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Franchise Plan

Franchise Plan

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08/17/2012

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FRANCHISING BUSINESS PLAN

PREPARED BY: GROUP 1 Jennifer De la Cruz Leilani Carino Mary Anne Marino Jennifer Gangan Elaine Legaspi Katherine

Franchise Details: Franchise Fee: 250,000.00 Php + 12% VAT Royalty Fee: None Advertising Fee: 2% Franchise Renewal: 5 Years Minimum Floor Area: 15 Sqm Cash Bond: 600,000.00 Php

Franchise application procedure: Interested parties should submit a Letter of Intent to CIS Bayad Center, Inc. (CBCI) with attached Location Map of proposed site and the letter should be addressed to Ms. Aida C. Yuvienco, VP and Head Sales, Marketing, and Business Development. The letter should include the complete address of the proposed sites as well as all the complete

contact details of the applicant. Contact Details: CIS Bayad Center Incorporated Business Solutions Center, Meralco Complex Ortigas Ave., Pasig City Landline and Contact Persons: (632) 1622-5567 (Ms. Phoebe Vargas) (632) 1622-5520 (Ms. Bung Roa) Telefax: (02) 9142160 Email: inquiry@cis.com.ph and povargas@cis.com.ph

HISTORY OF THE COMPANY: CIS Bayad Center, Inc. The BAYAD CENTER is the country's pioneer and leader in the over-the-counter multiple bills payment collection business. With over 10 years of serving the Filipino, Bayad Center continues to define and set the standards in the industry with its increasing number of biller partners and fast-growing network of payment centers, and introduction of innovative service lines. BAYAD CENTER: Blazing the Trail in the Industry The CIS Bayad Center business model is the first of its kind in the Philippines: concurrently providing a dependable payment collection solution to its corporate partners, creating business opportunities for its franchisees, and offering the public a reliable and convenient bills payment collection service. As a pioneer, Bayad Center has defined and set the standards of the Outsourced Payment Collection Industry. The BAYAD CENTER was originally known as the Payment Collection Service, a division of Corporate Information Solutions, Inc. (CIS) established in May 1997. From three Lopez corporations (MERALCO, BayanTel, and Sky Cable), more and more companies from different industries have partnered with the BAYAD CENTER. By October 2000, the BAYAD CENTER has hit the one million-transaction mark. Eventually, the BAYAD CENTER has evolved from being a profitable division of CIS to becoming the core business of the Corporation in 2005. In 2006, The BAYAD CENTER has spun-off from CIS to become the CIS BAYAD CENTER, INC (CBCI). A year later, as part of its mission to be present in every possible

neighborhood in the country, CBCI transitioned into a franchising organization. In March 25, 2008, CBCI was awarded the “Investor in People” (IiP) certification by the People Management Association of the Philippines and the UK-based IiP Quality Centre. This coveted global recognition honors CBCI as a company that nurtures the development of its employees side by side with its own corporate growth. BAYAD CENTER is now the leading brand in the over-the-counter multiple bills payment collection business. It proudly provides the public a worry-free payment collection service for organizations in the following sectors: utilities, government service, telecommunications, cable TV, Internet, insurance & pre-need, healthcare, transportation, electronic wallet, credit card, real estate, financial services, arts and entertainment, columbary, memorial park, charity donations, among others. The BAYAD CENTER is not resting on its laurels. At present, the BAYAD CENTER network is composed of around 900 collection centers in the Philippines and, soon, hundreds more overseas.

I. INTRODUCTION

Ever had the problem of having to pay multiple bills in their respective payment centers that is totally out of the way from each other? Well you are not alone. Thousands upon Hundreds of thousands of people pay their bills daily. What better way to help them with their inconvenience by having a single place where they can pay all their bills at the same time. Thus, the Bayad Center was born. Bayad Centers are very convenient one stop shops that cater to everyone. It does not matter if your household belongs to the A, B, C or D segment of the society. The richest and the poorest among us have at least some bills to pay. Bayad Centers earn a percentage of money for each bill paid, and I assume it’s safe to say that with the right location, you will never run out of customers. Bayad Center is also a wholly owned subsidiary of MERALCO and is looking for BAYAD CENTER Entrepreneurs who has the right attitude to join their franchise.

We chose this type of franchising business BAYAD CENTER because we see it as a recognized player and a market leader in the global outsourced payment collection industry and we have major reasons why we prioritize BAYAD CENTER to start a franchising business:

1) Most recognized brand in the business today. 2) Trusted by our country’s best and biggest organizations. 3) Award winning 4) Member of Meralco Group and Companies. 5) Easy to manage and less human resource capital needed.

II. PRODUCTS AND SERVICES

Bayad Center started as the over-the-counter (OTC) bills payment collection arm of the Manila Electric Co. (Meralco) 12 years ago, and has since become the market leader in third-party bills payment collection, with clients that include PLDT, Globe Telecoms, Smart, Digitel, SSS, Manulife, Sunlife, Bayan Communications, Sky Cable, RCBC Bankard, UNICEF, SuperFerry and Cebu Pacific, internet bills in all networks.

At Bayad Center franchised branches, all its new services are available: bills payment, mobile loading, money remittance using the cellphone and the internet via Bayad Direct; remittance payout at our branches situated near residential areas; and eventually, electronic gift cards that can be used to pay bills, load mobile phones and internet cards, as well as do merchant purchases. Bayad Center "Your One-Stop Payment Shop" is the payment collection service of Bayad Center. It is a cost-effective method of handling and automating payment collections for various utilities, telecommunications and insurance companies. Backed by Corporate Information Solutions, Inc. (CIS), the pioneer in Information Technology in the Philippines, Bayad Center "Your One-Stop Payment Shop" utilizes highly efficient and fully automated software and hardware systems. Bayad Center "Your One-Stop Payment Shop" uses compact point-of-sales terminals manned by well-trained accredited third party collection agents accepting cash and cheque payments. The service is offered to consumers free of charge. Bayad Center "Your OneStop Payment Shop" also partners with third party agents whose establishments have longer operating hours to accommodate Bill Payers of different habits and lifestyles.

There are 26 companies that are subscribed to the BAYAD CENTER service. These include companies providing electric and water utilities, telecommunications, insurance, cable television, Internet services, financial services and charitable organizations: Meralco Homecable Grepalife PLDT Pilipino Cable Manulife Manila Water Skycable Manuplan Maynilad Edsamail Philamlife BayantelInfocom Platinum Plans Digitel Skyinternet Unicef Nextel CAP Education & Pension World Vision Smart Extraordinary Dev’t. Corp. Bankard Cablelink First Lepanto Taisho Insurance Pilte, PT&T SSS (selected area) III. LOCATION

Our location as we analyzed by research and studies it we choose a place where there is a High foot and vehicular Traffic, proximity to partners bank, visible to costumers, In a commercial Area, presence of at least 10,000 households, not within proximity to an existing BAYAD CENTER franchise site not beside at the meralco business offices. We are located here: Cor Oranbo drive, Kapitolyo, Pasig City Besides Banco de oro

IV. BRANCH LAYOUT

• •

FLOOR ARE TILES MADE OF TILE 10 SQM WITH AND 5SQM LENGTH AREA OF THE OFFICE. COUNTER SIZE IS 3 METERS LONG AND HALF METER WIDE. FULLY PAINTED WITH BENCHES INSIDE FOR THE COSTUMER COMFORT. 2 COMPUTERS MACHINES FOR TRANSACTION USED FULLY AIR-CONDITIONED 2 COMFORT CHAIRS FOR THE TELLER USED

• • • • •

The accredited Third Party Agent will only make a minimal investment and this investment would include the following: •

• •

Surety Bond and Cash Bond, or Bank Assignment, the amount of which will be based on the result of financial evaluation. Renovation of the service area of Bayad Center to ensure adherence to the "standard look" of all Bayad Centers Phone line Personal Computer – Pentium III, 800 MB Hard Disk or higher with pre-installed Windows 95B or 98

• • • • • • • • •

Monitor, Keyboard, Mouse, CDROM Bar Code Scanner – must be laser type barcode scanner and not CCD type. Printer Fax Machine Modem – 28.8 kbps baud rate with built-in speaker Uninterrupted Power Supply Automatic Voltage Regulator – 500 watts capacity Internet or LAN access device (56K modem or 10/100 MBPS NIC, or both)

V. MARKETING STRATEGY

a) Promotional Activities • • • • • Fliers Poster Province magazines Ads Raffle draws given to those who have reach the amount of 3,000 bill costs.

b) Target markets • • • All households near to our location All business organization besides our vicinity All business store, shops nearest us.

VI. FINANCING NEEDS

Start-up Expenses Franchise Fee: 12% VAT Advertising Fee: 2%(300,000) Grand Opening Advance rent: 2months Salaries and Wages Payroll Taxes Insurance Telephone Line Utilities Office Supplies Equipment Office renovation expenses Accounting/Legal Documents Travel Total Start-up Expense

Amount 250,000.00 30,000 6,000 28,000 16,000 18,898 5,650 4,720 1,740 2,800 560 77,000 18,000 14,600 2,450 P476,418

Start-up Funding Plan Investment Cash Bond: Total Capital

Amount P476,418 P600,000 P1,076,418

Year 1 Year 2 Year 3 Year 4 Year 5 Revenues 1,976,000 2,074,800 2,178,540 2,287,467 2,401,840 Payment Sales 1,213,659 1,274,342 1,338,059 1,404,962 1,475,210 Gross Profit 762,341 800,458 840,481 882,505 926,630 Accounting 6,000 6,300 6,615 6,946 7,293 Advertising & Promotion 15,000 12,360 12,731 13,113 13,506 Compensation & Benefits 46,643 54,042 61,663 69,513 77,598 Insurance 2000 2,050 2,103 2,158 2,216

Lease Facilities 96,000 Legal & accounting 3,500 Licenses & Fees 7500 Maintenance 3600 Miscellaneous 1,800 Office supplies 2,700 Telephone 1,800 Utilities 4,200 Total Operating Exp. 190,743 EBIDTA 571,598Depreciation 4,916 Operating Profit 566,682 Interest Expense 73,199 Earnings Before Taxes 4933,483 Income Taxes 17,873

96,000 3,500 7510 3612 1,836 2,754 1,836 4,410 191,451 6090074,916 604,091 70,274 543,817 30,431

96,000 3,500 7520 3624 1,873 2,809 1,873 4,631 205,176 635,3054,916 630,389 79,059 551,330 41,738

96,000 3,500 7531 3637 1,910 2,865 1,910 4,862 213,945 6685604,916 663644 78,524 585,120 53,724

96,000 3,500 7541 3649 1,948 2,923 1,948 5,105 228,098 698532-4,916 693616 77,639 615,977 66,429

INCREASE IN NUMBERS OF BILLERS

INCREASE OF NUMBERS TRANSACTIONS

INCREASE OF BAYAD CENTER BRANCHES We in a , as a are its operate highly result, able to enhance service

levels, streamline operations, improve cost-saving measures, develop strengths, slice costs, pump-up profits, and ultimately return greater value to its stakeholders.

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