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Franchise Business Plan
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Happy Learning Centre Franchise Business Plan
Page 1
Contents EXECUTIVE SUMMARY .................................................................................................................... 3
OVERALL BUSINESS SYSTEM ........................................................................................................... 5
Center Set-up Phase.................................................................................................................... 5
Ongoing Revenue Generation Source......................................................................................... 5
Operational Expenses ................................................................................................................. 5
Marketing Expenses .................................................................................................................... 6
IMPLICATION FOR FRANCHISEE OFFERING .................................................................................... 7
FRANCHISEE PROFILE FOR HAPPY LEARNING CENTRE ................................................................... 8
FRANCHISING STRATEGY FOR HAPPY LEARNING CENTRE .............................................................. 9
FRANCHISE TERMS ...................................................................................................................... 9
FRANCHISE AGREEMENT ............................................................................................................ 9
REVENUE AND EXPENSES SHARING .......................................................................................... 10
FRANCHISOR-FRANCHISEE RELATIONSHIP ................................................................................... 11
UNIT FRANCHISEE’S OBLIGATIONS ........................................................................................... 11
FRANCHISOR OBLIGATIONS ...................................................................................................... 11
FRANCHISE SUPPORT MECHANISM .............................................................................................. 12
PRE-OPENING FRANCHISE SUPPORT .................................................................................... 12
POST OPENING FRANCHISE SUPPORT .................................................................................. 12
MARKETING PROGRAMS .............................................................................................................. 13
LOCAL ADVERTISING ............................................................................................................. 13
COOPERATIVE ADVERTISING ................................................................................................ 13
SUPPORT PROGRAMS ................................................................................................................... 14
INITIAL INVESTMENT ..................................................................................................................... 15
ESTIMATED INVESTMENT & PROJECTIONS: HOME BASED .......................................................... 16
KEY HIGHLIGHTS ........................................................................................................................ 16
UNIT FRANCHISEE INCOME STATEMENT ...................................................................................... 17
Happy Learning Centre Franchise Business Plan
Page 2
ESTIMATED INVESTMENT & PROJECTIONS: STAND-ALONE FRANCHISE ...................................... 18
KEY HIGHLIGHTS ........................................................................................................................ 18
UNIT FRANCHISEE INCOME STATEMENT ...................................................................................... 19
DISCLAIMER................................................................................................................................... 20
Happy Learning Centre Franchise Business Plan
Page 3
EXECUTIVE SUMMARY
The following business plan is prepared by Franchise India Consultants for the Client Business
Entity ‘Happy Learning Education Trust’. The following are the highlights of the franchise
business plan.
The Company:
Happy Learning Center is a home based K12 and higher study tutorial institute. It helps children
to increase the mental strength by several innovative ways. It is the most highly rated tutorials
were people come from 15 km distance to study. Every teacher can teach 4 kids per batch for 1.5 hours and 0.5 hours is for Meditation and Goal Visualization and Food break, i.e. 2 hours per batch timing.
Happy Learning Center is now looking at expanding its operations in India and is keen on opening franchise units. The financial projections of the franchise units have been observed in the present report.
Franchisee Profiling
High ability means less amount of value addition required in current set of skills/facility to
run the franchise
Experience in Education & Training Industry
Sound Financial Bandwidth
Property at the Desired Location
Supervisory Involvement in the Daily Operations
Giving franchise to a franchisee with the investment appetite and right property is
important with low rentals.
Franchise Fee:
Unit Franchise Fee for a home based format is INR 1 lakhs (Excluding Service Tax) and for standalone unit franchise fee is INR 1.5 lakhs (Excluding Service Tax).
Franchising is also preferred individuals with experience in teaching and education training.
Entrepreneurs meeting with the investment and space prerequisite.
Roll-out: Major cities Pan-India starting from Maharashtra and Central India
Happy Learning Centre Franchise Business Plan
Page 4
Business required very minimum area under home based and required 500 sq. ft. for standalone unit franchise for individual to start the franchise.
Financial Details: Unit Franchise: Home based business Initial Investment: INR 2 - 3 lakhs approximately
Royalty of 15% of gross sales paid on a monthly basis
Include total of 1.5% central marketing fund contribution, wherein 1.5% would be contributed towards local marketing
Unit Franchise: Standalone franchise format Initial Investment: INR 7 - 8 lakhs approximately
Royalty of 15% of gross sales paid on a monthly basis
Include total of 1.5% central marketing fund contribution, wherein 1.5% would be contributed towards local marketing
Happy Learning Centre Franchise Business Plan
Page 5
OVERALL BUSINESS SYSTEM
Center Set-up Phase
Ongoing Revenue Generation Source
Unit Franchise will have following ongoing revenue sources:
Tuition fee collection through enrollment of students
Operational Expenses
The Unit Franchisee will bear the following operational expenses on a monthly basis:
Employee Cost
Referral to Faculty
Incentives to Full time Faculty
Commission to Part Time Faculty
Royalty to Franchisor
Rent
Electricity
Cost of refreshments/gifts
Communication Expenses (Tel + Internet)
Printing & Stationery
Quality Monitoring Charges
Misc Expenses
Marketing Expenses
o Local marketing Overheads
o Contribution to central marketing fund
Unit Franchise Franchisor Launch & Pre-Opening Marketing
Expenses
Software & Licensing cost
Training (Lodging & Boarding)
Happy Learning Centre Franchise Business Plan
Page 6
Marketing Expenses
The Franchisee will contribute to the Local and Central Marketing. The Franchisee will spend a
3% of gross sales towards marketing on Monthly basis, out of which 1.5% will be on Local
Marketing against which franchisee will be producing the bill and 1.5% of gross sales will be
contributed towards central marketing.
Happy Learning Centre Franchise Business Plan
Page 7
IMPLICATION FOR FRANCHISEE OFFERING
Higher Returns
Higher returns in short run will be an attractive proposition against the initial investment risk.
Longevity
Longevity of the business is important for a franchisee to put in such investment. It is advisable
to have the term of franchise agreement for a longer period which will bring stability in the
business and franchisee will also focus on long term goals.
Training Program
The staff at franchisee Center needs to be adequately trained by a team of professionals from
‘Happy Learning Centre’ about all the micro and macro aspects of the operations.
Investment Disbursement
Being a strong concept in franchising & strong regional presence, the credibility attached to
‘Happy Learning Centre’ brand which is substantially good will attracts the investors. As per the
market size; expected sales; a marketing strategy will be framed, which will excite the
franchisee to outlay the investment.
Happy Learning Centre Franchise Business Plan
Page 8
FRANCHISEE PROFILE FOR HAPPY LEARNING CENTRE
On the basis of the business concept and format and ratings on the above criteria, following
characteristics are recommended for a franchisee of ‘Happy Learning Centre’:
Investment capacity - Entrepreneurs meeting with the investment and space prerequisite.
Ability to run the business - Franchisees with commitment to efficient service & long-term association.
Experience in education and training industry - Individuals with a teaching and training
background are ideal.
Ability to manage faculty - Conversant with the training, daily administration and staff management
Network strength- An expansive local network.
Passion for education- Should be excited about imparting education.
Although there may be a number of viable franchisee profiles, Management believes that it
should try to attract franchisees that meet the following competency criteria:
Believes in people and capable of motivating team.
High personal standards: discipline, excellence, honesty, integrity, etc.
Able to meet initial investment requirements.
Speed of response and ready to service any time.
Aggressive and Action oriented.
Strives for excellence.
Quick to learn and very quick to implement new learning.
Process/Systems oriented.
Knows how to manage productivity.
Knows how to make profit and where to focus to get it.
Happy Learning Centre Franchise Business Plan
Page 9
FRANCHISING STRATEGY FOR HAPPY LEARNING CENTRE
FRANCHISE TERMS
Non-Exclusive area rights according to agreement
Initial unit franchise Fee for a Stand-alone format of 500 sq. ft. is INR 1, 50,000 (Excluding
Service Tax) and INR 1, 00,000 (Excluding Service Tax) for home based.
Initial setting up of the franchise owned center will be coordinated and assisted by
Franchisor.
Franchisor will provide initial training to the respective staff.
Franchisor will provide assistance in running the center
Franchisee will monitor/supervise the business on regular basis by keeping a check on local
team and smooth coordination with the Franchisor.
Business will be run under the brand name of ‘Happy Learning Centre’
Sourcing of manpower will be entire responsibility of the franchisee. However Franchisor
will assist in recruitment and selection. The charges will be applicable in the entire process.
All employees shall be on rolls of the Franchisee and their salaries shall be payable by the
franchisee
FRANCHISE AGREEMENT
The franchise agreement of ‘Happy Learning Centre’ will include the UNIT franchisees across
the complete roll out plan. A property of minimum 500 sq. ft. area will be required for a
stand-alone format.
The agreement term is suggested to be of at least 3+3 years with an option for further
renewal, subject to mutual agreement of both the parties.
Royalty fee will be paid to the franchisor by franchisee on gross sale, which is 15%
Happy Learning Centre Franchise Business Plan
Page 10
REVENUE AND EXPENSES SHARING
Unit Franchise Fee: INR 100,000, as per area required, and for rights & obligation of
opening one home based and INR 150,000 stand-alone center (Excluding Service Tax)
Local Marketing Expenses: Local marketing expenses will be a monthly contribution of a
percentage of sales borne by the franchisee, which will be 1.5% of gross sales.
Central Marketing Fund: Franchise will contribute 1.5% of gross sales towards central
marketing fund which will be paid on a monthly basis.
Royalty Fee: Franchisee will give 15% of gross sale to franchiser as royalty fees.
Happy Learning Centre Franchise Business Plan
Page 11
FRANCHISOR-FRANCHISEE RELATIONSHIP
UNIT FRANCHISEE’S OBLIGATIONS
Franchise set up cost investment.
Payment of initial unit franchise Fee for a Stand-alone format of 500 sq. ft. is INR 1, 50,000
(Excluding Service Tax) and INR 1, 00,000 (Excluding Service Tax) for home based.
Center site selection.
Franchisee will work as a core investor who will be providing the property at an appropriate
location and will do the Initial Investment
Quality Control
Overall supervisory control including feedback, quality control, timely sales reporting
FRANCHISOR OBLIGATIONS
Site Approval.
Fit-outs of the center.
Providing the equipment needed at the center for Business Operations
Proper maintenance of books and accounts.
Training programs on a regular basis for Franchisee staff.
Creation and installation of Marketing material, POS etc.
All national level promotional activities and events.
Providing printed material like Brochures, Pamphlets and Flex Banners on cost basis
Franchisee will operate and manage the business to make sure that the successful business
formulae and systems get implemented at the franchisee end to run it on profit. Franchisor will
take care of quality of teaching to be delivered at franchisee end by property audit & training.
Happy Learning Centre Franchise Business Plan
Page 12
FRANCHISE SUPPORT MECHANISM
‘Happy Learning Centre’ will manage the business to make sure that the successful business
formulae and systems get implemented at the franchisee end to run it on profit.
PRE-OPENING FRANCHISE SUPPORT
Comprehensive turn-key assistance from set-up to start operations.
Layout and design; architectural support.
Pre-opening purchasing assistance.
Assistance in organizing of launch promo.
The process starts with the location and identification of a suitable site that meets our
stringent criteria (the location, exposure, and access of a ‘Happy Learning Centre’ center).
The company can help in providing following assistance to its franchisees during the period:
Locating a suitable site for the center.
Negotiation of suitable terms and organizing for lease.
Organizing of all necessary regulatory approvals.
POST OPENING FRANCHISE SUPPORT
Advertising & local promotion
Operational Management: Daily operations and Administrative advices
Frequent official visits, advices on local promotions programs etc.
Marketing Ideas structured to suit a location.
PR support: Regular PR coverage at national, regional as well as town level. Centralized
Brand Building through all media - Print, Outdoor, Web, Retail, and Electronic.
Happy Learning Centre Franchise Business Plan
Page 13
MARKETING PROGRAMS
LOCAL ADVERTISING
The Franchisor will provide local promotional support in association with Franchisee to spread
awareness in the given geography, which will be on a cost basis.
COOPERATIVE ADVERTISING
If two or more franchisees are established in a common market, the Franchisor will adjust the
manner in which local advertising money spent to make combined advertising expenditures more
effective. In this situation, the Franchisor may require all or part of the local advertising
expenditures to be used as cooperative advertising in that individual market.
Happy Learning Centre Franchise Business Plan
Page 14
SUPPORT PROGRAMS
The Franchisor will incorporate a formalized mechanism for ensuring smooth and structured
operations among franchisees that will be monitored and implemented by franchise
development manager.
In addition to management of Franchise center, members of the Franchisor organization will
provide the services listed below. The Franchisor must assign a specific person to cover each of
these support areas (one person can be assigned to more than one task). The Franchisor has
the responsibility to assign a person/people to each task during the development of the
franchise program.
Operational Management -- The Franchisor will assist in the Franchise center operations,
including unit operations and maintenance, efficient student training and administrative
procedures.
Accounting/Audit/Legal -- Reporting directly to administration, this department is
responsible for the financial and legal oversight of franchisees.
Internal Support -- The functional areas of franchisee communications, and research and
development are typically included in such a department.
Overall Program Oversight -- The Franchisor will provide the overall coordination and
planning for the system.
Happy Learning Centre Franchise Business Plan
Page 15
INITIAL INVESTMENT
Management has provided Franchise India with financial information for an average ‘Happy
Learning Centre’ unit. It represents the range of the initial investment for a new franchise and is a
required item in the Disclosure Document. It shows the potential franchise buyer what it will cost
to open the business. The range represents the potential variations in rental and other expenses
in each area. The expense items are pre-opening start-up expenses and do not represent any
ongoing expenses unless identified otherwise. These results are based on the following
assumptions:
Real Estate/Rent: The franchisee will typically be required to pay three to nine (can vary
based on location) months' rent as a security deposit.
Centre Furnishing/Improvement: Although some of these items may be leased, the estimate
represents the actual purchase price.
Equipment and Misc Items: The range of costs represents the cost involved in purchase
against all equipment’s for the franchisee center.
Marketing: Initial marketing expense in the neighborhood area and in the city will be
conducted and an initial launch of the franchise center will be conducted by the franchisee.
Happy Learning Centre Franchise Business Plan
Page 16
ESTIMATED INVESTMENT & PROJECTIONS: HOME BASED
ELEMENTS
Centre Furnishing / Improvement etc. INR.
Signage (Int/ext) 15,000
Sub-Total 15,000
Equipments & misc items
Laptops -
Projector 40,000
Printer/Scanner/Fax -
CCTV 25,000
Sound System -
Communication equipments & Internet
Connection -
Misc (display boards, stationery etc.) 5,000
Sub-Total 70,000
Total capital investment 85,000
Launch & Pre-Opening Marketing Expenses 20,000
Software & Licensing cost 10,000
Training (Lodging & Boarding) 15,000
Total Financial Requirement for Setup 130,000
Franchise Fee 100,000
Service Tax (12.36%) 12,360
TOTAL PROJECT COST 242,000
Franchise set up cost
KEY HIGHLIGHTS
Minimum initial Investment: Approximately around INR 2-3 lakhs for an center (Including
Franchisee Fee)
Average ROI of Ist year for minimum investment: Around 375% - 425%
Pay Back Period: 0.3 years
Happy Learning Centre Franchise Business Plan
Page 17
UNIT FRANCHISEE INCOME STATEMENT
Year 1 Year 2 Year 3 Year 4 Year 5
Franchisee's revenue 3,233,320 3,880,000 4,656,000 5,587,000 6,704,000
Expenses
Cost of Educational Kit Delivered 162,000 194,000 233,000 279,000 335,000
Cost of Operations
Employee Cost - - - - -
Referral Commission to Faculty 161,666 194,000 232,800 279,350 335,200
Incentives to Full time Faculty - - - - -
Commission to Part Time Faculty 970,000 1,164,000 1,397,000 1,676,000 2,011,000
Royalty to Franchisor 485,000 582,000 698,000 838,000 1,006,000
Electricity 30,000 30,000 30,000 30,000 30,000
Cost of refreshments/gifts 162,000 194,000 233,000 279,000 335,000
Communication Expenses (Tel + Internet) 36,000 36,000 36,000 36,000 36,000
Printing & Stationery 24,000 24,000 24,000 24,000 24,000
Quality Monitoring Charges 115,000 138,000 166,000 199,000 239,000
Misc Expenses 36,000 36,000 36,000 36,000 36,000
Marketing Expenses
Local marketing Overheads 48,000 58,000 70,000 84,000 101,000
Contribution to central marketing fund 48,000 58,000 70,000 84,000 101,000
Total Expenses 2,278,000 2,708,000 3,226,000 3,844,000 4,589,000
% of Gross Receipts 70% 70% 69% 69% 68%
PBDIT 955,320 1,172,000 1,430,000 1,743,000 2,115,000
Depreciation 8,500 8,500 8,500 8,500 8,500
PBIT 947,000 1,164,000 1,422,000 1,735,000 2,107,000
PBT Margin (%) 29% 30% 31% 31% 31%
Project Cost 242,000
ROI (%) 391% 481% 588% 717% 871%
Payback 0.3
Income projections
Happy Learning Centre Franchise Business Plan
Page 18
ESTIMATED INVESTMENT & PROJECTIONS: STAND-ALONE FRANCHISE
ELEMENTS
Total Area 500
Centre Furnishing / Improvement etc. INR.
Furniture / Fixtures / wood work 250,000
Signage (Int/ext) 25,000
Sub-Total 275,000
Equipments & misc items
Laptops 35,000
Projector 40,000
Printer/Scanner/Fax 20,000
CCTV 25,000
Sound System 20,000
Communication equipments & Internet
Connection 5,000
LCD 45,000
Misc (display boards, stationery etc.) 15,000
Sub-Total 205,000
Total capital investment 480,000
Launch & Pre-Opening Marketing Expenses 50,000
Software & Licensing cost 10,000
Training (Lodging & Boarding) 25,000
Total Financial Requirement for Setup 565,000
Franchise Fee 150,000
Service Tax (12.36%) 18,540
TOTAL PROJECT COST 734,000
Franchise set up cost
KEY HIGHLIGHTS
Minimum initial Investment: Approximately around INR 7-8 lakhs for an center (Including
Franchisee Fee)
Average ROI of Ist year for minimum investment: Around 50-60%
Pay Back Period: 1.4 years
Happy Learning Centre Franchise Business Plan
Page 19
UNIT FRANCHISEE INCOME STATEMENT
Year 1 Year 2 Year 3 Year 4 Year 5
Franchisee's revenue 4,093,645 4,912,000 5,894,000 7,073,000 8,488,000
Expenses
Cost of Educational Kit Delivered 205,000 246,000 295,000 354,000 424,000
Cost of Operations
Employee Cost 642,000 902,000 990,000 1,087,000 1,193,000
Referral to Faculty 204,682 245,600 294,700 353,650 424,400
Incentives to Full time Faculty 307,000 368,500 442,000 530,500 636,500
Commission to Part Time Faculty 511,500 614,000 737,000 884,000 1,061,000
Royalty to Franchisor 614,000 737,000 884,000 1,061,000 1,273,000
Rent 480,000 480,000 480,000 480,000 480,000
Electricity 30,000 30,000 30,000 30,000 30,000
Cost of refreshments/gifts 205,000 246,000 295,000 354,000 424,000
Communication Expenses (Tel + Internet) 36,000 36,000 36,000 36,000 36,000
Printing & Stationery 24,000 24,000 24,000 24,000 24,000
Quality Monitoring Charges 142,000 170,000 204,000 245,000 294,000
Misc Expenses 36,000 36,000 36,000 36,000 36,000
Marketing Expenses
Local marketing Overheads 61,000 74,000 88,000 106,000 127,000
Contribution to central marketing fund 61,000 74,000 88,000 106,000 127,000
Total Expenses 3,559,000 4,283,000 4,924,000 5,687,000 6,590,000
% of Gross Receipts 87% 87% 84% 80% 78%
PBDIT 534,645 629,000 970,000 1,386,000 1,898,000
Depreciation 48,000 48,000 48,000 48,000 48,000
PBIT 487,000 581,000 922,000 1,338,000 1,850,000
PBT Margin (%) 12% 12% 16% 19% 22%
Project Cost 734,000
ROI (%) 66% 79% 126% 182% 252%
Payback 1.4
Income projections
Happy Learning Centre Franchise Business Plan
Page 20
DISCLAIMER
This report is not to be used in conjunction with the actual sale of franchises. The profit and loss pro forma contained
in this report reflects revenue and expense assumptions provided by Management. Franchise India has made no
attempt to verify the accuracy of figures provided by Management, and has not verified the financial statements of
any operating units upon which the assumptions are based. Sales targets for selling franchises were derived from
discussions between Franchise India staff and Management, and assumptions regarding franchise development costs
have been set accordingly.
The text and financial pro forma contained herein are intended to be used exclusively by Management and its
associates for internal discussion and planning.
THE PLANS, MATERIALS, AND CONSULTING ADVICE PROVIDED HEREIN HAVE BEEN PREPARED
BASED ON FRANCHISE INDIA'S EXPERIENCE AND THE INFORMATION AVAILABLE TO US.
HOWEVER, BECAUSE THE SUCCESS OF A FRANCHISE PROGRAM DEPENDS UPON A VARIETY OF
FACTORS OUTSIDE FRANCHISE INDIA'S CONTROL, FRANCHISE INDIA CANNOT AND DOES NOT
WARRANT THE SUCCESS OF ANY SUCH PROGRAM OR ANY OF THE PROJECTIONS OR
FORECASTS PROVIDED BY FRANCHISE INDIA CONTAINED HEREIN.
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