Updated Tier - 3 Model

8/13/2019 Updated Tier - 3 Model

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Assumptions

TIER-3

Area Estimation

Center Setup Area

Area 300

ELEMENTS

Centre Furnishing / Improvement etc. PSF/ NO.

Ceiling / Flooring / Painting 140

Furniture / Fixtures / wood work 165

Decorative Item

Electrical equipments & fittings & lighting 80

Signage (Int / ext)

EquipmentsDesktop 2

Printer, Scanner & Photocopier

Airconditioners 1

Communication Equipments & Internet Connection

Coffee Vending Machine

Stationary

Misc items (water dispenser, pantry items etc)

Launch & Pre-opening Marketing Expenses

Licenses, Permits, and Certifications

Software Cost

Training Cost

Lease Deposit

Working capital requirements (months) 3

Franchisee fee

Updations made

Ticket value of rental has been lowered to 10000/-

Ticket value of liaison services has been lowered to 10000/-

No. of employees have been changed n so employee cost is lowered

Changes have been made in no of sales order of primary n secondary sale

So now new pay back period is 0.8 years

Franchise set up cost


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All the updations done have been coloured yellow


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Cost per unit

-

25,000

25000

15,000

35,000

10,000

10,000

10,000

10,000

30,000

10,000

20,000

15,000

100,000


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Franchise HR costHR Salary Annual Increment

Centre Head 60,000 10%

Receptionist 7,000 10%

Business Development Manager 10,000 10%

Business Development Executive 7,000 10%

Office Boy 5,000 5%

Revenue and margins

YOY growth rate 35%Franchisee

Primary Sale 1.5%

Secondary Sale 1.5%

Royalty on Primary & Secondary Services 25.0%

Royalty On Liaison Services 50.0%

Categories

Primary Sale 2,000,000

Secondary 1,500,000

Cost of operations PSF / % of sales

Employee Incentive 30% Of Employee Cost

#NAME?:gridName:[3]Franchisee Income Statement(A4) 25

#NAME?:gridName:[3]Franchisee Income Statement(A4) 5000

#NAME?:gridName:[3]Franchisee Income Statement(A4) 6,000

Marketing Overheads

- Local Marketing 3.0%

- Contribution to central marketing fund 3.0%

#NAME?:gridName:[3]Franchisee Income Statement(A4) 1.0%

#NAME?:gridName:[3]Franchisee Income Statement(A4) 6,000

Rate of depreciation on capital investment 20%YOY growth in expenses 10%


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Brokerage Recovery Pattern

Brokerage Recovery Option-1 Option-2

Instalment % - Every Two

Months

Instalment-1 30% 25% 10%



Instalment-4 - 25% 10%

Total 100% 100%

DP Primary Sa


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Option-1

Instalment % - Every

Months Option-1

25% 10% 30%

25% 10% 30%

25% 10% 40%

25%

100% 100%

le #REF!


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Franchise Set Up Cost PSF

ELEMENTS

Area (Sqft) 300

Centre Furnishing / Improvement etc. Rs.Ceiling / Flooring / Painting 42,000

Furniture & Fixtures 49,500

Decorative Item -

Electrical equipments & fittings & lighting 24,000

Signage (Int / ext) 25,000

Sub-Total 140,500 470

Equipments

Desktop 50,000

Printer, Scanner & Photocopier 15,000

Airconditioners 35,000

Communication Equipments & Internet Connection 10,000

Coffee Vending Machine 10,000

Fire Fighting Equipment /Extinguisher -

Stationary 10,000

Misc items (water dispenser, pantry items etc) 10,000

Sub-Total 90,000

Total capital investment 230,500 770

Launch & Pre-opening Marketing Expenses 30,000

Licenses, Permits, and Certifications 10,000

Software Cost 20,000

Training Cost 15,000

Lease Deposit 22,500

Working capital requirements (months) 3

Rental 22,500

HR 87,000

Electricity 15,000

Total WCR 124,500

Total Financial Requirement for Setup 452,500Franchise Fee 100,000

Service Tax (12.36%) 12,000

TOTAL PROJECT COST 560,000

Inception cost


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435,500


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Month 1 Month 2 Month 3

Nos. of Employees

Monthly Salary

Centre Head 60,000 - - -

Receptionist 7,000 1 1 1

Business Development Manager 10,000 1 1 1Business Development Executive 7,000 1 1 1

Office Boy 5,000 1 1 1

Total 89,000 4 4 4

1 1 1

Annual Package of Each Employee

Centre Head 60,000 60,000 60,000 60,000

Receptionist 7,000 7,000 7,000 7,000

Business Development Manager 10,000 10,000 10,000 10,000

Business Development Executive 7,000 7,000 7,000 7,000

Office Boy 5,000 5,000 5,000 5,000

Total 89,000 89,000 89,000 89,000

HR Cost

Centre Head - - -

Receptionist 7,000 7,000 7,000

Business Development Manager 10,000 10,000 10,000

Business Development Executive 7,000 7,000 7,000

Office Boy 5,000 5,000 5,000

Total 29,000 29,000 29,000


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Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10

- - - - - - -

1 1 1 1 1 1 1

1 1 1 1 1 1 12 2 2 3 3 3 3

1 1 1 1 1 1 1

5 5 5 6 6 6 6

2 2 2 3 3 3 3

60,000 60,000 60,000 60,000 60,000 60,000 60,000

7,000 7,000 7,000 7,000 7,000 7,000 7,000

10,000 10,000 10,000 10,000 10,000 10,000 10,000

7,000 7,000 7,000 7,000 7,000 7,000 7,000

5,000 5,000 5,000 5,000 5,000 5,000 5,000

89,000 89,000 89,000 89,000 89,000 89,000 89,000

- - - - - - -

7,000 7,000 7,000 7,000 7,000 7,000 7,000

10,000 10,000 10,000 10,000 10,000 10,000 10,000

14,000 14,000 14,000 21,000 21,000 21,000 21,000

5,000 5,000 5,000 5,000 5,000 5,000 5,000

36,000 36,000 36,000 43,000 43,000 43,000 43,000

FRANCHISE HR STUCTURE


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Month 11 Month 12 Year 1 Year 2 Year 3 Year 4 Year 5

- - - - - - -

1 1 1 1 1 1 1

1 1 1 1 1 1 13 3 3 3 4 5 6

1 1 1 1 1 1 1

6 6 6 6 7 8 9

3 3

60,000 60,000 720,000 792,000 871,200 958,320 1,054,152

7,000 7,000 84,000 92,400 101,640 111,804 122,984

10,000 10,000 120,000 132,000 145,200 159,720 175,692

7,000 7,000 84,000 92,400 101,640 111,804 122,984

5,000 5,000 60,000 63,000 66,150 69,458 72,930

89,000 89,000 1,068,000 1,171,800 1,285,830 1,411,106 1,548,743

- - - - - - -

7,000 7,000 84,000 92,400 101,640 111,804 122,984

10,000 10,000 120,000 132,000 145,200 159,720 175,692

21,000 21,000 189,000 277,200 406,560 559,020 737,906

5,000 5,000 60,000 63,000 66,150 69,458 72,930

43,000 43,000 453,000 564,600 719,550 900,002 1,109,513


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Increment

10%

5%

Increment

10%


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Franchisee revenue Estimation

Primary Sale

Secondary Sale

Liaison Services

Sales

Categories Average Price

Primary Sale 2,000,000

Secondary 1,500,000

Total

Primary Sale

Primary Sale M1Average ticket value (INR) 2,000,000

Number of orders in a month (average)-Option-1 -

Number of orders in a month (average) -

Sales booked per month- Option -1 -

Sales per month -

Total sales per year 124,500,000

Average Brokerage (%) 1.5%

Brokerage Booked

Option-1 -

Instalment Booked (every 2 months) 10%

Booking Amount (Equal instalment amount) -

Brokerage Received

Option-1 -

Total Instalment Received -

Total Yearly Instalment Received 29,400,000

Brokerage Received- (Ideal scenario)-Monthly -

Brokerage Received- (Ideal scenario)-Yearly 675,000

Deferred Payments (%) 10%

Deferred Payments 67,500

Total Brokerage Received- Yearly 607,500

Brokerage Schedule 25%

Total Brokerage

M1 -

M2 15,000

M3 37,500

M4 105,000

M5 105,000


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M6 120,000

M7 225,000

M8 225,000

M9 247,500

M10 247,500

M11 270,000

M12 270,000Total

Assumes every two months instalment are received- 1st 4 Instalment Schedule

M1 -

M2 100,000

M3 250,000

M4 700,000

M5 700,000

M6 800,000

M7 1,500,000

M8 1,500,000

M9 1,650,000

M10 1,650,000

M11 1,800,000

M12 1,800,000

Secondary

Sale M1

Average ticket value (INR) 1,500,000

Number of orders in a month (average)-Option-1 -Number of orders in a month (average) -


Sales per month -

Total sales per year 73,500,000

Average Brokerage (%) 1.5%

Brokerage Booked

Recovery Option-1 -

Brokerage Received

Recovery Option-1 -

Brokerage Received- (Ideal scenario)-Yearly 1,102,500

Deferred Payments (%) 0%

Deferred Payments -

Total Brokerage Received- Yearly 1,102,500

Income from Rentals

Average Rent (Per month) 10,000

No. of Orders Booked Per Month -

Average Commission Per Order 10,000

Total Commission Per Month -


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Total Commission Yearly 260,000

Liaison Services

Property M1

Average ticket value (INR) 10,000

Number of orders in a month (average)-Option-1Number of orders in a month (average) -


Sales per month -

Total sales per year 167,858

Average Commission (%) 100%

Commission Received -

Total 167,858


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Brokerage Sales Total Units Sold Brokerage

1.50% 124,500,000 62 607,500

1.50% 73,500,000 49 1,102,500

198,000,000 111 607,500

M2 M3 M4 M52,000,000 2,000,000 2,000,000 2,000,000

1 1 4 4

1 1 4 4

1,000,000 2,500,000 7,000,000 7,000,000

1,000,000 2,500,000 7,000,000 7,000,000

15,000 37,500 105,000 105,000

100,000 250,000 700,000 700,000

- - 3,750 9,375

100,000 250,000 800,000 950,000

- - 3,750 9,375

M1 M2 M3 M4

- -

3,750


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- - - 3,750

M1 M2 M3 M4

- -

100,000 100,000

250,000

700,000

M2 M3 M4 M5

1,500,000 1,500,000 1,500,000 1,500,000

- 1 2 3- 1 2 3

- 1,500,000 3,000,000 4,500,000

- 1,500,000 3,000,000 4,500,000

- 22,500 45,000 67,500

- 22,500 45,000 67,500

- 1 1 1

- 10,000 12,000 14,000


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M2 M3 M4 M5

10,000 10,000 10,000 10,000

- - 1 1- - 1 1

- - 10,000 11,500

- - 10,000 11,500

- - 10,000 11,500


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Sales Mix

63%

37%

1.69

M6 M7 M8 M9 M102,000,000 2,000,000 2,000,000 2,000,000 2,000,000

4 8 8 8 8

4 8 8 8 8

8,000,000 15,000,000 15,000,000 16,500,000 16,500,000

8,000,000 15,000,000 15,000,000 16,500,000 16,500,000

120,000 225,000 225,000 247,500 247,500

800,000 1,500,000 1,500,000 1,650,000 1,650,000

30,000 35,625 60,000 91,875 116,250

1,600,000 2,450,000 3,100,000 4,100,000 4,650,000

30,000 35,625 60,000 91,875 116,250

M5 M6 M7 M8 M9

- - - - -

- 3,750 - 3,750 -

9,375 - 9,375 - 9,375

26,250 - 26,250 -

26,250 - 26,250


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30,000 -

56,250

9,375 30,000 35,625 60,000 91,875

M5 M6 M7 M8 M9

- -

100,000 100,000

250,000 250,000 250,000

700,000 700,000

700,000 700,000 700,000

800,000 800,000

1,500,000 1,500,000

1,500,000

1,650,000

M6 M7 M8 M9 M10

1,500,000 1,500,000 1,500,000 1,500,000 1,500,000

4 5 6 7 74 5 6 7 7

6,000,000 7,500,000 9,000,000 10,500,000 10,500,000

6,000,000 7,500,000 9,000,000 10,500,000 10,500,000

90,000 112,500 135,000 157,500 157,500

90,000 112,500 135,000 157,500 157,500

2 2 2 3 4

17,000 21,000 25,000 30,000 36,000


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M6 M7 M8 M9 M10

10,000 10,000 10,000 10,000 10,000

1 2 2 2 21 2 2 2 2

13,225 15,209 17,490 20,114 23,131

13,225 15,209 17,490 20,114 23,131

13,225 15,209 17,490 20,114 23,131


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M11 M122,000,000 2,000,000

9 9 62

9 9

18,000,000 18,000,000

18,000,000 18,000,000

270,000 270,000

1,800,000 1,800,000

153,750 174,375

5,650,000 5,750,000

153,750 174,375

M10 M11 M12

- - - 0 0

3,750 - - 15,000 0

- 9,375 - 37,500 0

26,250 - 26,250 105,000 0

- 26,250 - 78,750 26,250


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30,000 - 30,000 90,000 30,000

- 56,250 - 112,500 112,500

56,250 - 56,250 112,500 112,500

61,875 - 61,875 185,625

61,875 61,875 185,625

270,000

270,000116,250 153,750 174,375

M10 M11 M12

700,000

700,000

800,000 800,000

1,500,000

1,500,000 1,500,000

1,650,000

1,650,000 1,650,000

1,800,000

1,800,000

M11 M12

1,500,000 1,500,000

7 7 497 7

10,500,000 10,500,000

10,500,000 10,500,000

157,500 157,500

157,500 157,500

4 5 20%

43,000 52,000


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M11 M12

10,000 10,000

3 3 15%3 3

26,600 30,590

26,600 30,590

26,600 30,590


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Franchisee income statement

Year 1 Year 2

Brokerage/Commission 2,138,000 2,886,000

Primary Sale 607,500 820,000

Secondary

- Sale 1,102,500 1,488,000

- Rental 260,000 351,000

Liaison Services 167,858 227,000

Cost of Operations

Royalty on Primary & Secondary Services 493,000 665,000

Royalty On Liaison Services 84,000 114,000

Employee Cost 453,000 564,600

Employee Incentive 135,900 169,380Rent 90,000 90,000

Electricity 60,000 66,000

#NAME?:gridName:[3]Franchisee Income Statement(A 72,000 79,000

Marketing Overheads

Local marketing 64,000 87,000

Contribution to central marketing fund 64,000 87,000

#NAME?:gridName:[3]Franchisee Income Statement(A 6,075 8,200

Misc expenses 72,000 79,200

Total Cost of Operations 1,593,975 2,009,380

% of Gross Receipts 75% 70%

Earning Before Interest, Tax, Depreciation &

Amortization (EBITDA)544,025 876,620

Profit margin 25% 30%

Depreciation 46,100 46,100

PBT 497,925 830,520

Profit margin (%) 23% 29%

Project Cost 413,000

ROI (%) 121% 201%

Payback 0.8

Income projections

600%

700%

800%


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0%

100%

200%

300%

400%

500%


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Year 3 Year 4 Year 5 Assumptions

3,896,000 5,259,000 7,100,000 Sales Mix

1,107,000 1,494,000 2,017,000 35% 28%

2,009,000 2,712,000 3,661,000 52%

474,000 640,000 864,000 12%

306,000 413,000 558,000 8%

898,000 1,212,000 1,636,000 25%

153,000 207,000 279,000 50%

719,550 900,002 1,109,513

215,865 270,000 332,854 21%90,000 99,000 109,000

73,000 80,000 88,000

87,000 96,000 106,000

117,000 158,000 213,000

117,000 158,000 213,000

11,070 14,940 20,170

87,120 95,832 105,415

2,568,605 3,290,774 4,211,952

66% 63% 59%

1,327,395 1,968,226 2,888,048

34% 37% 41%

46,100 46,100 46,100

1,281,295 1,922,126 2,841,948

33% 37% 40%

310% 465% 688%

Year 1


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Year 2

Year 3

Year 4

Year 5


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64%

Updated Tier - 3 Model

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