July 5, 2008
All Scream for Ice Cream
Mr Whippy, home of the sprinkle flake cone with chocolate topping, is for sale.
AN ICONIC ice-cream company with scope to whip up more business is for sale by negotiation.
Mr Whippy NZ is one of the most widely known franchise networks in the country, Mukesh Parsotam, of Harcourts Team Wellington, says.
"It has very high percentage brand recognition and research shows it's one of the top three most-recognised brands in New Zealand."
The signature Greensleeves sound of a Mr Whippy van has been heard here since 1964. The company now has 55 franchised ice cream vans and nine franchised stores throughout the country.
The sale also includes the distribution and warehousing of Mr Whippy products, intellectual property and branding, and Crystal Peak, a water brand with concept stores under licence in Wellington and Auckland.
"Franchise operations and day-to-day running of the company are managed out of the head office in Auckland," Mr Parsotam says. "Mr Whippy New Zealand essentially is a warehousing and distribution business.
"All the products are contract packed by Mr Whippy's suppliers, and then shipped and freighted directly to its Hamilton warehouse, from where they're dispatched to franchisees around the North Island and to a third- party warehouse in the South Island."
It employs two staff: one runs the day-to-day warehouse and logistic operation, which includes stock purchasing, and makes fortnightly deliveries to the Mr Whippy stores in Auckland; the other is an administration officer who processes orders.
Mr Whippy's annual turnover from products is $1.2 million.
"Gross profit averages 55 per cent," Mr Parsotam says.
"Traditionally, sales peak over summer and slow over winter. To reduce this seasonality, the company has introduced hot beverages and sweet snack foods to complement the ice cream business."
Another revenue source is franchise sales. Because all franchisees have contracts that are subject to renewal, territories can be redrawn to increase total revenue, Mr Parsotam says.
The average mobile franchise cost $140,000, including the $30,000 franchise fee; stores can vary from $100,000 to $225,000, depending on the location and fit-out.
"There are territories that are still to be sold," Mr Parsotam says. "Based on run rates in the United Kingdom, the company estimates the mobile network's potential could be up to 200 vans."
He adds corporate rebates are another income stream (all new deals that have been procured will transfer with the business sale).
"Flying Kiwi Holdings 2006 Limited bought the Mr Whippy New Zealand brand in December 2006. It used Mr Whippy's purchasing volume to set up the ice cream support products distributor, Supa Foods, which it now wants to focus on.
"The new owner of Mr Whippy will benefit from Flying Kiwi's investment in the company, which has turned it into a profitable distribution business with well-structured franchise systems."
For more information, contact Mukesh Parsotam on 495 9020 or 021 500 368 or e-mail: [email protected]
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