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Franchise Information Kit “Over 21 Years as Australia’s Premier Trade and Industrial Tool Retailer”


Welcome to the Total Tools Franchise Group Being the best means selling the best. Australia’s most trusted tools retailer, Total Tools supplies only quality trade, industrial or commercial tools and hardware. So you’ll find we’re specialists in leading brands such as Makita, Sidchrome, Hitachi, Bosch, Stanley, Irwin, Cigweld, Milwaukee, DeWalt and Sutton. Already a successful national franchise, Total Tools is currently on a growth trajectory. This retail network expansion means Total Tools is presently seeking potential franchisees. Read on if you envisage being part of a dynamic franchise network, actively involved in an exciting growth phase. A Total Tools franchise is an unrivalled opportunity for anyone with a passion for tools. You will: • be guided by a proven retailing and franchising system; • enjoy the strength of Total Tools’ trusted brand; • be supported by a national management team and support office. Total Tools franchisees are positive, focused people, usually with tool or trade experience. Many already have a good head for business and people management. They choose Total Tools for brand strength, proven systems, security and the kind of return on investment only great franchises offer. If you have what it takes to build a successful Total Tools business, we want to talk to you.

“Total Tools appear to us to be the leader in the Australian market in the Professional Trade Retail sector.”

Michael Kirkman, Managing Director, Stanley Works Australia

“Our company’s growth with Total Tools has been outstanding and we consider them a great retail partner.”

Tom Fukaya, Managing Director Sales and Marketing, Makita Australia

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ABOUT THE MARKET


About the Tools Market Like every Total Tools business, your franchise has the advantage of selling into a buoyant and high value market. In fact, the Domestic Hardware Retailing Industry recently valued Australia’s tools market at $11.13 billion annual sales. Imagine being part of that. The market can be divided into 3 primary segments:

Replacement & Renovation Estimated @ 60%

New Household Estimated @ 25%

Professional Tradespeople Estimated @ 15%

60% 25% 15%

Total Tools specialises in supplying tools and machinery to people who make their living using them. This robust sector comprises anyone who aspires to use professional quality tools and includes:

• tradespersons • sub contractor • government bodies • construction companies • manufacturers • engineers • farmers

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About the Tools Market Key tools market facts • New construction and existing dwelling alterations have driven strong market growth.1 • Current hardware industry revenue is forecasted at $26

billion, of which 60% is considered

‘trade’ or $15.6 billion.

2

•2

million Australians intend spending over $5,000 renovating or extending their home.

• 32% of people plan to make minor repairs/alterations or redecorate/refurbish a house.3

$11.99 Billion DIY

TRADE

DIY

Serious DIY

Bunnings

Repco

Light Industrial Heavy Industrial

Reece

Mitre 10

BOC

Home Hardware

United Tools

Autobarn

Sydney Tools

Supercheap Auto

Trade Tools

1. Source: IBIS World Domestic Hardware Retailing in Australia.

INDUSTRIAL

2. Source: Australian Financial Review.

4

Blackwoods

3. Source: Roy Morgan Research, Mar 07


WHO ARE TOTAL TOOLS


Who are Total Tools? Total Tools is Australia’s leading trade and industrial tools retailer. Each store offers a wide product range and experienced staff who deliver fast, individual attention and professional advice. Thanks to a detailed retail strategy for store owners, we are able to deliver Tool Heaven.

Total Tools is sought out and recognised for: • an extensive range of professional tools; • superior service and trusted, qualified advice; • a “can get it, will get it” customer approach. Because Total Tools is a team passionate about tools, we’ve built a range and quality reputation that is exciting and irresistible to customers. Smart, competent staff offer advice and product knowledge to support customers in

“My Total Tools store gives me the perfect work/ life balance. I have a profitable business whilst still having time to enjoy life”

a way that keeps them coming back.

Ian Chambers

Through strategic marketing, Total Tools works

Total Tools Braeside

continuously to extend an already recognised brand. Efforts encompass advertising and promotion, strong store level visibility and online marketing.

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Who are Total Tools? Total Tools product importing division provides a strong advantage over competitors. By importing direct, Total Tools not only sources quality tools and equipment, but because those products are branded for exclusive sale through Total Tools retail stores, customers seek them out. Plus private brands offer franchise owners like you improved profit margin.

Our goal is to be Australia’s ultimate “One Stop Tool Shop” for people who use tools for a living. Total Tools also guarantee everything we sell, regardless of the manufacturer’s policy. There’s a clear focus on continuous improvement in every area of the business. Your Total Tools franchise business will be part of a progressive modern company with a quality philosophy and growth objective.

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Who are Total Tools? Vision

VISION Total Tools aspires to be Australia’s most profitable and robust professional tool retailer for people who make a living out of using tools. We will provide • Expert advice • Best practice and processes • Competitive, profitable, quality products • The right solution fast • A big product range • Tool Heaven that meets and exceeds customers expectations whilst developing superior relationships with all stakeholders.

o be Aust tool retai ols.

Our goal is to grow the business responsibly by nurturing will provide long-term stakeholderWe relationships plus meeting and exceeding customer expectations. • Expert advice • Best practice and processes • Competitive, profitable, quality products • The right solution fast • A big product range • Tool Heaven

that meets and exceeds customers expecta 8 relationships with all stakeholders.


Who are Total Tools? Values

BRAND Brand Attributes

Derived Benefits

1. Red Sheds

1. Easy to Spot

2. Big Range of Professional Tools

2. Got What I Need

3. Knowledgeable Service

3. Get the Right Solution Fast

4. Total Tools Logo

4. Signpost

5. Can and Will Get It

Personality

BRAND ESSENCE TOOL HEAVEN

5. One Stop Shop

Values

1. Excitement - IRRESISTABLE

1. Honest and Ethical

2. Ruggedness - RUGGED

2. Service Oriented

3. Competence - SMART

3. Innovative

4. Sincerity - HONEST

4. Reliable

5. Sophistication - DOWN TO EARTH

5. Passionate

2. Big Range of Professional Tools

• Honest and Ethical 3. Knowledgeable Service 4. Total Tools Logo

• Service Orientated 5. Can and Will Get It • Innovative • Reliable • Passionate

Personality 1. Excitement - IRRESISTABLE 2. Ruggedness - RUGGED 3. Competence - SMART 4. Sincerity - HONEST 5. Sophistication - DOWN TO EARTH 9

BR ESS TO HEA


Total Tools History Tool retailing has changed dramatically in 21 years. In 1989, tools were sold from behind a counter. Staff would take the customers order and go “out the back” to grab the product. Back then, service and knowledge were the lifeline of a successful business. At Total Tools, the products and retail environment may have changed, but the service and knowledge we provide customers has not.

Total Tools began in 1989 as a co-operative of independent tool outlets. Early stores in Victoria and New South Wales traded under the name Total Tools Industrial. Later expanding interstate to South Australia and Queensland, the group updated its identity to Total Tools and has since become Australia’s premier franchised tool retailer. In taking its November 2007 decision to implement a Network Development Plan, Total Tools’ board resolved to adopt a successful franchise model. The National Support Office was suitably resourced to implement a growth strategy, and the office relocated to Derrimut, Victoria to better support an expanding network. Implementing the structured franchise network plan has realised a goal... to become Australia’s market leader. Total Tools is now entrenched as Australia’s paramount professional industrial and trade tool retailer.

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WHAT WE OFFER


What a Total Tools Franchise Offers Becoming a Total Tools franchisee means you benefit from:

• Proven Business Model The Total Tools business model has been tried and tested, so all you need to do is apply the formula.

• 21 Years Strong Because Total Tools has been trading since 1989, you are joining a firmly established business. Having managed steady, consistent growth over 21 years, Total Tools is poised and resourced to expand even greater nationally.

• Turn-Key System With store setup and technology carefully organised for optimum results, you simply walk in and set up. Total Tools draw on decades of experience, research and new technology in advising on store layout, site location, point of sale and stock systems, plus marketing.

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What a Total Tools Franchise Offers Becoming a Total Tools franchisee means you benefit from:

• Selling Premium Tools You will always feel confident about the tools and equipment your business sells. Total Tools know believing in your product improves sales. So stores only carry quality items and reputable brands. That way you will always offer customers the right solution.

• Promotion and Marketing Not every franchise is a national brand or supports its network on a national scale. As a Total Tools franchisee you’ll be involved in the development of national marketing campaigns, local promotions and store-specific neighbourhood marketing initiatives. Total Tools brand awareness and customer loyalty are driven by a website, TV and Radio advertising, email marketing and catalogue distributions.

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What a Total Tools Franchise Offers

tional Operational Support Becoming a Total Tools franchisee means you benefit from:

• National Operational Support

exists to ensure the success National Operational Support Be guided and supported by a talented and experienced team.

exists to ensure the success f every franchisee and their Total Tools store. of every franchisee and their Total Tools store. • IT Infrastructure Enjoy the world-class capabilities of Pronto Store Management Software system. Fully integrated across the Total Tools network, you’ll have all the backup and support you need. Dedicated National Operational IT Support staff are on-hand with help desk assistance.

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FRANCHISE SUPPORT


Supporting your Business from the start Franchise Establishment Support Like every new Total Tools franchisee you will benefit from National Support Office guidance and assistance during the setup and establishment of your store. Establishment support includes: • site location advice • demographic research data • commercial lease guidance • document support and assistance • store design and fit-out • staff recruitment, training and mentoring

Store Site Location & Selection To help put your new Total Tools store in an ideal position, you will receive professional advice with regard to: • a preferred store location, the suitability of properties and site selection; • aspects of commercial leasing, contract negotiation and documentation support.

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Supporting your Business from the start Franchise Establishment Support

Demographic Research & New Store Sites Total Tools’ external research consultants have completed detailed analysis of sales drivers and demographic data across Australia. To offer each franchise the best chance of success, this study was used to carefully map exclusive territories for every Total Tools store.

Census Mesh Blocks

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Supporting your Business from the start Franchise Establishment Support (cont)

Store Design & Fit-Out Support To maximise operating efficiency and sales performance, Total Tools provides a specific and proven store layout. In partnership with each franchisee we plan and implement your optimal store layout and fit out. The Total Tools store merchandising layout is fully specified and based on a successful formula. This includes Total Tools’ proprietary Power Tool Zone that is versatile, efficient, cost and retail effective. Total Tools uses a national store design company to strategically create the ideal atmosphere and environment of a tool store. Our aim at Total Tools is to create “Tool Heaven” for our customers.

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Supporting your Business from the start Franchise Establishment Support (cont)

Induction Training As a successful franchisee you will enjoy a comprehensive initial training program. Gather skills and confidence throughout, especially during your store placement. You will create network relationships and become familiar with all aspects of operations so you can successfully manage your own store from day one. The initial training compromises but is not limited to the following components: • Sales • Service • Financials • IT • Merchandise • Visual Merchandising • HR • Back Office

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Supporting your Business from the start Ongoing Franchise Support Total Tools’ National Support Office assists you to grow and run a successful business. Ask the dedicated staff to advise on operations, marketing, product management, product purchasing, store management, and staff management. All franchisees benefit from a constant drive to: • provide professional and reliable systems, programs and advice; • offer support that allows the business to focus tool retailing; • ensure programs, systems and advice comply with professional standards; • always promote Total Tools’ business interests; • plan, develop and grow fresh business with new franchisees; • continuously improve performance of systems and programs; • develop franchise owner’s abilities to manage their total business; • understand and respond to the needs of franchisees.

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Supporting your Business from the start Ongoing Franchise Support

Marketing Support Total Tools takes its investment in marketing and promotion seriously. The success and growth of your store (and the overall franchise network) relies on rolling out smart, practical and proven marketing initiatives. Because Total Tools enjoys buying power across all franchise stores, many suppliers provide marketing rebates. These rebates make up Total Tools’ Marketing Fund, so individual stores need not directly contribute. All other supplier trading terms like additional rebates, payment settlement, quantity discounts and volume incentives are passed on to you in full. The 3 marketing budgets resourced by the Marketing Fund are:

1. National Marketing

controlled by the National Marketing Manager to promote all stores nationally.

2. Regional Marketing

regionally controlled in consultation with the National Marketing Manager to support dedicated regional marketing.

3. Local Marketing

allocated to individual stores for local area marketing initiatives and activities.

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Supporting your Business from the start Ongoing Franchise Support (cont) Another key investment area is national catalogues and flyers. These promotional items are designed, printed and distributed by Total Tools’ National Support Office to every store. Copies are provided for your ‘in-store’ use, letterbox distribution and folded ready for mail-out.

Key features and benefits: • National Marketing Fund • National, regional and local marketing programs • Strong, recognised branding across stores, vehicles merchandise and POS • National store owner Advertising Committee • Extensive catalogue printing and distribution program • Exclusive customer loyalty program - Insiders • National Style Guide

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Supporting your Business from the start Ongoing Franchise Support (cont)

Operations Support Ongoing operational support ensures your franchise business can maximise store profit and performance. The National Support Office assists Total Tools stores through: • Regular business analysis of your store and staff performance. • Measuring and reporting against Key Performance Indicators (KPI). • Help and guidance to increase sales and store owner profit. (“If you can’t measure it; you can’t improve it”. ) • Total Tools benchmarking includes but is not limited to: - Sales. Sales by category. Sales by supplier. - Stocked lines - Gross profit margin - Out of stocks - Aged stock - Customer visits - Average sales - Items per sale • A “Buddy” system linking your new franchise with a successful store owner and mentor.

Ongoing Training Keep your store Managers and staff on top of key business functions with ongoing training support.

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Supporting your Business from the start Ongoing Franchise Support (cont)

Conferences At Total Tools, we believe the best environment to learn new ideas, concepts and sales drivers are from your fellow store owners. That is why Total Tools holds 2 conferences a year for both you and your family to attend. Our annual December conference culminates is a supplier showcase where you will have an opportunity to see and speak to all our major suppliers in one location.

Product Support & Private Brand Program Through its national multi-store buying power, Total Tools has secured many purchase related benefits. As a store owner, you will enjoy volume incentives, favourable trading terms and quantity discounts.

Local Product Support The Total Tools product support team has successfully negotiated favourable trading terms with leading suppliers like Makita, Stanley, Bosch, Irwin and Cigweld. Special trading terms free up cash flow so you can maximise profit, plus save time and money. Many deals are negotiated on stores’ behalf, allowing you more time to work on your business. Trading terms with local suppliers allow for rebates, settlement discounts and over and above offers or concessions.

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Supporting your Business from the start Ongoing Franchise Support (cont)

Private Brands Total Tools Importing sources exclusive private branded products for Total Tools stores. Key features and benefits of this program include:

Exclusivity Over 1000 products ranged through 5 private brands that provide exclusivity and price protection in the market.

Greater Profit Because we import direct, Total Tools’ private brands offer franchisees attractive profit margins. The combined network buying power imports around 200 containers each year.

dLibrary - Online Digital Asset Management System Total Tools has an online photographic library of all private branded products in their portfolio. That is over 1000 products under 5 brands. As a store owner, you have 24 hour access to high resolution images to use for marketing purposes such as print and TV ads as well for tenders and quote purposes.

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Supporting your Business from the start Ongoing Franchise Support (cont)

IT Support Total Tools recognise how integral technology and computer systems are to the success of your store and our national franchise network. Information technology is an everyday part of our operations. The Total Tools network is integrated from local store point of sale right through to national marketing and promotions. This includes: • Network Store Management Software System (Pronto) • Dedicated Support Office personnel • Secure Virtual Private Network • Cost & Bar Code Stock Management • Standardised Computer Software • Standardised Computer Hardware World class Pronto software provides a leading Enterprise Resource Planning (ERP) system. Deployed across the Total Tools network, Pronto offers your store, other franchises and the National Support Office advanced functionality such as: • Central Server Based Integrated Management System • Purchase Order Tracking Custom Order Facilities • Product File Managed (TTI) Automatic Reordering • EDI Private Brand Orders Detailed Sales Analysis Reports • General Ledger Fully Supported by TTI • Set Chart of Accounts Comparative Store Performance • Special tracking of NS Lines – catalogue/slow moving lines

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FRANCHISE COSTS


Franchise Investment Details Franchise Setup Costs Depending on chosen location and store size, your initial Total Tools investment may vary. For more detailed information on initial fees and set up costs, please speak to our staff who will be able to discuss all areas in detail with you. Total Tools recommends that you seek independent financial advice when contemplating opening a Total Tools store. Your financial advisor will be able to talk you through the financial implications and ways to structure your accounts.

Franchise Fees A Total Tools Administration Fee applies to gross sales. This covers all your franchise business support and services. Total Tools charge no additional, ongoing or franchise performance fees.

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STEPS TO SUCCESS


Steps to a Total Tools Franchise: STEP 1: ENQUIRY STAGE A

Make a Franchise Enquiry to Total Tools

B Read and Assess Franchise Information Kit C Informal Interview with Total Tools

STEP 2: APPLICATION STAGE A Complete Application Form B Review Total Tools Documentation C Seek Independent Franchising Advice D Seek Funding Advice

STEP 3: ACCEPTANCE/APPROVAL STAGE A Formal Interview with Total Tools Management B New Franchisee Acceptance C Business Plan Presentation D Contract Sign Up

STEP 4: STORE ESTABLISHMENT A Site Identification and Acquisition B Legal Documentation C Induction and Training D Store Establishment

STEP 5: STORE OPENING A Store Open 30

On Your WaiytthoUs! Building w


For further assistance please contact: TOTAL TOOLS 19 Grimes Court, Derrimut, Victoria, Australia. 3030 Tel: + 3 9394 4300 Fax: + 3 9394 1699 email: newstores@totaltools.com.au www.totaltools.com.au


Franchise Information Kit