Business Proposal Of VB Franchised Outlet Project

In recent years,domestic apparel industry grows faster and faster,making more and more original equipment manufacturer(OEM)take a transformation to be a brand garment sel er.And fast fashion clothing is a very popular niche market for its rapid growth and mass target consumers.VB Company is one of those transferring successfully in the trend.Launching its first store in Guangzhou in 2006,VB now has over 100 stores in China,mostly in Beijing,Shanghai and Guangzhou,and plans to open more than 300 stores before 2020.VB's swift expanding results from its Full-hosting Franchise Mode.Under the Full-hosting Franchise Mode,franchisee,the one who makes the investment,owns the store but have no right to manage it,but the right of supervision.VB manages both its chain stores and franchise stores.In this case,VB's management capacity plays an important role in the project.This dissertation will prove with theories and data that it is feasible to invest on VB's franchise store in CityOn Shopping Mal.As a business plan,this dissertation will start with the subject's significance and background through studying the relevant literature.After elaborating the project's operation mode and VB's management capability,we will show how to choose the proper strategy in the situation of the project.And then we make appropriate market management strategies with STP and 4P theories.Base on the above analysis,we describe the investment and financing plan through estimation of revenue and expenditure,evaluation of incremental cash flow and benefit.At last,we analysis the project's risk and put forward some advice with Single-factor and Multi-factor method.This project's initial investment is 5.8 million Yuan and the Cost of Capitals of the project is 17.13%.NPV of the project is 3.92 million Yuan which is much larger than zero.The Modified Internal Rate of Return(MIRR)in previous five years is 29.88% which is greater than the Cost of Capitals of the project.Therefore,it can be concluded that the project's benefit is very significant.Under the most pessimistic circumstance,NPV of the project is-0.18 million,lower than zero.To prevent the most pessimistic circumstance,VB has set up a series of monitoring measures on the most sensitive factor-the sales volume.When the sales volume of the former two month is lower than the cordon,VB will launch large promotion to increase the sales volume.And if the annual sales volume is lower than 85% of the predicted,VB will distribute the revenue according to 85% of the predicted.In this case,even the project has some risk,but the risk can be controlled and investment is prospective.