Management Model
The Management Model is the most revolutionary business model among school entrepreneurs who wanted to grow with the business flow keeping the initial risk part protected. To start an education project, especially a preschool project one requires initial capital expenditure as well as operational funding for primitive years to reach the break-even point, thus the Management Model has been developed keeping in mind the risk factors of the business and an entrepreneur’s comfort level to enter into the education business.
In this model, the smaller entrepreneurs (Associate Partners) not only get his/her exposure in the business activities such as Marketing, Financial control, Operational and strategic part of the business but also start earning very quickly as the major operational cost is taken care by the Management Partner (Brand).
Since the Management Partner carries the knowledge and technical know-how of day to day operations of the business so automatically the risk factors of operational overheads go to Management Partner’s part. Moreover, the salary of the School head is borne by the Management Partner, so here also the initial pressure of human resource cost has been released for the smaller entrepreneur (Associate Partner).
In terms of the Capital Expenditure of the Preschool project, Management Partner (Brand) took the major role to invest in setting up the School Unit. Whether we talk about the School academic Infrastructure (Teachings Aids, Learning Equipments, Furniture, Play Equipments, etc.) and Non-Academic Infrastructure (Reception office, Glow sign board, waiting area etc.) it is taken care by the Management Partner (Brand).
What Management Partner brings on Table? (Grovill Education)
– Salaries of head of the school
– Major overhead Expenses
Difference between Management & Franchisee Model
——— PRE OPERATIONS ———–
| POINTS | Wisdomkids SCHOOL | FRANCHISEE BASED PRE-SCHOOL |
|---|---|---|
| Franchisee Fee / Joining Fee | Not Applicable | Yes (Varies Between 1 Lacs to 7 Lacs) Non-refundable |
| Materials / School Infrastructure | Major expenses taken care by BRAND | Needs to Buy from Franchiser at a higher price (Varies Between 2.5 Lacs to 10 Lacs) |
| Other School Setup | Majorly took care by BRAND | Expenses of Franchisee (Local) Partner |
| Training of school Teacher/ staff | Fully Taken care by BRAND at no cost to Associate Partner | Franchiser conduct but at a cost to Franchisee |
——— POST OPERATIONS ———–
| POINTS | Wisdomkids SCHOOL | FRANCHISEE BASED PRE-SCHOOL |
|---|---|---|
| If school property is rented | BRAND bear the Rent/Lease of School building | Franchisee Partner has to bear completely |
| If the property is owned by the Local Partner | BRAND bear the Rent/Lease of School building | Franchiser do not share any expenses for rental value |
| Principal’s Salary | Fully Taken care by BRAND (under Brand’s payroll) | Franchisee Partner has to bear completely |
| School Teacher’s Salary | Associate Partner has to Pay | Franchisee Partner has to bear completely |
| Day to day Admin. expenses | Jointly taken care by BRAND & Associate Partner | Franchisee Partner has to bear completely |
| Student Kit (Books, Bags, Uniform etc.) | Fully Taken care by BRAND at no cost to Associate Partner | Franchisee Partner has to buy from Franchiser at a cost and resale to end user |
| Initial Branding and local campaigning | Taken care by BRAND at no cost to Associate Partner | Franchisee Partner has to bear complete with a minimal / Moral support from the franchiser |
| Day to day awareness campaigning | BRAND shares cost equally with Associate Partners (50:50) | Franchisee Partner has to bear cost fully/ majorly |
——— COLLECTIONS ———–
| POINTS | WISDOMKIDS SCHOOL | FRANCHISEE BASED PRE-SCHOOL |
|---|---|---|
| Royalty | BRAND do not charge any royalty from Associate Partner (We pay revenue share to Associate Partners on gross school’s collection) | Franchisor’s charges between 10-23% on Top Line { i.e. Local Partner remaining with 15-2% of profitability, applicable only after break-even} |
——— TILL THE OPERATION BREAK EVEN ———–
| POINTS | WISDOMKIDS SCHOOL | FRANCHISEE BASED PRE-SCHOOL |
|---|---|---|
| Operational Loss | Management Partner & Associate Partners share jointly | Franchisee Partner has to bear completely |
——— IN CASE of THE SCHOOL DO NOT run EVEN AFTER ALL EFFORTS ———–
| POINTS | Wisdomkids SCHOOL | FRANCHISEE BASED PRE-SCHOOL |
|---|---|---|
| Take Away | Associate Partner do not lose any money on capital expenditure for the project. | Franchiser earns Franchisee Fee, Trading margins of School set-up/ Infra, earn royalties and Local partner Loses his/her Money, Motivation and faith in the business model |