a project report on setting up a francise of cartridge world

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Institute of Management

Nirma University, Ahmedabad

Project Management

SEPTEMBER 3, 2011

Project :

TO ESTABLISHED A FRANCHISE STORE OF CARTRIDGE WORLD

Submitted To: - Prof . H.K.Shrivastava

Submitted by:-

ADITYA LODHA (101159)

MBA FT II



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INDEX

S.NO TABLE OF

CONTENTS

PAGE NO

1 INTRODUCTION 3

2 SERVICES AND

PRODUCTS

4

3 WORK BREAK DOWN

STRUCTURE

5

4 PROJECT MILESTONE 6

5 NETWORK DIAGRAM 86 WBS DESCRIPTION 9

7 Franchise Support 10

8 COSTING 13

9 BREAK-EVENANALYSIS

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3

PHASE – 1

INTRODUCTION

Project Objective:

To established a franchise store of Cartridge World in jodhpur city.

.

Current status of the Project:

The project is still at its initial stage and hence various secondary researches are being

carried.

ABOUT THE COMPANY

Introduction

Cartridge World is the world leader in recharging and remanufacturing of inkjet and toner

cartridges. The multi award bagging company, headquartered in Australia, has a strong

franchise network in over 51 countries with more than 2000 stores. All cartridge World stores

are independently owned and operated by franchisees.

Cartridge World Stores in the Indian Sub -Continent

The Cartridge World brand, business format and product offerings are available in the Indian

Sub-Continent through AFL Pvt. Ltd the leading logistics, cargo and courier company

(www.afl.co.in), an exclusive Master Franchisee of Cartridge Wor ld in this region.

Over 90 franchisees have already been appointed and 75 stores have been launched across

Mumbai, Navi Mumbai, Pune, Nasik, Nagpur, Indore, Bhopal, Ahmedabad, Baroda, Surat,

Bangalore, Chennai, Hyderabad, Secunderabad, Cochin, Coimbatore, Vizag, Hubli,

Pondicherry, Tirupur, Mysore, New Delhi, Jaipur, Gurgaon, Noida, Lucknow, Varanasi,

Kolkata, Ranchi, Guwahati, Shillong, Maldah.

The Brand has already won 7 prestigious awards in its 3 year of operations in India viz. „New



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Concept in Franchising‟ & „Concept of the Year „07‟ & Best – Business Services Brand

2008 awarded by Franchising Association of India and The Franchising World Magazine

respectively. Jury Special Award at the Reid & Taylor Awards for Retail Excellence 2009

and their CEO – Mr. Naveen Rakhecha won the “Youth Achiever of the Year” award at the

Youth

SERVICES AND PRODUCTS

A Cartridge World store, positioned as a ONE STOP SHOP for all Printer needs, offers the

following range of services and products to its customers:

Services:

Recharging used Inkjet Cartridges with 100% money back guarantee

Recharging used toner Cartridges with 100% money back guarantee

Free Cartridge care education

Printer Repair Services

MPS: Managed Print Service

Free Collection & Delivery

Products:

Original Printer Cartridges of all popular brands viz. HP, Canon, Epson, Brother etc.

Printers of all popular brands

Business Direct Cartridges / Re-man cartridges

Compatible Cartridges

Printer Accessories

Regular and Specialty Paper

Office & Fax supplies

Storage Devices



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PHASE - 2

WORK BREAK-DOWN STRUCTURE:

STORE LAUNCH

STORE SETUP AND CERTIFICATION

Release of SOP manuals and access to

- Attend Training in Mumbai and get certified

training session for staffs and management at mumbai

Store construction / development as per

set up of store as per CW requirement

- Recruitment of staff

Selection of staff (2 worker,1 manager, 2delivery boys initially)

Agreement Signing & remit Training Fees

official paper work payment of fees

Site Selection and Approval

NEARNESS TO BUYER COVERAGE OF CITY

Signing of LOI and remit Franchise Fees

FRANCHISEE SELECTED APPLIER

Submission of Financial Statement

FOR THEIR ANALYSIS BY US

Initial Meetings & Discussions

regional manager APPLIER



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PROJECT MILESTONE

ACTIVITY DESCRIPTION DURATION START

TIME

END

TIME

PRECEDENCING

ACTIVITY

1 Initial Meetings &

Discussions

1 WEEK 0 1 NONE

2 Submission of

Financial

Statement

1 WEEK 1 2 1

3 SIGNING OF LOI

AND REMIT

FEES

1 WEEK 2 3 2

4 SITE

SELECTION

AND APPROVAL

3 WEEK 3 6 3

5 AGREEMENT

SIGNING AND

REMIT

TRAINING FEES

.5 WEEK 3 3.5 3

6 RECRUITMENT

OF STAFF

3 WEEK 3 6 3

7 STORE

CONSTRUCTION

8 WEEK 6 14 3



7

AS PER CW

8 TRAINING AND

CERTIFICATION

8 WEEK 6 14 6

9 LAUNCH 2 WEEK 14 16 8



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PHASE – 3

NETWORK DIAGRAM

Initial Meetings &

Discussions

Submission of

Financial Statemen

SITE SELECTION AND

APPROVAL

SITE SELECTION AND

APPROVAL

AGREEMENT SIGNING

AND REMIT TRAINING

FEES

TRAINING AND

CERTIFICATION LAUNCH

RECRUITMENT OF

STAFF

STORE

CONSTRUCTION



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WBS DESCRIPTION :

MEETING WITH REGIONAL MANAGER

A s the first step towards the goal, Franchisee Cartridge World asked us to fill a candidate

information form*, and there after a meeting was arranged on 17/7/2011 with head of

network development of Cartridge World to discuss about the further process and know-how

about the services and product in detail.

SUBMISSION OF FINANCIAL DATA :

Various aspects of business was discussed in the meeting, to move forward submission of

statement of financial data like last three years income tax return data, who will be heading

the business i,e name qualification and experience of the management team. They require this

os as to confirm weather applicant would e able to manage business or not.

SIGNING OF LOI AND REMIT FEES

Applicant who is selected is called in the head office and various letter of intent document

needs to be filled. Together with the franchisee fees of 3 lakhs refundable(see exhibit ) needs

to be submitted.

SITE SELECTION AND APPROVAL

Next is selection of site i.e location of store, this is one of the major requirement.Every

Cartridge World store is a retail space attached to a micro -manufacturing unit. A ground

floor – road facing visible retail space is ideal. It requires 27 to 40 sq. mtr. of retail space is

required.

FEW POINTS TO BE CONSIDER WHILE SELECTION OF STORE :

Population of target customer : Hospitals, Banks and cyber cafes

Land cost : low rented space

Competitors : there is major competition from unorganised sector.

Taking all into the account we have selected a site which is at the bank street in jodhpur.



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The size of the shop is 20*20 feet which is equal approx 37 square meter. The rent of this

shop is rs. 10,000. It has a big location advantage has 3 banks, 4 hospital and few hotels are

within the radius 1 km which are the major clients of CW. This site was sent for approval and

after a week it was inspected by the CW official and it was approved after 2 days.

AGREEMENT SIGNING AND REMIT TRAINING FEES

After the approval of site, all final agreement need to be signed and payment of training fee

of 2 lakhs need to payed.

RECRUITMENT OF STAFF

Initial requirement of staff are

1 manager

2 service boys(one who will refurbhished the cartridges0

1 delivery boys(to delivery person)

2 marketing guys

STORE CONSTRUCTION AS PER CW

The store selected is then decorated and designed according to the norms of the company

TRAINING AND CERTIFICATION

While the store is constructed staffs are given two months training and ooen moth training for

manager is given by the company. After the successful completion of traning staffs are given

certification.



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Franchise Support

A Cartridge World franchisee can look forward to take advantage of:

Brand Name- A well-established international brand name with business systems that have

been proven internationally and nationally

Business Orientation and Technical Training Programs

- A 2 week Technical Training program conducted at our state -of-the-art

Learning

Centre in Mumbai for 2 Franchise Owner + 4 Technical Staff

A one week Business Orientation training program conducted at our state -of-the-art

Learning Centre in Mumbai for 2 managerial level staff (including the Franchise

Owner)

On going Technical Support

- Technical know-how and ongoing access to new developments in printing andcartridge technology as a continuous process.

- 24x7 access to know-how and troubleshooting (Secure Extranet)

- Additionally, on the job training sessions are held in various stores for

refresher/advanced training. We have operational staff on hand at Head Office

in Mumbai and at our regional offices in India to provide ongoing support

Store Development assistance

- Store & Ambience development manual will be released and assistance

provided in the development and store set -up by our Regional and Head

office teams

- Point of Sales systems addressing all requirements of data capture and report

generation, include key CRM elements.

Manuals



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- Franchisee will be provided with following Manuals which will help in

starting and running the Cartridge World business as per the Standard

Operating Procedures

- Store Development and Ambience Manual

- Store Set-up Manual

- Retail Store Operations Manual

- Sales Manual

- Brand Manual

- Local Store Marketing Manual

- Technical Manual covering Laser & Inkjet cartridges and equipment handling

Procedures

Buying Power

Access to Global vendor relationships for effective buying of raw materials.

Finance assistance

- Assistance in procuring finance from SBI. Our project has been

evaluated and approved for financing by SBI **

Marketing Support

- We provide requisite marketing support to propagate the various services

ofCartridge World stores through national and regional PR programs and

activities

- Marketing training is continual and advice may be sought by franchisees as and

when required



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COSTING :

Fixed cost :

PARTICULARS INVESTMENT in

lakhs

DETAILS

Franchise Fee 3 FOR 3 YEARS

Training Fee 2 MANAGMENT-2

TECHNICAL – 2 TO 4 PERSON

MOTHS

Marketing & Operations

Kit

0.52

Marketing Collaterals &

Uniforms

0.30

Equipment, Machinery,

tools,

1.5 PART OF FRANCHISEE START-UP

KIT

Store Interior &

Development

3.3 ESTIMATE MADE BY EXPERIENCE

PEOPLE

Local Purchases &

Requirements like

Computers, Test printers

0.90

Miscellaneous 0.10

Total 11.72

Other then the above mention cost following two more revenue sharing conditions

are laid by the franchisee :

Royalty is charged at 6% of recharging sales and 6% of profit on sale of Allied products

everymonth

Contribution to National Ad Fund at 3% of recharging sales and 3% of profit on sale of Allied

products(other then cartridge’s) every month



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Operational cost (monthly):

Particulars Investment

Rent 10000

Salaries 15000(manager)

5000(service boys)

3000(delivery boy)

8000(marketing)

Total=15000+10000+3000+16000=44000

Electricity+

Phone bill

4000

Advertisement 10000

Misc. 5000

Total 73000

Profit margin of various products :

PRODUCT MARGIN(PERCENT)/unit RANGE(IN RS)

OEM’S PRINTER 10 600-3000

OEM’S CARTRIDGE 10 80-600

REFURBHISHING 70-80% 300-400

PRINTER SERVICE 100(MINIMUM)

SUPER SAVER 70% 400(MINIMUM)



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BREAK – EVEN ANALYSIS

Its has been found that 90% of the total sales of CW comes from super saver. This is its major

product so carryinh out break even analysis from only

Only from super saver(90% of total sale)

Total operating cost = 77000

Profit = 400/unit

Break-even(units) = 77000/400 = 193 units

FROM ALL THE PRODUCT

Since this would be a new franchisee, its is not expected to have high sales in its first few

months. So after asking the experts of the same industries it would take around six mothns for

estabhlished and sales to pick there we have calculated the pay-back period by dividing

period in two parts – sales of first six month and sales after six mont

for first six months

Product no. of unit(expected) avg. price avg. cost profit/unit net profit

OEM’S PRINTER 10 10000 9000 1000 10000

OEM’S

CARTRIDGE

20 1000

900

100

2000

REFURBHISHING 10 450 100 350 3500

PRINTER

SERVICE

30 150

50

100

3000

SUPER SAVER 150 1200 800 400 60000

total 78500

operating cost 87000

net profit -9500

NET PROFIT FOR FIRST SIX MONTH -57000



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AFTER SIX MONTHS

product no. of unit(expected) avg. price avg. cost profit/unit net profit

OEM’S PRINTER 20 10000 9000 1000 20000

OEM’S

CARTRIDGE

30 1000

900

100

3000

REFURBHISHING 20 450 100 350 7000

PRINTER

SERVICE

30 150

50

100

3000

SUPER SAVER 300 1200 800 400 120000

toal 153000

operating cost 77000

net profit 76000

TOTAL INVESTMENT = 11.72 lakhs

PAY PACK PERIOD(MONTHS) =6 + (11.72-(-57000))/76000

= 22.17 = 23 MONTHS APPROX

a project report on setting up a francise of cartridge world

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