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Updated Tier - 3 Model

This document provides cost estimates and projections for setting up and operating a franchise center. It includes estimates for initial set up costs such as furnishings, equipment, licenses, and working capital. It also provides projections for staffing levels and costs over 5 years as the franchise grows. Revenue projections are provided from primary sales, secondary sales, and liaison services based on assumed sales volumes and brokerage/commission rates. Brokerage recovery schedules with deferred payments are outlined. Overall it appears to estimate all relevant costs and revenues to evaluate the financial feasibility and payback period of the franchise opportunity.

Uploaded by

Darpan Ashokrao Salunkhe
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
64 views

Updated Tier - 3 Model

This document provides cost estimates and projections for setting up and operating a franchise center. It includes estimates for initial set up costs such as furnishings, equipment, licenses, and working capital. It also provides projections for staffing levels and costs over 5 years as the franchise grows. Revenue projections are provided from primary sales, secondary sales, and liaison services based on assumed sales volumes and brokerage/commission rates. Brokerage recovery schedules with deferred payments are outlined. Overall it appears to estimate all relevant costs and revenues to evaluate the financial feasibility and payback period of the franchise opportunity.

Uploaded by

Darpan Ashokrao Salunkhe
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Assumptions

TIER-3
Area Estimation
Center Setup

Area
300

Area
Franchise set up cost
ELEMENTS
Centre Furnishing / Improvement etc.
Ceiling / Flooring / Painting
Furniture / Fixtures / wood work
Decorative Item
Electrical equipments & fittings & lighting
Signage (Int / ext)
Equipments
Desktop
Printer, Scanner & Photocopier
Airconditioners
Communication Equipments & Internet Connection
Coffee Vending Machine

PSF/ NO.
140
165
80

2
1

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)
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

All the updations done have been coloured yellow

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

Franchise HR cost
HR
Centre Head
Receptionist
Business Development Manager
Business Development Executive
Office Boy

Revenue and margins


YOY growth rate

Salary
Annual Increment
60,000
10%
7,000
10%
10,000
10%
7,000
10%
5,000
5%

35%
Franchisee
1.5%
1.5%
25.0%
50.0%

Primary Sale
Secondary Sale
Royalty on Primary & Secondary Services
Royalty On Liaison Services
Categories
Primary Sale
Secondary

Cost of operations
Employee Incentive
#NAME?:gridName:[3]Franchisee Income Statement(A4)
#NAME?:gridName:[3]Franchisee Income Statement(A4)
#NAME?:gridName:[3]Franchisee Income Statement(A4)
Marketing Overheads
- Local Marketing
- Contribution to central marketing fund
#NAME?:gridName:[3]Franchisee Income Statement(A4)
#NAME?:gridName:[3]Franchisee Income Statement(A4)
Rate of depreciation on capital investment
YOY growth in expenses

2,000,000
1,500,000

PSF / % of sales
30% Of Employee Cost
25
5000
6,000
3.0%
3.0%
1.0%
6,000
20%
10%

Brokerage Recovery Pattern


DP
Brokerage Recovery
Instalment-1
Instalment-2
Instalment-3
Instalment-4
Total

Option-1
30%
30%
40%
100%

Option-2
25%
25%
25%
25%
100%

Primary Sale
Instalment % - Every Two
Months
10%
10%
10%
10%

Primary Sale
Option-1
25%
25%
25%
25%
100%

#REF!
Instalment % - Every
Months
10%
10%
10%

Option-1
30%
30%
40%
100%

Inception cost
Franchise Set Up Cost
ELEMENTS
Area (Sqft)
Centre Furnishing / Improvement etc.
Ceiling / Flooring / Painting
Furniture & Fixtures
Decorative Item
Electrical equipments & fittings & lighting
Signage (Int / ext)
Sub-Total
Equipments
Desktop
Printer, Scanner & Photocopier
Airconditioners
Communication Equipments & Internet Connection
Coffee Vending Machine
Fire Fighting Equipment /Extinguisher
Stationary
Misc items (water dispenser, pantry items etc)
Sub-Total
Total capital investment
Launch & Pre-opening Marketing Expenses
Licenses, Permits, and Certifications
Software Cost
Training Cost
Lease Deposit

PSF
300
Rs.
42,000
49,500
24,000
25,000
140,500

470

50,000
15,000
35,000
10,000
10,000
10,000
10,000
90,000
230,500

770

30,000
10,000
20,000
15,000
22,500

Working capital requirements (months)


Rental
HR
Electricity
Total WCR

3
22,500
87,000
15,000
124,500

Total Financial Requirement for Setup


Franchise Fee
Service Tax (12.36%)
TOTAL PROJECT COST

452,500
100,000
12,000
560,000

435,500

Month 1

Month 2

Month 3

Nos. of Employees
Centre Head
Receptionist
Business Development Manager
Business Development Executive
Office Boy
Total
Annual Package of Each Employee
Centre Head
Receptionist
Business Development Manager
Business Development Executive
Office Boy
Total
HR Cost
Centre Head
Receptionist
Business Development Manager
Business Development Executive
Office Boy
Total

Monthly Salary
60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

1
1
1
1
4
1

1
1
1
1
4
1

1
1
1
1
4
1

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

7,000
10,000
7,000
5,000
29,000

7,000
10,000
7,000
5,000
29,000

7,000
10,000
7,000
5,000
29,000

FRANCHISE HR STUCTURE
Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

1
1
2
1
5
2

1
1
2
1
5
2

1
1
2
1
5
2

1
1
3
1
6
3

1
1
3
1
6
3

1
1
3
1
6
3

1
1
3
1
6
3

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

7,000
10,000
14,000
5,000
36,000

7,000
10,000
14,000
5,000
36,000

7,000
10,000
14,000
5,000
36,000

7,000
10,000
21,000
5,000
43,000

7,000
10,000
21,000
5,000
43,000

7,000
10,000
21,000
5,000
43,000

7,000
10,000
21,000
5,000
43,000

Month 11

Month 12

Year 1

Year 2

Year 3

Year 4

Year 5

1
1
3
1
6
3

1
1
3
1
6
3

1
1
3
1
6

1
1
3
1
6

1
1
4
1
7

1
1
5
1
8

1
1
6
1
9

60,000
7,000
10,000
7,000
5,000
89,000

60,000
7,000
10,000
7,000
5,000
89,000

720,000
84,000
120,000
84,000
60,000
1,068,000

792,000
92,400
132,000
92,400
63,000
1,171,800

871,200
101,640
145,200
101,640
66,150
1,285,830

958,320
111,804
159,720
111,804
69,458
1,411,106

1,054,152
122,984
175,692
122,984
72,930
1,548,743

7,000
10,000
21,000
5,000
43,000

7,000
10,000
21,000
5,000
43,000

84,000
120,000
189,000
60,000
453,000

92,400
132,000
277,200
63,000
564,600

101,640
145,200
406,560
66,150
719,550

111,804
159,720
559,020
69,458
900,002

122,984
175,692
737,906
72,930
1,109,513

Increment

10%

5%

Increment

10%

Franchisee revenue Estimation


Primary Sale
Secondary Sale
Liaison Services
Sales
Categories
Primary Sale
Secondary
Total
Primary Sale
Primary Sale
Average ticket value (INR)
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
Average Brokerage (%)
Brokerage Booked
Option-1
Instalment Booked (every 2 months)
Booking Amount (Equal instalment amount)
Brokerage Received
Option-1
Total Instalment Received
Total Yearly Instalment Received
Brokerage Received- (Ideal scenario)-Monthly
Brokerage Received- (Ideal scenario)-Yearly
Deferred Payments (%)
Deferred Payments
Total Brokerage Received- Yearly

Brokerage Schedule
M1
M2
M3
M4
M5

Average Price
2,000,000
1,500,000

M1
2,000,000
124,500,000
1.5%
10%
29,400,000
675,000
10%
67,500
607,500

25%
Total Brokerage
15,000
37,500
105,000
105,000

M6
120,000
M7
225,000
M8
225,000
M9
247,500
M10
247,500
M11
270,000
M12
270,000
Total
Assumes every two months instalment are received- 1st 4 Instalment Schedule
M1
M2
M3
M4
M5
M6
M7
M8
M9
M10
M11
M12

100,000
250,000
700,000
700,000
800,000
1,500,000
1,500,000
1,650,000
1,650,000
1,800,000
1,800,000

Secondary
Sale
Average ticket value (INR)
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
Average Brokerage (%)
Brokerage Booked
Recovery Option-1
Brokerage Received
Recovery Option-1
Brokerage Received- (Ideal scenario)-Yearly
Deferred Payments (%)
Deferred Payments
Total Brokerage Received- Yearly
Income from Rentals
Average Rent (Per month)
No. of Orders Booked Per Month
Average Commission Per Order
Total Commission Per Month

M1
1,500,000
73,500,000
1.5%
1,102,500
0%
1,102,500
10,000
10,000
-

Total Commission Yearly

260,000

Liaison Services
Property
Average ticket value (INR)
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
Average Commission (%)
Commission Received
Total

M1
10,000
167,858
100%
167,858

Brokerage

Sales
1.50%
1.50%

Brokerage

124,500,000
73,500,000
198,000,000

62
49
111

607,500
1,102,500
607,500

2,000,000
1
1
1,000,000
1,000,000

M3
2,000,000
1
1
2,500,000
2,500,000

M4
2,000,000
4
4
7,000,000
7,000,000

M5
2,000,000
4
4
7,000,000
7,000,000

15,000

37,500

105,000

105,000

100,000

250,000

700,000

700,000

100,000

250,000

3,750
800,000

9,375
950,000

3,750

9,375

M2

M1

Total Units Sold

M2

M3

M4
-

3,750

M1

M2

M3

3,750
M4

100,000

100,000
250,000
700,000

M2
1,500,000
-

M3
1,500,000
1
1
1,500,000
1,500,000

M4
1,500,000
2
2
3,000,000
3,000,000

M5
1,500,000
3
3
4,500,000
4,500,000

22,500

45,000

67,500

22,500

45,000

67,500

10,000

12,000

14,000

M2

M3

M4

M5

10,000
-

10,000
-

10,000
1
1
10,000
10,000

10,000
1
1
11,500
11,500

10,000

11,500

Sales Mix
63%
37%
1.69

M6
2,000,000
4
4
8,000,000
8,000,000

2,000,000
8
8
15,000,000
15,000,000

M8
2,000,000
8
8
15,000,000
15,000,000

M9
2,000,000
8
8
16,500,000
16,500,000

M10
2,000,000
8
8
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
1,600,000

35,625
2,450,000

60,000
3,100,000

91,875
4,100,000

116,250
4,650,000

30,000

35,625

60,000

91,875

116,250

M5

M7

M6
9,375

M7
3,750
26,250

M8
9,375
26,250

M9
3,750
26,250
-

9,375
26,250

9,375
M5

30,000
M6

35,625
M7

30,000

56,250

60,000

91,875

M8

M9

100,000

250,000

100,000
250,000

700,000
700,000

250,000
700,000

700,000
800,000

700,000
800,000

1,500,000

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

M6
1,500,000
4
4
6,000,000
6,000,000

M7
1,500,000
5
5
7,500,000
7,500,000

M8
1,500,000
6
6
9,000,000
9,000,000

M9
1,500,000
7
7
10,500,000
10,500,000

M10
1,500,000
7
7
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

17,000

21,000

25,000

30,000

36,000

M6
10,000
1
1
13,225
13,225

M7
10,000
2
2
15,209
15,209

M8
10,000
2
2
17,490
17,490

M9
10,000
2
2
20,114
20,114

13,225

15,209

17,490

20,114

M10
10,000
2
2
23,131
23,131

23,131

M11
2,000,000
9
9
18,000,000
18,000,000

M12
2,000,000
9
9
18,000,000
18,000,000

270,000

270,000

1,800,000

1,800,000

153,750
5,650,000

174,375
5,750,000

153,750

174,375

M10

M11
3,750
26,250
-

62

M12
9,375
26,250

26,250
-

0
15,000
37,500
105,000
78,750

0
0
0
0
26,250

30,000
56,250

56,250
61,875

30,000
56,250
61,875

116,250

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
1,500,000
7
7
10,500,000
10,500,000

M12
1,500,000
7
7
10,500,000
10,500,000

157,500

157,500

157,500

157,500

4
43,000

5 20%
52,000

49

90,000
112,500
112,500
61,875
61,875

30,000
112,500
112,500
185,625
185,625
270,000
270,000

M11
10,000
3
3
26,600
26,600

M12
10,000
3
3
30,590
30,590

26,600

30,590

15%

Franchisee income statement


Income projections
Year 1
Brokerage/Commission
Primary Sale
Secondary
- Sale
- Rental
Liaison Services
Cost of Operations
Royalty on Primary & Secondary Services
Royalty On Liaison Services
Employee Cost
Employee Incentive
Rent
Electricity
#NAME?:gridName:[3]Franchisee Income Statement(A4)
Marketing Overheads
Local marketing
Contribution to central marketing fund
#NAME?:gridName:[3]Franchisee Income Statement(A4)
Misc expenses
Total Cost of Operations
% of Gross Receipts
Earning Before Interest, Tax, Depreciation &
Amortization (EBITDA)
Profit margin
Depreciation
PBT
Profit margin (%)
Project Cost
ROI (%)
Payback

Year 2

2,138,000
607,500

2,886,000
820,000

1,102,500
260,000
167,858

1,488,000
351,000
227,000

493,000
84,000
453,000
135,900
90,000
60,000
72,000

665,000
114,000
564,600
169,380
90,000
66,000
79,000

64,000
64,000
6,075
72,000
1,593,975
75%

87,000
87,000
8,200
79,200
2,009,380
70%

544,025

876,620

25%
46,100
497,925
23%
413,000
121%
0.8

800%
700%
600%
500%

30%
46,100
830,520
29%
201%

500%
400%
300%
200%
100%
0%

Year 3

Year 4

Year 5

Assumptions

3,896,000
1,107,000

5,259,000
1,494,000

7,100,000
2,017,000

2,009,000
474,000
306,000

2,712,000
640,000
413,000

3,661,000
864,000
558,000

898,000
153,000
719,550
215,865
90,000
73,000
87,000

1,212,000
207,000
900,002
270,000
99,000
80,000
96,000

1,636,000
279,000
1,109,513
332,854
109,000
88,000
106,000

117,000
117,000
11,070
87,120
2,568,605
66%

158,000
158,000
14,940
95,832
3,290,774
63%

213,000
213,000
20,170
105,415
4,211,952
59%

1,327,395

1,968,226

2,888,048

34%
46,100
1,281,295
33%

37%
46,100
1,922,126
37%

41%
46,100
2,841,948
40%

310%

465%

688%

Year 1

35%

Sales Mix
28%
52%
12%
8%

25%
50%
21%

Year 1
Year 2
Year 3
Year 4
Year 5

64%

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