Purchasing a franchise is one of the easier ways to get into business. You don’t need to start from scratch and the business operations are already outlined for you. The biggest decision you need to make is which franchise to purchase. A great option in South Africa is a franchise from the courier company, PostNet.
A franchise is when you buy the rights to use a business’ operations, branding and knowledge. The person or company which owns the licence is called the franchisor. The buyer is the franchisee.
According to the Franchise Association of South Africa (FASA), there are over 40 000 franchise businesses in South Africa. The franchise sector employs over 500 000 people. The largest franchise in South Africa is KFC.
In this article, we look at what you need to become the owner of a PostNet franchise and what it will cost you.
What Do You Need to Own a PostNet Franchise?
Much like any other franchise, there are certain steps you will need to take before purchasing your PostNet franchise. The first thing you have to do is market research to find a suitable location. A great location for a PostNet would be somewhere where people need a one-stop shop for printing, internet use and courier services.
The next step is to get in touch with the franchisor. PostNet has an online form you can fill in when you want to open a franchise. You can also send them an e-mail at sales@postnetsa.co.za to find out more about their franchise offerings.
What Will It Cost You to Own a PostNet Franchise?
To own a PostNet franchise you must have a pre-prepared franchise fee amount. A franchise fee is the money you pay to the franchise owner for the right to enter into the franchise agreement. PostNet requires a franchise fee of R 95 000 to enter into the franchise agreement.
The total investment package also includes the franchise fee. The total investment package is the money you pay in total for the franchise. PostNet requires a total investment package fee of R 800 000 or more.
Note: PostNet requires that 50% of the total investment package must be available as unencumbered capital.
What Does PostNet Require From its Potential Franchisee?
PostNet refers to franchisees as business partners. On the company’s website, there is a list of qualities that PostNet considers as key for its business partners. These include:
- Being a team player.
- Be a people person.
- Be energetic.
- Pay attention to detail.
- Be enthusiastic.
- Be financially oriented.
Of course, the company also needs its potential franchisees to be financially prepared to buy the franchise. One of the ways to help yourself be prepared is to get a loan.
How to Get Funding for Your PostNet Franchise
You can get funding to help cover some of the costs of starting a franchise. Some of the loans for franchise purchasing are:
Term Loans: A lump sum of money which is repaid with interest in monthly instalments over a set period.
Working Capital: This can help boost your working capital as you start your business.
Inventory Loan: This can help you buy stock and equipment.
When applying for a loan, you will need the following information:
- Written confirmation from the franchisor that you have been approved to buy the franchise.
- A copy of your ID.
- A personal balance sheet which shows our assets and liabilities.
- Information that relates to your background which is similar to a CV.
- Proof of the origin of your unencumbered deposit.
- A robust and comprehensive business plan.
- A copy of the lease agreement.
- A copy of the franchise agreement.
- A copy of the signed agreement sales which states the conditions of the sale.
- A comprehensive breakdown of equipment to be financed. This includes a Rand value per article.
- Applicable company registration certificates from the Companies and Intellectual Property Commission (CIPC).
- Signed financial statements and a 12-month cash flow projection. If your financial statements are older than six months, you must submit up-to-date management accounts.
- Six months’ bank statements of the business trading account.
Where to Apply for Franchise Funding?
There are a few places where you can get funding for your franchise. The platforms are as follows:
Masisizane Fund: The fund provides enterprise development funding to small, micro and medium enterprises (SMMEs).
National Empowerment Fund (NEF): The NEF provides franchising funding of up to R 10 million to B-BBEE-certified applicants.
Traditional Banks: Most banks in South Africa offer franchise funding. You must ensure that your credit score is good and that you have a comprehensive business plan.
Note: Only apply for loans if you are sure that you can pay them back.
These are the things you will need to get your PostNet franchise up and running. Don’t wait too long, find the perfect location with a good customer base, get your PostNet franchise and begin your business journey without much hassle.
For more information on the right franchise for you, find out more about the franchise opportunities in South Africa.
