Sports - Retail Tennis Shop Business Plan

1.0 Executive Summary [back to top]

Tennis Master Pro Shops, Inc. operates retail tennis stores known as Tennis Master Pro Shops. Each retail location markets indoor tennis instruction and custom racket fitting. These two primary revenue streams are both high in profit margin and low in inventory requirements. Custom fitted rackets are made on site from components and are marketed under the "Tennis Master" brand name. Tennis instruction and training are conducted by in-store staff under the direction of a USTA professional at each store.

A Tennis Master Pro Shop is 5,000 square feet and includes two virtual reality tennis simulators, two computer swing analysis systems, a racket fitting analysis system, and four additional practice court and net combinations. Private label and brand name tennis merchandise are also included in the product mix.

Tennis Master forecasts growth from its current 15 stores to a cumulative total of 380 stores over the next three years. Ten stores will be company owned and the remainder will be franchised. Forty "Master Franchise" licenses will be sold to qualified regional marketers in order to achieve the high rate of growth targeted by this expansion plan.

Tennis Master franchise operations and company owned stores will all be included under the corporate umbrella of Tennis Master Pro Shops, Inc. Combined revenues are forecast to be $6.8 million in 1997, $14.3 million in 1998, and $23 million in 1999. Profits are expected to be $1.8 million in '97, increase to $5 million in '98, and reach $9.3 million in '99. Margins will also increase over the same time frame from 26.7% to 40.3%. These highlights of the over-all plan are illustrated in the chart below:

Highlights

Click to Enlarge

1.1 Objectives [back to top]

Tennis Master has the objective of becoming the nation's largest retail indoor training facility. We are targeting 400 retail locations as our ultimate goal. Forty "Master Franchises" have been targeted, each with ten retail stores in a "Master Group." Roll-out by year is as follows:

• 1997--10 Master Franchises and 60 retail stores.

• 1998--20 Master Franchises and 120 retail stores (Cumulative: 30 Master Franchises and 180 retail stores).

• 1999--10 Master Franchises and 200 retail stores (Cumulative: 40 Master Franchises and 380 retail stores).

A table illustrating this expansion plan is in Appendix "D" (Note: this is a customer-included appendix; not part of a standard business plan).

The over-all retail objective for each store is to achieve 25% utilization of available training time. All the projections in this plan are based on timed growth up to the 25% utilization level. The attainment of this level of utilization will produce highly profitable retail stores. The combination of profitable stores and successful franchise sales will be essential to the success of the plan.

1.2 Mission [back to top]

Tennis Master Pro Shops, Inc. strives to offer the finest indoor tennis training available. We seek to promote the enjoyment of the game of tennis by helping tennis enthusiasts of all levels play better tennis. We will deliver this product by individual instruction in tennis fundamentals and individual fitting of a tennis player's equipment. We offer all of our products and services at times and locations convenient to our customers.

Tennis Master Pro Shops, Inc. pledges to offer an outstanding business opportunity to our franchisees and to deliver at all times the training and ongoing support outlined in our franchise program.

1.3 Keys to Success [back to top]

The keys to success in Tennis Master's business are:

1. Attainment of our store expansion goals (both company stores and franchise stores).

2. Attainment of 25% minimum utilization of training time in each retail location.

3. Obtaining initial capitalization.

4. Executing franchise marketing program.

5. Executing retail marketing program.

6. Converting existing stores to training/racket fitting format.

7. Careful attention to store locations by using economic and tennis playing demographics.

8. Management control of both company and franchise stores.

9. Management of cash flow--maintaining the pace of franchise sales--and obtaining additional investment in year one to maintain the pace of company owned store expansion.

2.0 Company Summary [back to top]

Tennis Master Pro Shops are positioned to fill the growing need for tennis instruction demanded by both a growing number of new tennis enthusiasts and more than 20 million existing tennis enthusiasts in the U.S. The stores offer computerized swing analysis, indoor tennis practice and simulation on "real" tennis courts, and ongoing tennis lessons and instruction for tennis enthusiasts who desire to improve their game.

Custom racket fitting of "Tennis Master" tennis rackets and also top-selling national name brand rackets will offer the individual tennis player the equipment that is most suited to his/her game.

All Tennis Master stores will be open, clean, well-merchandised, and attractive. The Tennis Master store will be a tennis "center" where tennis enthusiasts of all abilities will feel welcome and comfortable. The patrons of the store will want to spend time there and will want to return again and again.

2.1 Company Ownership [back to top]

Tennis Master Pro Shops, Inc. was founded in 1994 by John Jones. It is a privately held Cascade State "C" corporation. Other stockholders include Doug Smith, James Brown, and Jeff Clark.

The previous operating history of Tennis Master Pro Shops, Inc. includes the retail sales of the original "flagship" store located in Anytown, WA. and also the sale of approximately 15 franchise locations (not all of which have opened as of the date of this plan). Total revenues to date are approximately $1 million and operations have produced a very minimal profit.

For the purpose of this plan the expansion of Tennis Master Pro Shops, Inc. is treated as a start-up as of January 1997 with all previous assets and operations "rolled in" to this plan.

At this time Tennis Master Pro Shops, Inc. seeks to extend its ownership via a Private Placement to a select few additional investors.

2.2 Start-up Summary [back to top]

The next generation of computer training combines the "computer coach" concept with the simulator in one piece. It's now being developed and initial marketing is underway. The joint venture is between Tennis Training Systems, Inc. and [name omitted], the company that created lifelike human animation for Acclaim Entertainment's high end computer games. [Name omitted] also did the computer animation for the action scenes in [name omitted], [name omitted], and [name omitted]. This new simulation training system, called [name omitted] runs on a [name omitted] Platform and is currently being marketed at $500,000 per system. This cost is beyond the scope of Tennis Master's retail concept at this time. However, these technologies tend to come down in price as they are further developed. Our management will maintain a working relationship with [name omitted] to stay abreast of product development and cost reduction. At the present time, the extra benefits of these systems to all but the most serious of tennis enthusiasts could amount to "overkill." There is a need in tennis training to "keep it simple." And it is debatable if the consumer is willing to spend the fare this system would require under its present cost structure. There can be no doubt that the system goes beyond anything currently available in its capabilities.

Start-up

Requirements

Start-up Expenses

Legal $20,000

Franchise Marketing Materials $25,000

Investment Offering Costs $15,000

Consultants $12,500

Insurance $1,500

Rent & Deposits $15,000

Store Build-out $50,000

Expensed Equipment $5,000

Simulator (1) $40,000

Swing Analysis Systems (2) $30,000

Racket Fitting Analysis System $10,000

Existing Debt Retirement $150,000

Total Start-up Expenses $374,000

Start-up Assets Needed

Cash Balance on Starting Date $90,000

Start-up Inventory $36,000

Other Current Assets $0

Total Current Assets $126,000

Long-term Assets $0

Total Assets $126,000

Total Requirements $500,000

Funding

Investment

Private Placement $500,000

Other $0

Total Investment $500,000

Current Liabilities

Accounts Payable $0

Current Borrowing $0

Other Current Liabilities $0

Current Liabilities $0

Long-term Liabilities $0

Total Liabilities $0

Loss at Start-up ($374,000)

Total Capital $126,000

Total Capital and Liabilities $126,000

Start-up

Click to Enlarge

2.3 Company Locations and Facilities [back to top]

Tennis Master Pro Shops, Inc. is presently located at: 1234 Main Street, Anytown, WA. 98000. The phone # is ....

The new retail location planned at the launch of this expansion plan will be in one of several spots already investigated. Retail space is expected to lease at

...