As final year students in School of Business, you and three other friends decided to start your

own business rather than joining the workforce. After all, you reasoned that it is the best time

to be entrepreneurs before age and other family commitments catch up$.$ In order to start a

business in a structured way, you believe that obtaining a franchise is the best approach to start

a business without any prior experience.

Since one of the members is a dance aficionado with a Grade $8$ certificate from the Royal

Academy of Dance, your team contacted a franchise owner in USA that specialises in dance

enrichment programmes for $5$ to $12$ years old children. The franchisor, Let$$s Dance Kids

International Inc., was founded in $1996$ and has a well$-$established franchising programme

for countries outside the USA. Let$$s Dance Kids International Inc.$$ signature dance

programmes for children focus on both physical development and mental well$-$being. It has a

proven curriculum that is constantly updated to adapt to the changing market and customer

needs around the world.

Excited over the possibilities of starting this franchise in Singapore, you obtained the following

information from the USA franchisor:

$1.$

An initial and one$-$time fee of USD$20,000$ is immediately payable upon signing the

franchising agreement. The franchisor will provide guidance and support to start the

business. There is a minimum commitment period of $3$ years for the franchise

agreement.The franchisee may open any number of outlets but will be restricted to Singapore only.

The franchisee must appoint a master dance instructor to travel to the USA for

programme induction, training and certification purposes. The total estimated cost of

air tickets, lodging and other travel expenses is estimated to be around USD$12,000$ for

one person for a total duration of $7$ days. The master dance instructor will in turn train

other dance instructors in Singapore.

The franchisee can only market and sell courses authorised by the franchisor, and the

franchisee must follow the marketing and branding guides provided. The franchisee

cannot represent other dance programmes or franchises.

The franchisee is expected to plan and carry out appropriate level of marketing activities

in Singapore.

There will be three key dance programmes to be introduced in Singapore: Let$$s Dance

Kids$$ Start $(5$ to $6$ years old$),$ Let$$s Dance Kids$$ Together $(7$ to $9$ years old$),$ and

Let$$s Dance Kids$$ Excel $(10$ to $12$ years old$).$ Each programme consists of $30$ lessons

per year, and each lesson is $2-$hours in duration. The franchisee is allowed to determine

the appropriate fees for Singapore market.

There shall be a $10\%$ royalty payment for net fees collected, payable to the franchisor

on a monthly basis.

There shall be annual fee of USD$8,000$ payable from the start of second year onwards.

This is to maintain the franchise programme and for continual marketing and business

support.

The franchisor will provide a cloud$-$based student management and billing platform for

the franchisee$$s use. The use of this software is provided free$-$of$-$charge to all

franchisees.

The franchisee is responsible for the day$-$to$-$day operations and management of the

dance school in line with the franchise operating procedures which will be made

available to the franchisee upon signing the franchise agreement.

Eager to commence this business, your team identified Sime Darby Centre at $896$ Dunearn

Rd$,$ Singapore $589472,$ as a potential location for the dance school with a total floor size of $800$

square feet, which can be partitioned into a few classrooms. The lease agreement is for two $(2)$

years at SGD$15$ per square feet per month. Your team has pulled together SGD$60,000$ as initial

capital. There are no other external equity partners to the business. Based on your financial

projections for two $(2)$ years, this capital is insufficient, and the team plans to apply for a bank

loan to cover the shortfall.

Required:

As part of the bank loan application process, you are required to appraise the business concept

and analyse the information provided above to construct a business plan with two $(2)$ years

financial projections on a monthly basis. This business plan will be submitted to the bank. Your

business plan must be based on the information provided above, and organised to the sections

in the prescribed Table of Contents below.

Demonstrate your proficiency in writing a business plan by supporting with suitable narratives,

relevant research data and analysis, and any reasonable assumptions to justify the attractiveness

and viability of the business to the bank.

Question $1$:

The Business Concept and Description of Franchise Business Model using the Business Model Canvas