Kauai wants to expand in SA, looking for new franchisees
Companies / 3 July 2018, 11:00am / Gabriella Steyn
CAPE TOWN - Kauai is looking for hands-on franchisees to partner with as part of its growth plan for 2018.
The company has seen improvement for the past 22 years of trading with 25% year on year growth and 4% improvement on net profit percentage.
"The truth is that we are always looking for the right franchisees to join our family but especially now we have had two of our best years ever after 22 years of trade", said Franchise Executive Guy Le Ray-Cook.
The healthy food chain has moved rapidly in recent years, including a redesign, a partnership with UberEats, an an ‘order ahead’ app and loyalty and cashless payments adding a minimum of 5% additional overall sales in loyalty transactions.
Kauai boasts over 150 stores nationwide and has a partnership with 93 Virgin Active Health Clubs, with room to grow its footprint given that the gym has 142 clubs in South Africa.
When looking for a new franchisee Le Ray-Cook explains a hands-on leader is a key factor.
" A hands-on leader that is able to work in his or her store (32% of our franchisees are women) every day, working with their teams, helping customers and keeping an eye on the operations to ensure only the best quality products go out. They will also need 50% unencumbered capital to get the business going", said Le Ray-Cook.
When asked how Kauai is able to stay updated with the latest food trends, Le Ray-Cook says that since 1996, they company have been a trend setting, starting with the introduction of smoothies into South Africa.
"Ever since then we have watched trends especially in the USA and work on combining them with other health items in our own unique way to ensure that South Africans can enjoy them without necessarily needing to be a health nut but simply knowing it is good for them".
"John Berry our innovations executive was one of the founding partners of Kauai and still works on the innovations of our menu that adapts itself at least twice a year", he said.
When asked which city they company would like to see more growth, Le Ray-Cook said Gauteng.
" We see great opportunity for growth in Gauteng where although we have many successful health club stores, these are closed off to the general public and therefore need more retail stores around the entire city from Midrand to the South", he said.
"We see many malls losing feet each month but our market share is growing faster than the mall is losing feet. We have been at the forefront of making healthy food accessible to many South Africans for 22 years and now we see more doors opening as more and more people despite economic tough times, are not sacrificing their health as a consequence of the tough times – “at least I can feel good about what I eat” seems to be the general consensus", he said.
What does a Kauai franchise ultimately cost?
New stores estimated cost:
1. Set up costs of approximately R2,000,000 (capital costs of setting a store up), excluding VAT
2. Franchise fee R120,000 excluding VAT per store
3. Staff costs during training estimated R30,000, depending on travel requirements.
4. Rent deposit R50,000 (can vary)
5.Legal fees if any R3,500 (can vary)
6.R3,200 franchise application fee – R2,875 for psychometric testing, and the balance for credit checks and
7. Administration uniforms and smalls are also part of working capital and can be R60,000 when you first open a store.
" Set up costs are from R800 000 for a health club store where you have a small but captured market and R2 000 000 for a retail site where growth opportunity is high and in the right site can generate great returns. We have a strict application process before we award a franchise", said Le Ray- Cook.
According to Le Ray-Cook Kauai has a broad target market that is constantly changing.
" Surprisingly we have a very broad customer target market and we see previous die hard fast food consumers now looking towards Kauai as they become more aware of the benefits of eating healthily"
"This can be seen by the current rapid growth experienced in the malls across the country and not just the Virgin Active health clubs where you can find a Kauai", said Le Ray-Cook.