F R CARGROOMERS AUSTRALIA AND YOU A Thank you for your interest in Cargroomers Australia. N It is with great pleasure that we enclose a Cargroomers' Franchise Proposal for your perusal. C Cargroomers is a National Franchise Operation in the business of mobile H car care, taking the service direct to the market. Cargroomers Australia, by taking full advantage of the benefits of I franchising, has nurtured a network of successful Franchise Owners, which is growing and developing steadily. S Since inception, Cargroomers has experienced incredible growth and internal development. This expansion has not only been reflected in size, E numbers and profitability, but also in improved service to the customer and better overall business operations. Cargroomers is an organisation founded on teamwork - each member of that team carrying out their role to the best of their ability. The result - P a successful and dynamic organisation. If you have any questions regarding the information contained in the R proposal, please contact myself, or the relevant Cargroomers' State or Regional Licensee. O Yours faithfully, CARGROOMERS AUSTRALIA P O S ERROL WOOLCOTT NATIONAL FRANCHISOR A L 2 WHAT IS FRANCHISING? Many people think franchising is an industry, but it’s not, it’s simply a way of doing business. A unique way to distribute independently. There are key characteristics in the way all franchise companies do business. First and most valuable is the unique, protected trademark. Each franchise offers comprehensive training, not just the usual manual and product. There is an on-going business relationship between the Franchisor, State and Regional Licensee and the Franchise Owner. There are tested market plans, operating manuals, standards and quality control. Within the franchise system there is a lot of two-way communication and there is a license agreement spelling out the business relationship. If the public understood that franchising is basically only a tried-and-true, tested way of doing business, some of the mystery and confusion would disappear. The very first company to use a franchise system was the Singer Sewing Machine Company in the 1860's. Singer turned to franchising because it was a way of spreading inventory costs and establishing a dealer network that could service, what was at the time, a fairly sophisticated piece of equipment. In 1886, Coca-Cola turned to franchising, as a way of creating a network of bottlers that would sell at the wholesale level. Then, around the turn of the century, some manufacturers were working on a new invention. This one cost even more than the sewing machine and it demanded dealers at a local level who could service the thing. These manufacturers turned to franchising and the automobile has changed the course of history. The automobile dealership and service stations were followed by the major oil companies and eventually Holiday Inn, McDonald’s and Kentucky Fried Chicken. Franchising is a form of marketing that gives consumers what they want, when they want it, the way they want it ... all at a price they can afford. Customers want quality at a reasonable price, franchising with its system-wide management controls, provides it. Consumers want consistent quality from a name they can trust; franchising, with its quality standards and uniform trade name, gives them just that. 3 AREA FRANCHISE SUMMARY FIRSTLY For a business to have a better chance of succeeding it has to have something distinctive about its products and service of which the business owner can 'hang his/her hat on’. It's the ‘POINTS OF DIFFERENCE' that makes CARGROOMERS a ‘cut above the rest.’ The business focus is squarely on satisfying market demand, adjusting to those demands and providing the standard of service that secures repeat and referral business. Cargroomers strong business philosophies and proactive working ethic have positioned this network of dedicated home service operators as one of the largest and most respected of its kind in the Southern Hemisphere. CARGROOMERS are not part of a network of other Home Service businesses. The CARGROOMERS Executive Team is committed solely to the CARGROOMERS business and providing the necessary ongoing support to Franchisees. YOUR FULL INVESTIGATION INTO THIS UNIQUE BUSINESS OPPORTUNITY WIILL BE WORTH YOUR TIME. THE SERVICE AND PRODUCTS: Whilst CARGROOMERS provide the budget conscious customer with a standard car wash service at their home or workplace, the range of services extends much further, to include full exterior car grooming, comprehensive car detailing, and paint or fabric protection. CARGROOMERS services continue to evolve with operational procedures being developed to minimise the labour component of the service and maximise the returns to an operator. CARGROOMERS have also worked tirelessly to source, develop and manufacture a product range of cleaning agents, equipment and supplies. CARGROOMERS now produce a complete range of cleaning agents such as detergents, degreasers, polishes and fragrances. The entire CARGROOMERS range is manufactured at CARGROOMERS head office in Binary Street, Yatala. WHAT CARGROOMERS DOES FOR YOU: YOU can find comfort and security as a team member of this substantial organisation. Full technical and operational procedures are documented and are contained in the CARGROOMERS confidential Operations Manual. Proven Business Building techniques are immediately activated to ensure YOUR business gets the necessary 'kick start'. This includes working with YOU to formulate a Powerful marketing/advertising strategy for the long-term financial growth of YOUR territory). 4 YOUR JOB AS FRANCHISE OWNER: With CARGROOMERS assistance, YOU establish and maintain at least one operating unit within YOUR Territory. As Franchise Owner YOU are given the option to expand YOUR business by appointing contract operators within the Territory. It will be your responsibility to provide the operators with start-up and ongoing support. WHAT YOU GET: - An Exclusive Territory - Low Overhead Business - The BEST possible initial and ongoing training/support in all facets of the business - Initial Start-Up Inventory and equipment- Substantial Yellow Pages Display Advertising. Your investment is $29, 950 including GST- a sum that can be rapidly recouped. THE SKILLS YOU WILL NEED: The most important skill or attribute will be YOUR determination to build a successful business from the solid foundations that CARGROOMERS will provide. This will only be achieved through YOUR ability to effectively communicate with customers and contract operators. ADVICE: You are encouraged to seek professional advice in making your decision. The people who know most about the CARGROOMERS business are the existing Franchise Owners. You are encouraged to meet as many of the existing operators as you like to find out first hand how they feel about their business and the support they receive from their State or Regional Licensee. VAN OPTION: You are able to operate from an approved white van or utility. You are responsible for the purchase of the van. Sign writing will be arranged by the State or Regional Licensee. TAXATION: There are definite taxation advantages in running a small business. As you are operating your business from home, part of your telephone, vehicle expenses, electricity costs etc are tax deductible. Interest on a business loan can also be deducted. Your Accountant will assist you in this regard. 5 1.0 Cargroomers: An Introduction to the Organisation 1.1 History Cargroomers’ first franchise operation began trading in Brisbane, Queensland, in November 1990. During its introductory phase of operations the company experienced excellent growth in customer demand for its car washing and detailing services. Additionally, it received a large amount of interest from business people all around Australia eager to secure state and regional franchise areas. By the end of its first trading year Cargroomers was operating in Queensland, Northern Territory, Victoria, Tasmania, New South Wales and South Australia. 1.2 Cargroomers’ Mission To bring together a team of people who have the skills, knowledge and stability to work towards a common goal - to optimise and fine-tune the Cargroomers Australia franchise network, and to profitably and successfully provide value- for-money car grooming service to all customers. 1.3 The Way We Do Business The business philosophy of Cargroomers Australia is to conduct all levels of business professionally and effectively. Fairness, honesty and integrity shall characterise all dealings between the National Franchisor, State and Regional Licensees, and Franchise Owners. 1.4 The Cargroomers' Organisational Structure As a franchise, the Cargroomers hierarchical structure has been specifically designed to take advantage of the geographic layout of Australia, while still enabling each individual within Cargroomers the autonomy needed to run their own business. 1.5 Bankers National Australia Bank, James Street, Beenleigh Qld 4207 1.6 Registered Office For Cargroomers Australia Pty Limited, Dignan Stephens Accountants PO Box 922,Nerang Qld 4211 Cargroomers Queensland Pty Limited, Dignan Stephens Accountants PO Box 922, Nerang Qld 4211 6 1.7 Trade Mark and Registration No. 575 252 Cargroomers Queensland is a Member of the Franchising Council of Australia. Cargroomers nationally has been divided into eight state-based divisions. These are: Brisbane & Northern Territories South Australia Sunshine Coast Victoria & Tasmania Gold Coast Western Australia N.S.W Cargroomers Australia Cargroomers Cargroomers Cargroomers Cargroomers Cargroomers Brisbane & Cargroomers Cargroomers Gold Sunshine South Western Northern N.S.W Victoria Coast Coast Australia Australia Territories Brisbane & Sunshine South Western Gold Coast Northern N.S.W Victorian Coast Australian Australian Franchise Territories Franchise Franchise Franchise Franchise Franchise Owners Franchise Owners Owners Owners Owners Owners Owners Each State or regional licensee is responsible for their specified geographic area and is directly responsible to the National Franchisor. Cargroomers, in each state of Australia, is regionally divided to enable an optimised spread of franchise areas. 7 2.0 The People Behind Cargroomers Cargroomers Australia is operated by a number of people, and receives professional support from external bodies, that play an integral role in the organisation, including legal, accounting and financial advisers. National Franchisor Errol Woolcott Gold Coast South Western Brisbane & Sunshine N.S.W State Victorian Region Australian Australia Northern Coast Licensee State John State State Territories Licensee David and Licensee Harrison & Licensee Licensee Errol Geoff Leigh-Anne Kenneth Craig Gabrielle Errol Woolcott McCracken Amos Taplin Mandall Coles Woolcott Brisbane & Sunshine South Victorian & Western Gold Coast Northern N.S.W Coast Australian Tasmanian Australian Franchise Territories Franchise Franchise Franchise Franchise Franchise Owners Franchise Owners Owners Owners Owners Owners Owners 2.1 Internal Internally, Cargroomers is a three-tiered franchise organisation comprising: The National Franchisor State and Regional Licensees, and Franchise Owners. Each Cargroomers participant has an individual role to play. However, as a franchise team, all members collectively pool their experience, knowledge, and attributes to ensure that Cargroomers operates effectively and optimally. 2.1.1. The National Franchisor Name: Errol Woolcott Specialisation: Small Business Management New Product Development Professional Background & Experience: Possessing a varied and comprehensive background in the area of Small Business Management and New Product Development, Errol is well equipped to administer the direction and overall running of Cargroomers Australia Pty Ltd. 8 From 1974 to 1984 Errol was South Island Manager of a progressive National Importing Company in New Zealand, Errol contributed to the firm's National Marketing, Purchasing and Service policies. Errol then established his own international trading firm involved in importation and distribution of small engine parts for lawn mowers and chain saws. He was one of the first to import ride-on mowers to New Zealand direct from the United States. Following his arrival in Australia, Errol was instrumental in establishing the Budget Hand Car Wash (now Cargroomers) franchise operation. His principal role as Co- Director involved coordination of Technical and Product aspects of the operation. In November 1990 he assumed the position of Sole National Franchisor for Budget Hand Car Wash, now Cargroomers Australia. As the catalyst behind Cargroomers' new business direction, Errol was the driving force behind the new Cargroomers image and name, together with various new product developments and service improvements. For the future, Errol, in his capacity as National Franchisor, is keen to continue expansion of existing Cargroomers services and products, and to increase the earning capacity of all Franchise Owners. 2.1.2 State/Regional Licensees BRISBANE, NORTHERN TERRITORIES LICENSEE Name: Errol Woolcott Specialisation: Small Business Management, Customer Liaison and Financial Control. Certificate Of Franchise Administration. GOLD COAST REGIONAL LICENSEE Name: John Harrison & Craig Mandall John Harrison Specialisation: Small Business Management & Marketing, Staff Training & Recruitment Professional Background and Experience: John Harrison's experience in small business management has been augmented by his attendance at various courses in staff training, management, and other relevant business techniques. Prior to purchasing the licensee rights to the Gold Coast Region, John worked throughout the region as a Cargroomers employee and he has wide hands-on experience and knowledge of this area. 9 Craig Mandall Specialisation: Office Administration & Staff Recruitment Professional Background and Experience: Craig holds an Associate Diploma in Business Marketing and Management and his administrative and staffing skills together with his hands on approach ensure the smooth efficient running of the regional franchise. SUNSHINE COAST REGIONAL LICENSEE Name: Geoff McCracken Specialisation: Management, Sales and Marketing Professional Background and Experience: Prior to joining Cargroomers in 1994, Geoff had over 20 years Sales, Marketing and Managerial experience in the Ice Cream and Frozen Food Industry. During his term as Metropolitan Sales Manager Brisbane with Peters Ice Cream, Geoff and his sales team achieved record market share in the Metropolitan area. Having worked the Sunshine Coast as a Cargroomers Franchisee for two years, he has a wide hand on experience and knowledge of the area. NEW SOUTH WALES STATE LICENSEE Name: David and Leigh-Anne Amos Specialisation: Automotive Industry Service Professional Background & Experience: David and Leigh-Ann took control of the Cargroomers New South Wales State license in 2005. Prior to joining Cargroomers, David and Leigh-Ann owned and operated a window tinting franchise in Newcastle. Other services available from this franchise include home or office window tinting and rustproofing. This business quickly grew to a multi-site franchise employing over 50 people. David’s first foray into the automotive industry was in the area of Finance and Insurance in 1991. In 1999 he became a Group General Manager for five car dealerships. With a wealth of experience in the automotive industry and small business within New South Wales, David and Leigh-Anne are well placed to capitalise on the available market in their state. SOUTH AUSTRALIA STATE LICENSEE 10 Name: Gabrielle Coles Specialisation: Business, Accounting Professional Background and Experience: VICTORIA Name: Kenneth Taplin Specialisation: Financial Planning Professional Background and Experience: In the last thirteen years Kenneth has been involved with leading financial institutions such as IOOF Trustees, IOOF LTD, Adelaide Bank, Financial Services Direct and the National Australia Bank. His association with these institutions has involved the design and implementation of marketing programs, training programs and company business plans. Kenneth has extensive experience in establishing company brands and the assessment of business strategies and methodologies to suit available products and customer demographics. Kenneth also brings to Cargroomers a wealth of experience in the management of human resources. 2.1.3 Franchise Owners The role of the Cargroomers Franchise Owners is: 1. To maintain any existing Cargroomers customers and to attract and secure potential Cargroomers' customers; 2. To recommend and carry out in a competent manner Cargroomers car detailing service for the customer; 3. To record the necessary customer information and relay this back to the State or Regional Licensee; 4. If necessary, to implement marketing policies outlined at National or State level; 5. To possess a thorough knowledge of all services and products and; 6. To keep abreast of improvements to Cargroomers' products and services. Experience: Although experience in car washing and detailing is not a compulsory prerequisite to become a franchise owner, a basic knowledge, appreciation and interest in cars is favourable. A background in retailing and selling would also be a decided advantage, but again, is not compulsory. A Franchise Owner must have a greater than satisfactory ability to work with people and communicate well with customers. Personality & Attitude: 11 The Franchise Owner is the prime ambassador for Cargroomers. Franchise Owners are our frontline sales people whose personality and attitude dictate how Cargroomers is perceived in the eyes of customers. Therefore effective communication skills and the ability to deal with all kinds of people are essential. A positive and enthusiastic attitude is compulsory. A Franchise Owner must work well individually and feel comfortable in a team situation. Finance: The Franchise Owner must be in the position to finance his/her own business. Age: There is no age restriction. However, a minimum of 20 years is desirable due to the maturity and experience levels needed to competently execute the role of Franchise Owner. Health: In the Franchise Owner's best interest it is advisable that he/she be of reasonable health to avoid down-time due to illness or injury. Business/Work History: Franchise Owners must have had a stable work history and be in a position to furnish positive employment and character references. 2.2 External When Cargroomers has been unable to source certain expertise internally, these professional services have been obtained from external organisations. The main areas of expertise called upon cover the disciplines of the law and accounting. Profiles on these organisations, which advise Cargroomers at a national level, are contained in the Appendix to this franchise proposal. 3.0 Cargroomers' Products and Services Cargroomers market a range of car detailing services and a range of retail products to its customers, manufactured by Cargroomers Queensland Pty Ltd. at the Brisbane plant. By using Cargroomers the customer is assured of receiving a comprehensive, convenient service at an affordable price. Customers can have their vehicles washed, polished, waxed and detailed at their homes or places of work. With standard service prices starting at $39 including GST for the Deluxe Wash and Wax Plus, and progressing through to the Premier Wash and Polish Plus, marketed at $187 including GST, the Franchise Owners have a large scope and earning capacity. 4.0 The Cargroomers' Franchise Option 12 Cargroomers State and Regional Licensees allocate each Franchise Owner a specific Franchise Area on a Post Code basis. This area will feature domestic, retail, commercial and industrial customers, all of which are potential clients. The cost of a Cargroomers franchise is $29 950 including GST. Cargroomers provides all the tools and equipment and the professional support a Franchise Owner / Operator will require in order to provide the client with the best possible service. 4.1 Professional Support Cargroomers Australia will provide the Franchise Owner/Operator with the necessary business and managerial support in order to establish and then operate a Cargroomers franchise on an ongoing basis. By calling on human resources internal to the organisation, and also the external helpers of Cargroomers, the organisation is continually able to provide meaningful assistance to its Franchise Owners. Assistance and support with any technical or operational issues or problem is simply a phone call away, and when necessary on-site assistance can be provided. The Cargroomers network of State and Regional Licensees exists to assist Franchise Owners at all times. The licensees are experienced problem solvers who generally endeavour to solve problems before they occur. 4.2 Comprehensive Technical and Customer Training Cargroomers Australia provides all Franchise Owners with the technical training needed to first set up, and then operate the franchise successfully. This training focuses on learning the tools and techniques of the Cargroomers' service. All product and service procedures and instructions are outlined in the Cargroomers' Operations Manual, but also are addressed during the on-the-job training sessions. Each Cargroomers' Franchise Owner is also trained in the art of small business management via the detailed and informative Cargroomers' Operations Manual. 4.3 Equipment All materials are supplied to the Franchise Owner directly from Cargroomers Australia, unless the franchised business is being purchased from an existing franchise owner. In which case, the materials and equipment will be supplied by the existing franchise owner. Starting equipment includes: * Custom-made trailer registered and sign-written, featuring a fibreglass canopy * 240 Volt Variable Speed Rotary Buffing Machine * 240 Volt Random Orbital Polishing Machine 13 * 240 Volt High Pressure Washer and Water Pressure Gun * Wet and dry vacuum cleaner (including shampoo capability) * 30 metre car wash hose and reel * 2 x 20 metre power cables * Electrical safety switch * Three perforated large chamois * Bag of light mixed rags * Two large heavy-duty sponges * Scrubbing brush * Mag wheel brush * Car wash brush * Ten 1 litre spray bottles * Two buckets * Scraper and blades * One pair PVC gloves * Protective mask * 40 mm brass padlock * Funnel * Paintbrush *Industrial Scourer * Measurer * Stepladder * Business cards * Card system box * Company stamp * Invoice book and cover * 500 brochures * Five monogrammed, collared shirts * Three pairs of shorts * Two sweaters * One cap Chemicals, Cleaners, Polishes & Accessories A Franchise Owner is provided with the essential Cargroomers' chemicals used to provide the various Cargroomers services. To see you through your initial months of trading you are supplied with the following: Cargroomers Quick Clean 20 litres Cargroomers Truck Wash 5 litres Cargroomers Wash and Wax 5 litres Cargroomers Glass Magic 5 litres Cargroomers New Look TyreDressing 20 litres Cargroomers Deodoriser 5 litres Cargroomers All-Purpose Cleaner 5 litres Cargroomers Tar & Glue Remover 4 litres Cargroomers K.O.Degreaser 5litres Cargroomers Nu-Guard Vinyl & Rubber Restorer 5 litres 14 Cargroomers Seal Brite 2 litres Cargroomers Rough 'n' Ready Compound 1 litre Cargroomers Fine Finishing Compound 1 litre Cargroomers Medium Compound 1 litre. Cargroomers Gold Wax 5 litres Cargroomers Blue Magic Polish 5 litres Cargroomers Express Wax 5 litres Overspray Clay Bar Polish Applicator Pads * 3 All Metal Polish 100g Wonder cloth * 2 Velcro Backing Plate Single Sided Wool Buffing Pad Velcro Foam Buffing Pad Velcro Foam Polishing Pad Velcro Foam Finishing Pad Black Again 500ml Cargroomers Final Shine 5 litres Cargroomers Leather Conditioner 500ml Environment Water 7 Containment Mat Insurance During the first year of operation, the insurance costs covering public and product liability, driving risk cover, tools, equipment and trailer is included in the total package of $29, 950.00 including GST. 5.0 The Investor's Benefits 5.1 Benefits to the Investor Cargroomers provides an Owner/Operator with the business infrastructure, equipment and know-how needed to establish and operate a successful mobile car care business. The advantages of franchising, such as economies of scales (the buying power of a large group), are optimised. All available human resources and support systems are at you fingertips on an on-going basis. Your contribution to the team is hard work and dedication BUT, most of all, a willingness to learn new skills along with a desire to continually improve yourself and your business. 6.0 The Next Step In order to assist you in your decision-making process, or for further or specific information, you may wish to speak to the Cargroomers' State or Regional Licensee in your area, or the Cargroomers' National Franchisor. Contact details of each are: Errol Woolcott National Franchisor 15 Ph: +61 7 3807 7577 Fax: +61 7 3807 7473 Email: firstname.lastname@example.org Scott Smith Brisbane & Northern Territories Franchise Co-Ordinator Ph: +61 7 3807 7577 Fax: +61 7 3807 7473 Email:email@example.com John Harrison & Craig Mandall Gold Coast Licensees Ph: +61 7 5594 9398 Fax: +61 7 3808 6399 Gabrielle Coles South Australia State Licensee Ph: +61 419 805 498 Email: firstname.lastname@example.org Kenneth Taplin Victoria regional Licensee Ph: 0413 447 040 Email: email@example.com Geoff McCracken Sunshine Coast Licensee Ph: +61 7 5441 1651 David and Leigh-Anne Amos New South Wales Licensee Ph: 0402 476 666 Email: firstname.lastname@example.org TheCargroomers website is located at www.cargroomers.com. Key Personnel Supporting Cargroomers: SOLICITOR: Deacons Deacons is a major international law firm with more than 900 lawyers across Australia and Asia. 16 With several lawyers specialising in franchise interests, including partner Stephen Giles who is the current National Chairman of the Franchise Council of Australia, Deacons are well positioned to provide ongoing advice to Cargroomers. ACCOUNTANTS: Dignan Stephens Dignan Stephens Accountants is a long standing CPA accounting firm established for past 18 years ago. The current partners of the practice are Alison Kerrigan and Shaun Stephens. Shaun has been with the practice since its inception and Alison had been a valuable staff member for 4 years before undertaking her current position as a partner. Currently, Dignan Stephens, employs 14 staff ranging from receptionists, bookkeepers and qualified accountants. The office is situated in Nerang just off the M1 Motorway which provides easy access for clients. Dignan Stephens has a commitment to provide the highest quality advice in: Taxation Compliance Self Managed Superannuation Business Management Services In-House Finance Services Financial Planning Business Succession Dignan Stephens prides themselves on attention to detail and provide a high level of customer service to their clients. CARGROOMERS MAIN POINTS OF AREA FRANCHISE AGREEMENT 17 Territory: Exclusive territory protected by Post Codes Refer Territory map. Area Franchise Fee: $29, 950 including GST Area Franchise includes: 1. Use of Name and Proven Operating System 2. Right to sell Cargroomers Retail products 3. Equipment, cleaning products and tools. 4. Full initial training 5. On-site Start-up Support and Marketing Plan 6. National Marketing Support 7. Full support documentation including Operations Manual. Terms of Agreement: 10 years Initial term: 4 years First Renewal Term: 3 years Second Renewal Term: 3 years Area Franchise Service Fee: $120.00 per week including GST Advertising Levy: $40.00 per week including GST Communication Levy: $15.00 per week including GST Who Controls the Advertising Fund: The Franchisor, State or Regional Licensees. Is Company & Business Name Fully Protected: Yes Cost of Renewal: $1100.00 including GST First Right of Refusal in case of Transfer: Franchisor has First Right of Refusal on same Terms and Conditions as offered by proposed Transferee. Timing of Various Payments: INITIAL AREA FRANCHISE FEE - 18 $3,000 on signing. Balance prior to commencing training. FRANCHISE SERVICE FEE - in arrears, payment on or before the Wednesday of each accounting week. OTHER PURCHASES C.O.D. Details of Training to be provided: One week minimum start assistance in your territory. This assistance includes local canvassing, start-up local marketing and operational systems set-up etc. One Day training at Cargroomers head office. Termination Provisos: Adherence to operational policy and procedure and Terms and Conditions of the License Agreement Indemnities: All parties agree they are independent and do not act as agents for each other. Each Party indemnifies the other against any action taken by others against them as independent operations.
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