FRANCHISEE PROSPECTUS 2015
Franchisee Prospectus 2 2015
RE: Sasol Franchise Dear Sir/Madam Thank you for your enquiry regarding a possible investment in a Sasol Convenience Centre. Attached please find the document explaining the company profile, capital expenditure, as well as other information regarding the franchise. The Franchisee Recruitment and Training Co-ordinator OR Call our Contact Centre on the toll free line : 0860 335 444 Yours sincerely, The Franchisee Development Manager DISCLAIMER: Please note we will only accept emailed application forms no hard copies or faxes will be allowed, You may only send in an application form for a site that is advertised on our website that has not exceeded the closing date. 3
INTRODUCTION Southern Africa Energy is a subsidiary of the Sasol Group of companies. Southern Africa Energy s main function is the sales and marketing of various fuels and lubricants products, including motor fuel, turbo diesel, liquid petroleum gas, motor oils and greases. 1. OUR SHARED VALUES AND DESIRED BEHAVIOURS ARE: Safety We are committed to zero harm and all that we do, we do safely Safety is our first priority in planning and executing any task We intervene in a positive way to address unsafe acts or conditions We do not harm or endanger ourselves or others, at or away from the workplace We take care of our own well-being, both physical and emotional, as well as that of others We create a safe, secure, productive and rewarding work environment People We create a caring, engaged and enabled work environment that recognises both individual and team contributions in pursuit of high performance We respect, embrace and value diversity and inclusion We establish trust and interdependence in our relationships We engage people through open and honest communication We collaborate effectively as teams to achieve common goals and high performance for the benefit of One Sasol We recognise high performance and act decisively to address sub-standard delivery Integrity We act consistently based on a set of values, ethical standards and principles We are open, honest and trustworthy in all our interactions We are consistent, respectful and fair in all situations We report and act on unethical behaviour We practise effective corporate governance We comply with all applicable legal requirements 4
Accountability We take ownership of our behaviour and responsibility to perform both individually and in teams We have a clear understanding of what is expected of us and act accordingly We make informed and responsible decisions We are individually accountable and hold others accountable for performance We learn from our mistakes and build on our successes We earn the trust of colleagues by honouring our commitments Stakeholder focus We serve our stakeholders through quality products, service solutions and value creation We take responsibility for profitably delivering quality products, services and solutions to our customers We understand the changing needs of our external and internal stakeholders and respond appropriately We make improving the quality of our stakeholders experience a matter of urgency We promote and protect our reputation We treat stakeholders with honesty, dignity and respect Excellence in all we do We deliver what we promise and add value beyond expectation We constantly find ways to simplify and improve the way we do things in a cost effective manner We show pride, enthusiasm and dedication in everything we do We share information openly, freely and proactively We commit to learning and continuous improvement and we embrace change We make decisions based on sound analysis of available inform DISCLAIMER: This document does not represent a contract or agreement and may not be interpreted as such. The document serves as a reference to questions frequently asked by people applying for a Sasol Franchise. 5
FAQ s Frequently asked questions Q1: How do I apply for a Sasol Franchise? A: You would need to view our website on a regular basis to see which sites are available, once there is a site available and you want to apply for it, then only will the application form become available on the website. You cannot apply for a site if it has not been advertised. You will then need to complete the Application Form and send it to us together with proof of funds in the form of a certified bank statement. You will also need to have at least 60% unencumbered cash of the total capital required. The balance can be a loan from a financial institution of your choice. (NB: the gearing needs to balance in terms of your contribution against the loan). We do not assist with Financial assistance. Recruitment Process: After a paper selection process (application form screening), telephone screening and the initial interview, shortlisted applicants will undergo further assessment tests where a non-refundable commitment fee of R3 000 is payable for the assessment test. Should they meet all the requirements, the successful individuals will be requested to compile a business plan (business plan template will be provided). The business plan needs to be submitted within 2 weeks. These business plans will be screened and short-listed individuals might be invited to a panel interview. Check our website for available franchises and apply for the site of your choice. Q2: How much Franchise Fee ( Right to Trade ) will I be expected to pay? A: You will be expected to pay an upfront franchise fee of a minimum of R3 000 000 excl VAT. This fee will be dependent on the locality of the site, Sasol investment in the infrastructure and equipment and, accordingly, our expectations on the profitability of the site. The franchisee will need to factor into his /her business plan an expected return on investment. A further R800 000 Bank Guarantees (Product /Rentals) will also be required upfront. In case of a carwash, an additional R120 000 Franchise Fee excl. VAT will be required NOTE: This fee is for preliminary costs incurred by Sasol in connection with the setting up of the franchise system e.g. development of corporate identity and a corporate design; location analysis; development of equipment; business finance, marketing and staff plans; drafting/updating of manuals; establishment of franchise management division. Q3: What is the total amount of capital required excluding the upfront Franchise Fee? A: You will require an additional amount of R2 000 000 to cover your start up costs. 6
Q4: What do I get for my money? A: You will receive: 1. Well thought through business opportunity. 2. Thorough initial training for you and your staff. 3. Initial and on-going business support. 4. Central purchasing facilities. 5. Professional services and benefits negotiated by Sasol. 6. A complete building/structure, which comprises of: Forecourt (include pumps and tanks but excluding stock) Sasol branding and signage Sasol delight! (Convenience Store) including equipment (excluding stock) Bakery/Fresh food outlet ATM where approved by the bank Car wash (some locations only) Q5: Which areas are available? A: We are currently building in the following provinces: Gauteng, Mpumalanga, Northern Province, KwaZulu Natal, Free State, North West, Western, Northern Cape. Notification of available Franchise opportunities will be advertised on the Sasol website with the address www.sasol.com/franchise and in the local or national newspapers. Q6: Initial Assistance: A: The franchisor will also provide assistance with: Marketing and advertising required, including the initial launch of the business; Design and layout of the premises; Incorporation of tradename(s) and trademarks; Training of staff; Installation of equipment, fixtures, fittings etc; Management, stock control, front and back office systems; and Financial management systems. CAPITAL EXPENDITURE (ESTIMATED CAPITAL REQUIRED) Minimum Franchise Fee (Excl VAT) R3 000 000 Car wash (if included) (Excl VAT) R 120 000 Guarantees (Approval of funds by the bank) R 800 000 START-UP-COSTS Wet Stock (Forecourt) including (40 000 liters stock and calibration fuel) R 750 000 Dry stock (C-store) R 50 000 Deposits (municipality connection charges) R 50 000 Initial requirements R 130 000 Working capital R 550 000 Estimated Total Capital Required R 4.650 Million NB: Own cash contribution: at least 60% plus of the total amount required 7
MONTHLY FRANCHISE FEES You will be required to pay the following monthly fees: The Sasol RAS portion is based on the investor margin, the risk mitigation margin and operations margin which constitute the RAS retail margin. The Sasol RAS portion consists of: 90.514 % of the investor portion of the Petrol Retail Margin to reward the investment into the Premises, Equipment and Capital Equipment in respect of the Business 15.00 % of the risk mitigation margin to reward business risk, environmental risk, beneficial use of Intellectual Property such as Confidential Information and Know-How and ongoing support provided by the Franchisor and its representatives. 5.673 % of operations margin as cost recovery for ongoing maintenance by the Franchisor and its representatives on Sasol s equipment as well as for municipality rates. Turnover fees in the Sasol delight! convenience store including the bakery is 10% on all gross shop sales (excluding cell phone airtime and lotto sales) Fees for ancillary businesses are available on request and relate to the particular franchise to which the ancillary business relates not included in the Estimated Total Capital Required. NOTE: PLEASE NOTE THAT THE ABOVE SERVES AS A GUIDE ONLY AND FIGURES QUOTED WERE APPLICABLE AT THE TIME OF UPDATE 8
Franchisee Prospectus 2015 What is RAS? A Sasol RAS portion which is set up in line with the principles of the Regulatory Accounting System (RAS), specified in Annexure 1, in respect of all Petroleum Products sold (excluding Lubricants) from the Business. The RAS portion as detailed in this clause will be included in the selling price to the franchisor i.e. it will not be invoiced separately Do I face any possible risks? Like any business there is no guarantee of success. Franchised businesses usually have a higher success rate than other independent businesses because of many of the reasons outlined in this document. However franchisees do fail. Some of the reasons are: Investment of insufficient capital in the business resulting in excessive borrowing. Insufficient research on the part of the Franchisee resulting in unrealistic expectations. Lack of compliance with the franchised business system. Lack of commitment, dedication and motivation to the time requirements of the business i.e. absent owners/ Franchisees. Poorly selected, trained and managed staff Undesirable business environment 9