The Mister Minit Franchise is a little different to the standard type of franchise. There is only a small up front financial commitment and the payment of stock and materials. The weekly franchise fees are fixed rather than expressed as a percentage of sales. The other main difference is that the franchisee will purchase a franchise for an established shop. The established customer base and trading record gives the franchisee the opportunity to potentially generate returns more quickly than if it was building a business from scratch.
Prior to commencing trading, the franchisee will be required to purchase the stock and materials carried by the Mister Minit shop that the franchisee has obtained a franchise for. Minit will conduct a stock take prior to the commencement of the franchise and will invoice the franchisee for the amount payable for the stock and materials. Throughout the term of the franchise, the franchisee will also be required to purchase its ongoing requirements for stock and materials from Minit. All stock and materials will be sold to the franchisee at Minit’s wholesale price list.
The franchisee will also be required to pay a fixed weekly Franchise Fee to Minit. The Franchise Fee covers rental and outgoings (Occupancy Costs), equipment rental for the equipment supplied (Equipment Rental) and a licence fee for the use of the Minit brand and intellectual property (Licence Fee). The Franchise Fee can easily be budgeted for. The Franchise Fee will be varied annually by CPI plus 2% and by any further amount if there is an increase in the rental charged by the landlord for the premises.
If in a Financial Year net sales are sufficiently high, then a net sales percentage will apply in calculating the Franchise Fee.
Some of the other main aspects of the Mister Minit Franchise include:
- There is a low entry fee into the franchise, plus the purchase price for the initial stock, and your own legal, accounting and other advisor fees
- The business is established, with a trading record, and existing customer base
- Because the franchise fee is fixed rather than variable, lifting sales performance has the potential to provide higher incremental returns to the franchisee. Of course, if sales drop, the same fixed fee is still payable.
- There are no extra charges for ‘Marketing’.
- Stock is sold at Minit’s wholesale purchase price (cost price plus warehousing and handling costs). Minit passes on the savings of its bulk purchasing power.
- Imported branded component stock is unique to the Mister Minit business and reinforces Minit’s brand positioning.
- The Franchise Fee covers repairs for major machinery breakdowns (provided the repair was not due to abuse or lack of proper maintenance) and designated shop refurbishments.
- Minit has made a considerable investment in the the franchise, and to protect that investment the franchisee will be required to provide a bank guarantee.