Pegasus Franchise
Background
Benefits
Agreement
Costs
Profitability
What do I need?
More Information
Confidentiality Agreement
Franchisee Questionnaire
Background
Pegasus Rental Cars Background
Pegasus Rental Cars was set up in Christchurch in 1989. The directors had previously identified overseas, the use of older vehicles as a more cost effective alternative to the new car fleets of “The Big 3” (Avis, Hertz, and Budget). However, the cost of vehicles here prohibited this type of operation as strict requirements by the LTSA on licensing and vehicle condition made the operation unrealistic.
Once importing of second-hand Japanese cars allowed the prices to fall to a realistic level, the opportunity was seen to establish a rental operation that catered for people on a budget. Pegasus specifically targeted the incoming budget traveller. The existing companies saw Pegasus as a threat, stealing their market share, but Pegasus believed it actually offered another option to people who would otherwise have taken a bus or train. Travellers could have more flexibility and at a cost no more than that of public transport.
Pegasus initially imported all its own vehicles and still brings in a limited number from Japan. Changing markets have meant it is now sometimes more cost effective to buy here. Pegasus centres and agencies are now located nationwide.
The need for more cars and hence a greater capital requirement, led to the decision to grow the business through the franchising of the Pegasus Rental Cars system. This enabled the established rate of growth to continue and to keep up with the ever-increasing demands of the expanding tourism sector, one of the major success stories of the New Zealand economy.
In 1991, the manager of the Christchurch branch set up the first franchise in Nelson. Once the format was proven to be successful, the new system was extended throughout the existing network of company branches. Branches at Auckland City, Auckland Airport, Christchurch Airport, Christchurch City, Wellington, Picton and Queenstown were sold as franchises. In addition, new franchises were set up in Whangarei, Dunedin, Greymouth, Napier, Tauranga, Rotorua, New Plymouth and Invercargill.
Recently, there has been a push into the business market with the Blue Wing Loyalty Club, which has been successful in creating a lot of repeat business, especially useful in the slower winter months.
The company has plans to develop business in Australia, with a view to extending the business internationally. This will eventually enhance the size of the New Zealand market, due to the growth of incoming Trans Tasman travel.
Pegasus needs partners in the business system that it has developed and is hence looking for new owners with business sense and integrity to share in its future growth.
Benefits
Benefits of a Pegasus Rental Car Franchise
- Ownership of your own business with assistance of experts in the field.
- Involvement with a well known brand name in both leisure and business travel market.
- Sharing of advertising marketing costs nationally as well as internationally.
- Purchasing price advantages through the established network and supply channels of a larger organisation.
- Conferences for the sharing of knowledge and experiences with others in the industry.
- Assistance in local selection of sites, marketing and promotion.
- Training and ongoing head office support.
- Access to advice on management and financing of your business.
- The ability to move cars from town to town without the restriction of only having one available depot.
- Assistance in selection and purchase of cars locally and from overseas (Japan).
- Benefits of a nationwide booking system and referrals from other operators and overseas tourist centres.
- Fully computerised rental management system and associated reporting, along with accounting systems.
- Assistance in the event of holidays and sickness from others in your own organisation.
- Budget and projection assistance in the setting up of a new and ongoing venture.
- Additional revenue from commissions with Pegasus and on other associated rental vehicle products.
- Fully functional online booking system with a powerful presence on the internet through a large network of websites.
- Repeat business through the Pegasus Blue Wing Business Club.
Agreement
Franchise Agreement
Pegasus Rental Cars has a franchise agreement which will be the basis of the contract between the parties.
The agreement is for 5 years with two renewals.
The agreement gives one "Pegasus Centre" right of operation within a defined area.
There is an ongoing management fee payable on gross revenue earned at the Pegasus Centre. This fee is 5%.
National advertising is paid monthly as a nominal percentage share of the gross turnover. In the case of a new Pegasus Centre there is a one off licence purchase fee.
In some cases it may be advisable or preferable to purchase an existing business. A goodwill payment will need to be made in this instance. This figure can be calculated by known factors for the business operation and is an ideal way to be instantly profitable.
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Costs
Costs
The cost of a new franchise centre in a new area will be determined by a variety of factors, so we will need to talk with you before a price can be determined.
Franchise Centre licence fee is a once only fee which allows the applicant the right to the use of the Pegasus Systems, Pegasus Name, Trademarks and identity at the designated Pegasus Centre and area described in the Franchise Agreement. The franchise purchase includes training at a Pegasus Centre, plus on site training and set up of the operation.
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Profitability
Profit Projections and Profitability
Guidance with financial forecasts can obtained from Pegasus Rental Cars. Each operation and each operator is different. Although we know the basic requirements and returns to be expected in the successful running of a Pegasus Centre the final results and budgeting are left to the purchaser, with guidance from the franchisor.
Turnover will be affected by the size of the town in which the centre is located, but will be in the hands of the owner and determined by efficiency and attitude. Costs of vehicle repairs will be determined by the quality of the fleet purchased and standard of maintenance applied. The financial status of the purchaser will have an effect on the results of the business.
Whilst Pegasus can assist in forecasts and projections the final result is in the hands of the operator and will be the results of his/her plans, ambitions and work habits. Professional advice must be sought prior to completing the purchase of a Pegasus franchise.
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What do I need?
What do I need to operate a Pegasus Franchise?
- The Rental Car industry is regulated and you will require a Rental Car Operators licence before commencing business.
- All cars must be registered under a class for hire or reward and have a current certificate of fitness.
- A desire to succeed in your own business is essential.
- Enjoying dealing with people is essential.
- Motor trade or mechanical knowledge above a basic level is not required.
- A basic business knowledge is essential, though comprehensive training will be given.
There are and have been many excellent articles in recent magazines and business papers on franchising.
We strongly suggest you search these out of bookshops and libraries.
The Franchise Association in Auckland has some very good information available for the prospective franchisees which gives a good guide to what you should expect. It's worthwhile subscribing to the FANZ monthly magazine which is full of interesting franchising information.
Franchise NZ Magazine
www.franchise.co.nz
Franchise Association of NZ
www.franchiseassociation.org.nz/
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More Information
How do I get more information?
There is a considerable amount of information that we can give you, and your advisers, to allow you to make a considered decision as to whether Pegasus Rental Cars is the right business opportunity for you.
The next step is for us to learn a bit about you so that we can consider if our business is right for you. We don’t just want to sell you a franchise; we want you to become a successful member of our organisation.
In order to discuss your franchise opportunity in more detail, we need to be sure that discussions remain confidential, and that we do not allow our systems to become public knowledge. By doing this we are safeguarding the interests of our existing franchisees. We also want you to be sure that any information that you give to us will remain confidential.
Please can you download, complete and sign our Confidentiality Agreement and Franchisee Questionnaire and mail them to us. These are PDF files and can be viewed with Adobe Reader.Once we have received these we will get in touch with you to discuss matters further, with a view to setting up a meeting where we can go through more specific aspects of franchise ownership. Please view our Franchise Presentation.
If you have further queries that you wish to raise prior to sending back the forms, please call or email us.
Kevin Lamb
Pegasus Rental Cars
Phone +64 3 548 2852
Fax +64 3 546 7381
Postal Address: PO Box 7166, Nelson, New Zealand.
Email: franchise@rentalcars.co.nz
