We heard that KAUAI was only a company owned business, is this true?

No, we have franchised and company owned stores in place. To ensure that we can continue maximizing the growth opportunity for Kauai, we see franchising as the most effective way of expanding. We will continue to own some of our stores, to ensure we keep a finger on the pulse of the key aspects of operations.

Who finds and negotiates the site?

Kauai has done extensive demographic research in the country to determine where the gaps are for new stores. Finding the right area is key, but what’s also important is the right location in that area or mall. We will generally assist with the lease discussions with the landlords for the franchisee, who should also seek their own legal advice on any eventual lease. Any franchisee who believes they have the right site or experience, will potentially then work alongside our development department to evaluate and where viable, close a deal.

Am I the right person for the KAUAI franchise?

If you are passionate about health and what KAUAI stands for, then you’re part way to being the right profile. What is equally as important is your ability to work hard in the service industry. This means working with people, from customers to employees, as well as motivating and getting the best out of your team. Most franchisees new to the business will comment that they have never worked as hard as in the first 6 to 12 months of starting their new business. If you find store work rewarding and enjoy working with people these are good signs. We do have a filtering process to assess this. Having the right amount of capital is vital and we cannot consider applicants without the necessary capital backing.

Do I need to form a company to hold my franchise?

Yes, we sign an agreement with you and your company which must be registered for VAT. We require that all member / shareholders in that company sign the franchise agreement and prefer all shareholders to be active in the business unless discussed and approved by.

Will KAUAI offer a turnkey package?

Yes, Kauai will set up and fit the entire store as well as assisting in training the staff. As part of the working capital budget franchisees must be aware that staff salaries will need to be paid before opening (between R25 000 and R35 000).

Is there a franchise agreement?

Yes, we have a standard franchise agreement and we advise that every franchisee gets legal guidance in order to understand this agreement from day one. We will forward the agreement at least 10 days ahead of the required signing date, and can discuss the meaning of any clauses you need clarification on. The agreement is typically a 5 year agreement with a 5 year renewal included and is typically in line with the lease agreement where ever possible.

What kind of training can I expect from KAUAI

We have dedicated training staff and stores for training of all employees and franchisees. The training is extensive from running the store to running the business matters of the store. The program runs over 8 weeks for franchisees and must be passed in order to proceed to becoming a franchisee. During this time there is no salary for a franchisee and this must be budgeted for when considering buying a franchise.

What is the process from here in order to become a franchisee?

Please refer to the previous tab – becoming a franchisee.

What does a KAUAI franchise ultimately cost?

Retail store:

Set up costs of approximately R2 000 000 (capital costs of setting a store up), excluding VAT
plus
Franchise fee R120 000 excluding VAT per store
plus

Working capital:

  • Staff costs during training estimated R30 000, depending on travel requirements.
  • Rent deposit R50 000 to R400 000 each store differs
  • Legal fees if any R3500 (can vary)
  • R3200 franchise application fee – R2875 for psychometric testing, and the balance for credit checks and administration
  • Uniforms and smalls are also part of working capital and can be R60 000 when you first open a store

Existing stores:

Existing store costs will depend on sales volume and profitability and is done on a store by store basis. Please note a franchise fee is payable on the sale of any existing stores.

In Motion stores:

Set up costs of approximately R500 000 to R800 000 set up costs (excluding VAT)
plus
Franchise Fee R70 000 excluding VAT per store
plus

Working capital

  • Staff costs during training estimated R12 000, depending on travel requirements.
  • Rent deposit R10 000 (can vary)
  •  Legal fees if any R3500 (can vary)
  • R3200 franchise application fee – R2875 for psychometric testing, and the balance for credit checks and administration
  • Uniforms and smalls are also part of working capital and can be R30 000 when you first open a store

The applicant will need 50% of the total cost in unencumbered funds. This must be clearly highlighted on your application form.

Can I own more than one store?

If you prove yourself to be a team member, uphold excellent operational standards, have developed your managers around you as well as not been in any kind of breach of your agreement, we will be keen to develop your future with us. All of these standards are measured via a franchisee scorecard and this helps ascertain where the gaps in the business are and how we can work together to improve them. This will mean if you are doing well on the scorecard when any new or existing stores become available that is close to where you are based, you will be our first choice to be the franchisee.

What kind of returns can I expect from my investment?

There is no guarantee from us that your new venture will work as well as elsewhere in the group, however full returns on investment depending on the store, (based on rental, other variable costs and your ability to run the business), can be achieved between one to five years. This includes a salary that franchisees may choose to pay themselves while working in the business. We recommend to chat to any of our existing franchisees to gain references on what their experiences are.

Can I buy from my own suppliers?

We have carefully chosen the group suppliers based on quality, reliability and price. In order to maintain brand standards and consistent product, franchisees are required to buy from approved suppliers. Should you feel that we should be sourcing from elsewhere, you will be able to discuss this with us and if approved the Kauai group may then buy from them.

What kind of ongoing support do I receive from KAUAI?

We will always have refresher training programs available for your staff which you and your staff can attend either at a pre-approved cost or as part of a new initiative at our cost (not including travel and salary for that day of your employees). Our field support people are highly experienced and have most likely run one of the company owned stores themselves. Detail is vital in our business and our regular field service visits include discussions around audits, mystery shoppers and scorecard reviews will assist you in identifying where you can improve to optimise your business.

What do I pay the KAUAI group each month?

You will be charged 6% of your net sales (sales after VAT and discounts but before any service fees such as a delivery company charges) for the use of the brand and on-going field support. There is also a 4% marketing fee that goes to a separate fund to generate marketing and other brand building programs. Currently Kauai is the biggest single contributor to this fund as all its retail stores also pay 4% to this fund. The Kauai In Motion model has only a 1.5% contribution to the marketing fund and pay the same 6% royalty fee.

What is the requirements for international franchisees?

When we look for international operators to become territory master franchisees and are specifically interested in groups with experience in retail, sufficient capital to grow a brand, access to real estate and procurement infrastructure.
We need to understand your ability to manage a multi store business, including human resources and insight into the restaurant industry in your territory.
We do not tend to look at individuals for a territory franchise agreement due to the work, capital and required network involved in launching a brand and the potential learning curves this presents

How is the master licence fee determined?

To open in a new country takes a lot of work and understanding of the interested market.

International franchise fees are determined on the size of the market.

How does the school model work?

Running a Kauai@School involves being a hands-on operator during school terms and sharing the vision of a healthy canteen.
School canteens are closed over school holidays and public holidays and therefore the business model needs to be understood carefully with this loss in potential sales days, we evaluate with the applicant whether the school is viable and can suit their lifestyle.
The school model educates and creates awareness of healthy eating for the students and provides a menu that is in line with our values at Kauai.

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