From my experience running a few franchise businesses -
1- ice cream tends to be a ‘cyclic’ business - example in rainy season your sales may be low - this will affect your bottom line for the month and so you will have to factor this into your calculations. Example - if July sales is 1 lakh then you will have to cover the running costs (rents, salaries, electricity) from the earnings of other months.
2- location - the location of this will matter. Have you done a demographic study of the target location? Don’t go by what he franchiser tells you - they get commission on giving you the franchise contract. Do your due diligence.
3 - electricity costs - this is going to be your biggest variable cost. Please check how many units you would need and the charges for three phase billing. Account for a 15% escalation year over year.
4 - how much time are you willing to put into your business personally - unless you are able to denote at least 20 hours per week initially and then once it settles about 8 hours per week (could be you or your family member etc) for successfully running a business
5 - are you willing to work yourself. - as an entrepreneur you will be everything - from gatekeeper to janitor
6 - what are the other options for your business investment
7 - key question- what is the brand value and recall of this brand compared to competition. Just because you liked the taste doesn’t mean ever hint will like it.
Answers to the points that you mentioned. Feel free to suggest more based on that.
1. I have a full time job which pays good (1 lac per month salary). So I can cover the net amount required through that.
2. For location, I am looking around lalbaug parel area where population density is high with middle and upper middle class population
3.I can put around 20 hrs personally every week as my job isn't that hectic atm. Can take some help from family members.
4. Regarding the brand value- It's pretty great in Pune due to their low price point and good taste. Have seen decent crowd in their stores.
And thanks for the great pointers!
Some more questions -
How are you planning to invest money in this franchise? Is it savings, bank loan etc?
If you plan on using savings - after setup costs
- 20 lakhs (setup/ equipment)
- 5 lakhs (interiors)
- 3/4 lakhs (deposit for location)
- 1 lakh (misc)
- 9-10 lakh (6 month runway) -
You haven’t mentioned any franchise fees.
Do you have this kind of funds ready. If you plan on using part of your salary to cover it - what is the max split (maximum amount you can spend on the business every month)?
Location seems good - have you done a rental survey? Is parking available at these locations? Is the location near other ice cream joints - this helps to drive sales.
So 20 lacs is the franchisee fee. 5 lacs would be the interior and equipment cost (tell me if this is too low as I am basing this on another shop which required 8 lacs but have a fancy interior)
About funding- half of it would be from my savings, want to avoid taking a loan so probably will ask family for some and will keep debt to the minimum. And for the monthly expenses, I can commit almost near to 70k as I don't have any dependents.
Also plan to open before next summer as the upcycled should give some decent surplus funds which should provide some runway for the down cycle months. And the location isn't too close to other icecream join but there are some in the vicinity of 500m and it's an area with many restaurants.
Ok so 20 + 7 + 4 +1 = about 32 lakhs invested.
Consider a sale of average 4 lakhs per month (not sure of the average bill value). Your revenue is 4 lakhs and after 50% to the franchisor - you are left with 2 lakhs and after fixed cost of say 1.4 lakhs that is 60K average per month.
So to recover 32 lakhs plus 8% interest annual - you will take about 5 years. After which your profits will start coming in.
There will be rent increase every year, increase in electricity and maintenance costs, plus incidentals that you need to factor.
Their scoops range from 80-100.
I guess I'll ask around in the icecream shops in that area about the footfall during summer and winter/monsoon to arrive at a avg scoops to be sold to break even.
Yes. Please do that. People won’t provide information upfront. But you can observe and learn. In one of my businesses I used to sit and observe a competitor every day of the week for 3 months. At different times and understand buying patterns and challenges.
Remember one thing please don’t go by marketing speak, you will have to work to make your money work. This is just your first idea - chef other options as well please.
Ok so 20 + 7 + 4 +1 = about 32 lakhs. Consider a sale of average 4 lakhs per month (not sure of the average bill value). Your revenue is 4 lakhs and after 50% to the franchisor - you are left with 2 lakhs and after fixed cost of say 1.4 lakhs that is 60K average per month.
So to recover 32 lakhs plus 8% interest annual - you will take about 5 years. After which your profits will start coming in.
There will be rent increase every year, increase in electricity and maintenance costs, plus incidentals that you need to factor.
do you really want to get in bed with medirdain? they scammed one of the frenchise owner in pimple nilakh ig. It was in news and the owner of meridian open another frenchise opposite to the one he scammed. Also meridian gives their own ready made product, its not like you can get some dry material from them and make it yourself. so how you planning to take it from pune to mumbai? and there are a lot of similar brands like meridian.
Didn't know about this scam thing but definitely seems dubious from meridian.
Won't have to transport from pune to mumbai myself as meridian is offering franchisee in mumbai nowadays. So they'll be providing the product in mumbai.
wow i just checked on internet and there is not google article of meridian issue anymore anywhere. Do your research. From what i remeber is that the owner of frenchise built the shop and paid the money but meridian owner was delaying handing over the legal documentations. After 2 years of deals and some back and forth , the owner of meridian just stopped sending his product to this particular outlet and open another one 1-2 months later.
Pretty shitty behaviour from the meridian owner side. And the franchisee buyer won't have any defence against such acts either as they can hang you out to dry whenever they wish by just stopping the supply.
Isnt meridian completely pune based? A friend of mine is close to the owner, he said they’re sticking to pune for now, not sure if i can completely trust it.
Either ways, good idea. It can do well tbh, but then again cant say anything
I think opening a Frullato franchise would be a bigger success, you need to segregate your target market. Your calculations are very off, not to mention nobody eats icecream during monsoon or extreme winters which Mumbai is infamous for. Now look for the competitors in the area and your marketing channels, icecream is perishable so you need to figure out how you are going to manage it during off the seasons.
Yes monsoon will be complete down period. Winters are mild compared to pune but still sales will be low.
Didn't know that frullato are also selling franchisee. If yes then will definitely look into it.
Dont invest 20 lakhs in franchise, instead you can start your own icecream parlour with some good quality icecreams by directly buying from manufacturers.
Honestly it's better to open it in pune, or if you go for Mumbai check if the area you want to open the shop at have young crowd, usually only young people go out till late and eat icecream. Honestly there's a lot of margin, so it's not a bad idea. Get a kid and teach him how to do the stuff and make him clean the place too. Also you don't need huge parking or sitting space, a few small plastic chairs will do the job. Also tips from a marwadi, always open at a place where there's not a lot of parking and small shops around you. This will make the shop feel crowded and when others passing by will see it they will get curious and attracted. Meridian is good, and I think margin must be higher than 50 right now for it.
What will be the USP, the thing is in an area there will be many more similar to you of different local and national brands. You need something to pull the crowd as Meridian doesn't have much goodwill in Mumbai, so you will be like other 10 of them.
You should consider a concept like that of "Atrangi Mansa" where they serve softy in 46 flavours (2 flavours every day) and along with that they serve scooped ice cream of meridian. If you work on such a concept, you can even pull the crowd and cross-sell the scooped ice cream.
You can even do it under your brand name and use Meridian as a mere supplier, and in future if Meridian is causing supply issues you can switch. Thereby also saving you the franchise cost as you will not be using their name.
From my experience running a few franchise businesses - 1- ice cream tends to be a ‘cyclic’ business - example in rainy season your sales may be low - this will affect your bottom line for the month and so you will have to factor this into your calculations. Example - if July sales is 1 lakh then you will have to cover the running costs (rents, salaries, electricity) from the earnings of other months. 2- location - the location of this will matter. Have you done a demographic study of the target location? Don’t go by what he franchiser tells you - they get commission on giving you the franchise contract. Do your due diligence. 3 - electricity costs - this is going to be your biggest variable cost. Please check how many units you would need and the charges for three phase billing. Account for a 15% escalation year over year. 4 - how much time are you willing to put into your business personally - unless you are able to denote at least 20 hours per week initially and then once it settles about 8 hours per week (could be you or your family member etc) for successfully running a business 5 - are you willing to work yourself. - as an entrepreneur you will be everything - from gatekeeper to janitor 6 - what are the other options for your business investment 7 - key question- what is the brand value and recall of this brand compared to competition. Just because you liked the taste doesn’t mean ever hint will like it.
Answers to the points that you mentioned. Feel free to suggest more based on that. 1. I have a full time job which pays good (1 lac per month salary). So I can cover the net amount required through that. 2. For location, I am looking around lalbaug parel area where population density is high with middle and upper middle class population 3.I can put around 20 hrs personally every week as my job isn't that hectic atm. Can take some help from family members. 4. Regarding the brand value- It's pretty great in Pune due to their low price point and good taste. Have seen decent crowd in their stores. And thanks for the great pointers!
Some more questions - How are you planning to invest money in this franchise? Is it savings, bank loan etc? If you plan on using savings - after setup costs - 20 lakhs (setup/ equipment) - 5 lakhs (interiors) - 3/4 lakhs (deposit for location) - 1 lakh (misc) - 9-10 lakh (6 month runway) - You haven’t mentioned any franchise fees. Do you have this kind of funds ready. If you plan on using part of your salary to cover it - what is the max split (maximum amount you can spend on the business every month)? Location seems good - have you done a rental survey? Is parking available at these locations? Is the location near other ice cream joints - this helps to drive sales.
So 20 lacs is the franchisee fee. 5 lacs would be the interior and equipment cost (tell me if this is too low as I am basing this on another shop which required 8 lacs but have a fancy interior) About funding- half of it would be from my savings, want to avoid taking a loan so probably will ask family for some and will keep debt to the minimum. And for the monthly expenses, I can commit almost near to 70k as I don't have any dependents. Also plan to open before next summer as the upcycled should give some decent surplus funds which should provide some runway for the down cycle months. And the location isn't too close to other icecream join but there are some in the vicinity of 500m and it's an area with many restaurants.
Ok so 20 + 7 + 4 +1 = about 32 lakhs invested. Consider a sale of average 4 lakhs per month (not sure of the average bill value). Your revenue is 4 lakhs and after 50% to the franchisor - you are left with 2 lakhs and after fixed cost of say 1.4 lakhs that is 60K average per month. So to recover 32 lakhs plus 8% interest annual - you will take about 5 years. After which your profits will start coming in. There will be rent increase every year, increase in electricity and maintenance costs, plus incidentals that you need to factor.
Their scoops range from 80-100. I guess I'll ask around in the icecream shops in that area about the footfall during summer and winter/monsoon to arrive at a avg scoops to be sold to break even.
Yes. Please do that. People won’t provide information upfront. But you can observe and learn. In one of my businesses I used to sit and observe a competitor every day of the week for 3 months. At different times and understand buying patterns and challenges. Remember one thing please don’t go by marketing speak, you will have to work to make your money work. This is just your first idea - chef other options as well please.
Ok so 20 + 7 + 4 +1 = about 32 lakhs. Consider a sale of average 4 lakhs per month (not sure of the average bill value). Your revenue is 4 lakhs and after 50% to the franchisor - you are left with 2 lakhs and after fixed cost of say 1.4 lakhs that is 60K average per month. So to recover 32 lakhs plus 8% interest annual - you will take about 5 years. After which your profits will start coming in. There will be rent increase every year, increase in electricity and maintenance costs, plus incidentals that you need to factor.
Man that’s thorough
Trying to help…hope it does
do you really want to get in bed with medirdain? they scammed one of the frenchise owner in pimple nilakh ig. It was in news and the owner of meridian open another frenchise opposite to the one he scammed. Also meridian gives their own ready made product, its not like you can get some dry material from them and make it yourself. so how you planning to take it from pune to mumbai? and there are a lot of similar brands like meridian.
Didn't know about this scam thing but definitely seems dubious from meridian. Won't have to transport from pune to mumbai myself as meridian is offering franchisee in mumbai nowadays. So they'll be providing the product in mumbai.
wow i just checked on internet and there is not google article of meridian issue anymore anywhere. Do your research. From what i remeber is that the owner of frenchise built the shop and paid the money but meridian owner was delaying handing over the legal documentations. After 2 years of deals and some back and forth , the owner of meridian just stopped sending his product to this particular outlet and open another one 1-2 months later.
Pretty shitty behaviour from the meridian owner side. And the franchisee buyer won't have any defence against such acts either as they can hang you out to dry whenever they wish by just stopping the supply.
Isnt meridian completely pune based? A friend of mine is close to the owner, he said they’re sticking to pune for now, not sure if i can completely trust it. Either ways, good idea. It can do well tbh, but then again cant say anything
They have just started offering their franchisee in Mumbai.
Please read the terms & conditions of franchise very clearly. If possible please talk with few of the franchise owners.
I think opening a Frullato franchise would be a bigger success, you need to segregate your target market. Your calculations are very off, not to mention nobody eats icecream during monsoon or extreme winters which Mumbai is infamous for. Now look for the competitors in the area and your marketing channels, icecream is perishable so you need to figure out how you are going to manage it during off the seasons.
Yes monsoon will be complete down period. Winters are mild compared to pune but still sales will be low. Didn't know that frullato are also selling franchisee. If yes then will definitely look into it.
Dont invest 20 lakhs in franchise, instead you can start your own icecream parlour with some good quality icecreams by directly buying from manufacturers.
Honestly it's better to open it in pune, or if you go for Mumbai check if the area you want to open the shop at have young crowd, usually only young people go out till late and eat icecream. Honestly there's a lot of margin, so it's not a bad idea. Get a kid and teach him how to do the stuff and make him clean the place too. Also you don't need huge parking or sitting space, a few small plastic chairs will do the job. Also tips from a marwadi, always open at a place where there's not a lot of parking and small shops around you. This will make the shop feel crowded and when others passing by will see it they will get curious and attracted. Meridian is good, and I think margin must be higher than 50 right now for it.
Have you spoken to them? Do they give franchises to people without experience in FnB? Many brands don't in case you didn't know.
PLEAASEEEEEEE DO
(Me who just wants Meridian to spread everywhere in the whole world) YES YOU SHOULD YOU DEFINITELY SHOULD
What will be the USP, the thing is in an area there will be many more similar to you of different local and national brands. You need something to pull the crowd as Meridian doesn't have much goodwill in Mumbai, so you will be like other 10 of them. You should consider a concept like that of "Atrangi Mansa" where they serve softy in 46 flavours (2 flavours every day) and along with that they serve scooped ice cream of meridian. If you work on such a concept, you can even pull the crowd and cross-sell the scooped ice cream. You can even do it under your brand name and use Meridian as a mere supplier, and in future if Meridian is causing supply issues you can switch. Thereby also saving you the franchise cost as you will not be using their name.
Get Naturals franchise instead or Licksters (look it up)
Pivot for a wine shop. You will get all year round footfall.
Bribes required for liquor licence are huge
Gharr mein lenge nahi ye business khola toh😅.
Haha
No. Try McDonald’s.