Fully describe the business's activities?
Franchised Chicken Based Fast Food and Take Away Outlet
How long has the business been established?
The business was established in 2016 and was bought by current owners in 2018
How long has the owner had the business?
Give a breakdown between sit-down, takeaways and deliveries
Take away: 60% - Sit Down: 37% - Deliveries: 3%
The business operate in the LSM 3 - 7 income range. The business is situated inside the Taxi Rank. Terminus accommodates up to 10 000 people in foot traffic on a busy day, it does both local (Klerksdorp), district (Orkney, Stilfontein and Potchefstroom) and long haul (JHB, Pretoria, Durban, Eatern Cape etc) taxi transport.
How does the business operate on a daily basis?
The business opens at 08:00 and serves walkin customers mostly, this from the very busy Taxi Rank area
How are the clients attracted to the business?
Posters outside the shop, as well as around the shopping centre. Situated at one of 2 main entrance/exit doors to the centre, and have a lot of foot traffic coming from various other retailers in the area
What Advertising/Marketing is carried out?
Branded Taxi running through Klerksdorp, Orkney and Stilfontein. Posters and flyers. This can be extended to Facebook, Twitter, Local newspapers, Billboards etc.
Does the business have any contract work?
We do not have any contract work at this stage, but have had large orders from churches, schools etc for functions before. If a person/business who qualifies for BBBEE takes over, there is a huge potential market at SAPD, Municipality, Dept of Labour and other Govt departments that are situated within a 1km radius from the shop.
What competition exists?
Several other food outlets in the area that offers a range of foods, yet each has its own unique menu structure
What are the seasonal trends?
Daily: Lunch time and late afternoons busier than the rest of day. - Weekly: The week start with a reasonably busy Monday, drop to very slow on Tuesday, Wednesday and Thursday picks up reasonable, Friday and Saturday very busy. Sundays equivalent to Tuesdays, although we have had very good Sundays on occasion. - Monthly: Average monthly turnover around R210k to R230k currently. Busy trends are the SASSA week, between 3rd and 10th of the month, fortnight pay around 15th, bank and Govt agencies 20th, and then month end 25th to 31st- January is an above average good month, as it attracts commuters who come into town to buy school accessories. - February, March slows down a bit below average. - April does well due to long distance commuters going to Moria church or home over the long weekends. May, June, July, August slows down again to average. - September, October a little bit above average. November start to pick up above average with some Christmas shopping done. - December sales increase by 70% above average due to Christmas shopping.
How did the Covid-19 pandemic impact the business turnover / daily operations?
Business was compelled to close completely during April and , and we were allowed only deliveries during May 2020. This had a severe impact on the business, with 2 months trading lost. However, as soon as we opened, we were welcomed with open arms by customers, with the only drop in sales due to restrictions on taxi occupancy and fear mongering rumours. We were able to start trade at around 80% of average turnover within the first 2 months, and have gradually built up where we are running at around 95% to 100% of pre Covid figures. Currently Covid regulations are still stifling the hospitality industry with certain regulations, but we are confident that we would be able to bring the business back to pre-Covid and better, with the biggest concern currently being additional unemployment due to Covid and general downturn of the SA economy.
What steps / actions have been taken to combat the effect of Covid-19 pandemic?
Covid TERS relief was obtained to pay salaries and wages. - Applied for, but was denied Covid relief for the business itself, due to not being BEE complient. - Was granted partial relief on rental for 3months - Was granted partial relief from royalties from the franchisor.
Are there up-to-date Management Accounts available?
Yes up to date Management accounts are available
Management accounts available to serious potential buyers. - The business is run on 100% cash and card payments. No Debtors. - Purchases are done on a COD basis. No creditors for stock - The profitability of the business is dependant on the following: Tight control over stock and product quality, and minimum wastage. - Maximum sales. The business covers its monthly expenses, both Cost of sales and overheads, as well as a reasonable return (salary) for the owners. The biggest impact will be seen in an increase in turnover, which can be achieved through good marketing. This should however be done selectively, as the business is restricted to commuters passing by, and support from employees from other businesses. Normal vehicle traffic is virtually non-existent. A buyer who can comply with BBBEE standards may be able to win very lucrative contracts with any Government department.
What is the total staff complement?
Full time staff work between 5 and 6 days per week in shifts of 9.5 to 10.5 hours, excluding 1hr lunch - 2 part time staff who works over month end and SASSA week, or whenever extra staff is required, same hours as above - 2 Owner/managers, hours same as full time staff
Give a breakdown of staff/ functions/ length of service?
Most of the staff started in 2018
Do any receive special perks or incentives?
Non-guaranteed: We normally pay a bonus in December plus sales target bonuses when applicable
Are they on contract?
All contracts signed and on record. All UIF and COID paid up to date.
Do any have management potential?
Yes we have one employee that is competent to run the operational side of the business, but lack the administrative skills required to do stock ordering and control/cash control etc. as these have always been done by the owner. Although she knows how to do some of these, the new owner will have to assess any staff personally before appointing anyone as manager.
How involved is the Owner in running the business?
This business require the owner to be involved in the business on a daily basis, although some functions can be delegated to a "Manager". That is the only way to ensure quality control and good customer service.
Any special arrangements for the staff related to the Covid-19 pandemic?
All staff has applied for, and received Covid TERS relief payments.
When does the current lease end?
Contract for 3 years and 6 months, i.e contract ends August 2021. We are currently negotiating a new contract to end 28.02.2023, where the landlord has already agreed that the new owner will be able to take over the lease.
Is there an option of renewal & what period?
Usually 3 years
What is the annual escalation %?
10%, currently negotiating for 5.5%
What are the trading hours?
09h00 to 18h00. The centre doors open at 06H00, and close around 18h00. There is an outside door should you wish to remain open longer.
What is the square meters of the business?
144 sq metre. We currently use only 140 sqm, with another 4 sq m shopfront that is currently blocked off.
Is a copy of the lease available?
Copy of lease contract is available
Do you require a licence?
The new owner will have to arrange for a licence for the shop after a health inspection. +- R5000.00
What lease deposit and/or other surety is required?
+- R40 000
What are the main assets of the business?
Restaurant/Take Away Equipment
Are any items not included in the sale?
Coke double door fridge, GAAP point of Sale system. We are negotiating to buy a new Franchise approved system on a rent to buy option on a 3year contract.
What is their overall condition?
All equipment is kept in good condition, and repaired immediately should there be a breakdown. The only exception is a chest freezer that is not working, but we have not used this since we took over, as the walk in freezer has more than enough space available. The small vegetable fridge in the kitchen is very old, and tends to need repair at least once a year.
How have they been valued ?
Replacement used values
Which assets are on lease/HP and with whom?
ABI (Coke) double door fridge - no cost - GAAP Point of Sale: Contract with Gaap ends when the shop is sold and new owner will have to arrange for new POS system in line with Franchisor guidelines and approval. - Capitec Card Machine - Buyer to arrange with his own bank for a machine.
This franchise is seen as the cleanest take- away with high quality food in the centre. It is situated at one of the 2 main entrance/exists to the centre, and catches the passerby traffic between local, district and long distance taxis. It is easily accessible for pedestrians from the main road. We have built a reputation for fast and friendly service, with our motto that a customer should not have to wait more than 5 minutes for his food (although this is not always possible at peak trading time)
Due to the fact that entrance for vehicle traffic (other than taxis) is difficult, we do miss out on higher income customers who do not want to enter the Taxi rank.
The shop can easily be relocated, with the biggest expense being shop fittings. We have started negotiations to relocate the shop and expand it into a drive-though next to the N12 (JHB/Kimberley/Cape Town national road) in February 2020, but the COVID lockdowns has stopped all our plans. There is a hub of roadside take-aways. This will attract more high income traffic, increasing average ticket sales and thus turnover. It will also be more profitable in this area to expand trading hours here. Furthermore, the franchisor has been aggressively expanding in Gauteng over the last 3 years, making the brand more recognisable.
General economic downturns and COVID Lockdowns.
What is the reason for the sale?
Other business commitments
Why is this a good business?
Franchise that is well supported with several opportunities to increase sales and profitability.
What is the price plus stock and the profit?
The price is at R1,1 million
Discover similar, inspiring businesses for sale
Annual Turnover Amount between R 500 thousand and R 6 million