Pirtek
Date of Incorporation: 1997
Franchising Since: 1997
U.S.Headquarters: Delaware
Country of Origin: Australia
Description: Pirtek Fluid System Pty. Ltd. (PFS) is an Australian company incorporated in New South Wales, Australia in December 1979. Pirtek USA LLC offers Pirtek franchises to qualified persons in the United States under master franchise rights granted by PFS in June 1997. They are also in the business of the administration of their franchise system.
Franchise Offer: The franchise offered is for the right to own and operate a Pirtek hose service center business which will consist of the sale, custom assembly and installation of industrial and hydraulic hoses, fixed tube assemblies, linings and related components and other distinctive products and services.
Financial Assistance: The franchisor does not offer any direct or indirect financing nor do they guarantee any note, lease or obligation. The franchisor may periodically arrange with third party finance companies or banks to make financing programs available to franchisees. The United States Small Business Administration (SBA) currently offers a Franchise Registry Program to allow for the expedited processing of SBA loans for franchisees of approved franchisors. Pirtek franchisees who apply for SBA loans will receive the benefit of a streamlined loan process.
Training and Assistance: The franchisee must attend the initial training program before they open their Business. Training is available to the franchisee, the designated manager (if someone other than the franchisee), the operations manager, at least two MSS technicians and the administration person for the Business. The training program includes two phases: (i) instruction regarding the general management of the Business; and (ii) instruction regarding the sales and service aspect of the MSSU part of the Business. The "on the job" work experience is designed to provide the franchisee and their team with the opportunity to better understand and learn the Pirtek business.
Territory: The franchisee is granted the right to operate their franchise within a designated Territory. The method used to describe territorial boundaries of franchises generally will be one or a combination of the following: county lines, highways or streets or zip codes, and generally results in an area of 35 square miles. During the term of the Franchise Agreement, the franchisor will not establish either a company owned or franchised Pirtek Hose Service Center within the franchisees Territory or modify their Territory without written permission; provided that the franchisee is in complete compliance with the terms and conditions of the Franchise Agreement.
Term of Agreement and Renewal: The term of the franchise agreement is 10 years with an option to renew for two additional 10-year terms if all the conditions are met.
Obligations and Restrictions: If the franchisee is an individual, they must directly supervise and manage the Business. If the franchisee is a corporation, partnership or other business entity, they must designate in writing to the franchisor the individual who owns 51% of the franchisee and an individual who will directly supervise and manage the operation of the Business. The franchisor requires the franchisee to offer and sell only those products and services that the franchisor has approved. The franchisee must offer all products and services that the franchisor requires. There are no limits on the franchisors right to make modifications to the approved products and services from time to time.
Total Number of Units: There are 350 units worldwide.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $48,000 | $48,000 |
| Shop Set-up Fee | $10,000 | $10,000 |
| Pirtek Data System and Computer Connection Fee | $4,000 | $10,000 |
| Training | No separate fee for initial training because it is included in the Initial Franchise Fee; $5,000 to $15,000 for expenses (which is $1,000 to $3,000 per person for travel and living expenses during Training) | |
| Leasehold Improvements | $5,000 | $40,000 |
| Signs and Equipment | $65,000 | $80,000 |
| MSS Units | $50,000 | $100,000 |
| Prepaid Rent and Security Deposit | $2,000 | $5,000 |
| Opening Inventory | $65,000 | $120,000 |
| Insurance Premiums | $20,000 | $40,000 |
| Utility deposits and Business Licenses | $1,000 | $3,000 |
| Attorney’s fees | $2,000 | $5,000 |
| Additional funds -3 Months | $50,000 | $100,000 |
| Total | $327,000 | $576,000 |
Ongoing Fees:
| Name of fee | Amount |
|---|---|
| Continuing License Fee | 4% of Gross Sales, with a reduction in the first year to 1.5%. |
| Marketing Fees | 1.5% - 3% of Gross Sales. |
| Local Marketing | .75% - 1.5% of Gross Sales. |
| Transfer Fee | $10,000 |
| Pirtek Meetings | Will vary under the circumstances. |
| Audit and Recordkeeping Costs | Will vary under the circumstances. |
| Interest Expenses | Will vary under the circumstances. |
| Renewal fee | $10,000 |
| Computer/Data Transfer | $500-$2,675 per month. |
| Insurance | $2,000-$10,000 annual premium for liability insurance only; plus other annual premiums ranging from $4,000 -$30,000 or more, which will vary under the circumstances. |
| Remodeling Expenses | A maximum of $5,000 per year for each year that the franchisee operates the business under the Franchise Agreement. |
| Costs and Attorneys' fees | Will vary under circumstances. |
| Dispute Resolution | $5,000 |
Date of FDD: 2010
The above information has been taken from the UFOC/FDD and online sources of Pirtek.
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