Pirtek

Introduction

 

The Pirtek operation began in Sydney, Australia in 1980 and is now Australia's leading provider of the on-site hose replacement service in the country.

Pirtek started operations in the UK in January 1989 and now dominates the UK& Irish markets with over 90 centres spread around the country. This year's net sales will be in excess of £50 million, making Pirtek by far the largest operator in this market sector. The market sector itself is estimated to be worth £700 million - and there is ample opportunity for growth in the next decade and beyond. Pirtek operates as a business format franchise system where the franchisee acquires the rights to establish, own and operate a Pirtek business in their region. Franchisees are provided with the support in the form of sales, training, technical and financial back-up, to ensure that the business succeeds along a proven track.

In essence Pirtek is a marketing distributor of a wide range of hoses, fittings and associated products from a number of leading world manufacturers; the local Pirtek Centre essentially becomes a regional or local distributor in his own right. Pirtek's product selection criteria are extremely high.

 

Q&A

 

Q: Are you still looking for Franchisees?
A: Yes there are several areas where we would like to open new Hose Centres and from time to time there are existing businesses which come up for sale.
Q: How much money do I need to open a Pirtek Franchise?
A: Around £70000 in liquid capital. Finance can be arranged for the rest of the investment providing you have other assets to use as collateral.
Q: Do you have any competitors?
A: Yes. Pirtek has successfully developed the mobile hose replacement market and is Number One in Europe. This success has been achieved against a number of competitors.
Q: Will I be able to draw a salary from the business during the first year of trading?
A: This depends on your personal circumstances; please discuss it with the Pirtek Franchise Director, Alistair Wiggins on 020 8749 8444
Q: Do Pirtek franchises have specific territories or is it a 'free for all'?
A: Pirtek franchises have specific territories for which they are primarily responsible. Jobs received for another area are passed to the appropriate Centre that can satisfy the customer.
Q: I do not know any thing about Hydraulic hoses, does it matter?
A: No. Many successful franchisees entered the Pirtek network from a wide variety of backgrounds with no previous product knowledge; however, practical commonsense is essential!
Q: Can I open more than one depot?
A: Yes but that would depend on the success of your first depot and the availability of other "green field" sites.
Q: Does Pirtek UK Ltd have any company owned depots?
A: Not in the United Kingdom.
Q: What training will I get?
A: The initial training course is three weeks residential but the ongoing training and support will carry on throughout your life as a Pirtek Franchisee.

The business is exciting. Opportunities and demands are ever changing. Challenging projects, people contact and a healthy profit potential ensure that the business retains its interest.

Pirtek operates as a well supported business format franchise together with Licensees who acquire the rights to own and operate one of the Pirtek Centres in various regions of the UK. Each Centre is owned and operated by the individual Licensee within the proven guidelines which have made the Pirtek formula successful not only in the UK but also in Belgium, France, Germany, Holland, Australia, New Zealand, South Africa and the USA.

Pirtek Licensees come from many walks of life, from banking to sales and marketing backgrounds, from industrial managers to marine engineers; few if any have specific hydraulic training, although a general industrial background can be helpful. Pirtek provides an on-site industrial service for many of its customers - "just like the AA" - this service often demands quick response for the crisis situation. There is a second side to the business which develops increasingly as the business matures, and that is as a provider of a wide range of hydraulic and industrial products to end users in locations such as plants or factories - this part of the business is not driven by the same urgency as the field service work. The breadth of the Pirtek customer base is reflected in the size of the job or invoice value, which can range from a few pounds for some smaller fittings purchased at the trade counter to many thousands of pounds for the larger job in a factory or plant.

Sales Revenue and Costs

Pirtek UK is a national distributor for its various Licensees who purchase their products on a monthly, weekly or sometimes daily basis. Each Licensee then becomes effectively a local or regional distributor and on-sells those products to its own customers. It also sells its services - service call out fees, labour and assembly charges. Pirtek's main product suppliers are from Italy, a country which is well known in the marketplace for the highest quality. Italian companies supply products which are constantly at the forefront of technology, mainly through the extensive research and development programmes the companies have in place.

When combined, the products and services which the Pirtek Licensees sell normally produce a gross profit margin ranging between 50 - 65% of the total of each individual sale. At this level of margin, once the business becomes mature, healthy and consistent, profit levels can be maintained and a much bigger business can be built up.

The cost of opening a typical Pirtek Centre is normally around £220,000 of which Pirtek can organise financing for two thirds of that amount. This means the prospective Licensee needs to have liquid capital resources of around £70,000. For this the Licensee will start his business operating from a 2,000 sq. ft warehouse, fully equipped with plant and machinery needed for manufacturing hose assemblies, computer hardware and software designed for the task and three mobile workshops, fully fitted out to be able to do 90% of the jobs they are called upon to do, and of course a start up stock of products.

First year turnovers usually range from between £170,000 and £200,000 and grow to £500,000 in the 3-4 year period.

There are certain opportunities for smaller operations within the main metropolitan regions of the country, which of course have a lower start-up cost.

The figures quoted above are of course only meant to be general examples, if you are interested in pursuing the opportunity that the Pirtek business provides, we would of course be happy to go through financial areas of the business in much greater detail.

For more information on this fantastic franchise opportunity, please complete the following form...