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Snap-on Tools' There's a Difference

Congratulations on completing your ride-along! You enjoyed a first-hand look at how a Snap-on Tools Franchise business owner utilise the Snap-on program to forge a strong relationship with the professional tool users at the locations where they apply their trade. By having these close customer relationships in which the franchise owner provides such personal service, Snap-on gleans insights into the changing needs of the customers.


 

Ride Along Report

Let's talk about it.

  • What impressed you the most about the franchisee you rode with?
  • Did you get all of your questions answered?
  • How do you feel about the amount and types of accounts the franchisee had?
  • Would you be comfortable collecting money?
  • What do you think your biggest strength would be?
  • What do you think the most difficult part of the business would be?
  • Are you comfortable with the amount of hours you see the franchisee working?
  • Are you comfortable in a sales and collection orientated environment?

 

Customer Driven Selling

Snap-on have a unique method of delivering products to customers, in which after spending time on the van ride you will hopefully now have been exposed too. The method is Customer Driven Selling which compromises of:

  • Planning Your Day
  • Benefits of the Prelist
  • Review and Preview Garages
  • Greet the Customer with Product
  • Tote & Promote
  • Sell the Tools
  • Payment Options
  • Collect the Money

Innovative Point of Sale System

Did you observe the franchisee business owner was equipped with a custom point of sale (POS) system, we call “Chrome.” We designed Chrome to help the franchisees stay organized and maximise their time with customers instead of losing time with bookkeeping and inventory management. Chrome has many capabilities you may have not been able to experience on your ride-along, including:

  • Chrome Express Plus (Mobile POS Suite)
  • Electronic Contracts
  • Electronic Money Transfers
  • Customer Transfers
  • Product Transfers

 

Your Investment Package

The total investment is £161,189 - £162,989

  • Starter Inventory
  • Training: Dedicated Franchise Developer for 4 weeks
  • Business set-up costs
  • Your franchise fee
  • Working capital*
  • Exclusive protected territory
  • Advanced sales and stock IT system
  • Continuous training and support
    • Monthly franchisee meetings
    • Franchise development training
    • National Franchise Conference


 

Now Let's Break that Down into More Detail

The total cost of the franchise is £161,189 - £162,989
You raise £8,989 - £14,989 *
We will finance £148,000

The £148,000 is divided into three areas:

  • £10,500 Franchise Fee
  • Up to £52,500 Revolving Account (RA)
  • £85,000 Starter Inventory
Total £148,000
 
  • These costs are excluding VAT, but Snap-on Finance could also loan the VAT amount on the re-payment terms of:
    • Term length: the due date will be 18 weeks from the date of contract/funded


 

Initial Funding Term

The loan will initially be funded by Snap-on Tools, with repayment terms requiring weekly payments of 5% of Paid Sales for the first 104 weeks paid back automatically through your Franchise Statement. This will be interest free.

  • Repayments will start in the 14th week of trading, this is designed to help reduce pressure on your business expenses in your first quarter
  • Your repayments will pay the loan off in the following order:
    • £10,500 Franchise Fee
    • Up to £52,500 Revolving Account (RA)
    • £85,000 Starter Inventory

Remaining Funding Term

At the end of the initial term the remaining balance will convert into an interest-bearing loan with Snap-on Finance* over an additional 10-year period. Assuming you have made payments of 5% of paid sales based on current system averages, you will owe approximately £114,024 after two years.

Loan 1: INVENTORY and REVOLVING ACCOUNT (RA)

Inventory start-up stock £85,000
Funding your RA £29,025 (£52,500 less payments made)
TOTAL £114,025

 

Another funding component is RA Development. The RA Development is a portion of the Snap-on financing to help you grow your RA investment with your customers, selling them tools on their RA account which you will usually collect back in 6 – 8 weeks. If you use the Snap-on financing programs, Snap-on will provide funding by increasing this portion of your loan facility.

After 9 months of operating the business you should have reached £70,000 in RA sales, which is £52,500 at cost – and the cost component is the amount financed by Snap-on (up to the relative cap on financing for this component). Your funding will then be turned off and the value of your RA balance confirmed.

Should you be successful in being offered a Snap-on franchise business and the area has an existing RA balance this would be audited and sold to you at the time you started with a 75-day recourse period.

*All individuals will be subject to a full finance application at the end of the initial funding term and is subject to approval


 

Start-Up Capital

The £13,189 - £14,989 that you need to raise includes:

  • £5,689 - £7,489 to obtain required licences to operate a Snap-on Franchise
  • £1,500 down payment on the Franchise Fee
  • Up to £6,000 working capital*
    • **varies according to individualized expenses

UK FRANCHISE ON-GOING COSTS         ROI FRANCHISE ON-GOING COSTS


 

Your Mobile Store

  • Custom-built – Store, Office and delivery vehicle
  • Designed to operate comfortably as a two-person store. This is good to know, especially if your plans include hiring a Franchisee Assistant in the future.
  • Snap-on Tools has an established relationship with Lynch Display Vehicles (LDV) and Kurt Hobbs Coachworks. Mobile stores are designed to Snap-on specifications.
  • All new Franchisees start with a 7.5T Iveco, unless they elect an approved second-hand vehicle
  • C1 driving license and CPC qualification to operate the vehicle.
  • The vehicle is your responsibility to maintain
  • Our dedicated Fleet Manager is available to support any questions you may have regarding the vehicle
  • New Mobile Stores are estimated to cost £130,000 + VAT, and you could request funding using our in-house financing

Download Mobile Store Brochure


 

Application for Finance with Snap-on Finance

If you are considering using our in-house financing, now is the time to review the Snap-on Franchise Finance Application and your new start budget.

You will need to send the following documentation:

  • Proof of Address (utility bill/bank statement) ensuring this is verified, named, signed and dated by a separate individual
  • Proof of ID including passport, as well as front and back of driving license, ensuring this is verified, named, signed and dated by a separate individual
  • New Start Budget
  • Proof of Start-up Funds ensuring this clearly displays Full Name, Bank/Building Society Name, Funds Available and Dated

 

Review

You have now had a chance to read the full franchise agreement which outlines the obligations to a Snap-on franchise, is there anything you would like to ask? If you have decided that Snap-on Finance is your preferred way to finance the purchase of your Snap-on franchise business we will now review your application and budget.


 

Final Steps

The final step is a formal interview. Together, we will complete our discovery journey and answer any remaining questions you may have. If both parties feeling that this is a good fit, Snap-on will make you an offer a Snap-on Tools franchise. In preparation for the final interview be prepared to present to us your business and personal goals.

Set Goals That Motivate You

Think about your goals in two ways:

Your personal goals - What do you want the business to give you? How do you want it to better your life? This is your motivation, what will drive you to build a successful business.
 
Your business goals - Think about what direction you want to take your business in? Break it down into short (within a year), medium (1 - 5 years) and long term goals.

The physical act of writing down a goal makes it real and tangible and reminds you every day of what it is you intend to do.

 

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