Mugg & Bean is a coffee themed restaurant chain focused mainly on the South African shopping market: it is essentially a “shoppers shop”. Mugg & Bean provides the highest standard of coffee and associated hot beverages in addition to a great selection of food items, from various breakfast options to lunches and dinners. Mugg & Bean has won the Caxton Leisure Options “Best Coffee Bar” category for 10 years in a row.
The investment required for a Mugg & Bean franchise will vary, depending on the size of the premises available for rental. The average Mugg & Bean restaurant has:
- An estimated average development cost of R10 000.00 per m2 Excluding V.A.T depending on the size of the restaurant. For example: Should a restaurant be 300m2, then the setup cost will be 300m2 x R10 000 = R3 000 000 Excl V.A.T. There are many variables, in finalizing the cost like: The Landlords contributions, Complexity of the site, Store design. Size of location.
Please note that the above is a guideline and a more accurate figure is provided once all information pertaining to the site is finalized and a site survey is completed. The above figures are exclusive of V.A.T.
Over and above the building of the shop, there will be other capital requirements like:
- Rental deposits: generally 2 months rental
- Electricity deposits: about R5000.00
- Stamp duty: calculated at 0.6% of the total rental value of the lease period
- Lawyers fees: ( if required )
- License fees: i.e liquor license, trading license
- Submission fees for plans: R1500 to R2000.00
- Staff training: staff meals and salaries during training – between R25 000.00 and R35 000.00
- Operational capital: R100 000.00
There is an initial joining fee, which is a once off payment for the duration of your franchise agreement as follows:
- Joining Fee: R240, 000.00 (excl VAT)
- Monthly management services fee: 6% on your restaurant’s gross sales (excl V.A.T)
- Monthly marketing fee: 4% on your restaurant’s gross sales (excl V.A.T)
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 programmes of any bank or financial institution, subject of course, to fulfillment of their usual credit requirements.
Our experience is that franchise expectations exceed available sites and we are therefore not in a position to assist you in finding a suitable site at this time.
Established since 1996, there are currently 60 franchised units in South Africa. Mugg & Bean is the winner of the “FASA Newcomer Franchisor of the Year 2001 Award”, the winner of the “FASA Brand Builder of the Year 2003 Award” and the “FASA Franchisee of the Year 2003 Award”.
Mugg & Bean is a coffee themed restaurant chain focused mainly on the South African shopping market: It is essentially a “shoppers shop”. Mugg & Bean South Africa provides a high standard of coffee and associated hot beverages in addition to a great selection of food items on their innovative and unusual menu, from various breakfast options for early morning shoppers to muffins and cakes for tea time. Lunches and dinners are catered for with a superb range of hot and cold foods.
So taken is the public with the chain that Mugg & Bean sales in its Southern African units exceeded R300 million in 2004. While no specific profile is targeted, Mugg & Bean enjoys support from the residents of the areas in which the stores are located. Socio-geographically, most units are located in areas where there is a distinct density of upper-end customers.
Mugg & Bean South Africa falls into a category perhaps best described as “Fast Casual”. It is neither fast food nor is it casual dining, but a mix of casual diners wanting quality food quickly and efficiently. Mugg & Bean dominates this sector in all of its 70 South African locations.
The South African market is fascinated by brands and has an insatiable appetite for the new and trendy. Mugg & Bean identified this early on and has, since its inception, revamped its menu content at least twice a year, providing an interesting change for some 100,000 registered Mugg & Bean Regulars.
The South African market also embraces new concepts easily and the company is constantly looking at new food items to add to menus that will broaden appeal and attract new customers.
Mugg & Bean is generally regarded as a coffee shop, when in fact only 23 percent of sales are coffee and related items and 77 percent of sales is food. Mugg & Bean South Africa sees a distinct move toward convenience in the retail environment with the big growth being shown in smaller strip mall environments.
The company aims to continue to dominate this sector and is now regarded as a draw-card for most malls and is therefore offered real estate preference. Mugg & Bean also aims to grow to 120 “classic” units in the next five years, and to capitalize on the opportunities that exist for brand extensions. Turnover currently grows at around 30 percent per annum, where same-store growth is around the 12 percent mark.