So a recurring theme to the emails which come to me asking for suggestions is something like this;
“Dear Mr. Abhiney, Just going through the internet I reached yourself.
- Scale: For a budget school offering, Franchise Schools will be a profitable idea only when, you are looking to build a school for more than 2000 students, To accommodate 2000 students, one should have a minimum of 7-8 acres campus and an investment capacity of 8-10 crores over a period of time. Since most of the brands’ available charge 8% – 15% of the top line and a substantially fixed fee as license and support fee, one has to take into account the above costs.
- Existing Competition: What is the kind of competition there exists, if the market is already very competitive, then it can be a good idea to go with the brand. This gives you two advantage (1) You have a distinct identity from Day 1 (2) if the location is good and a brand is known, you will have the advantage of the track record of the parent brand.
- Awareness about various brands: This according to me is very vital, do people in your city/town/area really know that you are opening a Franchise School. Do they really have any idea that this brand stands for something, is there a positive awareness of the brand?. If none of this sticks, don’t bother taking a franchise if you have the wherewithal to execute and run the project on your own.
- Qualification of the promoters: This is again a key ingredient in decision making if School is something you are looking to start to park excess funds or out of philanthropy and not something which is going to take your active involvement, go for a franchise known or unknown, but if you think you are qualified and have the resources and the time to deploy yourself fully in the initial years, and have enough confidence that you will be able to do a good job, you can go on your own.
- Appreciation of ‘any’ brand in the city/town: There can be markets rather there are markets where the city doesn’t take well to a branded offering, probably the missionaries have done a good job, or the public is largely satisfied with homegrown brands. In such a market more often than not the so to say ‘branded’ offering is considered as expensive. If the market is seeing changes at the retail level where people are looking to acquire brands and in general the populace is exposed to other nearby brands, one can look to start a franchise.
- The Brand (their intention & objectives): There are brands in the Pre-School market who are cruel and do not think twice before offering franchise to another player in the same market without consulting the older partner and without understanding ground realities, there are brands who see this as pure business (which at a level one should), without understanding the pain and the risk involved. The brands have all the right to be business-like but at the same time, there has to be a level of support. The idea should always be to work for a brand who understands your situation and is ready to work with you by sharing some risk and throwing some skin in the same.
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