Q: Are the employee contracts drawn up along with the setup of the business before the franchise is opened?
A: Staffing and employment are left to the branch owner’s discretion – however, our experienced team will assist you in employing the correct people. Employment contracts, salary packages, and benefits can be obtained from the head office.
Adverts for staff vacancies will need to be placed in the first week after payment. All interviews and employment contracts will need to be handled before the branch is opened.
Q: Are the employee salaries determined by the franchisor or franchisee?
A: Head Office can make suggestions on salaries, based on the market standards, and guide the franchise, however, the franchise is completely his own boss and will make the final decisions regarding salaries and overheads.
Q: What is the expected time period from the signing of the contract to the business being operational?
A: Complete erection of an HATTECH Branch takes approximately 30 to 60 days from payment.
Q: How does the business get its leads for generating income on an ongoing basis to sustain the business?
A: HATTECH is a national company with one smart telephone number and one website. Online marketing will be done on a national level by head office, which will generate leads. All leads from the website will be passed on the relevant branch.
Each branch is also responsible for its own marketing within the designated area to increase leads.
Solution developers/sales executives should be doing direct marketing such as cold-calling, door-to-door visits, and getting referrals from existing clients, in order to reach their sales targets.
Q: Is the marketing of the franchise centralised or is each HATTECH branch responsible for its own marketing?
A: HATTECH Head Office will be teaming up with an online marketing company to market HATTECH on a national level once the company branch network has grown to the desired level. However, each HATTECH branch will be responsible for its own marketing within its licensed area.
This means that head office will be responsible for creating brand and product awareness on a national level, but the store owner will be responsible for marketing and lead generation within his/her specific area.
Q: Are the majority of the client’s walk-in or per appointment clients? (This will determine the location and facilities of the offices.)
A: HATTECH works with clients by appointment only.
Q: What is the size of the offices required? Does it need to be in a specific area?
A: HATTECH Branches are not dependent on walk-in clients or the general public thus they do not need to be located in shopping malls or busy centers. For insurance and safety purposes office parks with good security and access-controlled gates are preferred locations for HATTECH branches.
The ideal size of an HATTECH Branch office is around 120m2 - 130m2. The HATTECH Branch needs to have a reception area, a technical workshop, a meeting room, a store room, a kitchenette, bathrooms, and sufficient office space for employees including a sales office and support desk.
Q: What is the expected turnover of the franchise per year? (BEE requirements)
A: Total Turnover should be around R 450 000 per month with a Gross Profit of around 40% (R 180 000). This means an expected turnover of around 5.4 million per year. There are no BEE Requirements.
Q: Are we allowed to chop and change pricing as this industry of information technology is a rapid growing industry? Do we need to chop and change pricing to stay afloat in the industry?
A: Yes, HATTECH head office supplies the branches with all hardware, but it is up to the branches to determine their own margins. HATTECH head office will guide and help the branch to structure prices with the support of the NHS and in-house management systems to be competitive and market-related.
We work on old basic principles, bulk buying power. HATTECH head office buys hardware in bulk and supplies this hardware to all the branches as per their request. We buy bulk and resell to our branches at prices our competitors cannot compete with. This allows the branches to be sold at market-related prices and be competitive with the advantage of much higher margins.
HATTECH is currently in the process of manufacturing our own hardware that will be available soon.
Q: You mention in the portfolio that the business will try to recover the funds that I invest within the first year … can you elaborate how this process will work?
A: In a nutshell, you should earn back the money you invest within a year, based on the expected volume of sales.
Turnover is expected to be around R 450 000 per month with a gross profit of around 40% (R 180 000). This gives an estimated gross profit of R2.16 million annually. Purchasing an HATTECH branch costs R595000 – therefore you should earn back your investment within the first year.
Q: Is working capital included in the asking price of R595000 or does it have to be budgeted for separately?
A: The new franchisee is responsible for the rent and deposit of the offices, new business registration with CIPC, VAT registration number with SARS, and business internet connection. This will be separate from the purchasing price.
Q: Apart from the purchase price and the vehicle, what else will have to be financed? Is there something else for which there has to be budgeted for?
A: The franchise has to keep some funds available for the first two to three months after start-up for general running cost and kick-off overheads. Generally, this will not be more than R150000, but the amount is subject to the office rent costs, a number of employees, etc.
Q: What does the business/branch staffing structure consist of?
A: For the first 6 to 12 months you will need to employ:
1 x Branch Manager - preferably the branch owner for the interim stages of the business.
1 x Receptionist
3 x Solution Developers (sales executives)
1 x Junior technician
1 x Senior technician
1 x cleaner (part time only)