FINANCIAL INFORMATION
a. The initial franchise licence fee payable to the Franchisor on the signing of the franchise agreement and how it will be applied
A Franchisee will be required to have at least 50% deposit available on signing the offer to purchase/agreement of franchise sale, and the balance, on signature of the Franchise Agreement. This may vary with different agreements/offers. A good credit reference and a stable background are required to qualify to purchase a Monkeynastix Franchise.
The Franchise up-front fee is a once-off payment for each Monkeynastix Franchise sold. It secures the rights to trade as Monkeynastix, using the Monkeynastix trademark and total business system in a specific area for a specific period as per the franchise agreement.
The initial franchise licence fee is R50 000. This applies for a new franchise with no members, as well as for the re-sale of a franchise sold as a going concern.
The Franchisee acknowledges that the initial franchise licence fee, referred to, is payable in respect of:
§ Initial legal costs incurred in conclusion of the Franchise Agreement;
§ Being granted the right to operate the franchise business;
§ The right to use and exploit the franchise business and business system;
§ Initial training provided in terms of the training schedule – Management Training with regards to a simple yet effective control system
§ Support as provided in terms of the training schedule;
§ Access to information and advice.
§ Advice and assistance from the Franchisor with the set-up of the franchise business;
§ Initial pre-opening and launch assistance.
§ Corporate Imaging Signage.
§ Full operations training
§ Local, provincial and national advertising as per the franchise agreement
§ Further development and marketing strategies
§ Initial operational support
In addition to purchasing the right to operate as Monkeynastix Franchise, the Franchisee will have the use of the company’s intellectual property.
The Franchisee shall not be entitled to commence with the franchise business until the franchise fee has been paid in full and until adequate finances are available to cover the set up costs. Should the relationship be terminated the following direct costs will be deducted from the Upfront Franchise Fee prior to the refund being processed. These direct costs may include:
§ Franchise assessment costs;
§ Bank administration
§ Credit verification
§ Travel costs incurred by the franchisor
§ Area feasibility studies if required;
§ Training;
§ Other direct costs
NOTE: The termination period takes cognisance of the
fact that the Consumer Protection Act and the
FASA Code of Ethics allows for a 14 day cooling
off period before signing the Franchise Agreement
and a further 10 days after signature.
b. Franchise general area opportunity cost:
The Franchise area opportunity cost is a once-off payment for each Monkeynastix Franchise sold. It determines the size of the area in which the franchisee may opporate.
The franchise area will be determined according to the amount of children/schools available to participate in the program relevant to available statistics. This will be determined via some area pre assesment and consulted between franchisor and franchisee. A area will be limited to a maximum amount of 20000 children or approx 50 schools available. Currently R5000 per school will be used as a factor to calculate the area. The franchisor will refer to other franchise areas and successful opporation with registared children in the program.
Exsample: 12 schools x R5000 = R 60 000
c. The initial working capital and the purpose thereof
An average of R30000 is recommended. However, it is incumbent on the franchisee to calculate this and make the necessary provisions.
Once the Monkeynastix Franchise is opened for business, the new Franchisee should anticipate the need for initial Working Capital. These are the funds which will be required to support the Franchise during the early months of operation when expenses are incurred but there are not enough paying customers to cover immediate expenses.
d. Set up costs
Start-up equipment and stock:
The start up equipment and stock supplied with the franchise is R55 000. In the case off a resale this is sold as a going concern and the price will be calculated based on the value of the business and the equipment and/ or stock that is included.
e. The total investment required Example Only
New Franchise sold with zero members:
(Please note that this is only a basic guideline and sales may vary. Please refer to the Agreement of Franchise Sale).
Franchise Licensing Rights: R 50 000
(Initial Franchise Licence fee)
Franchise area opportunity cost: TBA
Start Up Equipment Package: R 49750
TOTAL R 97750
Working Capital R 30 000 average.
Re-Sale of Franchise sold as a going concern
(Please note that this is only a basic guideline and sales may vary. Please refer to the Agreement of Franchise Sale).
Franchise Licensing Rights R50 000
(Initial franchise licence fee)
Start Up Equipment Package R0.00 (INCLUDED)
Franchise sold as a going concern with X members
TOTAL: sale price is negotiable with existing franchisee and is dependent on the number of members.
In addition to this there is a 12% fee payable to Monkeynastix on the sale price.
Upon signing the Franchise Agreement, the Franchisee is required to have access to sufficient capital to cover initial expenses. The total Franchise cost (or as outlined in the Agreement of Sale / Offer to Purchase – attached as Annexure 6) is payable to the Franchisor on the signing of the Franchise Agreement. This fee covers access to the Franchisor’s intellectual property including the trade names, training, trademarks, Operations Manual and other support necessary for the new Franchise business to open and operate successfully.
Please note:
The Franchise Fee for franchises may differ from country to country and region to region due to various factors.
6.5 The extent of funding which would be generally be
available and the conditions attached to such loans
This is to be negotiated separately with each bank and it is dependent on the individual franchisee’s creditworthy status at the bank and amount of security available.
A Franchisee will be required to have at least a 50% deposit available, a good credit rating and a stable background.
The total franchise cost secures the rights to trade, use the Monkeynastix trademarks, trade names and total business system.
Where a Franchisee requires funding, the viability of the monthly repayments will be considered in establishing the amount of deposit required.
6.6 Total cash amount that the Franchisee must contribute towards necessary funding of the franchise
This is to be negotiated separately with each bank and it is dependent on the individual franchisee’s creditworthy status at the bank and amount of security available. This can range between 40% and 60% on average of the total investment, and it is dependant on the profile of the individual application.
The total Franchise cost is a once-off payment for each Monkeynastix Franchise sold. It secures the rights to trade as Monkeynastix, using the Monkeynastix trademarks, trade names and total business system.
Where a Franchisee requires funding, the viability of the monthly repayments will be considered in establishing the amount of deposit required.
6.7 Ongoing amounts payable to Franchisor
6.7.1 Annual Membership Fee
The Franchisee will collect an annual membership fee of R135 incl. of VAT from each child attending the Monkeynastix programme.
This membership fee will be used for the purchasing and printing of handouts, stickers, certificates, medals etc. These are to be given to each child throughout the year and will include the insurance premium as above.
6.7.2 Insurance fee
In addition to Tuition Fees, the franchisee will also collect an annual insurance premium from each child attending the Monkeynastix programme. This premium forms part of the Membership Fee listed in 6.7.1. The Franchisee will pay this money over to the Franchisor on a termly basis as the insurance cover.
6.7.3 Royalty fee
A Franchisee will be required to pay a termly royalty fee of 12% of the tuition fees received from members (per child per term). This amount is paid directly into the Master Franchisor’s account by the Franchisee by means of a direct deposit and the relevant remittance submitted to head office as proof of payment.
NOTE: Terms are three times per annum i.e. every four months). The Royalty Fee is payable to the Franchisor from the first term of operation.
6.8 Company statement
Refer to Annexure 7 for the signed statement by the
Director.
This is a formal Director’s Statement, executed by Dirk Cilliers in his capacity as the Managing Member. The statement attests to the “sound” financial position of the Company. It further refers to the Company’s ability to pay all of its bills, and other obligations in a timely manner.
6.9 Deposit
Once approved as a franchisee a deposit will be payable and within 30 days of signing the Franchisee is to pay the balance.
6.10 Financial Projections
The projected profitability of a Monkeynastix Franchise is detailed in Annexure 8. These benchmark figures indicate profit margins and revenue expenses at stated turnover levels, which have been experienced by the pilot operation on average. The latest profit and loss statistics are available.
The Total Investment to acquire, open and operate the new Monkeynastix Franchise until the business generates sufficient funds to pay immediate obligations is projected in Annexure 9.
There is no guarantee that any prospective Franchisee will not necessarily achieve the same results, nor is it intended that a prospective Franchisee should rely on them as a guarantee.
In the event that the proposed area of prospective Franchisees has been previously trading as Monkeynastix, the company will provide all available details on that operation to the prospective Franchisee.
6.11 Sale of the business
12% of the sale price at any point will be payable to the
Franchisor.