aqua franchise brochure
Introduction Aqua Maritime d.o.o. is a fast growing company specializing in the design, distribution and retailing of convenient, unique and distinctive maritime apparel and accessories for tourists, as an alternative in the gift-shop market. The effectiveness of Aqua s concept lies in simple product design carried out by an experienced in-house design team and in fully branded and eye-catching retail outlets - attractive, conspicuous, striking and trendy. Although seasonal, Aqua s business model generates revenues per m 2 that are several times higher than in other retail apparel businesses. Proven concept in the gift shop sector Low entry-cost franchise model Eye catching and trendy design Value for money products 2
Company Highlights 17 own retail outlets (16 in Croatia and 1 in Italy) 28 franchises - 17 domestic (Croatia) and 11 international (Australia, France, Hungary, Netherlands, Slovenia, South Africa, Spain and United Kingdom) Contract with Havaianas (www.havaianas.com) for co-branding of flip-flops Recognizable brand and design in Croatia Headquarters and warehouse located in Zagreb, Croatia (3,500 m 2 ); sufficient to support the expected growth of the company in the future Large product range No.1 gift shop in Croatia 3
Collections * At present, the company has 5 different product groups and is constantly developing / designing new products. Products are divided into the following product groups: Aqua Basic (Fish & Star) School & stationery Gadgets Mini beach & travel Aqua Bath Kids shampoo Herbal soaps Bath frizzers Towels Aqua Beach Beachwear Clothes Beach items Jewelry Aqua Natural Handmade natural soaps Lavender bags Baskets High quality natural sponges Wooden vases * Aqua does not provide seasonal collections. For more informations about our products, please visit www.aquamaritime.hr Aqua Home Textile Glassware Scented candles Ceramics Cutlery 4
Co-branding In 2007, Aqua signed a co-branding contract with the world s most renowned flip-flop producer Havaianas (www.havaianas.com). Havaianas are present globally and have sold more than 2.5 billion pairs of flip-flops. The co-branding contract with Aqua, a precedent for Havaianas, was an acknowledgement of the company s concept and design. At present, Aqua generates about 5% of its sales with this product group. The company sees great potential in this product group in the future. 5
The Franchising Model Aqua is one of the fastest growing franchises in South East Europe After first opening a series of own shops oriented to maritime tourism on the Croatian coast, the company began to receive requests from independent owners of gift shops wanting to open franchises. This provided the basis for the expansion of a franchise network along the Croatian Adriatic coast. Due to the popularity of these shops with foreign tourists the company also began to attract interest in international markets. This led to the opening of franchise stores in a number of foreign countries neighboring Slovenia and Hungary, as well as Spain, South Africa and Australia. This first phase of franchising growth was relatively unplanned, relying mostly on expressions of interest. The next phase will be a concentrated effort to open up markets along the Mediterranean coast in the seaside tourist centers of Spain, France, Italy, Greece and Turkey, as well as Montenegro and Portugal. No franchise fee, low set-up costs In order to prove the concept and achieve fast growth and critical mass, the company decided not to charge a franchise fee, giving franchisees a low entry cost with a fast ROI period only around 4,000 is required upfront for shop refurbishment and conversion into an Aqua branded store (average refurbishment cost for an average-sized shop of 40 m 2 ). In addition to the set-up costs, the franchisees commit to an exclusive supply of goods/products from Aqua. The initial supply of stock for an average-sized shop amounts to about 40,000. 6
The franchise selection criteria The key selection criterion for a potential franchise shop is location. The owners/managers personally inspect and approve each franchise location prior to making a final decision on whether or not to approve the franchise. Given the constraints of the tourist season, which usually lasts from April to September, when most of the gift shops generate 90% of their revenues, it is vital to be located in a street with the highest density of tourists (i.e. spots where most gift/souvenir shops are located). Branding the Shop Upon location approval, Aqua s interior designers create, position and brand the complete interior of the shop (wall colors, position of furniture and various displays). Complete interior furniture is supplied by Aqua. In order to have quality control of the entire refurbishment process, the company sends its own workers to the location to monitor the process, which usually takes up to 5 days. Upon completion of the refurbishment, Aqua workers and managers approve the opening of the store. With tight control over this process, Aqua assures that the quality of each individual shop remains on the same level and guarantees the same brand perception wherever the shop is located. 7
Aqua franchise terms and conditions The franchise is based on an agreement entered into for mutual benefit that can be signed in advance or after the first season. Aqua know-how Location and interior of an Aqua shop An outlet in a prime location is the main condition or the first step to an Aqua franchise. This is a guarantee for a successful retail business and is a brand standard. The location of the shop can be approved from photos of the shop and the location. The photos should be taken from the inside, outside and should cover all interiors, exteriors and surroundings. The shop window, entrance, storage and the atmosphere around the shop should be captured. The shop size can vary from 25-100 m 2, and should have at least one window or open front. All the readjustments should be done by franchisee in advance under the supervision of Aqua designers. An Aqua standard shop should have smooth white walls, a telephone and Internet connection, hardware and software for operating the retail and one fitting room. Lighting should consist of movable spotlights equipped with metal-halogen bulbs of 150W each (number of spotlights and other lighting fittings according to the Aqua instructions). It is highly recommended that the shop should have a storage space either in the same location or elsewhere, but certainly large enough to cover the needs of a shop for at least few weeks. 8
Investments Readjustment of the shop (floors, walls, lighting) Furniture and displays Goods Crew (that will come and install the furniture, arrange the goods and train the personnel how to maintain an Aqua store) The first entry on the investment list must be calculated by the franchisee, while all other entries will be estimated according to the size of the shop and the destination to which items and crew must be dispatched. Furniture The cost of Aqua standard furniture is approximately 200 per m 2. Shop front signboard and other displays are provided by Aqua. Awnings can be provided by Aqua or done by the franchisee under Aqua instructions. If the shop is in an old city, under any kind of historical protection or if there are any regulations regarding shop front commercial signs or even interior design, then all of the works will be conducted in accordance with the regulations. Goods The wholesale value of the goods for the first stocking of the shop of 30-40 m 2 is approximately 35-40,000. This includes the stock for the first sales period. Aqua shopping bags, ribbons and various displays are included in the cost of the goods. All hanging tags, catalogues, flyers, blue wall paint, aqua wall letters, etc. are free of charge. 9
Crew The cost of this assistance is individual and is paid only once to cover the costs of the arrival and stay of assistants for 4-5 days during the furnishing process and training of the personnel. Before the final agreement, a personal meeting in Zagreb is requested, as this is considered the only way the franchisee can be introduced to the full Aqua shop system, Aqua collections, and to get instructions regarding the shop fitting and support. At this meeting we also share all financial reports and statistics with our potential franchisee. 10
Headquarters AQUA MARITIME d.o.o. Ventilatorska 5a HR-10250 Lučko Zagreb, Croatia tel. + 385 1 30 91 765 fax. + 385 1 30 91 766 aquamaritime@aquamaritime.hr www.aquamaritime.hr 11