Fully describe the business's activities?
Service and repair workshops - A reputable network of 70 workshops countrywide. They specialise in affordable service and repairs of all models of cars and bakkies and are fast becoming one of South Africa's leading car servicing groups. They offer best quality service through conveniently placed workshops throughout South Africa, at affordable prices. It is their vision to become the most recognised and respected brand in the car servicing industry
How long has the business been established?
The Franchise was started in 2004.
What skills and background is the franchisor looking for in a prospective franchisee?
Franchisees should possess a successful business background with particular emphasis on interpersonal skills and business management. Most of the company's franchisees are not from the motor industry but all run successful branches.
What is the Franchise opportunity about?
Grasp the opportunity to become a franchisee of a long established & top vehicle service centre franchise, which is now expanding within KZN and the Western Cape. The Competition Commission has ruled that from 1 July 2021, Independent Service Providers will have access to the automotive aftermarket & will be permitted to service & repair vehicles which are still under warranty.
In which Provinces/Areas are the Franchises located in.
Current franchises are in all provinces, including Botswana. The Franchisor is looking to aggressively further expand in the KZN and the Western Cape regions.
What is the success of the current franchisees?
Franchisees are highly successful, with most franchisees owning more than one branch.
How does the business operate on a daily basis?
They specialise in reputable, affordable services and repairs of all makes and models of vehicles, using quality parts and highly trained mechanics.
What Advertising/Marketing is carried out?
The Group employs both traditional and non-traditional advertising formats and promotions are rolled out to franchisees on regular intervals. There are various national marketing campaigns done at a Head Office level (Radio, outdoor, print, online, social platforms). Each franchisee pays 2.5% of T/O or a minimum of R5 000 towards national marketing on a monthly basis and each franchise will also be responsible for local advertising within their own area via pamphlets etc.
What are the seasonal trends?
There are no real seasonal trends.
How did the Covid-19 pandemic impact the business turnover / daily operations?
The Franchise was one of only a few businesses that showed growth during the pandemic.
Does the Franchise offer any Guarantees ?
Yes - guarantee against defects arising from faulty workmanship or parts for a period of SIX MONTHS or 10 000km, whichever occurs first. This guarantee is in accordance with the Consumer Protection Act. Head office has further negotiated a group insurance deal which offers comprehensive insurance products to protect the franchisees in the event of a claim i.e., Defective Workmanship.
Are there any industry regulations or licenses needed to operate the franchise?
Yes â A full list will be provided on request. E.g MIBCO, COIDA, RMI/MIWA
â¢ Does the Head Office assist in securing contracts (if applicable) or is it up to the individual franchisees to do this?
Head Office do assist and to date have secured multiple fleet contracts for the group i.e., Hollard & Innovation Group. The franchisee is also encouraged to secure new fleets and business within their area.
Are there up-to-date Management Accounts available?
A complete 5 year "projection" is available on request. Turnover in year 5 is projected at around R420 000 pm with approximately R57 000 net profit pm (ie annually a Turnover of R5m pa and a Net Profit of R686 000 pa, inclusive of a manager ) - This can be achieved and improved significantly if the owner is focused on their business.
Is Seller finance available and for what amount?
In the case of approved Franchisees, the Franchisor would be prepared to consider payment for the store to be paid over two years, with terms and conditions to be negotiated.
How many months working capital will the franchisee require?
As a general guideline you will need R150 000 to R200 000 as working capital to start the business. This will allow you to settle the following expenses: Rental deposit due in terms of the lease agreement first monthâs rental, salaries for the first two months operational costs for the first two months (telephone / consumables etc.) Extensive local advertising for the area / promotional items and opening specials.
When will a franchisee be able to start drawing profits from the franchise?
This is entirely dependent on the franchisee and how hungry they are for their business to grow. Some franchises have shown a profit from month one.
Franchise Agreement Terms and Financials
Advertising fees are calculated at 2, 5% of turnover or a minimum of R5000 per month. Royalty fees are calculated at 5% of turnover, or a minimum of R12 000 per month, hence variable dependent on turnover.
Give a breakdown of staff/ functions/ length of service?
Staff normally consist of: 1 x Manager 1 x Receptionist 1x Qualified Mechanic 1 x Assistant Mechanic 1 x Cleaner 4-5 Flyer guys
Do any receive special perks or incentives?
Possible profit share and 13th cheques.
How involved is the Owner in running the business?
Owners are encouraged to be hands on in the management of their branch.
What support and backup is offered to the franchisee?
Full training as well as ongoing backup and support is offered by Head Office, support on offer includes, but is not limited to Human Resources, IT, Operations, Marketing, Legal Advisory, Accounting, Tax and customer Relationship Management.
What training is provided for new franchisees and staff members? Is there a cost associated with this?
Training for the franchisee, manager and secretary will be provided for and the cost of this is included in the purchase price. Cost of travel, accommodation etc. will be for the franchisees account.
What size premise are required to operate the Franchise?
Minimum space required is 280m2 up to maximum of 800m2 depending on the rent . Suitable venues offer sufficient off-road parking as well as prominent signage.
Will the franchisor assist in acquiring premises and negotiating leases?
The franchisor will assist the franchisee or will appoint a property broker to assist the franchisee or will approve the site selected by the franchisee. The franchisor will also complete limited shop fittings for the franchisee and assist with lease negotiations, but the franchisee will assume full responsibility of the lease.
Will upgrades to the premises be required and if so how often will this occur?
Compliancy will be assessed frequently and on an ongoing basis to maintain brand conformity. The Franchisee shall be obliged to conduct a revamp in the 1st (first) month of the 3rd (third) year of trading with this Agreement, or any time after, up until the end of this Agreement, an amount of up to R150 000 (One Hundred And Fifty Thousand Rand), may be invoiced to the Franchisee to be used for an aesthetic upgrade of the store. This will not include tools and machinery.
How many franchises will be located in each area/province?
There is a general rule of around 4.kms between each branch but this is dependent on certain factors i.e., area density.
What are the main assets of the business?
For R1.2m (excl VAT), you obtain a full turnkey operation, inclusive of a 5-star graded workshop, which is in line with RMI (Retail Motor Industry) standards. Included therein are the diagnostic machinery, tooling, IT, Lifts, furniture, branded gear, full management system & signage necessities (Plus much more!).
The Franchise is a leader in the car service industry. They offer competitive prices and excellent service to all of their clients. They are a recognised and trusted brand. Their enthusiastic head office specialists provide the support, guidance and advice franchisees require to run a successful business without stifling their entrepreneurial spirit. Ongoing support and training are provided. Power of group purchasing deals. Business analysis reports are provided annually.
No apparent weaknesses.
To build a loyal and growing clientele within your franchise area to become their preferred service centre. Grow your portfolio into many branches. The Franchisee can focus solely on their business while head offices take care of the rest in terms of e.g. front office staff training, national marketing campaigns, CRM management etc. Right to repair will be coming into effect on the 1st July 2021 which will enable aftermarket workshops such as Franchisee to service and repair vehicles which are still under warrantee. This in turn will open the market extensively for new business.
None perceived other than the franchisee not running his/her business effectively and according to franchisor specifications.
What is the reason for the sale?
Franchisor focusing on growing their footprint in the Western Cape and KZN
Why is this a good business?
Established group with tried, tested and successful methods on how to run your own business. Ongoing support in terms of customer relationship management, marketing, technical, IT and training is provided from Head Office. The business has proved to be recession proof, which not many businesses can brag about. Even during the covid-19 pandemic, branches were reaching record months, appearing that the business is additionally pandemic proof.
What is the price plus stock and the profit?
Selling price for a new franchise ranges from around R1 200 000 depending on the size and location of the business. Included therein are the diagnostic machinery, tooling, IT, furniture, & signage necessities.
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Annual Turnover Amount between R 500 thousand and R 6 million