1. “FRANCHISING: PLAY SCHOOL AND ACTIVITY CENTER”
THEME: CREATING SUSTAINABLE BUSINESS MODELS
NAME: KIRK QUADROS
MMS-1
NAME: ALISHA MODY
MMS-1
ST.FRANCIS INSTITUTE OF MANAGEMENT AND RESEARCH
CONTACT NO: 022-28917089
EMAIL ID: info@sfimar.org

2. ABSTRACT
Franchising has proven to be the most successful expansion model in the history of
business. It has played a significant role in developing large economies and expanding
the operations of diverse businesses and companies across the country. Franchise model
offers the best option to guarantee and set acceptable learning standards and quality in
pre-school education, provided it is done with the right intent, under the right leadership
and vision.
Franchising of pre-schools helps in encouraging entrepreneurship along with some
guidance and also in benefitting society by offering valued education in not only urban
but in also semi-urban and rural areas. This research discusses the franchise setup in India
and also the advantages and disadvantages of it. A detailed study of EuroKids, a leading
pre-school in India shows how it franchises its outlets thus providing opportunities to
people in entrepreneurship and high quality education to children.
INTRODUCTION
The pre-school industry is creating a lot of franchise opportunities and entrepreneurs.
Though at a nascent stage, the pre-school industry in India with a current estimated size
of Rs 7000 crores is expected to top $ 1 billion by 2016, clocking a growth of over 28%
per year. And taking advantage of this huge growth opportunity, most of the players are
out to scale up their operations through the franchise route. There is a huge growth
opportunity in the sector and most players have scaled up their operations through the
franchise route.
As three-year-old Sanika’s parents shifted from Gurgaon to Bangalore, her mother’s
biggest concern was putting the child in a pre-school similar to her last one. Much to her
relief she found exactly the same one. With pre-school franchises growing across the
country, life has become much easier for young parents with transferable jobs. “My
biggest concern was that Sanika should not feel uprooted and alienated,” says Sanika’s

3. mother Nidhi Pandey, a housewife. “Since she was used to the toys, classroom set-up and
general ambience in her previous pre-school there was not much issue settling down
here.”
Playschools, popularly known as pre-schools cater to children between the age of one and
a half and four years, the time when children are too young to start formal education. The
concept of pre-schools is relatively new in India, but the trend is fast growing due to
increasing awareness about the fact that about 40% of a person’s ability to learn is
developed in the first four years of his life. It is an environment which imparts a smooth
transition to a child from informal homely atmosphere to a formal schooling set up and
hence passion and care are two most important ingredients of this segment.
The transition too has been relatively for the operators behind these franchises. In several
cases, these franchises are housewives looking to gain fully utilize their time. Unlike
schools that run from nursery to class 12, which largely are mandated by states to be run
by non-profit trusts, pre-schools can be set up as profit companies. And with increasing
awareness among parents about the benefits of a quality pre-school education, the school
chains and crèches, is reportedly turning profitable within the first year- quite uncommon
in the franchise market.
Lina Ashar, founder of Brainworks Kangaroo Kids Education, elaborates,” This is a
critical period in a child’s life when specific types of learning takes place. The brain is
especially receptive to stimulation in the area of language, for example, during the first
three years. Therefore, children that are exposed to speech (talking, reading, singing, etc)
on a regular basis, exhibit language skills that far exceed those with little verbal
stimulation.” Lina, along with many specialists in the educational field are now pitching
this concept and stressing towards the importance of pre-schools in a child’s life. Even
parents are realizing the significance of building a foundation for their kids, thanks to
tough competition with regards to school admissions.
They no longer go for any neighborhood play school or day care center but are on the
lookout for a pre-school with a reputed name and infrastructural facilities for their child’s
overall development. Several pre-school chains have already opened up in the past few

4. years to cater to the growing needs. But with around 126 million children expected to be
in the age group of 0 to 4 by the end of this year, the demand for pre-schools in the
organized segment may well soar like never before.
NEED OF THE STUDY
Pre-school franchising is a superb low resource model to reach the large number of
under-provided children in smaller cities and rural India. Parents across the country
including those in rural India want to send their children to good pre-schools. We
strongly believe that the franchise model offers the best option to guarantee and set
acceptable learning standards and quality in pre-school education, provided it’s done with
the right intent, under the right leadership and vision. The current crop of local mom-and-
pop schools with internationally accepted pedagogies and standardized early childhood
education norms and practices.
Looking at the Indian demography which has its own complexities and limitations, in our
opinion, quality franchising is the right way forward to quickly expand access and
increase supply of good quality pre-schools across the country.
OBJECTIVES
 To study why franchising is said to be the most successful expansion model.
 To study how franchising is a win-win model for all constituents – franchisor,
franchisee, end consumers, stakeholders, society and the economy?
 To analyze how does the franchise model have an edge in many respects over
self-owned independent start-ups.
 To study how pre-school franchising is a superb low resource model to reach the
large number of under-provided children in smaller cities and rural India?

5. RESEARCH
Research methodology- Qualitative Study
EuroKids International is an early childhood education school, is a name to reckon with
after it made its mark in 2001 as a wholly-owned subsidiary of Egmont. However in 2004
Egmont’s exit from the company led to the management buyout by the top management
team comprising of Uday Mathur, Vikas Phadnis, Ganesh Viswanathan and Prajodh
Rajan. Bouyed by the success of the pre-schooling education in 2008, EduComp
Solutions Ltd also bought a 50 percent stake in EuroKids International Ltd.
From the very start, EuroKids’ main business revolved around children’s books, as it has
operated in the licensed book space. EuroBooks today is the leader in the licensed book
publishing business with licenses from some of the world’s best brands. EuroBooks has
recently launched Agatha Christie, Hardy Boys and the Commando Series as well as the
very popular Archie’s books in India. Currently EuroBooks has 500+ titles in a given
year.
Today, Eurokids has a varied profile of franchisees, but more than 80 percent of its
franchisees are women entrepreneurs. The EuroKids franchisee profile comprises
homemakers, professionals like teachers, doctors, chartered accountants, etc. Many of its
franchisees are also first time entrepreneurs who need a lot of hand holding in the initial
years. EuroKids adopts an owner- operator model and wants each franchisee to be hands
on with the operations of their given centre.
Today, there are many EuroKids franchisees who have moved on from being single unit
franchisees to multiple unit franchisees.

6. DISCUSSION
To underline this research, a survey was conducted to analyze that franchising is an
excellent model to adapt to quickly increase access to and supply of, quality pre-schools
across the country.
Sample size: Five pre-school centers of EuroKids in Mumbai.
Major findings from the survey
 Almost all the franchisees were female.
 All the franchisees were between age group of 30 to 45.
 Security was paid by them in the form of franchising fees. The amount was
almost the same amount. All had paid license fees for franchising.
 It takes an estimate of 3 months to set up a EuroKids franchise along with paper
work, interior and all set ups.
 Major reason received from franchisee for opting EuroKids franchising than self
operated pre- school was a risk proof business with minimum investment and less
hassle of registration and licensing of a new business. They have an edge over
others due to brand recognition and advertisement undertaken by EuroKids.
 All the respondents agreed that break even was achieved within the year of setting
up the franchise.
SWOT ANALYSIS
Strengths
You can be your own boss. At the end of the day you have started a business of your own
and you are not answerable to anyone for the ups and downs of your business even if it is
a shared business.
Since you are starting a business under the shade of the franchiser that had already made
a mark in the industry, small franchises can flourish in that name and make good business
profit out of it. It is the name and recognition that comes with the franchising.

7. Big businesses tend to make a neat profit through the small franchises. They give backup
to the smaller franchises helping them in corporate marketing. Keeping interest in
smaller franchises is nothing but a business tactic used well by the franchisers to have a
good hold over the market.
A common saying in the franchise industry reads, “You’re in the business for yourself,
but not by yourself”, it is the franchiser who takes care of the initial costs. The initial
stages of financial burden will be shouldered by the franchiser helping the franchisee to
get the supplies and equipments needed.
As mentioned above, the franchiser will be interested in the success of the franchise, so it
will turn no stones unturned to help the franchise succeed. The franchiser will lend their
hand in all kinds of training and assistance, like personnel training, site selection and
advertising.
Weakness
Thought the franchise is run as a small business, the franchisee will have to abide by the
rules of the franchiser. For every decision that has to be taken the franchiser’s
consultation and approval is a must. The authoritative control of the franchise owner will
be limited.
When there are too many franchisees, decisions made by the franchiser can be biased.
Getting a firm deal from the franchiser becomes a rarity because of this.
Sometimes apart from the initial fee, the franchise will have to give a part of the revenue
that they make every month.
At times the franchise will be forced to get goods from the franchiser and not necessarily
at the best price. This can affect the business profit of the franchise.

8. Opportunity
The organized pre-school market is a relatively new phenomenon in India. In today’s
environment parents want every edge that can get for their kid’s education even before
they are out of the crib, which is why pre-schooling is emerging as a great business
opportunity
The Indian pre-school market is highly fragmented and unorganized with only 8-10
organized players operating currently. This is because of low entry barriers and low
investment required in the segment.
The pre-school industry in India with a current estimated size of Rs 7000 crores is
expected to top $ 1 billion by 2016, clocking a growth of over 28 percent per year.
Threats
This industry is presently very fragmented with numerous ‘aunty next door ’ pre-schools
spread across the country.
One of the biggest challenges that this industry faces at the moment is awareness amongst
the parents about the importance of pre-school education.
Another challenge faced by almost all players is lack of adequately trained and skill
manpower.
On one hand it’s a great opportunity but at the same time it can also be a drawback since
small sample size, although high on quality and standard parameters, may not be able to
claim representation of the entire segment.
The general sentiment about pre-school and franchise concept also becomes a challenge
because the word franchise sometimes has a negative connotation. People feel that a
franchise is there just to make fast bucks.

9. SURVEY QUESTIONS
1. Gender and Age.
2. Have you paid any security to take up Eurokids preschool franchise.
3. Have you paid any license fee for EuroKids preschool franchise.
4. How long did it take for registration and starting up this franchise.
5. Why did you opt for taking up franchising from EuroKids.
6. Do you agree that franchise business is more risk proof than running a self
operated preschool.
7. How long does it take to reach breakeven point.
8. Are you satisfied with the profit made.
9. Would you recommend this franchise system to anyone considering it.
CONCLUSION
Indian pre-school industry is still at a very nascent stage with minimal corporate
intervention and hence a huge crowd growth opportunity. It may be considered to be the
‘entry level’ that eventually opens up to a broader spectrum in the education domain. The
current market penetration may largely be assumed at approximately 10%-15 %
depending on the demography of the cities/ towns and these statistics too are largely
urban based. Hence there is a huge untapped market across the country.
As many more organized players have entered into this segment over the recent past,
resultantly, almost all metros, today, can be seen flooded with pre-schools that are not
only systematically designed but are tech- friendly in their approach too. As future holds
bright for this market, players are expanding their reach into tier 2, tier 3 or small towns
in the country, giving new thrust to the franchise business.

10. REFERENCES
1. www.franchiseworld.com
2. www.franchisebusiness.in
3. www.franchiseindia.org
4. www.franchise-plus.com
5. www.treehouseplaygroup.com
6. www.eurokidsindia.com
7. htpps://indiaplayschools.com/EuroKids.html