the lease available?

Yes a copy of the lease is available. Only to serious buyers.

Do you require a licence?

Yes. Business License is required. Registration with the local municipality. A once off fee is required. The health inspector will inspect the business premises for hygiene, staff attire, lockers, cleanliness in food preparation. Music License with SAMRO should you require to play some upbeat tunes to the clients.

What lease deposit and/or other surety is required?

Key deposit : 2x months rental as deposit-R42 000. One months rental for current month.

6. Assets

Is a full asset list on file?

Yes a Full Assets list is on file.

Are any items not included in the sale?

Yes . 1x Coca-Cola Fridge 1x Oasis water That is not included in the sale as it belongs to the coke and water franchises that supply the cool drinks and water.

What is their overall condition?

Everything is in good working order.

Do any require repairing?

No repairing is required.Maintenance is on a continuous basis especially with the fridges & equipment.

How have they been valued ?

Insurance and Owner value

Are they presently insured?

Yes with local insurance company.

7. S.W.O.T. Analysis

Strengths?

Strengths: 1.They cater for the average South African family who wants good food at affordable prices. 2. Never before has there been such a need to provide affordability as today and on this basis they have positioned themselves throughout the market. 3.Prioritizing the need to provide the customer with value for money. 4.Their burgers are a meal, not a "snack"!!! 5.Variety of Products.

Weaknesses?

Weaknesses: 1. Marketing is not done extensively and that impacts the turnovers. 2.The business can not be left unattended for long periods of time by the owner for stock and cash losses. 3.Long hours and tiresome.Need a support system to help with the hours and relief the owner.Make the work load lighter.

Opportunities?

Opportunities 1.Marketing as a restaurant and "sit in" take away will increase revenue as they have placed a "seating area" on the outside.

Threats?

Threats 1.Economy is our biggest enemy and concern.Clients will be restricted to the amount of cash to spend on Take Away products.This business has seen the need & adjusted their prices to accommodate this fluctuation in the market.

8. Reason For Sale

What is the reason for the sale?

The owner wants to explore other ventures. He is tired of the food industry. He devoted 13 years to this sector.

9. Conclusion

Why is this a good business?

They have adapted to changing demographics and turbulent financial conditions in South Africa and remains a buoyant business, with stores nationwide and a legacy that started in 1982, the business have proven its success as a leader in its segment of the market!

What is the price plus stock and the net profit?

Purchase price of R950 000 including stock & assets. Additional Costs : Joining Fee-R30 000 including Vat Royalties- Monthly flat fee R3000 pm. Options may be discussed !