About the Business
Veera Collections:
We are presently engaged in trading, serving a loyal client base of approximately 200 retailers in the men’s wear segment for the past 4 years.
In pursuit of expansion, we have devised a plan to launch a retail chain under the brand name Veera Collections. Within this brand, we are extending an invitation to potential franchisees to join us. The franchise operation will be based on a profit-sharing model.
As the franchisor, we will provide comprehensive support to franchisees, including shop setup, provisioning of necessary inventory, marketing assistance, and day-to-day store operations management.
Our vision is to collaborate with reputable domestic brands that share our goal of serving tier 2, tier 3 cities, and smaller towns. We are committed to offering high-quality products at reasonable prices, aligning with market demands and leveraging our extensive experience in the industry.
Business Model Highlights:
– Exclusive men’s wear collection
– Franchisee fee: ₹30,000
– Yearly renewal fee: ₹30,000
– Space requirement: 400 to 500 sq. feet
– Initial investment: ₹10 to ₹12 lakhs (includes deposit, interior setup, stock, CCTV, computers, software)
– Working capital: ₹40,000 to ₹50,000 per month (covering rent, electricity, staffing, bank interest on invested capital)
– Expected monthly sales: ₹3 lakhs
– Profit margin: 40% to 50%
– Franchisor margin: 2% to 5%
– Break-even sales per month: ₹1 lakh
– ROI (Return on Investment): 12 to 16 months
Achieving break-even is an attainable goal. Consider this scenario: Suppose you sell 50 pants, 50 shirts, and 50 t-shirts each month, totaling ₹1 lakh in monthly sales. The cost of acquiring these items would be approximately ₹55,000 to ₹60,000.
To reach break-even, you need to sell 2 shirts, 2 pants, and 2 t-shirts daily. This is a manageable target that can be achieved consistently.
Additional Notes:
1. Quality always takes precedence over price in the goods you sell.
2. Building a base of repeat customers is essential, especially in smaller cities and towns where there isn’t a substantial floating population.
Further Considerations:
1. Retailers can focus on customer service while we handle the sourcing of high-quality goods.
2. Our computerized system tracks all sales and inventory, providing valuable insights into product demand.
3. Our networked shops allow for efficient stock management and inter-store stock transfers based on demand.
4. Based on our experience, approximately 75% of purchases are typically sold in-store, and our network enables effective management of unsold inventory.
