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Mugg and Bean Franchise Opportunity

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Mugg & Bean is a coffee themed restaurant chain focused mainly on the South African shopping market: it is essentially a “shoppers shop”. Mugg & Bean provides the highest standard of coffee and associated hot beverages in addition to a great selection of food items, from various breakfast options to lunches and dinners. Mugg & Bean has won the Caxton Leisure Options “Best Coffee Bar” category for 10 years in a row.

The average Mugg & Bean restaurant has an estimated average development cost of R10 000.00 per m2 Excluding V.A.T depending on the size of the restaurant. Operational capital of R100,000 is also required.

About Us

Established since 1996, there are currently 60 franchised units in South Africa. Mugg & Bean is the winner of the "FASA Newcomer Franchisor of the Year 2001 Award", the winner of the "FASA Brand Builder of the Year 2003 Award" and the "FASA Franchisee of the Year 2003 Award".

Mugg & Bean is a coffee themed restaurant chain focused mainly on the South African shopping market: It is essentially a “shoppers shop”. Mugg & Bean South Africa provides a high standard of coffee and associated hot beverages in addition to a great selection of food items on their innovative and unusual menu, from various breakfast options for early morning shoppers to muffins and cakes for tea time. Lunches and dinners are catered for with a superb range of hot and cold foods. So taken is the public with the chain that Mugg & Bean sales in its Southern African units exceeded R300 million in 2004. While no specific profile is targeted, Mugg & Bean enjoys support from the residents of the areas in which the stores are located. Socio-geographically, most units are located in areas where there is a distinct density of upper-end customers. Mugg & Bean South Africa falls into a category perhaps best described as “Fast Casual”. It is neither fast food nor is it casual dining, but a mix of casual diners wanting quality food quickly and efficiently. Mugg & Bean dominates this sector in all of its 70 South African locations.

The South African market is fascinated by brands and has an insatiable appetite for the new and trendy. Mugg & Bean identified this early on and has, since its inception, revamped its menu content at least twice a year, providing an interesting change for some 100,000 registered Mugg & Bean Regulars. The South African market also embraces new concepts easily and the company is constantly looking at new food items to add to menus that will broaden appeal and attract new customers.

Mugg & Bean is generally regarded as a coffee shop, when in fact only 23 percent of sales are coffee and related items and 77 percent of sales is food. Mugg & Bean South Africa sees a distinct move toward convenience in the retail environment with the big growth being shown in smaller strip mall environments. The company aims to continue to dominate this sector and is now regarded as a draw-card for most malls and is therefore offered real estate preference. Mugg & Bean also aims to grow to 120 “classic” units in the next five years, and to capitalize on the opportunities that exist for brand extensions. Turnover currently grows at around 30 percent per annum, where same-store growth is around the 12 percent mark.

Finance

How much does a Mugg and Bean franchise cost?

The investment required for a Mugg & Bean franchise opportunity will vary, depending on the size of the premises available for rental. The total development cost of fitting out a Mugg & Bean store has an estimated development cost of R10,000 per m² excluding VAT depending on the size of the store.

For example; Should a store be 300 m², then the setup cost will be 300 m² x R10,000 = R3 000 000 Excl VAT

There are many variables, in finalizing the cost like:-

The landlords contributions
Complexity of the site
Store design
Size of location

Generally the setup cost of a store can be calculated by using a square rate figure of between R7000 m² – R8000 m². The smaller the store, the higher the rate m² i.e a store of 200 m² will cost R8000 m² (R1,600,000.00) whereas a store of 300 m² will cost R7000.00 m² (R2,100,000.00). This is due to economies of scale where the cost per m² comes down as the size of the store increases.

Please note that the above is a guideline and a more accurate figure is provided once all information pertaining to the site is finalized and a site survey is completed.

The above figures are exclusive of V.A.T and relate mainly to the actual building of the shop.

Over and above the building of the shop there will be other capital requirements like:

Rental deposits – Generally 2 months Rental
Electricity deposits – about R5000.00
Stamp duty – calculated at 0.6% of the total rental value of the lease period.
Lawyers fees (if required )
License fees i.e liquor license, trading license
Submission fees for plans – R1500 – R2000.00
Staff training – staff meals and salaries during training – between R25,000.00 and R35,000.00
Operational capital – R100,000.00

Training and Support

If you identify a site, please contact Mugg & Bean Franchising on +2711 339 2765 or fill in the form below to receive an application pack.

Should the site identified meet all the criteria and be sanctioned by Mugg & Bean South Africa, you will be notified and asked to come in for an interview.

Once you have been approved as a franchisee, signed the franchise agreement and have paid the franchise fee, Mugg and Bean South Africa will provide you with the following:-

Assistance with the conclusion of a lease or rental agreement with the landlord.
Assistance in the design, development and commissioning of the new store, the cost attached to these are part of the development cost.
Should you require capital The Mugg & Bean Franchise opportunity has an approved rating with certain commercial banks to which you will be referred.
A 4-6 week training program during which you are taught all facets of the operation of your store, which will take place in the Mugg & Bean Training Center and nearby Mugg & Bean stores. After which, there is a 2 week in-store training program once your store has been commissioned.
The assistance of our Operations Staff with the opening of your store. The Operations Staff will help you hire and train staff, clean and prepare the store for opening and provide general assistance and guidance to you in the running of your store.
Access to the Mugg & Bean Intellectual Property (know-how), the loan of all Mugg & Bean Operation Manuals which contain recipes, formulas, operating procedures, and general reference materials for guidance in the proper manner of operating a Mugg & Bean South African store.
A team of personnel, experienced in all facets of our system, who are available on an ongoing basis for operational support and guidance.
The right to use Mugg & Bean trademarks, which are applicable to your franchise in connection with the operation of your store for the term of the franchise.
Marketing of the brand and assistance in marketing specific to your store

Each store is allocated a franchise consultant. You can expect to receive consultations from your franchise consultant on a regular basis and assistance when special problems arise.

These trained and experienced people keep franchisees up-to-date on new ideas, improved methods, new products, and marketing techniques, and generally act as sources of information to help our franchisees avoid the pitfalls of trial and error.

Who's Ideal for Us?

People oriented individuals with a high work ethic, previous food service experience would be an advantage.

Each application will be evaluated on individual merit. The evaluation criteria are as follows:

Food service experience, ideally 3-5 years
An understanding of how franchising works
Available capital to setup the business
Owners are expected to operate the business themselves
A positive attitude and good people skills
Agree to undergo psychometric testing
Not afraid of long hours and hard work

This business is a most demanding one. It requires and responds to personal attention. You will be expected to operate your store in accordance with Mugg & Bean standards of service, quality and cleanliness.

Territories/Locations

Our experience is that franchise expectations exceed available sites and we are therefore not in a position to assist you in finding a suitable site at this time.

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Most commercial banks require an own contribution of up to 50% in cash from the potential franchisee in order to qualify for finance for the remainder of the total investment.
*I confirm that I have access to at least 50% of the total investment required in cash for buying this franchise (If you do not have 50% of the investment in cash for this franchise then please reconsider your franchise options based on investment)

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