Mugg and Bean Franchise for Sale

 
 
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Mugg & Bean Franchise for Sale

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 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. Operational capital of R100,000 is also required.

Finance

Mugg & Bean lasagne and saladThe 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.

What other costs should be budgeted for:

Mugg & Bean store with patrons
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

What do I get when I purchase a Mugg & Bean Franchise?

Once you have been approved as a franchisee, signed the Franchise agreement and have paid the franchise fee, Mugg & Bean will provide you with the following:

  • Assistance with the conclusion of a lease or rental agreement with the landlord.
  • Assistance in the design, development and commissioning of the new restaurant, the cost attached to these are part of the development cost.
  • Should you require capital The Mugg & Bean Franchise has an approved rating with certain commercial banks to which you will be referred.
  • A 4-6 week training program during which you are taught all facets of the operation of your restaurant, which will take place in the Mugg & Bean Training Centre and Mugg & Bean restaurants. After which, there is a 2 week in-store training programme once your restaurant has been commissioned.
  • The assistance of our Operations Staff with the opening of your restaurant. The Operations Staff will help you hire and train staff, clean and prepare the restaurant for opening and provide general assistance and guidance to you in the running of your restaurant.
  • Access to the Mugg & Bean Intellectual Property (know-how), the loan of all Mugg & Bean Operation Manuals which contain recipes, formulas, operating procedures, and general reference materials for guidance in the proper manner of operating a Mugg & Bean restaurant.
  • A team of personnel, experienced in all facets of our system, who are available on an ongoing basis for operational support and guidance.
  • The right to use Mugg & Bean trademarks, which are applicable to your franchise in connection with the operation of your restaurant for the term of the franchise.
  • Marketing of the brand and assistance in marketing specific to your restaurant.

What does Mugg & Bean charge as Franchise Fee and royalty?

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)

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:

  • A monthly management services fee of 6% on your restaurant’s gross sales (excl V.A.T)
  • A monthly marketing fee of 4% on your restaurant’s gross sales (excl V.A.T)

How much money do I need before borrowings?

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 fulfilment of their usual credit requirements.

 

How much money can I make from my business?

The profit potential of one restaurant versus another, prior to opening, is impossible to determine. Restaurant profitability is a function of many variables not the least of which is management. Profitability can fluctuate from market to market, and even restaurant to restaurant within the same marketing area.
Generally as a guideline earnings before drawing interest and tax varies between 12% and 20% of gross turnover excl V.A.T. But it must be clearly understood that the franchisor provides no guarantees or makes any promises in this regard. The size of the restaurant and trading hours also influence calculations.

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Territories/Locations

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.

Training and Support

Mugg and Bean South Africa will provide you with the following:-

Initial training

  • Assistance with the conclusion of a lease or rental agreement with the landlord.
  • Assistance in the design, development and commissioning of the new store, the cost attached to these are part of the development cost.
  • Should you require capital The Mugg & Bean Franchise opportunity has an approved rating with certain commercial banks to which you will be referred.
  • A 4-6 week training program during which you are taught all facets of the operation of your store, which will take place in the Mugg & Bean Training Center and nearby Mugg & Bean stores. After which, there is a 2 week in-store training program once your store has been commissioned.Mugg & Bean retail product biscuits and coffee
  • The assistance of our Operations Staff with the opening of your store. The Operations Staff will help you hire and train staff, clean and prepare the store for opening and provide general assistance and guidance to you in the running of your store.
  • Access to the Mugg & Bean Intellectual Property (know-how), the loan of all Mugg & Bean Operation Manuals which contain recipes, formulas, operating procedures, and general reference materials for guidance in the proper manner of operating a Mugg & Bean South African store.
  • A team of personnel, experienced in all facets of our system, who are available on an ongoing basis for operational support and guidance.
  • The right to use Mugg & Bean trademarks, which are applicable to your franchise in connection with the operation of your store for the term of the franchise.
  • Marketing of the brand and assistance in marketing specific to your store
Each store is allocated a franchise consultant. You can expect to receive consultations 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.

Ongoing support

Each restaurant is allocated a franchise manager. You can expect to receive consultation from your franchise manager 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.
We trust that this information will provide an insight into the Mugg & Bean franchise option. If you feel that you meet the requirements as outlined in this brief and you are driven to become part of the Mugg & Bean family, then the next step is to submit an application form for consideration.
Request and read the disclosure document before committing to the franchise agreement.

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About Mugg & Bean Franchises

Mugg & Bean

Mugg & Bean cappucinoEstablished 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.

Mugg & Bean pita breads

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.

Who’s Ideal for Us?

Mugg & Bean beans and mugPeople oriented individuals with a high work ethic, previous food service experience would be an advantage.

Each application will be evaluated on individual merit. The evaluation criteria are as follows:
  • Food service experience, ideally 3-5 years
  • An understanding of how franchising works
  • Available capital to setup the business
  • Owners are expected to operate the business themselves
  • A positive attitude and good people skills
  • Agree to undergo psychometric testing
  • Not afraid of long hours and hard work
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.

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