Fully describe the business's activities?
This beauty salon offers services such as gel and acrylic nails, nail art, pedicures, waxes, facials, lashes and tinting and massages. They make use of 4 of the most popular 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 this store 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 vouchers and products.
How are the clients attracted to the business?
The franchise advertise. This is a well known brand and it is situated in a very good spot at a popular shopping mall.
What Advertising/Marketing is carried out?
The franchisor does marketing.
Does the business have any contract work?
The business sells gift cards. The owner will reimburse a new buyer with outstanding gift cards and loyalty points. This amounts to +/- R80,000.
What competition exists?
There are many beauty salons, this is a well known brand which ensures regular clients. The salon had 6,234 existing clients for the year ended December 2018 and 839 walk in clients.
What are the seasonal trends?
December months are busier and it slows down during winter months.
Is the business VAT Registered?
The business is not yet VAT registered, the accountant is in the process of registration for VAT. We have excluded VAT from the figures as a new owner will have to be VAT registered.
Are there up-to-date Management Accounts available?
Monthly figures are available.
What Balance Sheet and Income Statements are available?
We have the AFS for the year ended February 2018 on file. The accountant is busy with the 2019 financial statements.
How could the profitability of the business be improved?
Employ more beauty therapists.
Is Seller finance available and for what amount?
No, the seller wishes to emigrate.
What is the total staff complement?
Give a breakdown of staff/ functions/ length of service?
1 manager 2 beauty therapists 3 nail technicians 2 cleaners (1 work from Monday to Thursday and 1 Friday to Sunday, they alternate every 2nd Sunday)
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?
There is a manager in place.
How involved is the Owner in running the business?
The owner is involved daily and sees to the ordering of stock, financial matters and assists the manager with reception duties when the manager does treatments.
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 6 pm, Saturday 9am to 5 pm and Sundays and Public Holidays from 9 am to 3 pm.
What is the square meters of the business?
Who is the Owner/Landlord?
Is a copy of the lease available?
A copy of the lease is on file.
Do you require a licence?
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 on file.
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.
How have they been valued ?
Which assets are on lease/HP and with whom?
All assets are unencumbered. The seller will settle all debt prior to the effective date.
What are their settlement amounts?
Will Seller settle or Buyer to take over?
Seller will settle.
Are copies of agreements available?
Are they presently insured?
The business and its assets are comprehensively insured.
Well, know brand. Established for 11 years. Regular and walk-in clients. Situated at a busy entrance with a 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 club cards allowing customers to pay for treatments or products with their card. This is backed by ABSA 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 seller wishes to emigrate and is selling the business and her residential property.
Why is this a good business?
Well established business and a good brand. This store has won many rewards and is seen as the top franchise in the group in Gauteng area.
What is the price plus stock and the net profit?
The seller wants R1,650,000 plus stock of +/- R220K = R1,870,000. The seller will also reimburse the buyer with the loyalty points and gift cards outstanding (+/- R80,000).
Annual Turnover Amount between R 500 thousand and R 6 million