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Questions & Answers About owning a Mugg & Bean Franchise Click here to fill in the Franchise Application Form online Please note that any information listed be changed without notice. This information should prove useful to a prospective franchisee in understanding and evaluating the purchase of a Mugg & Bean Franchise.
You can identify a site and complete the application form on the website and submit it. Should the site identified meet all the criteria and be sanctioned by Mugg & Bean, you will be notified and asked to come in for an interview. Our experience is that franchise expectations exceed available sites and we cannot therefore assist you in finding a suitable site. Each application will be evaluated on individual merit; however the evaluation criteria are as follows:
The investment required for a Mugg & Bean franchise will vary, depending on the size of the premises available for rental. The average Mugg & Bean store has an estimated average development cost of R8500.00 per m2 Excluding V.A.T depending on the size of the store. For example; Should a store be 300m2, then the setup cost will be 300m2 x R8500 = R2 550 000 Excl V.A.T There are many variables, in finalizing the cost like:- Over and above the building of the shop there will be other capital requirements like:
Once you have been approved as a franchisee, signed the Franchise agreement and have paid the franchise fee, Mugg and Bean will provide you with the following:-
There is an initial joining fee, which is a once off payment for the duration of your franchise agreement as follows: Joining Fee: R80,000.00 (excl VAT) You will be required to make the following franchise fee payments to Mugg & Bean franchising on an ongoing monthly basis for the duration of the franchise agreement:
You must have unencumbered capital of at least 50% of the total setup cost in cash, which is to be applied toward the purchase and development of the franchise package. The balance of the franchise package cost can be financed through various lending programs of any bank or financial institution, subject of course, to fulfilment of their usual credit requirements.
Mugg & Bean does provide a turnkey operation. This is administered through our development company. Monies are lodged into a Mugg & Bean trust account and paid out to the development company in stages of the development.
The profit potential of one store versus another, prior to opening, is impossible to determine. Store profitability is a function of many variables not the least of which is management. Profitability can fluctuate from market to market, and even store to store within the same marketing area. Generally as a guideline earnings before drawings interest and tax varies between 15% and 22%. Of gross turnover excl v.a.t. But it must be clearly understood the franchisor provides no guarantees or makes any promises in this regard. Size of the store and trading hours also influence calculations. It is most important that you read the Mugg & Bean Disclosure Document carefully and familiarize yourself with all obligations of the various parties.
The Mugg & Bean franchise agreement, runs concurrently with the term of lease of premises but provides for a five (5) year term. Also, you typically have an option to renew for an additional aggregated period of five (5) years, subject to your fulfillment of certain renewal conditions and the conclusion of a further term of lease. There is no additional franchise fee charged for the renewal term.
This amount is spent on media advertising, merchandising materials, advertising production, research programs, co-operative advertising, special promotions and public relations efforts. We seek advice and direction from franchisee representatives as to the above expenditures, although we retain ultimate decision-making authority. The franchisee is encouraged to place local advertising in addition to their advertising fee contribution, but such local advertising must be approved by the Marketing and Advertising Department prior to any publication, distribution or display.
This business is a most demanding one. It requires and responds to personal attention. You will be expected to operate your store in accordance with Mugg & Bean standards of service, quality and cleanliness.
The terms and conditions in the franchise agreement have been established to maintain and protect the integrity of the brand. The franchise agreement is not negotiable.
Personal guarantees are required with respect to the execution of the franchise agreement and any lease/sub-lease agreement with your landlord, the financial institution providing development capital, or us. If you form a corporation to operate your store, you and your spouse, (if applicable), as well as any other shareholders of your corporation and their spouses, (if applicable), are required to personally guarantee the proper performance of the terms of the aforementioned agreements.
Certain licensed products are compulsory from specified suppliers.
Yes! We strongly recommend that you have the terms of our franchise agreement and other related agreements explained to you by your lawyer.
Yes it is required that you have an entity in which to lodge the franchise agreement. This can either be Company (Pty Ltd) or Closed Corporation (CC). The lease and the franchise agreement should be lodged within the same entity.
We do not generally allow sleeping partners or absentee owners to be franchisees. The operation of a Mugg & Bean store requires direct supervision on the part of the franchisee. Mugg & Bean therefore insists that a operational partner with a share of no less than 26% operate the business. The operational partner must purchase his share of the business.
The concept of the Mugg & Bean and its specialty items allows no discretion to franchisees in determining the menu for a store. You are also not allowed to set menu prices. Menus are updated at least twice per annum and menu items are reviewed and prices re-evaluated by the Mugg & Bean brand team prior to new menu implementation.
New stores are located in markets where research indicates strong possibilities for survival. Our marketing plan of concentrating stores in an area is designed to provide strong brand recognition and strengthening our competitive edge. Exclusivity to specific areas are seldom granted, however expansion is encouraged and opportunities are approved on a case by case method.
Each store is allocated a franchise consultant. you can expect to receive consultation from your franchise consultant on a regular basis and assistance when special problems arise. These trained and experienced people keep franchisees up-to- date on new ideas, improved methods, new products, and marketing techniques, and generally act as sources of information to help our franchisees avoid the pitfalls of trial and error.
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