Financial Elements

Application Fee

R20 000.00 incl VAT.- Incurred to demonstrate commitment to the Simply Asia franchise process and to partially offset the costs of in-store assessments, interviews and tests. The balance of the amount which wasn’t utilised to conduct the relevant checks and screenings will be offset against the joining fee of R100 000 (excl VAT) which is required once the drafting of the franchise agreement has started.

This amount is refunded in the event of the potential applicant withdrawing in the process as per our terms and conditions.

Joining Fee

R100,000 (excluding VAT) – This fee includes the following:

    • The right to use and operate the name and concept
    • Franchisee and staff training
    • Assistance with the site selection and negotiations
    • Assistance with lease negotiations

Please note that the upfront fee specifically excludes any fees levied by the Franchisor in respect of chef deployment and opening support and training. This fee is payable upfront and is non-refundable after signature of the franchise agreement. Any costs incurred prior to signature will be deducted from this upfront payment. This would be in the event of withdrawal prior to signature of the Franchise Agreement.

These costs may include:

      • Site feasibility studies
      • Lease negotiations
      • Drawings/architects fees
      • Administration
      • Psychometric testing
      • Training
      • Any other costs incurred and/or disbursements made in respect of this deal

The training and opening support is site dependent and ranges between R20 000 and R30 000.
The chef deployment fee is R 20 000
A Marketing Plan fee of R 40 000 is billed for all new stores, franchise renewals and revamps. This fee is used to implement the marketing activities for opening a new or revamped store. This fee however excludes the cost of any marketing material used by the Marketing to open the store

Project management fee is R35 000

A legal fee of R 5 500 is payable for drafting of all franchise agreements in terms of new stores and franchise agreement renewals.

Estimated Set-Up Costs

These costs may vary based on the size and design of the store. The estimated costs include working capital and all other anticipated costs.

Sit-down Restaurant: R1,800 000.00 (excluding VAT) includes all initial fees listed above (Approximately 40-seater restaurant. Cost might increase based on size of site)
Express Stores: R1,300 000.00 (excluding VAT) includes all initial fees listed above

Minimum unencumbered cash contribution: 50% of set-up costs.

Initial working capital: Approximately R 300 000
Minimum unencumbered cash contribution by Franchisee: 50%
(i.e. available cash before borrowed funds based on average investment)
The above cost is dependent on landlord contribution to basic building work.
Notes:
1) The figures included above are estimated and not expressly or by implication, guaranteed. Set up figures will vary from site to site.
2) It is anticipated that the Franchisee will be required to fund at least 50% of the capital investment required through unencumbered funds. The balance of the funding could be a combination of medium term loans and overdraft. We advise all Franchisees to ensure that their funding requirements are sufficient and sustainable taking into consideration possible funding structures which may be offered by financiers

Project Management

In a further effort to assist the Franchisee through the development phase of the business, Simply Asia has adopted a project management approach. This approach includes full project coordination at a cost of R 35 000 (which is included in the estimated total establishment cost referred to above) and is applicable to both new stores and current stores due for revamp.

Design fees by the appointed architects are levied separately and are dependent on the requirements of landlords and local councils.

In determining the final budget for the restaurant, the project management team will present the final quotes to the franchisee which will then be confirmed by the Franchisee by signature to the budget.
It is important to stress at this point that Simply Asia has no objection to Franchisees obtaining their own quotes from alternative contractors, subject to the ability of such contractors to meet the required standards. Notwithstanding this, experience has shown that third parties not accustomed to these kinds of projects usually delay set-up and, consequently, the opening date of the store. This then has the effect of incurring additional expense on the part of the Franchisee who is required to cover certain fixed expenses within this time, for example, staff salaries/wages. This usually erodes any benefit derived from the use of “unknown” contractors.
The project management process is totally transparent and the Franchisee is at liberty to scrutinize and compare any item at their will. The process is designed with the main objective of taking some of the pain out of the establishment of a restaurant for the Franchisee through letting the professionals do what they do best.

Royalties

Monthly royalties are calculated as a percentage of the monthly turnover of each store and enables the franchisor to give ongoing support and service. Marketing royalties cover national advertising, promotions, research and other activities which benefit the Simply Asia brand.

Franchise Fee: 7% of monthly Net Sales
Marketing Royalty: 3% of monthly Net sales