MASTER FRANCHISE

CREATIVE IMAGE
IN
AUSTRALIA

FRANCHISE OPPORTUNITY

Creative Image Craft Painting Studios,
The most successful craft painting franchise company in Southern Africa and Mauritius, who have established 70 franchise paint teaching studios across the continent and teach over 4000 ladies per week in craft art painting.

We are looking to open franchises in Australia.

To this end we are looking for Master franchise operators and individual franchise operators across Australia.
If you are craft orientated and would like to earn big money with your own business backed by training, product and marketing, with a company that has a successful formula then check out our web site and contact us.
Master franchise operators will be trained in South Africa as well as in Australia.

State Master franchise as well as national franchises available.

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Creative Image Craft Painting studios have now become synonymous with the craft industry in South Africa and to date established 60 studios nationally as well as 3 international studios being in Mauritius, Zimbabwe and Namibia. Over 3500 ladies attend classes nationally with a student life span of over 2 years (national average)
It is becoming increasingly clear to us that the trends in South Africa are no different than the rest of the world in our industry. The craft industry has blossomed in the world. A number of factors have accounted for this including retrenchments, early retirements and the increase in the cost of living.

People attend the classes for a great variety of reasons some of which are:

1. to learn to paint

2. to relax and relieve stress

3. to escape the world for a few hours

4. to meet other like minded people

5. to make new friends

6. to be creative and make items for friends and family

People are in situations where they have to look for work to sustain their life style. Generally speaking they are ill equipped to gain work in an ever-increasing high tech world. This has created a need to generate income from self-skills.
At a recent exhibition in Johannesburg over 45,000 people attended a craft show, add to this the number of craft and flea markets that are on every weekend and it is easy to see the interest in craft and hobbies

Creative Image Craft Painting studios have now become synonymous with the craft industry in South Africa and to date established 60 studios nationally, as well as 3 international studios being in Mauritius, Zimbabwe and Namibia. Over 3500 ladies attend classes nationally with a student life span of over 3 years (national average).
It is becoming increasingly clear to us that the trends in South Africa are no different than the rest of the world in our industry.
The craft industry has blossomed in the world. A number of factors have accounted for this including retrenchments, early retirements and the increase in the cost of living.
People attend our classes for a great variety of reasons some of  which are ;

1)      to learn to paint
2)      to relax and relieve stress
3)      to escape the world for a few hours
4)      to meet other like minded people
5)      to make new friends
6)      to be creative and make items for friends and family 

People are in situations where they have to look for work to sustain their life style. Generally speaking they are ill equipped to gain work in an ever-increasing high tech world. This has created a need to generate income from self-skills.
At a recent exhibition in Johannesburg over 45,000 people attended a craft show, add to this the number of craft and flea markets that are on every weekend and it is easy to see the interest in craft and hobbies.
Teaching craft or painting is not a unique endeavour but coordinating it and managing it in a professional way are. Many people try to give lessons and generate income from this but soon fall by the wayside because of a number of reasons:

1. The continuous advertising required to generate clients is costly

2. The self motivation to create new ideas and patterns is too time demanding and leaves no time for teaching

3. The non access to relevant products at realistic prices from one source

4. No set program to work to

5. No credibility in the market place

6. No business skills to operate the business effectively

7. No interaction with other teachers (as they are perceived as a threat)
   8)      Cannot afford to attend major craft shows as an exhibitor
   These are just some of the reasons that the small operator faces when starting a home industry.
   
   Creative Image has turned the home industry into a business with professional advertising, design, marketing and product supply as well as ongoing training and motivation. Add this to our unique designs, products and operating procedure we create a winning formula.

FRANCHISE ROUTE TO EMPOWERMENT

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Teaching craft or painting is not a unique endeavour but co-ordinating it and managing it in a professional way are. Many people try to give lessons and generate income from this but soon fall by the wayside because of a number of reasons,

1. The continuous advertising required to generate clients is costly

2. The self motivation to create new ideas and patterns is too time demanding and leaves no time for teaching

3. The non access to relevant products at realistic prices from one source

4. No set program to work to

5. No credibility in the market place

6. No business skills to operate the business effectively

7. No interaction with other teachers (as they are perceived as a threat)

8. Cannot afford to attend major craft shows as an exhibitor

These are just some of the reasons that the small operator faces when starting a home industry.
Creative Image has turned the home industry into a business with professional advertising, design, marketing and product supply as well as ongoing training and motivation. Add this to our unique designs and operating procedure we create a winning formula.

In South Africa we have a limited number of people to market to as arts and craft as a hobby is predominately a white orientated pastime other than traditional arts and crafts practiced by the rural black population.

Having only 6 million white people in S.A. once this is broken down to the viable target group we finish with less than 1 million. We foresee the viability of opening up to 100 studios in S.A. as a feasible size market.
If one takes Australia and applies the same criteria, with its 24 million people the thought of the number of studios exceeding 200 is not only viable but also a realistic expectation. We would expect each major city to accommodate 20 studios with smaller cities and rural towns having one or two. Having spent the last 15 years perfecting our ideas and testing them in the market place, we have eliminated all the pitfalls that are out there and have gone forward to the success of today.

PROJECTED TURNOVER AND PROFITABILITY
FOR A 5 YEAR PLAN

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This gives us a total over the 5 year period $,7015.000
The opening of a studio cost approx. $3000 or 30% of revenue
The profit on stock is in excess of 50% so total profit including franchise fees over the 5 year period will be in excess of 6.5 million $
This assume that the studios only reach 110 over the 5 year period but in reality it should be 200, it also assumes that the franchise fee increases only marginally, but we have increased our franchise fee by 30% since we started. it also assumes that the studios will only do$10,000 in sales where some of our local studios are doing over $15,000.
Once you get into the 6/7/8 years as we are in South Africa the revenues increase drastically as you put more studios on with existing studios paying royalties and the stock sales multiplying.
If one takes the original cost of the franchise fee and offsets that over the next 10 years ,plus the advertising costs of +/- $200,000 to get established it still gives a profit of in excess of $5 million
 

WHAT DO YOU GET FOR YOUR INVESTMENT IN THE MASTER FRANCHISE

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We are offering the exclusive rights to market and sell the Creative Image concept, Using the Creative Image name and logo, our designs and formats, manuals and marketing programs.
This includes:

1. Training of two of your staff in South Africa for one month to a standard that is acceptable to us to be able train other teachers who will be buying into the franchise.

2. Training in Australia for staff for one month by South African founders of Creative Image.

3. Assistance in selling the first franchise and training of the first operator.

4. Directors of creative image to be in Australia for 6 weeks to launch concept.

5. Design of all marketing needs for the Australia market to help start the master franchise.

6. To assist with all marketing in a personal way via radio/tv and other media to help launch the franchise.

7. To provide stock initially at export prices to start the franchise, there after to assist in obtaining local suppliers of products that are more cost efficient to source locally.

8. Provide paint in bulk for local packaging in due course when supply demands

9. To provide new products on a regular basis

10. Directors to travel to Australia once a year. To do ongoing promotional work.

11. Inclusion on website under Australian heading

12. Stock to the value of $50,000

13. Training manuals and patterns, plus ongoing supply of new patterns

14. Ongoing training for Australian staff

15. Ongoing projects and new ideas
     

COST OF MASTER FRANCHISE

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The cost of the franchise has been worked out according to the viability of the country. We estimate that 150/200 studios can be established in Australia over a 5/7-year period.
This would mean a cost of less than $4000. Per studio. Given that each studio will generate revenues in excess of $100,000 over the 5 year period and more the longer the studio operates (studios in S.A. are now in their 8 year with us) in total the revenues of the 200 studios will exceed 15million.

These figures may seem at first glance to be unrealistic but one only has to take the S.A. operation and do the simple math to see that over the last 6 years we have put on 60 studios.
 
In all revenues from the local operation have exceeded 10million$.

As can be seen in the other information supplied that each studio generates more than $50,000 p/a ( which includes the lesson fees and sales at the studio) which if a operator is with us for 7 years she puts approx. R300,000.00 into the economy multiply this by 110 studios and $34, million is put into the local economy.

Cost of Australian Franchise will be negotiable to the style of the operation and the operator
Master Franchise can be whole owned or owned in partnership with the parent company.

the Master Franchise operators can purchase the whole of Australia or States.
the fee will be tailored to suit the client.
Individual state franchises start at $A100,000
Part financing available to approved clients

ROYALTY PER YEAR AFTER THE FIRST 2 YEARS 25 000 $au
Basic contract 5 years

Creative Image retains 25% non-profit in company for ongoing sale or operating rights
 

THINGS TO BE AWARE OF

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One must also be aware that additional funds will be required to promote the concept and do regular advertising. However there are a number of ways to get free advertising, which we will advise during training. The business should be self generating after the initial startup, but cash flow is vital to be able to maintain a good stock level to be able to service the studios. In South Africa we carry approx. $100,000 of stock on hand to service the studios. With importing from South Africa you will also have to budget for the delivery time for sea freight. The current exchange rates should act in your favor in respect of stock purchases.

Last year we spent in excess of $80,000 on advertising in national magazines and distributed over 550,000 pamphlets nationwide.
It is essential to know that this is a hands on business and will only succeed if it is attacked with gusto and passion. In the early stage it will be enticing to take on anybody with money to be a franchise operator but this will be to the detriment of the business as a whole. Your selection process and the standard of your operators will ultimately set the standard of your credibility in the market place.
You will need a basic infrastructure to operate the business.

Stock control and del.
Stock purchasing (Import control)
Training
Marketing and promotion
Advertising
Finance
Premises approx 50 sq metre for training area and 150 metres for stock
Infrastructure for stock room, packing and dispatch

These tasks can be done as separate functions with staffing or can be handled by one or two people. If you decide each state could have a separate infrastructure.

See web site www.creativeimage.co.za for local franchise disclosure document supplied to prospective buyers of the franchise in South Africa. Alterations would be done to use a similar document for Australian market
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RAY HOGG
CREATIVE IMAGE INTERNATIONAL
South Africa
+27 11 453 3504
rghogg@mweb.co.za
www.creativeimage.co.za
E/fax 27 086 672 1615