WEDDING AND FUNCTION DISCLOSURE DOCUMENT 1. QUALIFICATIONS AND EXPERIENCE OF FRANCHISOR Ricochet Publishing is owned by Graeme Lund. Graeme is also the Managing Director of the company. Graeme has B.Com from the University of KZN and ensures that his knowledge of business legislation, trends and technology is up to date by attending industry related courses on a regular basis. Apart from three years when working as an accountant for a large engineering company, Graeme has always owned and managed his own businesses. Graeme has been publishing magazines since 1997 as well as having owned an advertising agency and a tourism company. Graeme s experience in publishing is extensive and he has been editor or managing editor of a number of different magazines and newspapers including Ubuntu Community Magazine (270 000 print run quarterly), Business Link Magazine (11 000 print run bimonthly), Home Living (35 000 print run monthly), Cacadu News (50 000 print run quarterly) and Kids Connection (7500 quartly), RNEWS digital newspaper (110 000 unique users a month). Ricochet Publishing currently publishes five titles; Home, Food and Travel, Business Link, RNEWS, Kids Connection and Wedding and Function. The company employees 15 people, has an annual turnover of R7 mil and has its head office in Port Elizabeth. 2. WEDDING AND FUNCTION FRANCHISE OFFER Ricochet Publishing currently has franchises for its Wedding and Function magazine in the following areas; Western Cape, Garden Route, Eastern Cape, KZN, Free State and Northern Gauteng and is looking to establish franchises in the Limpopo, Mpumalanga, East Rand and Southern Gauteng. Wedding and Function is currently the largest wedding publication in South Africa in terms of distribution and print run and the Wedding and Function website is the largest on-line wedding directory in South Africa. Wedding and Function magazine is a free issue magazine that is distributed through wedding venues, bridal fairs and through shopping centres. The primary readership are people planning a wedding and people planning functions, be they 21st parties, wedding anniversaries, corporate functions and the like. The franchisees generate their revenue by selling advertising space in the magazine. The franchisees are also responsible for ensuring that the magazine is compiled, printed and distributed effectively, in short, they are the publisher of their magazine. The running of the Wedding and Function franchise has very little overheads as the business can be run from home and once a relationship has been established with an advertiser the franchisee becomes more of a relationship manager than a sales person. Franchisees are requested to also attend all wedding and bridal fairs and events in their area to improve brand penetration and as an added advertising service to their advertisers.
Wedding and Function is very successful for the following reasons: Our advertising rates are the lowest in the industry. Our distribution is the most comprehensive in the industry. Our print run per edition is the highest in the industry. Our clients advertising appears in print, email, web and social media. FC* Front Cover BC* Back Cover We design all adverts free of charge. IFC* Inside Front Cover IBC* Inside Back Cover ** Border Regio n We have the most downloaded App (Blackberry, Apple and Android) in the industry and the exposure that the advertiser receives is free. We attend more wedding and bridal fairs than any other similar publication. 2 www.weddingan dfunction.c o.za We are the best way of connecting a service provider with a bridal party and as a result over 75% of our advertisers are repeat advertisers. We are the only publication that will trade advertising space for goods and services. Cell: 076 638 1381 / 041 379 2976 www.abcvideoproductions.co.za 6 7 12 13 3. OBLIGATIONS OF THE FRANCHISOR VIS-À-VIS THE FRANCHISEE. 3.1. Allow the franchisee the use of the Wedding and Function brand. 3.2. Allow the franchisee exclusive publishing and distribution rights in a specific geographic area. 3.3. Assist the franchisee in establishing their franchise by: Establishing a database of potential customers and preloading them onto a cloud based CRM Establishing a distribution network Determining the optimum company to be used for the printing of the magazine Creating a Corporate Identity for the franchisee which includes logo, business cards, email signature, letterhead, etc Creating a marketing and sales strategy for the franchisee and assisting with the implementation thereof Creating a presence for the franchisee on social media Training the franchisee on all aspects of the business including sales techniques, customer relations, essential advert content, communication, dealing with typical customer requests and compiling the magazine content. 3.4. On-going assistance to the franchisee by: Providing marketing and advertising material for each edition of the magazine Set up and running of competitions to build relevant email databases Providing elements of the marketing material used by the franchisee at wedding fairs and expos. Providing monthly reports on digital statistics Providing industry and franchise updates in a quarterly franchise newsletter Uploading the franchisees publication on the Wedding and Function App and creating hyperlinks from the App to the advertiser s websites. Assisting the franchisee with human resource, administration, accounting, marketing, selling and other franchise related queries and problems.
4. OBLIGATIONS OF THE FRANCHISEE VIS-À-VIS THE FRANCHISOR. 5.1. Pay the non-refundable purchase price for the franchise when the Franchise Agreement is signed. 5.2. Pay the franchisee royalty fee 30 days after the publishing of each edition of the magazine 5.3. Provide the franchisor with a spread sheet of all advertisers in each edition of the magazine as well as the space that they purchased and the rate paid for the space within 5 days of the magazine going to print. 5.4. Provide the franchisor with five copies of each edition of the magazine. 5.5. Pay the franchisor for the design of each edition of the magazine 30 days after the magazine is sent to print. 5.6. The franchisee may not be involved in any other business which is in conflict with Wedding and Function. 5.7. The franchisee must conform to the minimum standards, brand and business practices of Wedding and Function. 5.8. The franchisee must inform the franchisor immediately should they notice that the Wedding and Function brand is being used by a third party and the franchisee is to take all necessary steps to protect the brand. 5. IMPORTANT CLAUSES OF THE FRANCHISE AGREEMENT 6.1. The franchisee may only use the franchisor for the design of the magazine, adverts and marketing material. The franchisor must approve of all such material before it is printed or distributed. 6.2. The franchisee may only distribute their publication and source their clients within their geographic area. 6.3. If the franchisee fails to publish 6 editions of the magazine in a 12 month period or if the franchisee fails to publish an edition of the magazine for three consecutive months the Franchisor may cancel the franchise agreement. 6.4. The franchisee may sell advertising space in any of the other franchisees magazines provided that the rate at which the advert is sold is agreed to by the other franchisee. The franchisee who sells the advert will receive a 15% commission from the franchisee in whose magazine the advert appears. 16 17
6. FINANCIAL PROJECTIONS FOR FIRST YEAR OF FRANCHISE OPERATIONS PUBLICATION AND SALES Months after selling starts Start-up 2 4 6 8 10 12 Edition 1 st ed 2 nd ed 3 rd ed 4 th ed 5 th ed 6 th ed Pages 16 16 20 24 24 24 Qty 8000 8000 8000 8000 8000 8000 Sales 35000 45000 55000 65000 75000 85000 Expenses 16650 32150 36850 40550 41050 41550 Printing 0 15000 18000 20000 20000 20000 Design 4800 4800 6000 7200 7200 7200 Distribution 5000 5000 5000 5000 5000 5000 Overheads 5100 5100 5100 5100 5100 5100 Franchise Fee 1750 2250 2750 3250 3750 4250 Profit 18350 12850 18150 24450 33950 43450 CASHFLOW Months after startup Start-up 2 4 6 8 10 12 Opening Bank Balance 20000 20000 20150 28000 35350 48000 66950 Total Collections 0 5250 29500 44500 54500 64500 74500 Cash Sales 5250 6750 8250 9750 11250 12750 Accounts at 30 days 22750 29250 35750 42250 48750 Accounts at 60 days 7000 9000 11000 13000 Total Payments 0 5100 21650 37150 41850 45550 46050 Printing 0 15000 18000 20000 20000 Design 4800 4800 6000 7200 7200 Distribution 5000 5000 5000 5000 5000 Overheads 5100 5100 5100 5100 5100 5100 Franchise Fee 1750 2250 2750 3250 3750 Franchise Purchase 5000 5000 5000 5000 5000 Closing Bank Balance 20000 20150 28000 35350 48000 66950 95400 OVERHEADS 5100 5100 5100 5100 5100 5100 Petrol 3000 3000 3000 3000 3000 3000 ADSL 400 400 400 400 400 400 General 500 500 500 500 500 500 Telephone 1000 1000 1000 1000 1000 1000 Stationary 200 200 200 200 200 200 Please note that the above excludes any member drawings, costs of attending bridal fairs and the cost of manufacturing display stands that the franchisee may want to use.
18 19 7. EXISTING FRANCHISEES AND MANAGERS Eastern Cape Graeme Lund Tel: 0861 636 845 Cell: 082 556 4043 Email: graeme@ricochetpublishing.co.za Garden Route Charmaine Pretorius Tel: 044 873 4341 Cell: 078 229 6347 Email: charmaine@zhuzh.co.za Kwazulu-Natal Alison Kirk Tel: 031 764 7425 Cell: 083 307 4291 Email: alisonkirk@fliggy.co.za Western Cape Marlene Cell: 073 222 8180 Email: sales@zhuzh.co.za