In a Box with a Bow

Boxfranchising is a unique solution to high retail rental and ‘dead space’ in malls. They sell fabulous shoes too.


In a Box with a Bow

The franchisor

Having a history in retail, business partners Nikola Kostic and Nemanja Kostic decided to start their own company.

“We’d developed a successful product – Butterfly Twists shoes – in the UK, but the South African retail space presented a more difficult challenge.Retail space is expensive, so having a fixed store wouldn’t work, and retailers wanted a greater profit margin. So we decided to develop a ‘pop up/kiosk retail space,” says director Nemanja Kostic.

The concept

Boxfranchising-ideas_Franchise-Interviews-and-Profiles

“We developed Boxfranchising in 2011, launching the first kiosk in 2012 in order to sell Butterfly Twists products. From there, we set about convincing malls to take on the kiosks and occupy their ‘dead retail space’, and we’ve also developed a deal with Nedbank that enables franchisees to get 50% finance as well as a starter pack that includes a bank account and credit card machine,” explains Kostic.

Developing the idea

The pop up Boxfranchising evolved with a slick look that’s both secure and attractive. Units are illuminated by LED light displays, have trellidor locking systems, require only one standard plug point, have 23 inch screen displays for advertising, a computerised POS system, and dome security camera for security and insurance purposes. And since each shopping mall has its own restrictions and specs, units can be customised to fit.

Twists and boxes

Butterfly-Twists-Franchising_Franchise-Interviews-and-Profiles

So what’s for sale? Fashionable, comfortable, practical and affordable shoes. Butterfly Twists fold in on themselves so they take up less space in cupboards and handbags.

“The Butterfly Twists approach is simple,” says Kostic, “Our award winning products inspire women to be fashionable and express themselves without breaking the bank.”

Moving forward

Boxfranchsising currently has six units in operation around South Africa, with another two due to open by the end of 2013.

“Since we also design the product, we are continuously evolving and growing the brand. We originally started with fold-up pumps, but now carry other styles like boots, flip flops and bags,” says Kostic. “The product is already doing well in the UK, and we plan to roll the concept out worldwide as we grow,” he adds.

The model

  • Boxfranchising is a low investment franchise opportunity: requiring capital of between R116 000 and R200 000 excl Vat, depending on the size of the unit, and a fixed initial fee of R25 000 excl Vat. There are no monthly royalties. Working capital of between R50 000 and R80 000 is recommended.
  • Boxfranchising works by entering negotiations with a shopping mall and running a three month feasibility study. If the mall is in agreement and the franchise is feasible, a franchisee is then found to purchase and run it. In other cases, once a franchise agreement has been signed and a Boxfranchising unit designed, manufacture takes approximately one month.
  • Franchisees receive an operations manual, are visited by head office staff, and receive one week of on-site training on stock management, POS systems, marketing and representing the brand.
  • Depending on site rental, stock consists of between 300 and 600 pairs of shoes, and ROI ranges between three and six months.

VITAL STATS

  • Boxfranchising &Butterfly Twists
  • Established: Butterfly Twists 2007, Boxfranchising 2011
  • Contact:  Zaahid Joosab
  • Call: +27 (0)21 426 4411
  • Visit: www.boxfranchising.co.za
Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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