Using the franchise you have selected,(Brain O Brain) Brain O Brain is one of th
ID: 2472323 • Letter: U
Question
Using the franchise you have selected,(Brain O Brain)
Brain O Brain is one of the Franchise opportunities. It is in the field of education giving practice to children to discover their learning potential. It uses the methods of abacus techniques.
Total investment = INR 1,00,000/- (inclusive of franchise fees)
Franchise fee = INR 68,000/-
Infrastructure Requirement = 250 sq.ft of hall to accommodate 15-20 children
Working capital = Zero
Initial Inventory = Zero
Royalties = 30% of the fee collected from the students
Learning material provided by the franchisor
answer the following questions: Would your chosen opportunity make a good investment? How difficult would it be to pursue the opportunity? Were you able to get all the information that you needed by using the Internet? What might be your chances of success with this opportunity?
Explanation / Answer
NPV is positive so it is a good opportunity.
Total investment 100,000 Franchise fee 68,000 Royalties 30% Lets assume fee per child 200 per month 20 student Total revenue per month 4,000 Per year 48,000 Royalty 14,400 Rent 6,000 Total cashflow 27,600 Suppose we take 10 year business model Year Cash flow PV@8% 0 (100,000) (100,000) 1 27,600 25,556 2 27,600 23,663 3 27,600 21,910 4 27,600 20,287 5 27,600 18,784 6 27,600 17,393 7 27,600 16,104 8 27,600 14,911 9 27,600 13,807 10 27,600 12,784 NPV 85,198Related Questions
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