#SAFranchiseFriday featuring H2O International

BACKGROUND
Around the globe H2O International has acquired a reputation as a provider of superior, safe drinking water filter systems. Continuously striving to improve the quality of their offering they tailor products to suit the demands of a specific market, and it is this ability to adapt that has secured their position as a global leader in the water purification industry.

H2O International SA was established in 1994 when Tony Marchesini secured the rights to distribute H2O’s range of products in South Africa. With over 55 franchises and stockists, H2O SA is as a leading force in water purification on the African continent.

THE CONCEPT
Franchisees have a choice of two business models — H2O Water Bar and H2O Water Station. Water Station franchisees also have the option to incorporate a water bottling plant. The Water Bar concept with its smaller footprint is ideal for shopping mall locations while the Water Station concept is well-suited to line shopping centres.

H2O International SA imports and distributes water and air purifiers, water coolers and boilers, and ice- and coffee machines. Via the H2O website, outlets are able to ‘display’ all of the 450+ products in the H2O range, from water purifiers and dispensers to shower filters. Customers can either buy the systems outright or avail themselves of the rental option. H2O’s superior after-sales service sets them apart from the competition and underscores their position as an undisputed industry leader.

While H2O’s primary target market is health- and fitness-conscious individuals and families with young children, their products are also popular for use in hotels, guest houses, restaurants, offices, light commercial businesses and factories. Responding to the increasingly questionable quality of our municipal water supply, and by allowing customers to purchase water in their own refillable containers at a minimal cost of R1 per litre, H2O SA has been able to grow their customer base amongst the middle and lower income groups.

FRANCHISOR SUPPORT
H2O SA’s technical team provides franchisees with ongoing operational and marketing support while the company’s dynamic online portal offers interactive support and access to marketing material.

New franchisees attend an intensive week-long, in-house training course followed by a period of on the job training. Further product-specific courses are offered throughout the year.

H2O employs multi-media marketing and advertising strategies to attract customers and any leads generated via their unique integrated marketing system are passed directly to the franchisees.

FRANCHISEE PROFILE
H2O franchisees are passionate about helping people improve their health and wellbeing. They are self-motivated, organized and comfortable working with the public. Experience in sales and marketing will be advantageous.

HISTORY
Founder: Tony Marchesini
Year founded: 1994
Area of origin: Cape Town, Western Cape
CEO: Tony Marchesini

NETWORK
1st SA franchise opened: 1995
Number of SA: outlets 55

FRANCHISE AGREEMENT
Management fee: 6% of turnover
Marketing fee: 3% of turnover
Agreement term: 5 Years
Renewal term: 5 Years

FINANCIALS
* Amounts quoted are VAT exclusive
Establishment cost: R400 000 to R700 000
Franchise joining fee: R95 000 to R125 000
Working capital required: R200 000 to R400 000
Total average set-up cost: From R695 000
Average monthly turnover: R200 000 to R700 000
Achievable gross margins: 50% to 60%

WANT TO KNOW MORE?
Contact Tony Marchesini on +27 21 702 3262 or tonym@h2o.co.za
www.h2o.co.za