Fully describe the business's activities?
The business is a service and swimming pool company that has been operating in the greater Durban area for 22 years. Their wide range of services includes building new pools, maintenance, servicing and cleaning, and equipment sales. The company is registered with the National Pool and Spa Institute, giving clients peace of mind that the work done adheres to the strictest guidelines for workmanship and construction. Having built a well established and recognized brand over the last 20 odd years the business now wishes to expand by offering Franchises, in select and exclusive areas, to potential Franchisees for Maintenance, Service and small Repair work. The opportunity would ideally suit someone in the Garden Services or allied industry that has an existing client base who are pool owners.
How long has the business been established?
How long has the owner had the business?
The current Owner started the business and has built it to its present status.
How does the business operate on a daily basis?
The Franchisee will operate in an exclusive area offering pool owners regular servicing and maintenance on their pools which could also include minor repair work relating to pumps, filters etc. Depending on the location of the Franchise purchased it may already come with an existing client base. These customers can be bought from the holding company at a negotiated price. The R 165,000 franchise fee includes training, supplying of tools, and the necessary chemicals one needs to start trading. The Franchisor will provide franchisees with extensive training and ongoing support. The training is both practical and theoretical, and is relevant to this industry. âTop-upâ training is available periodically, and can be attended by all staff members. The company has a mentor program which keeps in touch with their franchisees so that the business can grow and remain manageable and profitable.
How are the clients attracted to the business?
The business has built up a strong reputation over the years as can be seen by its many testimonials and a lot of business is generated through word of mouth. The company also has an excellent website as well as a strong Facebook presence. All leads generated in the Franchisees area will be allocated to them.
What Advertising/Marketing is carried out?
Digital social media advertising is done via the web page as well as Facebook. The Franchisor will offer Web Page Deign and set up for the Franchisee to open their own website.
Does the business have any contract work?
Some of the selected Franchise areas already have a client base in existence and these can be taken over from the Franchisor at a negotiated price.
What competition exists?
There are a number of pool manufacturing and servicing companies and small operators in the Durban area but few with the longevity and reputation for service and reliabililty afforded this particular business.
What are the seasonal trends?
As with most pool companies maintenance and service is higher in the Summer months, but with Durban's favourable climate business is strong all year round.
Is the business VAT Registered?
The Franchisor is VAT registered , but initially a Franchisee would fall below the VAT threshold.
Are there up-to-date Management Accounts available?
At a due diligence stage all Financial information relating to the Franchisor will be made available to prospective and qualified Franchisees. The figures shown in this report are based on projections for an 18 month period and annualised over 12 months. The projections are based on actual figures for existing services offered by the Franchisor. These projections can be detailed and validated at a due diligence stage with qualified purchasers. It is projected that after 18 months a Turnover of R 76,000 pm will be achieved with a Net Profit of R 35,000 PM.
What Balance Sheet and Income Statements are available?
As with Management Accounts these will be made available at a due diligence stage.
What percentage of the business is cash/credit?
The service business is largely cash .
What is the total staff complement?
If the Franchisor does not intend being a hands on operator, he would need to employ someone to conduct the service. If the owner runs the business hands on, initially no staff would be required. Once a certain level is reached the Franchisee may need to hire an assistant. These costs have been built into the projected figures.
How involved is the Owner in running the business?
The owner should be a hands on operator.
When does the current lease end?
There is no cost allocated to rent in the projections as the business could be run from home.
What are the main assets of the business?
The R 165,000 franchise fee includes training, supplying of tools, and the necessary chemicals one needs to start trading. A new Franchisee will receive: Chemical Stock Cleaning Equipment Tools Theoretical & practical on site training Training & Technical Manuals Technical online support Web-page design & setup If extra staff members wish to be trained, then a small fee to cover costs is payable. A new Franchisee will require a suitable vehicle, such as a Bakkie.
Are any items not included in the sale?
The Franchisor will need to have a suitable vehicle, such as a Bakkie, in order to conduct business.
The Franchisor has built up an enviable reputation and a strong customer base over the last 20 years. A new Franchisee will benefit from the strong brand that has been created.
The Franchisee will need to carry himself financially for between 6 months and a year. Based on the projections the business should make a small loss over the first three months and break even about the fourth month. Thereafter Net Profits will rise steadily reaching an anticipated R 18,000 after 12 months and about R 35,000 after 18 months. Thereafter growth will be determined by the operators abilities and work ethic.
A successful Franchisee can in time acquire more Franchises both locally and nationally.
Standard economic threats.
What is the reason for the sale?
The business has a proven track record and now wishes to grow the brand via franchising .
Why is this a good business?
The Franchisor has built a strong brand and been in existence for over 20 years. A new Franchisee will benefit from this. The business has been in operation for over 20 years and has acquired strong technical skills . Ongoing technical support will be available to the Franchisee.
What is the price plus stock and the profit?
The price for a new Franchise is R 165,000 which will include sufficient chemical stock to begin operating as well as tools , training and technical support.
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