Writing the business plan for a new venture Franchising or licensing: the Expert Literie business case

Details

Supervisors

De Jaegere, Tanguy

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

Loïc Semal and Alexandre Steens, two students in the final phase of management studies, have decided, in agreement with the founder and CEO of Expert Literie, to launch themselves as entrepreneurs when they graduate by setting up an Expert Literie franchise in Libramont in 2023. Under the franchise principle, the new company will benefit from the name, technologies and suppliers of Expert Literie while maintaining a degree of autonomy in terms of management. Through qualitative and quantitative research, this thesis shows that developing an Expert Literie store via a franchise is the best option for the CEO of Expert Literie and the two young entrepreneurs and that this project will be viable and profitable in the long run. While the franchise principle allows these two entrepreneurs to start as independents and be responsible for the entire management of the company, it allows the CEO of Expert Literie to entrust the development of new stores to young entrepreneurs in exchange for royalties. Market analysis has revealed that there is still room for development in the Belgian bedding sector; moreover, market research has shown that the province of Luxembourg, and more precisely Libramont, is a strategic and ideal location to set up a new Expert Literie store. The marketing strategy implemented by the new company to launch itself and in subsequent years will be similar to that of, and supported by, Expert Literie. Ultimately, the financial analysis proved that the project is profitable with a basic financing made up of a personal contribution of EUR 70,000 and a bank credit of EUR 280,000. Stable, positive and negative scenarios were developed, and it emerged that the stable and positive scenarios are both profitable, while the negative one is not. Clearly, the company must reach a turnover of EUR 849,500.00 to become profitable. In the negative scenario of a 10% decrease in sales, it would not reach this sum. The stable scenario exceeds this revenue in the first year of operation, although it only implies annual sales growth equal to the economic growth rate of the market. As a result, the main limitation of this project is that sales cannot decrease by more than 12% annually or the company will go bankrupt.