Property Ref: 52638

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Lone Star Cafe & Bar (Dunedin) - Iconic Local Business now FOR SALE

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Property Information

Lone Star has become famous for providing quality with quantity, using only the best and freshest local produce. The current owners Nick and Neisha Nilsen saw a chance to capitalise on the iconic Lone Star brand in Dunedin and the business was purchased in 2003, after being established in 1993. The business is now an established icon in the local hospitality industry - catering to a wide range of loyal clientele including professional people, tourists, students and families. It is generally the first 'after-match' stop for visiting sports teams and their supporters, and is the 'Official Club Rooms of The Highlanders'. Now enjoying a significant turnover of approx $4m and employing approx 46 staff, there are some great opportunities providing a strong platform for continued growth. 

Nick and Neisha Nilsen, have owned Lone Star Dunedin for the last 13 years and feel the time is right to pass the Business on to new owners to continue its success. With the current organisational structure in place the Business can be both actively managed or acquired as a passive investment.

 

 

THE BUSINESS

Lone Star has a long history of providing quality with quantity in a rich wild west themed environment

The first Lone Star restaurant (which shares a birthday with artist JB Priestly and writer Roald Dahl) opened its doors in Christchurch at 26 Manchester St on September 13th 1988 with a philosophy of bringing delicious Kiwi classics to New Zealanders. 

The Lone Star has become famous for providing quality with quantity, using only the best and freshest local produce. It's not only the size of the meals that are memorable, the service too, is legendary. There are now 27 Lone Star restaurants located throughout New Zealand which cover all of New Zealand’s main centres. Lone Star is a franchised business providing the benefits that come from this ranging from systems through to the Lone Star Buying Group. 


LONE STAR DUNEDIN

Nick and Neisha have owned Lone Star Dunedin for 13 years as well as owning Lone Star Nelson from 2006 to 2009. Prior to owning the business Nick worked for Lone Star Manchester Street as their Bar Manager for 2 years. He started his hospitality career 18 years ago in the UK during his overseas experience. Neisha started work in hospitality 18 years ago and has a background in administration. Her current role is organising the accounts, payroll and office staff. The business is open 7 days, 4pm till late offering dinner and a late night bar. There are multiple private function areas which are often utilised and can accommodate up to 210 patrons. 

 

PREMISES

The restaurant is ideally located with numerous motels, the University and the hospital all within 5 minutes walking distance and Forsyth Barr Stadium approximately 10-15 minutes walk.

The stunning 'new' (2013) premises have been designed in keeping with the double gable villas prevalent in the area using a cladding of Dunedin bluestone and dark-coloured concrete panels and can easily accommodate up to 170 guests and a further 210 in multiple private function areas.

The building is owned by property developer Allan Dippie and has a lease term of 10 years which commenced 1 March 2013 with two rights of renewal of 5 years each. Rent is reviewed annually. 

 

FRANCHISE AGREEMENT

The franchise agreement with Lone Star Café and Bar Franchise Limited (the Franchisor) has approximately 12 years remaining from a 15 year term. Key terms of the franchise agreement are as follows:

  1. Exclusive use of the trademarks are permitted within the territory
  2. After 6 years from the opening date, Lone Star may amend or reduce the territory to allow for the setting up and operation of another restaurant
  3. A royalty calculated as 5% (plus GST) on gross sales is payable by the Business to the Franchisor on a monthly basis
  4. The Business is required to spend 1% of gross sales (plus GST on such expenditure) on advertising and promotion of the restaurant and bar in the name of the Franchisor in the territory
  5. The Franchisor is to provide the following expertise and know-how:
  • the design, specification and fit-out of the restaurant & bar
  • management and operation of the restaurant & bar
  • menus, recipes and food preparation
  • pricing, marketing and advertising
  • staff and staff training
  • operational developments of Lone Star
  • use of trademarks
  • the sale of T-shirts, hats, condiments and other “Lone Star” articles

 

ORGANISATIONAL STRUCTURE

The Business has an inclusive culture, evidenced by great staff retention, and has capitalised on students at the University of Otago. It currently employs approximately 46 staff including Neisha who has an office role. Most of the bar and wait staff are in Dunedin studying at University and working part time. Part time Front of House staff has an average 3 year turnover.

 

DUNEDIN

Dunedin is enjoying what could be described as a "quiet boom" on the back of increasing tourist numbers, business confidence and more people relocating here for a lifestyle choice. Best known for its picturesque harbour setting, lively student population and Scottish heritage. It's the second largest city in the South Island, is considered one of the country's four main centres for its colonial history and prominence within the Otago region and the South Island  with the city population at 5 March 2013 was 120,246. Dunedin is surrounded by dramatic hills and at the foot of a long, picturesque harbour, Dunedin is one of the best-preserved Victorian and Edwardian cities in the Southern Hemisphere.

Tourism - Dunedin attracts about 2 million visitors annually, with New Zealanders making up the majority of the numbers. There is an average of 5500 visitors daily, many of whom have made the trip south to see Dunedin’s renowned wildlife and heritage for themselves. A growing part of this sector is the cruise ship industry, with 84 ship visits bringing 200,000 visitors during the 2011/12 season.

Otago Peninsula - the views are endless and the beaches are beautifully rugged. Nestled at the foot of Taiaroa Head is the Royal Albatross Centre, the only place in the world on the mainland where you can view Northern Royal Albatross in their natural habitat. On Dunedin’s doorstep you will also find incredible wildlife including the world’s rarest penguin colonies.

University city - The city's largest industry is tertiary education – Dunedin is home to the University of Otago, New Zealand's first university (established 1869), and the Otago Polytechnic. Students account for a large proportion of the population; 21.6 percent of the city's population was aged between 15 and 24 at the 2006 census, compared to the New Zealand average of 14.2 percent.

This is a genuine, rare opportunity to secure a proven hospitality business with outstanding potential.

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  • Lease - 1.3 MB

  • Asset Schedule - 370.9 KB

  • Plans - 1.5 MB

  • 2017 Statement of Financial Position - 93.0 KB

  • Marketing Plan 2017-18 - 744.2 KB

"Good food wonderful service great atmosphere..what more could you ask for when dining out.. Just making up the 100 minimum now"

"really nice place to eat and take yea family or friends lovely food and drinks :) good menu to looking at what you are wanting"