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BUSINESS REFERENCE : CN036 / RightBiz 24 HOUR AUTOMATED DVD RENTAL | | | | | | Cinemastore - 24 hour automated DVD Rental Master franchise UK and Ireland Confidentially offered for sale Ref. No: CN036 Location: Re-locatable Asking price: £1,270,000 | | | BUSINESS LOCATION: | Undisclosed Relocatable UNITED KINGDOM | | BUSINESS SECTOR: | Retail | | TRADE TYPE: | Music & Record Shops | | SALE: | Agent Sale | LEASEHOLD: | £1270000 | | | | | | | | | | | BUSINESS DETAILS: | Business profile:
Firmly established in over 90 locations around Europe, this 24/7 automated DVD rental concept was introduced into the UK as recently as 2006. As such the business is at the forefront of the technology involved in self service DVD rental.
Similar in concept to lobby cash machine service, this business uses state-of-the-art technology to dispense DVDs from interior vending machines. Access to the store is limited to members who use their membership swipe card to enter the shop. The swipe card also acts as payment topped up by credit or debit card thus enabling cashless renting. Rentals are chosen via a special console or can be reserved from home for in-store collection. Easy to use, the consoles allow customers to source films by genre, director or other selected criteria. Open day and night, the concept has revolutionised the rental of entertainment products offering total flexibility as to when to choose a DVD. Once a film has been rented it can be returned at any time of the day.
With literally thousands of titles to choose from the franchise owner buys the most appropriate stock from the Franchisor to meet the demands of the local audience not only in terms of the titles themselves but also the volume of each title to be made available at any one time. Up to date management information accessible remotely from anywhere in the world, provided by the console enables decisions to be made on stock at a moments notice. Franchise income accrues not only from rentals but can also arise from the sale of films that have reached the end of their optimum shelf life reflected by their rental income.
The establishment and growth of the UK and Ireland business has been slow to date due to the wide range of business interests of the current Owner but has enabled the UK and Ireland shops to fully prove the success of the concept in the UK and for the Italian based ultimate Owners of the business model to focus on instilling quality into every aspect of the operation and developing scalable systems to support the franchise network. In addition to years of testing and development of the business model, the owners have developed thorough and detailed customised training materials for franchise operators and their staff, key materials for franchisee recruitment, a professional corporate web-site, a computer-based marketing materials design system, and a series of other operational systems.
With the home entertainment market significantly boosted from the increasing penetration of DVD players in UK and Ireland homes to such an extent that the UK market for DVD rental is four times bigger and Ireland twice as large as the next biggest market in the world, this concept is rapidly re-defining this fast growing marketplace. With two outlets already set up one in the UK and the other in Ireland, an acquirer of this master franchise will be ideally placed to take maximum advantage of this growth.
Key strengths:
Franchising as a concept has enjoyed steady growth in the UK in the last decade, despite the nation's cycles of expansion-recession-recovery. Franchising does well in bad and good economies, because it has less to do with economic issues than with changing consumer patterns. With DVD rental levels in the UK and Ireland far in excess of anywhere else in the world Ireland has the largest DVD rate of rentals per household in Europe at 20.1 rentals per household annually and the UK is the second largest by volume with over 130m transactions annually - the availability of this Master franchise, at such an early stage in its UK and Ireland roll out represents an excellent opportunity to take full advantage of the growth of this very significant market. Competitors in this sector are currently achieving an average of between one and two store openings per month.
Offering exceptional levels of service and dedication to understanding the needs of franchisees, this business fulfils their needs with an appropriate mix of service, reliability and on-going support. The franchisees in turn deliver a broad range of high quality movies to customers in their respective territories. This business incorporates the very latest technology available in this sector using internationally accredited distribution machines capable of real time customer analysis and Customer Relationship Management, remote diagnostics and maintenance. The in-built software offers a customisable interface, detailed customer profiling and flexible low cost customer communication.
The state-of-the-art technology utilised by this business ensures lower operating costs than a normal home entertainment outlet. Staff costs are lower due to the self-service aspect of the business and the smaller sized premises generally required. Consequently cost savings can be passed on to customers. This combined with the economies of scale realized by centralized buying of movies from the major distributors encourages membership growth as customers switch from traditional DVD rental outlets. The frequency of rental is higher than it might be due to the 24/7 access and the attraction of lower hiring prices. 24/7 access combined with high usage rates and low costs results in significant margins for the franchisee and as a consequence healthy returns for the Master Franchisor.
In summary, the appeal to potential franchisees is a round the clock fully automated film rental service with state-of-the-art vending equipment, 24 hours, seven days a week, earning money without the inconvenience of being tied to the store as staff requirements are minimal. Full training and marketing support is given whenever needed.
Key opportunities:
The rights to the Master Franchise enable the acquirer to develop the franchise model throughout the UK and Ireland together with the existing franchise operations already in place.
The benefits of acquiring the existing principle operation include:
The values associated with a strong, identifiable brand.
A proven business formula.
An established and UK-specific low cost business model.
The existing customer base and revenue streams from royalties, equipment and merchandise.
Full training in running the business.
Continuing access to the central team in Italy and their expertise in the business system.
The provision of comprehensive operating manuals, training and marketing materials.
An asset which will increase in value should the purchaser decide to sell the business at a later date.
Franchise roll-out to date has been steady and restricted largely by the personal capacity of the current Owner who has a wide range of other business interests. Since establishing the business in the UK, the company has often had to turn away interested franchisees due to lack of resources to follow through with the franchise leads. This speaks volumes as to the growth potential of this business. A larger, dedicated and committed management team will be perfectly placed to build on the foundations already laid and with these resources in place the current owner of the Master Franchise believes 27 wholly owned stores and 26 franchises can be established within 36 months.
Market Outlook
Whilst there are a small number of self service based competitors operating in this sector, this business opportunity offers a far more sophisticated level of technology as well as unparalleled central support. This market leader also enjoys additional competitive advantages through its buying power and its excellent reputation for quality of delivery and franchisee follow through. This business is in a growth industry within a growth market and can expand as fast as the new buyer can apply resources.
The premises:
The UK and Ireland operation is currently run, in conjunction with the UK outlet by the owner of the Master Franchise, from very secure premises, ideally located in a prominent position on Battersea Park Road, Battersea, a very affluent suburb of South West London.
The premises are approximately 1000 square feet and were acquired by the current Owner of the Master Franchise. The freehold is available for offers in excess of £335,000 in addition to the Asking Price for the Master franchise. Alternatively the premises are available leasehold, length of term and annual rent to be agreed, or alternatively the whole operation could be re-located.
The second franchise is based in a very central location in Mitchelstown, Co. Cork in Ireland.
Full financial information and membership levels are available subject to the completion of the usual Confidentiality formalities.
Support and training
Full training, support and handover will be provided for a negotiable period of time. With so many high-quality and well developed systems in place, it is considered that this will be a relatively straightforward event. With two franchises already established and the potential for hundreds more throughout the UK and Ireland, this is a great opportunity for the new owner.
A fully costed Business Plan detailing a roll out throughout the UK and Ireland is available.
Financial Information:
Full financial disclosures including the current performance of the two outlets that are currently in operation is available subject to the completion of the usual Confidentiality formalities.
Reason for sale:
The current Owner is currently involved in a diverse range of business interests and consequently is unable to give this business the full attention and commitment it deserves. As a result the Owner wishes to pass this opportunity to new Owners to build upon the foundations that have already been built and to realize the full potential that undoubtedly exists | | | | | BUSINESS STATUS: | FOR SALE | | | | | SELLER: | TURNER BUTLER | | CONTACT: | 01895 25 6000 | | REFERENCE: | CN036 / RightBiz | | ENQUIRIES: | | | | | | | | | | | | | | | | | | | | |
