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  • Mandate: 33782
  • Added: 30 Dec 2019
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Franchise Beauty & Nail Salon

Gauteng, Johannesburg
Mandate 33782
Added 30 Dec 2019
R 510,000* ZAR
Stock: R 150,000
Assets: R 278,090
R 21,008 ZAR
Ian Tennant
Aldes Egoli
Gauteng, Hartbeespoort
Gauteng, Hartbeespoort

A franchise nail and beauty salon for sale in a large and popular West Rand mall

R 510,000* ZAR
Stock: R150,000
Assets: R278,090
R 21,008 ZAR

A franchise nail and beauty salon for sale in a large and popular West Rand mall

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How long has the business been established?
The business has been in the most popular and largest shopping mall in the West Rand since its establishment in 2004. The business is a (Pty) Ltd. Registered entity and VAT registered.

How long has the owner had the business?
3.5 years

What is the Franchise opportunity about?
The business services include: • Manicures & Pedicures • Acrylic & Gel Nails • Sculptured Nails • Nail Strengthen Treatments • Nail Art • Hand & Foot Add on Treatments such as Paraffin Dip and Medi-Heel • Massages • Facials & Peels • Eyelash and Brow Tinting • Eyelash Extensions • Waxing & Threading • Ear Piercings Further Treatment / Product Possibilities: • Spray Tanning • Makeup • Permanent Make-Up • Microblading • Additional skincare range and other retail products • Converting the second treatment room into a Pedi/mani room Salon products: All salon products are Franchisor selected & approved and of professional quality. The Nail range includes Bio Sculpture and Maskscara, while Skincare compromises of Regima and Matsimela (Body). (And additional Skincare product can be introduced to boost increased income). Depileve is used for waxing.

How long has the Franchise group been establised for?
This is a beauty salon franchise group that was established 35 years ago and is a respected and leading brand name in nails in South Africa.

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

How does the business operate on a daily basis?
Trading Hours: Monday to Thursday & Saturday: 9:00 am to 7:00 pm Fridays: 09:00 am to 9:00 pm Sundays: 09:00 am to 5:00 pm Salon closes on Christmas and New Year’s Day During December holidays during a 15 day period, the center is open from 9 am to 9 pm

How are the clients attracted to the business?
The shop is situated in the largest and most popular mall on the West Rand and is co-located with most of the other beauty related shops in the Mall. Extensive marketing is also carried out A substantial number of newly acquired clients are "Walk-In" or "Word of Mouth” clients.

What Advertising/Marketing is carried out?
Marketing: Majority of the marketing is done by the Franchisor which includes the following: Edgars - Using all their advertising platforms (including vouchers). The salon has an Edgars payment option. Magazine Advertisements (using vouchers) Street Pole Advertisements & Toilet Cubicle Door Advertisements Social Media Platforms & Emailers In-salon Promotional Posters & Gift offers (depending on the promotion) Point Rewards systems ensure returning clients The mall is open to using its marketing mediums as an extra cost, a free option also available. In-house marketing includes: SMS’s / Emailers / In-Mall Posters / Mall Tenant Discounts / Special Events / Social Media The mall also allows the use of their social media platforms to promote the salon's specials and are always willing to assist in any way. Once a year the mall has a Health &Beauty Expo where applicable tenants can promote their businesses in various ways. The mall also contributes by other means such as Influencer Photoshoots and marketing thereafter.

Does the business have any contract work?

What competition exists?
There are other salons situated within the mall, although, only one salon is a direct competitor.

Is the business VAT Registered?

What VAT documentation is on file?

Are there up-to-date Management Accounts available?

What Balance Sheet and Income Statements are available?

What percentage of the business is cash/credit?
25% cash, 75% card

What is the age analysis of the debtors book?

How could the profitability of the business be improved?
Grow the services side of the business

Is Seller finance available and for what amount?

What is the total staff complement?
The business has 6 full-time employees all earning a basic salary and commission.

Give a breakdown of staff/ functions/ length of service?
3 x Beauty Therapist / Nail Technician Combo (One can also do makeup) 2 x Nail Technician 1 Receptionist / Administrator / Manicurist & Pedicurist including Gel Combo Currently, one of the Beauty Therapists is on maternity leave, a Temp has replaced her and will be considered for full time employment if she establishes a solid client base. All ladies are excellent. The business has a low staff turnover. The 3 Beauty Therapists rank in "Top 10 Beauty Therapist of the Month" every month within the franchise group. One Beauty Therapist ranks "Top 1" for most months. At the annual awards ceremony in 2018, two Beauty Therapists received runner up prizes for 2018- "Beauty Therapist for the Year" and "Retail Therapist of the Year". The Nail Technician & Receptionist won "Long-standing Service" for 9 and 10 years respectively. For 2019, the ladies won "Therapist of the Year" and "Retail Therapist of the Year". The salon received runner up for "Salon of the Year". Staff breakdown is available upon request.

Do any receive special perks or incentives?
Staff are incentivised through a commission structure

Are they on contract?
All staff are on fixed term contracts

Do any have management potential?
Yes, but it is recommended that the business is owner / managed

How involved is the Owner in running the business?
Daily (around 6 hours per day)

When does the current lease end?
Standard lease agreement of 3 years, expires 30th of September 2021

Is there an option of renewal & what period?
Yes, 3 years

What is the annual escalation %?
Escalation per year: 8% p/a

What are the trading hours?
Trading Hours: Monday to Thursday & Saturday: 9:00 am to 7:00 pm Fridays: 09:00 am to 9:00 pm Sundays: 09:00 am to 5:00 pm Salon closes on Christmas and New Year’s Day During December holidays during a 15 day period, the center is open from 9 am to 9 pm

What is the square meters of the business?
Shop size is 50sqm

Who is the Owner/Landlord?

Is a copy of the lease available?

Do you require a licence?

What lease deposit and/or other surety is required?
Buyer must go through a standard approval process (includes credit checks) and deposit is required of 2 – 3 months rental amount. A bank guarantee may be negotiated with the landlord instead of a cash deposit (interest is earned on the deposit for your account).

What are the main assets of the business?
Shopfittings and furniture

Are any items not included in the sale?

What is their overall condition?
Very good

Do any require repairing?

How have they been valued ?
50% of estimated replacement cost

Which assets are on lease/HP and with whom?

What are their settlement amounts?

Will Seller settle or Buyer to take over?

Are copies of agreements available?

Are they presently insured?

Established and popular Franchise Established and popular Mall Growing business with further exponential growth potential Excellent staff & Low staff turnover Professional Products Excellent Client Service Edgars payment method Good marketing in place Franchise Support and Training Facility

Only one perceived weakness being a single direct competitor within the mall

With the current staff in place, the salon is fully functioning and able to “run on its own” but a new owner / manager on a full-time basis will result in increased revenue. This would be further enhanced if new treatments and a second skincare range are incorporated and marketed (such as permanent make-up, microblading, suntanning or spray tanning and makeup). A stricter stock issuing system can be put in place to save additional costs. Some current expenses can be cut out completely. The Imbalie salon next door, which specializes in skincare is also for sale through this Aldes Broker. There is an opportunity to buy both salons and merge as one. This has been done with success as combo stores within the franchise group.

The current economic climate but even in these conditions the business has grown substantially year on year

What is the reason for the sale?
Owner emigrating

Why is this a good business?
The business is part of a 35 year old successful franchise group in the beauty sector. The business is situated within the largest and most popular mall on the West Rand. It is on a growth trajectory which could be maintained and enhanced further with a fulltime owner/manager.

What is the price plus stock and the profit?
The sales price for the business is R360,000 plus stock of approximately R150,000. The valuation has been based on the projected earnings before owner salary, interest, depreciation and tax (fee cash flow) for the 2019 / 2020 financial year. This is based on actual management accounts to the end of December 2019 and forecasted expenditure for the period December 2019 to February 2020. The projected profit (earnings before depreciation, interest and tax) is R252,099.

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