Background

Mobile Macs was set up by Jonathan Matos and Gary Hesselberg in 2015 who identified a need in the fast food franchise industry for a reliable, cost-effective, hassle-free solution to meet the growing demand by consumers for a delivery service.

The pair quickly recognised that the acquisition of delivery motor bikes was just the start of the delivery challenge facing the franchisees. The bikes themselves are not particularly expensive although obtaining regular bank financing for each bike, and arranging the required insurance, could be a painstaking process. A far more pressing – and expensive – challenge for franchisees, most of whom just wanted to make and sell food, was keeping the bikes on the road. From their own experience in repairing two bikes for a small fast food franchise, Matos and Hesselberg quickly realised that the cost of repairing a bike that had been damaged by being dropped or involved in a minor accident (a frequent occurrence), was often significantly higher than purchasing a new vehicle.

Mobile Macs developed a unique business model that enables it to leverage the economies of scale that makes it feasible to offer franchise owners a full maintenance rental plan for their delivery fleets. However, unlike conventional full-maintenance rental offerings, the Mobile Macs model includes regular onsite servicing of the bikes to ensure they remain mechanically sound. In addition, to relieve franchisees of the expense of repairing damaged bikes, the agreement includes an exceptionally cost-effective repair and replacement service.

The Challenge

While demand for their rental solution was growing – within the first year, the company had delivered over 800 especially modified and branded bikes to well-known franchise operations around the country – their shareholders had reached their limit in terms of the investment they were willing and able to make in the business.

Additional funds were needed to enable the business to grow to the next level. As a relatively new business – and one dealing in relatively inexpensive assets that commercial banks can be somewhat reluctant to finance – Mobile Macs needed a new, reliable, partner. The company found this in Westbrooke Aria.

The Solution

The first step in the Westbrooke-Mobile Macs relationship was to split off the company’s operating entity from the rental business and establish Mobile Macs Rentals as a going concern. All existing rental assets within Mobile Macs, as well as the existing rental contracts, were transferred to the new rental company. The operating company was thus freed to continue to service the delivery bikes, refine its business model, and expand its operations in Durban and Cape Town.

With the injection of readily available capital, Mobile Macs has now increased its fleet to 1 500 bikes.

The Result

The growth of the business has resulted in Mobile Macs being able to introduce additional services for franchise owners. This includes a solution that has made the branding of the bikes far more affordable; and the utilisation of tracking devices to enable the monitoring of driver behaviour as well as to assist in the recovery of vehicles that have been dumped or stolen by their drivers.

In addition, in the 18 months since Westbrooke’s involvement in Mobile Macs, the company’s growth has resulted in a nearly 50% increase in direct employment with its staff complement rising to 55. At the same time, no fewer than 400 new jobs have been created for bike riders. Going forward, the ability of franchise owners to quickly and affordably put and keep delivery bikes on the road will translate into the creation of even more jobs.

“The involvement of Westbrooke in our business has been an absolute pleasure, it has made a huge difference to our cash flow,” Hesselberg said. “When we sign a deal with a franchisee for however many bikes are required, all we have to do is invoice Mobile Mac Rentals for the bikes and, the money is paid so that the bikes can be delivered. It’s a smooth, hassle-free process that both we, and our customers, appreciate.”

Now, after three years in business, Mobile Macs is at a crucial juncture in its development with several of its early rental contracts coming up for renewal. The big questions facing the company was whether the original customers would want to renew their contracts, and what to do with the returned bikes.

To date, the renewal process has gone exceptionally well, with the company achieving an almost 90% renewal rate. In addition, there is a very promising pipeline that could result in the fleet doubling in size over the next 12 months.

And what of the hundreds of used bikes that will now be finding their way back to Mobile Macs?

“We have a strategy for that, one that will open up a whole new avenue of rental opportunities for the company. Watch this space,” Hesselberg said.