Snap-on – value at work

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The team at Snap-on was elated when the Snap-on franchise, a mobile store network retailing professional tools, was voted by the Financial Review Smart Investor Magazine as the Best Value Franchise in Australia for 2009.

The franchise fee structure at Snap-on is what sets us apart from other similarly priced franchises. An investment of about $160,000 with a franchise fee of $40,000 covers so much more than just the licence fee for the two six year terms of the franchise.

The principle of any franchise is that there is a proven system to follow and accordingly the key to success is a combination of the suitability of the individual to the franchise and the training and support they will receive to maximise the potential of that system.

Over the many years in business Snap-on has developed a comprehensive recruiting process to best evaluate the suitability of a Snap-on franchise to a prospective franchisee.

In depth training

At Snap-on the comprehensive training means every new franchisee attends a six-day course at the Snap-on Training Centre in Dallas, Texas; franchisees then spend another two days training at the National Distribution Centre in Sydney.

All the training, plus the associated costs, including airfares, transfers, meals and accommodation are covered by the franchise fee. During the two days in Sydney franchisees spend time in each department and meet the people they will be dealing with on a day to day basis. At this time franchisees receive their laptop computer, printer and the custom software needed to operate the franchise, again all provided within the initial fee.

A survey carried out on the geographically bounded territory will have identified the location and type of business of all the potential customers for the new franchisee.

Theory into practice

For at least the first three weeks of operation, a franchisee has their sales development manager (SDM) riding with them as they call on their customers. These early days are when the franchisee is coached by their SDM in putting into practice the training they have received in America and Sydney.

There are no royalties or advertising levies payable with a Snap-on franchise. The departure from the more conventional franchise fee structure is due to Snap-on being the product manufacturer; Snap-on sells products to their franchisees who in turn sell to the customers.

There is a monthly management fee for the franchise which has remained at a token $400 per month for the last few years.

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