GG Proposal

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T h e G o u r m e t G r u b P r o p o s a l2 0 0 8

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T h e G o u r m e t G r u b P r o p o s a l

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Dear Prospective Gourmet Grub Operator,

PK Vending is leading the vending industry once again with the introduction of Fresh Food Machines.

PK Vending Distributors (PK) and Gourmet Grub thank you for responding to this business opportunity. Gourmet Grub (GG) has cre-ated a presence in the vending industry as an exclusive supplier of fresh food. Following on international market trends GG and PK have launched “Fresh Food Vending” in South Africa.

Briefly put, PK Vending will provide fresh food machines placed at a location. Gourmet Grub will provide you with fresh food and you may also place your own products in the machine. You are able to order directly from Gourmet Grub using their interactive website.

The initial cost of the three machines is R200,000. You may add on as many machines as you like in the future - as and when required - there is no limitation. The price of the machines includes VAT, initial stock, change, technical training and most important of all, the locations. There are no hidden costs and this is a Turn Key Business.

A finantial projection is attached and an average return on investment of 40% per annum (see financial projections). these figures are only an indication of potential financial viability and may not be achieved. Your management style and overall commitment are crucial to success.

Fresh Food Vending has been extremely successful in the USA and European markets. Until now the South African vending industry has not developed this market due to a lack of the following factors:

A reliable fresh produce supplier •

An established vending company willing to take on the project•

The machines with the correct technology •

The above objections have all been overcome, Gourmet Grub is a reliable supplier of fresh food and PK Vending is a well estab-lished company within the vending industry. PK has secured the rights to the Gourmet Grub Program and are supplying the latest in vending technology to meet the needs of this program.

Do not miss out on the opportunity to get in on the ground floor of this venture.

We have attached a proposal for your perusal

To get started, call us on 0861 656 055

The PK Vending Team

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Table of Contents4 COMPANY BACKGROUND - VENDING COMMERCIALLY4 YOUR KEY TO A SUCCESSFUL BUSINESS IN VENDING

4 A Good Investment

4 The objective of this business is...

4 Your Customers (Sites and Locations)

4 Your Role

4 PK Vending’s Role in the Business

5 Gourmet Grub’s Role in the Business

5 What franchise fees and royalties are charged?

5 Finding your locations and in turn your customers

5 Maintaining your machines at locations

5 The Profits

5 A COMPLETE BUSINESS PLAN 5 Summary of Business

6 The Equipment Supplier

6 The Equipment for Fresh Food Vending

6 Equipment Maintenance

6 Getting Started

6 Stock and Merchandise

6 Pricing

6 Locations

6 Future Expansion

7 QUESTIONS INVESTORS FREQUENTLY ASK7 Why is vending a good investment?

7 What sort of equipment do I need to start off with?

7 Who will find the location?

7 How many sites will I need?

7 Where will my sites be?

7 Where do I get stock?

7 How do I ensure freshness of product?

7 Will I get training?

7 What vehicle will I need?

7 Does PK Vending Distributors offer any guarantees?

8 What is the cost to start the Gourmet Grub Program?

8 How much money do I need before borrowings?

8 How Much Money will I Make?

8 ILLUSTRATION (Profit per product)

8 CONCLUSION8 I’M INTERESTED, WHAT DO I DO NOW?

9 GOURMET GRUB FINANCIAL PROJECTIONS

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COMPANY BACKGROUND - VENDING COMMERCIALLY

PK Vending has been in operation for several years, (1st October 2008 is our twelth anniversary) and has provided the industry with quality cost-effective machines. The sale of products in these machines range from confectionery and cold drinks to coffee and combi-nations of snack and cans. With eating habits changing and the pursuit of healthy life style alternatives PK is proud to announce a new generation of machines. These machines are made from the highest European Standards and meet all the requirements to dispense Fresh Food.Purchasing machines from PK Vending Distributors means that you get the opportunity to buy direct, no middlemen. We don’t restrict your area because it stunts commercial growth. We don’t charge franchise fees because it is in our interests to offer the required as-sistance to help our customers businesses grow and therefore help us sell more machines. We do sell very reliable, secure and versatile vending equipment at the lowest prices. We will show you how to set up and run your own independent Fresh Food Vending Service to businesses in your own area.Gourmet Grub has chosen PK Vending as their partner in this brand new venture in South Africa, Fresh Food Vending

YOUR KEY TO A SUCCESSFUL BUSINESS IN VENDING

A Good Inves tmentWe will show you how to set up and run your own independent vending services to businesses in your own area, and what equipment you’ll need for individual sites to obtain the highest returns from these sites. When you consider the Return on investment on other products such as Bank Fixed Deposits (10%) and the Stock Market (± 20%), vending is a good investment.A Return On Investment of +/- 40% per annum can be achieved on a machine (ask to see our financial projections).Should you choose to finance your machines the returns are still very attractive.

The objec t ive of th is bus iness i s . . .To provide a complete solution to run your own highly profitable Fresh Food Vending business from a small capital outlay, by eliminat-ing unnecessary costs like franchise fees, consumable product manufacture, area licenses, etc. You will be providing a unique vending service to companies, offices and factories in your area by supplying Branded Fresh Food such as sandwiches, speciality filled bread rolls, muffins, scones and fruit juices, all dispensed through quality vending machines. Even once your business is running, we will pro-vide on-going help and advice, leaving you free to expand and develop at your own pace.

Your Cus tomers (S i tes and Loca t ions)Will be factories, offices, hospitals, schools or any working environment that will benefit from having a Fresh Food machine on their premises. Many businesses value the opportunity to have Fresh Food on their premises as this often reduces the amount of absentee-ism whilst employees leave the premises to purchase from convenience stores and fast food outlets during working hours. The vending machine yields more productivity to the company and is often described as an “invisible” asset. Few businesses of suitable size object to vending machines being sited on their premises. PK Vending will locate and negotiate these locations for you.

Your RoleWith the assistance of Gourmet Grub and PK, is to offer and provide a Fresh Food vending service on a company’s premises in and around your area (it should be noted that we do not have any restrictions on where you operate the machines, but it does make practi-cal business sense to have machines sited within easy traveling distance). You will be required to stock and cash these machines at least twice a week. All proceeds from the takings of these machines are yours.

THE MORE SITES YOU OPERATE, THE MORE PROFIT YOU WILL MAKE !!

PK Vending’s Role in the Bus inessIs to supply you with the latest and advanced vending equipment, to provide you with a location and give you all the advice necessary to operate your business successfully. PK Vending only profit from the sale of its machines. It is in our interests to give you all the advice and knowledge to help your business succeed, as your success contributes to our success. We will even find sites for you, so all you have to do is install the machine, keep it stocked and collect the cash. Should a location not perform adequately within three months of be-ing sited, PK will supply a secondary site to you free of charge. You will however have to pay for the physical movement of the machine which can be carried out by our trained technicians.

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Gourmet Grub’s Role in the Bus inessIs to supply you, as per your order with fresh produce on a order placed basis. Once you have become an accredited Gourmet Grub op-erator all you have to do is order your product via the internet. Gourmet Grub has created an efficient ordering process with the use of technology. It’s simple and easy to use. All orders are processed within 24hrs of being placed Monday to Friday and work on a pre-paid basis. (see www.gourmetgrub.co.za) for more details.

What f r anch ise fees and roya l t i es a re charged?As Gourmet Grub is not a franchise, no Royalties or Franchise Fees are applicable. Gourmet Grub does however require a monthly mem-bership fee which is set at R100 ex.VAT per machine per month. Gourmet Grub uses the combined purchasing power of all the operators to achieve the best possible prices so that the operators are able to maximize profit margins. The membership fee includes the following:

An online ordering process•On-going support •New product development•Promotional materials•

Finding your loca t ions and in turn your cus tomersFor some people the idea of picking up the phone, arranging appointments with prospective locations and selling the idea may be daunting. As briefly explained in the previous paragraph, PK Vending can find locations for you so all you have to do is keep your ma-chines well stocked and clean. PK Vending has a team of qualified location procurement staff. These personal are responsible for finding you a location. Making use of our extensive data base they are able to pinpoint locations within a geographical area close to you. A demographic survey is carried out on each location to establish its viability. This survey is made available to you. You then get to choose from the possibilities. It is surprising how quickly your business can grow with this approach. References are available on request. Should your location not provide a reasonable rate of return PK will provide an additional location, you will however have to pay for the physical movement of the machine which can be carried out by our trained technicians.

Maint a in ing your machines a t loca t ionsOnce your sites are up and running, you will be required to keep them stocked with the Gourmet Grub or suitable range of products on a regular basis, a minimum of at least twice a week. At the same time you will cash the machine (all takings are yours). The machines are designed to be easily accessible, and PK Vending provides full training on the operating of your machines and advice on how to deal with your locations and customers.

The Prof i t sOn average, three machines can make a gross profit of around:R6,000 per month that is a profit of R72,000 per year. You could comfortably maintain more machines. Generating more profit.Please note that this is still a part time business and requires around 2 - 4 hours a week of your time to manage one machine.

A COMPLETE BUSINESS PLAN

Summar y of Bus inessTo provide an in-house Fresh Food Vending service to businesses. It is intended to offer this service free of charge to the businesses. Ap-proaching companies of medium to large size who require Fresh Food in addition to their existing vending machines, as it is this area of the vending market that to date has been neglected by traditional vending supply companies.The business will initially be operated on a part time basis, with the intention to develop this over the next 12-18 months, so that it will become a full time concern. Once the vending equipment has been placed into appropriate businesses, these machines will then be vis-ited at least twice weekly for re-stocking and cash collection. It is likely that some sites will require further visits. Stock will be purchased from Gourmet Grub or other suppliers. Your responsibility will be to take your stock and fill your machines.

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The Equipment Suppl ierPK Vending specialises in the distribution of floor model vending equipment, designed primarily for the entry-level start up of vending operators. We provide from the basic to the state of the art sophisticated machines depending on requirement. We supply locally as-sembled and imported machines that are S.A.B.S., EC and Gourmet Grub approved.PK Vending Distributors, although not a franchise, does offer full business start-up assistance and advice, and this is available on an on-going basis. We do not charge any royalties or start-up fees, and do not limit your growth.

The Equipment for Fresh Food VendingPK Vending will provide a minimum of one new elevator machine. “The Elevator Machines” are the latest innovation in the vending industry allowing you to vend Fresh Food, Yogurts and glass as well as plastic bottles. These machines are specifically designed to vend Fresh Food and meet all the stringent health requirements. Each machine is fitted with a Rand Currency Note Reader as well as Change Giver, thus maximising sales potential.

Equipment Main tenanceNo special maintenance contracts are required for these electronic vending machines. PK Vending offers full training to enable the operator to troubleshoot his or her own machines. Operators are expected to carry out routine cleaning and servicing as required and taught by PK Vending. Full technical backup is available from PK Vending and a help line is available for on site support.

Get t ing St a r ted

A 50% deposit is received from the operator and financial approval / guarantees are put in place. •Site and area information is requested from the investor•Where appropriate companies / sites are contacted to secure interest•Locations are secured and approved by the investor•The balance of funds are transferred and machines delivered within seven days of confirmed receipt of such funds.•

Stock and MerchandisePK Vending and Gourmet Grub offer complete product advice as to which product lines to stock. An extensive range of products are available through the Gourmet Grub web site. Some products are produced by the central kitchens in Kya Sands while others are out-sourced. Gourmet Grub has an ever evolving product range although the basic products stay the same, seasonal variations allow you to maximise sales. This includes advice about seasonal variations of products and alternative products that can be placed within the equipment. Fresh Food can be purchased directly from Gourmet Grub and drinks from various distributors. No minimums are enforced by Gourmet Grub. Products are ordered via the internet and are collected from ourselves or directly from central kitchens.

Pr ic ingWe provide a recommended retail selling price on all products to ensure that you achieve a more than adequate Return On Investment. All machines are equipped with note readers thus enabling product to be priced at reasonable profit margins without losing sales to “coin only” customers. Although we suggest a retail selling price you are able to price your product to suit your client base.

Locat ionsDue to the previously high capital costs traditionally associated with Fresh Food machines it has been financially not viable for vending operators to site equipment into smaller sites. The Fresh Food Elevator Machine offered by PK Vending Distributors in conjunction with Gourmet Grub are relatively low in capital cost and are ideally suited for these types of locations. As this the first time in South Africa that Fresh Food machines are being placed there is a large number of sites that machines can be placed on.

Future E xpans ionOnce you have purchased your initial machine you may expand your business at your own pace one machine at a time may be added to your route.

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QUESTIONS INVESTORS FREQUENTLY ASK

Why is vending a good inves tment?All people eat and drink foods of one description or another, and by providing Fresh Food Vending equipment on site, you in a unique market. You are providing your customers a convenient way to purchase a quality branded product. The Fresh Food vending sector is one of the fastest growing sectors of the vending industry internationally with high annual growth rates. The American market alone in 2005 was valued at U$D 6 billion. (Automatic Merchandiser survey 2005)

What sor t of equ ipment do I need to s t a r t of f w i th?Gourmet Grub has approved an elevator vending machine that is imported and distributed by PK Vending. This machine is the cutting edge in the vending industry and has achieved tremendous success in the European Market. The machine is capable of dispensing a wide variety of products with little or no adjustment necessary.

Who w i l l f ind the loca t ion?PK Vending will assign an experienced representative who does your initial siting. We accept that, for various reasons, some operators do not wish to be involved and therefore provide this service free of charge. Our experienced technical staff will then do the installation and commissioning.

How many s i tes w i l l I need?Under the Gourmet Grub Vending Program, the total number of locations required depends on the number of machines you have pur-chased. All locations are provided by PK Vending at no additional cost.

Where w i l l my s i tes be?Your sites will usually be set up close to your residence or work but again we impose no restrictions. If you wish to have your equipment sited in a different area for any reason, then this can be arranged. PK will do their best to accommodate you within a geographical area however in some instances you may have to go further to get better locations.

Where do I ge t s tock?Products are ordered via the internet and are collected from ourselves or directly from central kitchens. You may source your beverage products independantly and place them in the machines.

How do I ensure f r eshness of product?Gourmet Grub has implemented stringent quality control and all products are manufactured in our SWIFT approved kitchen. All ingredi-ents used are of the finest quality. All products are sealed using the latest in food technology without modifying the food and meeting all health standards as set out in The Foodstuff, Act of 1972 and all its amendments . Immediately after production, product is placed in a temperature controlled atmosphere and remains cold until sold to the end user.Product is transported and delivered in containers within which are interchangeable Techni Ice packs which ensure product freshness. All fresh food products are labeled with ingredients used and best before dates.

Wil l I ge t t r a in ing?You will be trained on all mechanical aspects of the equipment, shown how to adjust the coin mechanisms and taught how to carry out routine service and repairs. We will also, where appropriate, give you advice on running your business, taking into account stock control, merchandising and product selection.

What veh ic le w i l l I need?Initially a family type car or sedan would be suitable, but as your business grows and develops you will probably find it useful to acquire a small van or trailer.

Does PK Vending Dis t r ibu tor s of fer any guar an tees?Because the only money you pay to us is for vending machines, your investment is 100% secured against your equipment. So, should you ever wish to stop trading, you can return your money by selling your vending machines or vending business. And, in most instances,

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you would make a profit from your sale. In order to maintain the highest standards in the Fresh Food Program, after five years PK Vend-ing will give you a trade in on the equipment of a guaranteed amount of R10,000* towards your new Fresh Food Machine. In addition PK offer a 3 month labour and one year warranty on all working parts on all machines supplied.Should a location provided by PK not provide a reasonable return within three months a new location will be provided. You will how-ever have to pay for the physical movement of the machine which can be carried out by our trained technicians...

What i s the cos t to s t a r t the Gourmet Grub Progr am?The total initial cost is from R200,000 inclusive, this consists of all the relevant equipment you need. Once you have been approved as a Gourmet Grub Member, signed your agreement and maid the minimum deposit of R100,000, PK Vending will provide you with the following:

Minimum of three mechines.•Start up stock and change for each machine.•Installation of the machines.•A minimum of three locations.•Advertising Material.•The right to use Gourmet Grub trademarks for the duration of your membership.•Marketing of the brand and assistance in marketing specific to your locations. •Access to a team of personnel, experienced in all facets of our program, who are available on an ongoing basis for operational •support and guidance.

How much money do I need before bor rowings?

You must have at least an unencumbered capital of 30% (i.e. R80,000 for the initial package) towards the purchase of your pack-age. The balance of the package can be financed through various lending programs of any bank or financial institution, subject of course, to the fulfillment of their usual credit requirement.

How Much Money w i l l I Make?The following financial projection illustation (based on existing machines) are an indication of potential financial viability. Your manage-ment style, your specific financial model and overall commitment are crucial to the success of your Vending Business and will determine your profit.

I LLUS TR AT ION (Prof i t per product)Fresh Food Items e.g. BLT COST PRICE R 8.18 SELLING PRICE R16.00 = 48.8 % Gross Profit PROFIT R 7.82Drinks e.g. Liqui-Fruit COST PRICE R 3.84 SELLING PRICE R 6.50 = 45% Gross Profit PROFIT R 3.16

CONCLUSIONHaving read through all our documentation and digested the facts we are confident that our proposal meets the needs and expecta-tions of a market segment that has never been exploited before. Our rapid expansion and ‘first-to-market’ will ensure a profitable and successful opportunity for all our partners

I ’M INTERES TED, WHAT DO I DO NOW ?Contact the office and speak to one of our qualified sales people, we will be happy to discuss your particular requirements.

For more information contact PK Vending on0861 656 055

www.pkvending.co.zawww.gourmetgrub.co.za

*Terms and conditions apply.

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GOURMET GRUB FINANCIAL PROJECTIONS

call us on 0861 656 055 and visit www.pkvending.co.za for more information

Terms and Conditions:

A 50% deposit with orders are required and the balance is payable 7 days prior to delivery. Please note: Gourmet Grub Fresh Food Supply is limited to Gauteng only.

* Bear in mind that these fi gures are only an indication of potential fi nancial viability and may

not be achieved. Your management style and overall commitment are crucial to success.

Gourmet Grub Fresh Food VendorSells fresh sandwiches and fresh fruit juices

LOCATIONS PROVIDED

NEW TO SOUTH AFRICA

INCLUDES NOTE READER & ELEVATOR SYSTEM

R200 000 incl. VAT

for 3 machines all inclusive* Profi t Potential

Average price for Fresh Food is R 14.00, Drinks R 7.00

9 Food,9 DrinksDaily for 22 Days






Total Sales (Rands) 12484 16632 20790 24930 26642 34650

Machine 1 4158 5544 6930 8310 9702 11550

Machine 2 4158 5544 6930 8310 9702 11550

Machine 3 4158 5544 6930 8310 9702 11550

Less cost of sales (fresh food & drinks at 60% - Rands)

6237 8316 10395 12465 13321 17325

Fresh Food and Drinks at 50 % 6237 8316 10395 12465 13321 17325

Gross Pro� t 6237 8316 10395 12465 13321 17325

Less Expenses 1842 1842 1842 1842 1842 1842

Insurance 650 650 650 650 650 650

Petrol 700 700 700 700 700 700

Telephone and Fax 150 150 150 150 250 250

Membership fee 342 342 342 342 342 342

OPERATING PROFIT (per month in Rands) 4395 6474 8553 10623 11479 15383

RETURN ON INVESTMENT (%) 26 39 51 64 69 92

Purchase Price Based on R200 000 for 3 machines all inclusive

ROI calculated on direct equity i.e. Purchase price for cash purchase.•

New Advanced Elevator System

GG Proposal

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Transcript of GG Proposal