Download pdf - Business Communicaton

7/27/2019 Business Communicaton

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The main characteristic of fast food franchises is customer convenience. As aresult, fast food franchises can set up shop in a multitude of places. Atraditional location is commonly associated with a freestanding buildingwhere only one brand is sold.

Non-traditional locations take on a variety of sites including: - Shopping Malls

- Convenience Store- Airports- Travel Plazas- College Campuses

- Military Bases Franchise Offer: We will operate a KFC outlet, which is characterized by a

unique system which includes special recipes and menu items, distinctivedesign, dcor and furnishings, specifications and procedures for operations,procedures for quality control; training and assistance; and advertising and

promotional programs.


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The franchisor is KFC Corporation (KFCC) whose parent company

is YUM! Brands, Inc.

However, KFCC does not offer any arrangements for financing

the franchisees initial investment or regular operation of the

business. But, YUM Funding Financing Program offers finance for initial

investment to the franchisee.

Funding is available for the following:

(1) the construction of new (multi-brand or single -brand) outlets.

(2) the conversion of single-brand outlets into multi-brand outlets.(3) upgrades of outlets as required under the applicable franchise

agreement.

The loan can be taken anywhere between Rs. 20,00,000 to Rs.

2,00,00,000.


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The franchisee, manager and the other employeesindicated by KFCC must attend and complete to KFCC'ssatisfaction the initial training program offered by KFCC

on the operation of a KFC outlet. At KFCCs discretion, other employees must attend and

complete the training program to KFCs satisfaction. Training programs may include written material and

classroom instruction.


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The term of the franchisee agreement is 20 years.Renewal terms are dependent on the franchiseagreement signed.

During the term of the franchise agreement, thefranchisee or a fully trained and qualified managermust devote full time to the management andoperation of the KFC outlet.

The franchise must sell all required products as

KFCC periodically designates. The franchise may not deliver any product fromthe KFC outlet or anywhere else unless separatelyapproved for delivery and have signed a DeliveryAmendment.


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Name of Fee

Low

High

Building Construction Costs 80,00,000 1,50,00,000Site Work 10,00,000 25,00,000

Miscellaneous Permits, UtilityDeposits, Licenses, and Architectural

Costs5,00,000 10,00,000

Initial Franchise Fee 25,00,000Development Services Fee 4,000 35,000Training Expenses 5,000 20,000Miscellaneous Opening Costs 10,000 25,000Additional Funds 50,000 75,000


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The projected site for opening our franchise will be BandraKurla Complex.

Bandra Kurla Complex is a planned commercial complex inthe suburbs of Mumbai. There are around 4 lakh peopleworking in various offices throughout the Complex.

There are only two fast food chains in the complex U.S.

PIZZA and Subway which are both costlier compared to KFC.

So the suggested location guarantees increased sales due tocompetitive advantage.


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YEAR SALES (in Rs.)

FIRST 15,00,000

SECOND 20,00,000

THIRD 25,00,000

FOURTH 35,00,000

FIFTH 40,00,000


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The proposal of opening a franchise in the said location is aviable option. The projected sales in the first year arent up tothe mark but are likely to grow by 25% in the coming years.

The outlet being in a prime location in the heart of the city willattract youngsters and elders equally.

The cost of the project is high but YUMS financing schemealong with projected sales in the coming year will bringeconomies of scale and will help divide the cost of the projectamong the higher profits in the coming year.


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In this report we have tried to make an attempt to analyse

the possibility of opening of a new franchise of KFC in our

city.

The population here is continuously increasing, and moreand more people are settling down in urban areas from rural

areas.

Also there is a growing number of non- vegetarians in India

nowadays which will definitely help in the growth of KFC.

As KFC is a well known fast food joint all over the world, it

would be profitable to open a new franchise where thescope of expansion is great.


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