V-KOOL INTERNATIONAL Franchisor Case Study: V- KOOL International Date: 21 Oct 2010 Presented by: Winston Tang.

V-KOOL INTERNATIONAL

Franchisor Case Study: V-KOOL International

Date: 21 Oct 2010Presented by: Winston Tang

Franchising: A Right Decision?

Scope• The V-KOOL Journey

– Introduction to key milestones, global network and strategic thrusts

• Why Franchising?– The window film industry structure and competition

– Benefits of franchising

– Identifying value propositions, establishing the franchise system and gearing up for market expansion

• Embracing Challenges– Issues pertaining to the domestic and international markets,

franchisor and franchisees

• Success Factors– Building blocks to increase franchise competitiveness

“Asian Dragons Rising”(V-KOOL)

The Journey Begins…

V-KOOL Milestones• 1994: Secured distribution rights of high performance

window films for Singapore, Malaysia and Brunei. Product was marketed under the brand name “V-KOOL”.

• 1996: Distribution rights extended to entire South-East Asia and subsequently Middle East and North-East Asia regions.

• 1997: Global exclusive distribution rights obtained.

• 1998: Birth of the V-KOOL Franchise.

• 2001: Set up of Middle-East (Dubai) regional HQ

• 2002: Set up of North-Asia (Shanghai) regional HQ.

Global Network

V-KOOL HEADQUARTERS, Singapore

V-KOOL REGIONAL HEADQUARTERS

DubaiShanghai Beijing

Master Franchise Countries

Country Franchisees

Unit Franchise Agreement

Unit Franchisees

TokyoShenzhen

Global Network

North & South AmericaNorth & South AmericaDominican RepublicDominican RepublicGuatemalaGuatemalaMexicoMexicoUSAUSA

EuropeEuropeGermanyGermanyGreeceGreeceUnited KingdomUnited KingdomThe NetherlandsThe Netherlands

Middle East & AfricaMiddle East & AfricaBahrainBahrainEgyptEgyptKuwaitKuwaitOmanOmanQatarQatarSaudi ArabiaSaudi ArabiaUAEUAE

North & West AsiaNorth & West AsiaChinaChinaJapanJapanHong KongHong KongIndiaIndiaTaiwanTaiwan

Southeast AsiaSoutheast AsiaIndonesiaIndonesiaMalaysiaMalaysiaThe PhilippinesThe PhilippinesSingaporeSingaporeThailandThailandVietnamVietnam

OceaniaOceaniaAustraliaAustraliaGuam & SaipanGuam & Saipan

Global Network

Strategic ThrustsMission: To provide window film solutions based on best-in-class products and skillful delivery systems and to reward and value-add to franchise partners.

PartnerCare: We strive to remain as the preferred OEM/PDI partners through providing unparallel services and contributing to their bottom-line.

CustomerCare: As a global, world class brand, we deliver outstanding customer and brand experience consistently throughout the world.

EnviroCare: We care for the environment through our untiring efforts in educating our stakeholders to be responsible social citizens.

Why Franchising?

The Window Film Industry

• Distribution Mode– Low entry barrier for dealers (e.g credit terms, set-up

requirements, A&P activities, etc)

– Extensive channels / network

• Manufacturers going direct– Cost benefits

– Multiple brands

– Private labels

• Fragmented Playing Field– No dominant leader

– Stiff competition - internally and externally (I.e. price war)

– Lack of product differentiation and brand association

Benefits of Franchising• Reduce expansion risks

– (e.g. cultural context, legal implications, financial capital, overheads, manpower, accumulation of depreciating assets, etc)

• Additional sources of revenue– (e.g. franchise fee, royalties, etc)

• Leveraging on franchisees’ network / contacts and resources

– Understanding of market and competitor analysis

– Adopting new market strategies and ideas

• Better Quality control– Global brand positioning and credibility

– Service standards

Value Proposition

Distribution Mode– Market cannibalization

– Price war

– Weak brand / product reputation

– Low loyalty and commitment from dealers

– Lack of consistency in installation and service quality

– Scattered network

Franchising– Learning curve - proven

expertise

– Territorial exclusivity

– Strong Brand / Product reputation

– Extensive support from Franchisor

– Reliable systems and processes to ensure consistency

– Principal more focused

V-KOOL Franchise Model

V-KOOLInternational

Pte Ltd

Master Franchisee

Area/Unit Franchisee(Dealer, New Entrant)

Unit Franchisee(Dealer, New Entrant)

Area Franchisee(Dealer, New Entrant)

Direct Franchise Agreement

Master Franchise Agreement

Area Franchise Agreement

Company-ownedFranchisee Unit Franchise Agreement

Leads GenerationStep-by-Step guide to managing prospects

Receive Enquiries and Applications

Acknowledge Applications

Market Franchise

Shortlist Suitable Candidates for 1st

Meeting

Process Applications

Review Business Plan

Conduct Tour & Meeting

Conduct 2nd Meeting

V-KOOL Franchise Model

Leads Generation (cont…)Step-by-Step guide to managing prospects

Conduct Initial

Training

COMMENCE START - UP ACTIVITIES

Offer of FranchiseExecute the Franchise Agreement

Commence Operations

Renovate Premises

Organise Launch

Programme

V-KOOL Franchise Model

V-KOOL Franchise Model

FRANCHISE AGREEMENT

FRANCHISORFRANCHISOR

MASTER MASTER FRANCHISEEFRANCHISEE

Operations FormatProductProcesses

Marks & ImageManagement Support

Training

Franchise Fees

RoyaltyStart-up

ConsultancyProduct Purchase

Full-fledge Outlets

Corporate Identity Manual & Brand BookStandardizing corporate image and branding

Service Standards & Behavior

Fit-Out Guide Book & Retail Walkthrough VideoUniformity full-fledged retail outlet design

Service Standards & Behavior

V-KOOL® Full-Fledged OutletReform retail interface from multi-brand to exclusively V-KOOL retail point

V-KOOL China

More than 100 exclusive V-KOOL retail outlets proliferate in China

Physical Premises

V-KOOL® Full-Fledged OutletReform retail interface from multi-brand to exclusively V-KOOL retail point

Physical Premises

E-AcademyOnline learning platform for V-KOOL® franchisees / distributors & internal staff etc

Training & Enrichment Modules

IES (International E-Warranty System)Online warranty system that enables sales and performance analysis

Online Tracking Systems

Demonstration EquipmentSeeing is believing; demonstrating the technology through a total experience of sight and feel

Reflecto-Max Beam Splitter Thermal Trap

iMeasure Infinity (Temperature) Impact Test

Tools and Equipment

Simulation Test ResearchPerformance comparison among various film brands on cars of Honda, Chevrolet and Toyota, which is communicated at retail and car showroom level

Test Reports

V-KOOL ULTRAMASTER™Extension into premium auto-care products

Product Innovation

V-KOOL® TattooFirst-ever printing on window films that will revolutionize driving experience - Individualization. Expressive. Charismatic.

Product Innovation

V-KOOL® RoundTable 2010 - One WorldStrategic programme launches. Experience sharing. New marketing collateral s & systems.

Events

V-KOOL® RoundTable 2010 - One WorldStrategic programme launches. Experience sharing. New marketing collateral s & systems.

Events

V-KOOL® RoundTable 2010 - One WorldStrategic programme launches. Experience sharing. New marketing collateral s & systems.

Events

PDI Penetration through OEMGlobus™A special dedicated programme to assist franchisees to penetrate into PDI market

BMW China

Channel Strategies

V-KOOL® Boutique OutletBringing V-KOOL® retail experience into shopping mall

Channel Strategies

V-KOOL® in Petrol KisokBringing V-KOOL® retail experience into petrol kisok in UAE

Channel Strategies

Success?

Challenges (Franchisor)• Leads Generation for New Franchise Prospects

– Good prospects: Hard to come by!

– Assessing capabilities and potential of prospects

• Franchise System and Requirements– “Double-edged sword”

– “80:20 Rule”

• Managing Franchisees– Understanding cultural and market nuances

– Proximity issues

– Taking lead - Franchisor or Franchisee?

• Staying Relevant– Innovation - developing new products, monitoring and

responding to market trends

Challenges (Franchisee)• High Level of Investment

– High start-up cost

– The need to justify ROI

– Learning curve

• Brand Building - Who is responsible?– Role of the franchisor vs role of the franchisee

– Support from franchisor

• Fulfillment of Contractual Obligations – Purchases: In line with economic/industry growth?

– Corporate identity

– Account servicing from franchisor (I.e. training, ground visits, strategic directions, etc)

Success Factors

SUCCESSFULFRANCHISE

Strong Brand

Strong Partnership

Successful Business Format

Experienced Franchisor

Innovative Product

Extensive Network

Sufficient Resources

Localization

Good Franchisee

Q & A?

THANK YOUTHANK YOU