Innovative supplier and major franchisor of brand building promotional merchandise
Ref.CC031 Location Re LocatableAsking Price £295,000Confidential offered for sale
Finance available to buy this business subject to status. All regulated business is passed to independent financial advisors who are regulated by the FSA | |
Asking price includes:
A network of seven current franchisees plus ‘direct’ turnover
‘Direct’ turnover in excess of £200,000 plus £300,000+ from the franchise network
Established franchisees in UK and Ireland plus opportunities in Germany
Success fee oriented relationships with proven franchise network builders
Excellent franchisee support including Operations Manual and marketing material
Reputation for honesty, reliability and responsibility
Worldwide sourcing network including Far East
Successful range of innovative merchandise
Company website and franchisee Intranet
Completely re-locatable business
Excellent opportunity to grow
Trusted and respected name
Excellent profit margins
Established client base
Training and handover
Goodwill | Business profile: | With twenty years’ background in marketing the current owner of this business, formed in 1998, has built this company into one of the UK market leaders in the building of brands through the use of promotional merchandise. So much so that in 2002 this business launched a very successful franchise operation and can now boast seven current franchisees with many more in the pipeline.
Directly to its own customer base and via the franchise network this business offers a comprehensive range of promotional merchandise designed specifically to meet a Client’s marketing needs. This business has an enviable, loyal Client base across all markets including some of the biggest operators within their sectors but it is perhaps within the hotel and leisure sectors, where this business has a particularly well-established reputation.
This business does much more than just ‘source’. It closely analyses the Client’s brief to identify only those items it knows will meet the Client’s budget and complement the brand values of the Client’s product - only then calling upon its worldwide supplier network to source the best possible quality at the most competitive price. Whether it’s as simple as a bag, cap, T-shirt, Mouse mat, pen or umbrella or one of the most sophisticated IT products available from its innovative product range, Clients of this business can be assured that any of this business’s recommendations will be the inspiration they are looking for, for their next exhibition, seminar, conference, product launch or corporate entertainment day.
For any operator in this sector, customer service is crucial to success and this business appreciates it more than most. A member of the British Promotional Merchandise Association, high levels of Client liaison ensure expectations are managed right the way through the process and that items are delivered on time, every time.
This business has the capacity to build ‘direct’ turnover back to the £350,000 - £400,000 mark – some of which has now been passed on through the franchise network. This with a current franchise base of seven operators, many of whom are in their initial stages of development and therefore yet to significantly impact on company performance, together with the scope to increase to around 25 franchisees in the UK and Ireland alone, creates a significant opportunity to acquire a major player in the promotional merchandise sector with significant prospects for growth.
Key strengths:
The business is well established with a strong, growing customer base. The business retains a high level of repeat custom, particularly among a number of Clients returning on a regular basis, having done so for many years. The company has an outstanding reputation for its honesty, service, reliability, highly skilled, experienced staff and ability to deliver on time and to budget.
This business is an organisation where the business owner has, over time, developed and nurtured business and customer relationships with an excellent range of innovative merchandise, a highly reliable network of suppliers and the supply of high quality products at competitive prices. It is this base that has ensured a steady growth of its operation over the years and which has encouraged franchisees to become part of a growing network. This business is also a distributor for a Belgian manufacturer and an Italian manufacturer with a wealth of supplier contacts throughout the world including the Far East.
Operating directly this business can easily return to its previous levels of turnover of between £350,000 and £400,000 with its core base of thirty or so active Clients. And with a growing franchise network, will not only benefit from significant set up and on-going management fees from franchisees but will be well positioned to pick up and respond to promotional briefs throughout the UK and increasingly the European mainland without having to maintain the cost base of its competitors.
The franchise package developed by this business is very strong having been approved by the British Franchise Association and with the backing of the Royal Bank of Scotland. The franchise agreement was produced by Mundays, the franchise specialist solicitors. All franchisees benefit from excellent support with a 65 page Operations Manual, excellent marketing material, promotional initiatives and on-going training.
A success fee oriented relationship is already in place with franchise consultants both in the UK and Germany to ensure the franchise network continues to grow to meet current projections.
Key opportunities:
In promotional merchandising there is always an opportunity to build on the existing product portfolio – by supplementing it with additional products or exclusive distributorships. With a strong demand combined with a capacity to increase turnover, a new owner contributing fresh ideas will have every advantage of building on an excellent platform.
The greatest opportunity for this business however lies in the full development of its franchise network. This business has already built the network up to nine franchisees settling back to the current level of seven. With a major competitor having built a network of 48 franchisees there certainly is scope to achieve the current projection of 25 franchisees in the UK and Ireland in the next three years with additional Master Franchisors in Germany.
Customer Service:
The business manages many customers in any normal week and with an extremely limited Head Office overhead and additional freelance support it has the systems, processes and people to ensure that both supplier and customer requirements are always met. | Premises:
The business currently operates from 1200 square feet of leased office space on the South Coast of England. The lease (current rent: £7,500 per annum), is due for renewal in March 2006, however the business is eminently re-locatable. One option already under investigation is to purchase new office space at an approximate cost of £50,000 for the 400 square feet in which this business could easily operate. | <>Advertising and marketing:
On a direct supply basis the business has used limited advertising in the past relying on its excellent reputation within the industry and strong word of mouth recommendation.
This business has a well-designed, informative and easy to navigate web-site with an Intranet facility available exclusively to its franchisees. This business produces a new catalogue of merchandise each year plus a newsletter twice a year and has recently introduced a twice-yearly mini catalogue. In addition the business supplies franchises with 6 page colour flyers from the main catalogue to use as mailers with the newsletter.
More recently the business has embarked on an on-going e-marketing campaign.
For franchise recruitment, the business has in the past invested heavily in Franchise Exhibitions however with its name now well known in the sector and a proven trading base, efforts have been re-directed towards more highly targeted franchise lead generation with success fee oriented relationships with companies with proven track records in the growing of franchise operations. This business also receives a steady stream of enquiries from two web-sites it advertises on, a listing on the BFA web-site together with the regular PR features it achieves through the franchising trade magazines. | | | Financial profile: | The business is being offered for sale as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
‘Direct’ turnover for the current financial year was £204,552 – down from previous years, some turnover having been passed across to franchisees with existing Clients within their territories – resulting in a profit of £7,593.
Sales from franchisees for the year-end September 2005 were £308,607. The fee structure for the franchise side of the business involves an up-front payment of £24,995 with a further 6% management and marketing fees charged monthly dependent upon turnover.
Management fees from the franchisees from October 1st 2004 to the year-end September 2005 amounted to £31,539 with a slight end of year loss of £1,707. Projections for the 2005/6 financial year suggest that existing franchisees alone will generate management fees of around £35,000 - £40,000. | Employees:
The current Owner of the business is responsible for all aspects of the day to day operation well supported by his wife dealing with Accounts and a highly effective, full time administrative employee. Additional part-time administrative support, approximately 24 hours per week, is due to be added imminently.
Franchise training is conducted by the current Owner supported by two excellent, self employed trainers – one in Sales and Marketing and the other a Business Coach. | Support and training:
The current owner will provide all necessary training and all relevant contacts to allow continuity of trading even to the extent of staying on for a two or three year period as a Director on a salary or on a consultancy basis at a fee to be agreed.
Alternatively the current owner would consider working towards an ‘earn-out’ based on performance against the numbers of franchisees joining plus the increase in management fees from the franchise network.
The existing ‘direct’ business could also continue to be run by the current Owner but absorbed within the existing franchise network. | Reason for sale:
Having been involved in promotional merchandise for over twenty years and built the foundations for the growth of a substantial business the current Owner believes the time is right to pass the business on to new owners who can take it through its next stage of rapid development. | | Turner Butler Disclosure Statement: This statement applies to information relating to any company or other undertaking or business advertised for sale by Turner Butler (a 'Business') The information supplied by Turner Butler on its website or in any other promotional material ('the Information') is not and is not intended to constitute an offer for sale of the Business or any assets of the Business or of the shares of any company which owns the Business. For the avoidance of doubt there is no intention to create a legal relationship which will only come into existence when a written contract for sale and purchase of the shares in or the Business has been entered into The Information provided is not intended to address your particular requirements. Further the Information does not constitute any form of advice recommendation representation endorsement or arrangement by Turner Butler and is not intended to be relied upon in making (or refraining from making) any specific decisions. Any agreements transactions or other arrangements made between you and any client of Turner Butler are at your sole risk and responsibility. The prospective sellers of the Business have provided the Information to Turner Butler. The Information has not been verified by Turner Butler. You must carry out your own due diligence and satisfy yourself as to the accuracy of all matters. In the case of the sale of shares in a Business the Information has been prepared on the basis that the shares will consist of or include more than 50% of the voting shares and that both the seller and the buyer is either a body corporate, a partnership, a single individual or a group of connected individuals so as to fall outside the scope of regulated activities as defined by the Financial Services and Markets Act 2000. If you are considering a transaction which falls within the scope of such regulated activities you cannot do so through Turner Butler. Appropriate professional, legal and accountancy advice should be obtained before making or refraining to make any decision. Turner Butler does not accept any responsibility or liability for loss or damage of any nature that may occur by reliance on the Information. Neither Turner Butler nor any of our employees or agents makes any representation as to the completeness or accuracy of the Information nor do we accept any liability for any losses, costs, liabilities or expenses which may arise directly or indirectly from your use of, or reliance on the Information. This document is governed by and shall be construed in accordance with English Law and any dispute arising in connection with it shall be subject to the non-exclusive jurisdiction of the English courts Turner & Co (GB) Limited registered in England and Wales under company no. 2477988 of registered office Savoy House Savoy Circus London W3 7DA, trading as Turner Butler © Shaun Sweeney October 2006 |
|
