Business plan of a cellphone franchise

Executive Summary

Franchise Management

Franchise Structure

The current structure has been put in place in such a way as to allow the Cellphonecare brand to enter a mature shopping centre with a Franchisee who has a minor investment in the shop.

Currently the Franchisee contributes a franchisee fee (Royalty) of 2% on gross turnover (excluding VAT). Gross turnover comprises all sales taken through the point of sale system.

The key factors within the Cellphonecare are:

the cell phone user (Cellcall customer)

the service provided by the Cellphonecare Franchisee

the support provided by Cellcall Service Provider Co.(Pty) Ltd, the Franchisor

additional support received from Cellcall (Pty) Ltd, the Network

 

As the cellular industry changes, Cellcall ensure that the Cellphonecare shops continue to offer the very latest in mobile communication technology.

Cellcall has become a trusted brand name ensuring a national Franchise operation, which adheres to a supervised code of conduct fuelled by an aggressive ongoing advertising and marketing campaign.

Operating Management Structure

A private company to act as a vehicle for the business operations will be formed between Me Catherine Green and Me Alison Ntondo in a 50% / 50% shareholding. The management of the outlet will be full time managed by the above partners, overseeing and directing daily operations.

Franchise Operational Staffing

The Franchisor provides a quality service through well trained people who are at all times responsive to customers needs, making it the first choice cellular service and support offering in the country. With Cellcall's support, the Franchisees staff will be trained to have the ability to carry out in- and out- of warranty services with the use of all the latest repair technology, software, spares and equipment of the major manufacturer handsets. The training to the management staff and the operational staff will the very best service and delivery as can be expected from a national market leading company like Cellcall.

Training

All initial training will be provided to the Franchisees as well as the staff. Cellcall there after will provide continuous assistance and support on all related training. Cellcall Service Provider Co. will provide the funding for future training related travel and accommodation cost. The initial training provided will include:

Cellphonecare Operations

Service Base (Webmaster)

Cellphonecare Logistics

Customer Services

Cellphonecare Management

Warranty Vetting

 

Management supporting systems

Cellcall Service Provider Co. monitors the progress and success of the Franchisee monthly and provides reports and an overview of the progress of the Franchise. This would require the utilize the software packages provided by Cellcall Service Provider Co as well as to provide other related figures as requested.

Ongoing Franchise Support

Cellcall Service Provider Co. is able to offer extended support and additional backup which includes assistance from a focused and separately developed Franchise business unit.

Management Reporting Systems

Cellcall Service Provider Co. monitors the progress and success of each unit monthly and provides reports and an overview of the progress of the Franchise Channel as a whole. The Franchisee will be required to utilize the software packages provided by Cellcall Service Provider Co as well as provide other related figures as requested.

The Franchisee is accordingly required to submit monthly Management reports and annual audited financials.

 

Market Analysis

The market analysis is conducted by a Cellcall Service Provider Co. specialist. Cellcall Service Provider Co. is responsible for brand building and brand maintenance. The Location is selected to maximise the shop profitability ensuring franchisee success.

Sales and Marketing Strategy

Advertising

Cellcall contributes a significant portion of the finance to national media campaigns be it via print, audio or visual media. The Franchisee will be encouraged to enhance the image of the Cellphonecare by employing additional advertising and/or promotions, subject to approval from Cellcall Service Provider Co. These additional advertising cost will be carried by the franchisee.

The franchisee will deploy a initial campaign to create awareness of the shops location and existence to the public. All the Cellcall retail shops in the area will be contacted introducing the repair service availability to these outlets.

Promotions will be negotiated with Cellcall to introduce the outlet and create shop/outlet awareness to the public in the direct geographical area.

SWOT Analysis


Strengths


• The Franchise the biggest Cellular operator in South Africa operating over 10 year in the SA environment
• The Franchisor is reputable and have a vested interested in ensuring the success of the business.
• The franchise applicant have operated in an Franchise environment
• The entrepreneurs are young and willing and able to ensure sufficient drive and energy is invested into a business to make it a success.
• Strong national branding and advertising

 

Weaknesses


• The entrepreneurs do not have any relevant experience in this industry.

 

Opportunities


• The business will be started by two woman entrepreneurs (one white woman and one black woman) that will provide and excellent opportunity for a financier to support South Africa's empowerment initiatives in establishing more women in the business sector.
• There are only two Cellphonecare shops in Pretoria as well as none in the Eastern Area (Higher income group) in Pretoria.


Threats


• There are limited threats for there are only 3 cellular operators of which this will be part of the biggest Cellular operator in South Africa.

 

Financial Overview

A liquid facility of approximately R 350 000 (unencumbered) will be required for the initial stock holding and a further facility of approximately R100 000 to cover staffing and operational costs for the first couple of trading months, prior to receipt of annuity income and rebates.

The Franchisee is required to incorporate a private company to act as a vehicle for the business operations.

 

The Franchisee will be responsible for the lease rental in the following format:

Year 1 – 0% 

Year 2 – 20% 

Year 3 – 40% 

Year 4 - 60% 

Year 5 – 80%

 

Cellcall will contribute the balance due on the rental portion for this 5-year period. The Lease pertaining to the site will remain vested in Cellcall at all times. Please note that this support does not include any operational expenses such as Electricity, Water, and Telephone etc.

Financial Plan

Please refer to our Financial Plan page for more information on what the Financial Plan entails.

Break-even Analysis

Please refer to our Financial Plan page for a formula to calculate the Break-even point.

 

Projected Cash Flow

Click here to download a Cash Flow template.

Projected Income Statement (Profit and Loss)

Click here to download an Income Statement template.

Projected Balance Sheet

Click here to download a Balance Sheet template.

 

 

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