Business Today Net Special

Organised Play

As demand for play-schools for sub-kindergarten kids increases, the industry takes its first steps towards being organised. Already, franchise-driven play-schools have made appearance in metros like Mumbai and Delhi. Business Today's Shailesh Dobhal reports.

Playschools: Pooling The Act

The rigours it went through before deciding to open a new branch, its 19th in the country, in New Delhi's up-market locality---Vasant Kunj---could put any big brand name marketer to shame. Not only was the neighbourhood, oops market catchment, demographics in age groups, and income levels studied, but a thorough need-gap analysis was also done to understand the existing competition.

For, it was a matter of brand penetration for Mumbai-based Kangaroo Kids, and a whopping one-time investment of Rs 30 lakh (excluding the cost of property) for its Delhi franchisee. The trend is catching on like fire. Shemrock, another play school brand, has 23 franchised play-schools in Delhi alone, and an additional nine in five more cities. Kangaroo Kids, itself covers six cities, and is moving to another four in two months' time. It is the same story of expansion through franchising with Euro Kids in Mumbai, and Little Kingdom in Delhi. The list goes on.

What make play-schools the hot spot for franchising are the humongous consumer base and its concomitant business potential. Nearly a sixth of the population in top 25 cities across the country is in pre-school range---below six years of age. A back-of-the envelope calculation shows a market potential of more than Rs 200-crore, assuming that just one in every 10 kid from a middle-class family, goes to one of these organised/ franchised brand school!

Is it little wonder that the break-even point for play school franchisees is early compared to perhaps any other franchised business. ''Our franchisee needs to get seven new admissions every month to break even, with a residual strength of just 60," adds Dr. D.R. Arora, Chairman, Shemrock. A catchment with 40,000-50,000 population is more than enough to feed this churn. Kangaroo Kids' Delhi-franchisee has already broken even in less then two years. For the brand owner, the take is from royalties, which is 20 per cent (and higher) of gross fees.

On their part, the brand owners are making sure that they are putting the right business-inputs---from a structured hand-me-down curriculum, feedback loops, teacher training modules, corporate-like brochures, win over doting parents, to exact specifications on the school layout, interiors and artworks---for their brand to grow. "We go down to micro-level curriculum, and do not allow any deviation from it," adds Lina Ashar, Director, Kangaroo Kids.

These play-school chains also sharply differentiate themselves on the basis of social segments, a la any other consumer business. So, Kangaroo Kids is for the elite, with branches only in upmarket localities like Bandra/Khar in Mumbai and Vasant Kunj/Greater Kailash in New Delhi. The classrooms are air-conditioned with expensive teaching aids, half of which are imported from Australia. The monthly tuition fee is Rs 2,000 and above. And Shemrock is the mass-market brand, attracting franchisees from the suburbs, with a promise of a proven business-model and an investment of just Rs 10 lakh (excluding the cost of property).

Welcome to the world of play-school franchising.

Issue Contents Write to us Subscription Syndication