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A Stax Home Entertainment outlet must be a customer friendly environment, and we therefore carefully select premises and use our experience and expertise to plan the layout so that the customer feels welcome and always looks forward to spending some time selecting his or her films. Staff is also trained to contribute to the warm atmosphere to be found in a Stax Home Entertainment outlet.
Shops vary in size and carry a full complement of DVD's, Blu-Ray & Playstation games depending on the size of the store. This represents a wide range of titles including classics and the latest releases. With our experience in the field of marketing and the hands-on experience of the franchisee himself he or she soon knows which types of titles and how many of each particular title to keep in his or her shop.
We provide franchisees with upmarket boxes, covers and sleeves. The Stax sleeve is of a high quality and modern and colorful in design.
Stax offers DVD, Blu-Ray product and the very latest gaming products on Playstation and X Box formats for rental as well as retail product for direct sales to the public.
 
HOW TO START A NEW FRANCHISE
Buying an existing shop
Although owning a DVD store is a profitable business, it is not the desire of Stax Home Entertainment to run such outlets, but rather to be in the position where we can pay our full attention to our franchisees and provide the services they deserve. It is however inevitable that Stax Home Entertainment acquire outlets from time to time for the simple reason that, with the expertise available, it happens that somebody sees a gap in the market which is then taken with own recourses until a new franchisee in that area becomes available. Such transactions are not rare and normal procedures are followed. A value is placed on the store as agreed upon by all parties concerned, an agreement drawn up and signed and the new owner takes over on payment of the purchase price. The new franchisee literally walks into a well-researched and established DVD outlet and is assured of making a profit and getting a handsome return on his investment from day one.
Establishing a new outlet
This is the more traditional manner of becoming a franchisee. Usually the would-be franchisee locates a suitable location in close co-operation with Stax Home Entertainment who is experts in the field of sourcing suitable locations. Normally options are then taken on the existing shop/building (or premises that must still be built) for a certain period of time – usually enough time to allow negotiations between the would-be franchisee and Stax to be concluded properly and thoroughly.
Note that “Offers to Lease” are extremely dangerous documents to sign.
Negotiations can now commence during which the layout of the shop is scrutinized, possible shop fitting combinations worked out and priced, where after the stock complement of the shop can be calculated on the basis of possible shelving. Once this point is reached, one has a pretty accurate idea of costs involved in establishing the shop. Further estimates can now be made, like the number of shop assistants required, etc.
Once all costs are determined beyond doubt, the labour to fit the shop is calculated and the franchisee and Stax Head Office agree on a price which is typically comprised of an upfront fee (the “own” contribution) plus further amounts due and payable at some later stage, usually at commencement of shop fitting and on hand-over (covered by a guarantee). The breakdown of the price is negotiable. It is further established whether the would-be franchisee might require any financing and, if so, whether Stax would provide part of it or whether a bank will be approached for full financing.
After agreement is reached on the above, the standard Franchise Agreement is usually signed and work starts in all earnest.
Here is a brief summary of activities:
- Application is made for municipal services.
- Application is made for telephone connections.
- Computer equipment is purchased.
- Stock gets ordered or drawn.
- Computer is loaded with stock data.
- Shelving is manufactured.
- Shop is fitted, counters built, shelves installed, etc.
- Sign writing gets done.
- Promotional editorials are prepared for placement in local newspapers.
- Pamphlets get printed for knock-and-drop.
- Extensive advertising is done.
- A Grand Opening is planned.
- Promotional material is ordered.
- Planning for the next month is started.
- Training of franchisee and full staff complement is done.
During this period Stax Head Office staff is continually present to guide and assist the incoming franchisee and staff.
Training covers a wide spectrum and may be personalized individual training, group training and onsite training and guidance until you are off the ground. Training is not once-off and there are informal learning sessions (with Head Office contacts) where the franchisee is informed of latest releases, new developments, etc.
Furniture and Equipment
Stax believes that what is provided for initially in the form of furniture, fittings and equipment covers the whole spectrum of what is required, and will include some or all of the following depending on the agreement with the new franchisee.
Equipment & Fittings
- Display Shelves DVD (49 dvd covers)
- Display Shelves Playstation (49 dvd covers)
- Counter
- DVD Shelves (Behind Counter)
- Bulkheads
- Poster Frames (Depending on Ceiling Height)
- Computer System (Computer, Printer & Program)
- Scanner (Optional)
- Cash Register
- Slot in Door
- Safe
- TV
- Rule Board
- Price Board
Stationary
- Contracts
- Black Boxes DVD
- Customer Cards
- Sleeves DVD
- Barcode Labels
Promotional Material
- Opening Promotion (Pamphlets)
Signs
- illuminated Sign / Neon Sign
- Window Decals
Stock
- Sony Playstation 2/3 Console
- Sony Playstation 2 Games
- Sony Playstation 3 Games
- DVD Machine
- Films - DVD Opening Month
- - DVD New Releases (+/- previous 11 months)
- - DVD Back Catalogue
- - Blu Ray
- - Kiddies
- - Series
Number of items depends on type, size and purchase price of outlet.
The franchisee will bear the cost of any alterations to the building (if necessary). All other costs are included in the purchase price as quoted and agreed upon.
Turn-key operation: When we hand you your keys you can open your shop and immediately start doing business.
Franchise Fees
Stax Head Office does not believe in penalizing the franchisee that works hard (and clever!) and makes a huge success of his or her business. It is therefore not our policy to charge a franchisee fee based on a percentage of turnover, but we charge a fixed franchise fee (excluding VAT) as follows:
- Grade A Outlet R 2,500.00 per month
- Grade B Outlet R 2,000.00 per month
- Grade C Outlet R 1,500.00 per month
(Effective as from 1 September 2009)
Advertising
 There is no monthly advertising fee as we believe that each outlet is unique and its owner should budget for local advertising depending on his or her own circumstances and location. From time to time, for example over the Easter and Christmas holidays, Stax Head Office will run extensive advertising campaigns for the benefit of the group as a whole and by implication of each franchisee. In this case there is a compulsory contribution from each franchisee, but this will not be in excess of R8,000.00 per annum. On opening, however, Stax Head Office helps with promotions and advertising, the costs of which are included in the purchase price.
The Franchise Agreement is entered into on approval of the application. This agreement contains all the terms and conditions and the cost thereof are included in the purchase price.
For more information please contact us via email staxdej@iafrica.com.
You may also call us at (021) 531-3880/9.
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