Our Tampines Hub Franchise Business: Services, Facilities, And Development

Key Features of Our Tampines Hub Franchise Business

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Our Tampines Hub is the 1^st ever integrated lifestyle and community hub in Singapore. It brings together various agencies and provides wide ranges of diverse and comprehensive service, facilities and programmes. The project is headed by the association of people and it is located at the former Tampines Sports Hall and Tampines Stadium. The residents from Tampines can enjoy various sports facilities, countless amenities and programmes associated with community club, art facilities, retail shops and hawker centre. The Tampines Hub project management is actually designed for the residents, by the residents. The hub received BCA Green Park Millenium award from owing to their efforts for promotion of the eco-friendly habits. However, owing to the grand success of the hub, the management is planning for a new development and it will inject the vibrancy to town.   It is planned for opening the franchise business of Our Tampines Hub that will be opened in the location of Jurong East of Singapore as the area is developing fast with various facilities (Our Tampines Hub – Community-lifestyle-hub, 2018).

The franchise hub of Our Tampines Hub will be registered with the Local Government of Singapore for the advantages of community. It is planning to be managed by community and residents from Jurong East. Through the open meetings of the community it is planning to engage wide range of community and voluntary groups that will be operated through Jurong East (Units, 2014). Key features of the hub will be as follows –

• Any person can subscribe the share for becoming member
• Each shareholder will have the right of one vote irrespective of the size of holding
• No artificial restrictions will be there for membership
• It can borrow capital through loans, grants or share issue.
• The management will publish the financial reports annually
• The management committee will be headed by at least 3 members
• The management will hold AGN in each year for selecting the committee and conducting various businesses (Blank, 2013).

The hub will be designed by the top class architects for achieving highest level of environmental standard through usage of the modern techniques of buildings and improving the stock and ranges of various public amenities in the locality (Ward, 2016). Various facilities that will be provided by the hub as same as the services that are already provided by Our Tampines Hub are as follows –

• Open reception plan and the public place that will include workstations
• Versatile meeting rooms and public hall
• Children’s play area, nursery and day care area
• Recreational and activity space
• Ancillary storages and toilets
• Wellbeing and health areas
• Environment friendly surface with grass-crete for Parking of 50 cars

• Consultation booth for confidential discussions
• Security arrangements and general access
• Enhanced provision for special needs of the people those are facing physical disabilities and learning challenges

Further, the unique service that will be provided is that there will be informal chat of 30 minutes with the lifestyle advisor regarding the changes that can improve the lifestyle of the person. Further, the advisor will answer the questions that may be raised by the member regarding the issues faced by him (Bryman & Bell, 2015). The advisor will not tell the member what to do rather they will work on the suggestions that will be provided by the member. It will also provide unique appointment style like walk and talk under which the member and advisor will have a walk and discuss the issues instead of discussing in sitting in office.  

The vision of the franchise will be to offer high quality life to the residents of Tampines as well as Juron East. It will further enable them to achieve the educational, social and economic goals and to be part of the caring, prosperous and strong local community. To achieve its vision it will try to achieve the following mission –

• Manage the community building that will deliver high quality facilities and wide range of activities that will be accessible for all the sectors of local community.
• Update and develop the hub on continuous basis for meeting the changes in expectations and requirements of the community
• Developing activities that will increase the participation in the civic life that will include providing services to the local residents with the opportunities of volunteering, self-development and the involvement in making of local decisions.

Strengths of the Business Plan

There will be generally three groups of customers from the locality of Tampines and Jurong East. They are –

• School students, children and young group – engaging with the providers of local schools, children’s service and special requirements will develop the programmes that will fulfil the demand of the residents and will strengthen the links and engagement of youth leaders.
• Adults and families – with efficient programming and marketing sales in the hub, it is likely to enhance the services. It will further bring the adults and families into the hub and will provide positive influence for accelerating the influx (Council, 2014).
• Corporate, clubs and organizations – information from the Our Tampines Hub demonstrated how Jurong East and other surroundings will be benefitted from opening of franchise of the hub. It is further required to mention that the growth in new hub business and innovation centres in that area will provide opportunities to the local enterprises and companies for taking up new commercial opportunities (Finch, 2016).

As per the market research it is projected that there will be significant development in the community hub and lifestyle business on continuous basis. Therefore, the demand for good services and facilities will continue to grow (McKeever, 2016). It will further drive the demand for wellbeing and healthcare services, leisure, childcare services, social and family activities and nursery provisions. It is expected that the growing trends of community hub will become a high and lucrative demand for the residents in that area. This approach is also welcomed by the council as it is expected to improve the life standards of the residents.

Taking into consideration the above factors the business plan reviewed the external (opportunities and threats) and internal (strengths and weaknesses) factors that will dive the plan are as follows –

Strength –

Various strengths of this business plan will be –

• Experience – multi-award winning Our Tampines Hub’s extensive and community experience will be used for this franchise to maintain and deliver dynamic facilities and programmes that will be capable to engage all the members from Tampines and local community (Kruijsen, Owen & Boyd, 2014).
• Sustainability – the hub will be developed and created based on the principles of sustainable and strong management proposition
• Networks and involvement of stakeholders – strength of combined support networks that are already available with Our Tampines Hub will assist in establishing strong network which in turn will involve the stakeholders and the members.

Weaknesses –

On the contrary, the management have to overcome the following weaknesses –

• Lack of resources – available resources to the hub will be difficult to accumulate. Therefore, in absence of sufficient resources the project planning and conception may get hampered.
• Lack of awareness – local community may become distant from project. The reason behind this is that previously they were involved in various consultations which in turn may make them disengaged and weary (Simpson, 2014).
• Access to the information regarding present market – as there is regular changes and updates in the demand and the available data regarding demand and risks are historical, the management may not be able to plan based on current demand criteria.
• Lack of business and commercial expertise – requirements of the project for it to be sustainable financially is accessing of the full capital. It will require the business to adopt the commercial outlook for balancing the social demands.

Opportunities –

• Efficiencies in accessing the funds and supports – as the Our Tampines Hub already achieved huge success in Tampine area, it will be efficient for the franchise business to access supports and funds
• Targeted funding – there is opportunity for initiating various social action related projects that is linked to sales plan that will attract the resources from third party either towards infrastructure or funding posts (Harada, Yagi & Sashida, 2013).
• Design facilities as per the requirements – it will provide flexibility through the early agreement and development of business plan and it will allow the potential voluntary and commercial partners to influence the building’s internal design. It will further bring the additional resources and funding for the project for maximising the efficiency and effectiveness (Leigh & Blakely, 2016).
• Changing demographics – growing population and start of new projects like high speed rail and various other services will provide social as well as commercial opportunities in sector of hospitality, well being, childcare and exercise.

Threats –

• Resident engagement – the local community are not able to embrace the project
• Enhancing the cost of capital – as the construction costs are increasing rapidly, it may reduce the scope and scale of facilities if any unforeseen delays take place (Botha & Robertson, 2014).

	Deluxe room	Luxury room	Classic room	Garden area
Hiring of hall	$ 150	$ 130	$ 100	$ 180
Hiring of meeting room	$ 90	$ 75	$ 65	$ 100
Hiring of event space	On request	$ 35 per hour	On request	$ 40 per hour
Exercise classes	N/A	$ 100 per month		N/A

The charges will be reasonable with excellent value and will allow the target group to receive the facilities on continuous basis. Detailed price range for full range of the activities and facilities will be confirmed once the financial facilities and programme are confirmed.  Subsidised activities and reduced rates will also be provided with the principle of the hub. The commercial lets and hires rates will be competitive in the market and will be subject to booking nature. The pricing strategy of the company is expected to represent competitive value on the basis of the range and quality of the available facilities. Further, it seeks the commercial partner for running wide range of services that will include exercise classes, nursery classes and classes for disable children. Further, the pricing may be required to be more flexible for maximising the overall revenues. This will involve the premiere pricing under which the packages will be provided in discounted price if chances are there to earn additional revenues. The cancellation policies and the policies associated with administration charge and late payment will be developed in next 6 months period after consultation with the management and finance department.

The promotion will be done on two aspects. These are –

Raising interests and awareness in new hub – new volunteers will be recruited for procuring new services. They will communicate with the local community and communities from Tampians and analyse their expectation and aspirations taking into consideration the services that are projected to be offered. The principle for awareness is repeating the message constantly. Therefore, with the assistance of the steering member group it will create the positive approach for using the activities for generating every opportunity. It will further establish the positive relationship with the the media like television, radio and local newspaper to identify their stories for good causes.

On-going marketing for the hub – the on-going sales and promotional plan for new franchise of Out Tampines Hub will be prepared 3 months prior to the starting of the hub. It will reflect the specification and final mix of the facilities and will confirm the activities for the programme. The on-going marketing will include the following –

Weaknesses of the Business Plan

Offer free exercise classes and workshops – initially the members registered for the exercise classes will get 10 days free subscription with one month subscription. Further, 10% discount will be allowed on booking the meeting hall, event space.

Join with the Our Tampines Hub for generating customer demand – members registered with Our Tampines Hub will get 5% discount for using services from the franchise hub.

The new franchise will required to be registered with the company registrar in Singapore with the following details –

• Name of the business
• Description of the business activities
• Details of shareholders with their shareholding percentage
• Name of the directors
• Particulars regarding the company secretary
• Memorandum and the articles of association (Brinckmann & Kim, 2015).

Further, the franchise will be bound by the following commercial law for carrying out the business –

• Law of contract
• Competition law
• Forms of business organizations
• Singapore income taxation
• Insurance law

Further, the franchise is legally bound to pay 5% of the sales as royalty to the Our Tampines Hub as per the contract (Burns, 2016). Moreover, both the parties are required to go through the contract terms and clauses before starting up as the franchise.

The business will recruit employees from local community as they have better knowledge regarding the priority and expectation of the local community (Massa & Tucci, 2013). Other people will be recruited from voluntary groups. The required personnel will be as follows –

• The accountant – 2
• Direct employees for maintaining the hub – 80 (including the employees for supervising, cleaning and maintaining)
• Management level – 10 (including the directors, executives, secretary)

In addition to the above mentioned people for growing affordably and quickly the hub will require various 3^rd party collaborations where the commercial acumen and specialism will enable the business to get faster and greater returns. Depending only on in house staffs can be time consuming and expensive owing to the training and recruitment cost (Schaper et al., 2014).

It can be seen from the above table that the total funds required for starting up the business is $ 446,050. Out of the total requirement $ 20,000 will be contributed by the owners, $ 176,050 will be raised from issuing the shares and rest $ 250,000 will be raised through long-term debt. Therefore, 44% of total fund will be raised through equity and 56% will be raised through debt (Gatti, 2013).

Valuation of the firm –

Weighted average cost of capital –

E = funding from equity = $ 196,050

D = Funding from debt = $ 250,000

V = E + D = $ 446,050

WACC = (E/V)*R_e + (D/V)*R_d (1-t) (Brusov, Filatova & Orekhova, 2013)

Where, E/V = weight of equity = 0.44

R_e = cost of equity = 0.08

D/V = weight of debt = 0.56

R_d = cost of debt = 0.04

T = tax rate = 0.17

WACC = (0.44*0.08) + [(0.56*0.04)*(1-0.17)

WACC = 0.054 = 5.4%

Calculation of NPV –

As the project is giving positive cash inflow amounting to $ 38,60,499.85, the project shall be accepted.

Calculation of IRR –

IRR = 189% (as per calculation in excel)

7.3 capital requirement from Angel Investor

Total 44% of the requirements will be raised through equity. Out of the which, $ 20,000 will be contributed by the owners and $ 176,050 will be raised from issuing the shares to Angel Investors (Brusov, Filatova & Orekhova, 2014). Therefore, percentage of shareholding offered will be = (176,060/196,050*100) = 89.80%.

Opportunities for the Business Plan

Various potential risks are there with regard to setting up of the franchise at Our Tampines Hub. These are –

• The franchise may not understand the legal structure of setting up the franchise which in turn may lead to unintended liabilities.
• The franchise may not be able to secure the advance booking as well as revenues as the residents from Tampines may not wish to take the membership from the franchise and may wish to continue with the membership of Our Tampines Hub.
• As it is the franchise of Our Tampines Hub, the expectation of the community from the franchise will be of the same level as the Our Tampines Hub. Therefore, the facilities may not meet the expectation of the community (Brinckmann & Kim, 2015).
• Negative impacts from the community may lead to additional costs and lack of access to the grants and funding.

The company planned some alternative course of action to mitigate the above mentioned risks. These are –

• One lawyer will be hired who will manage all the legal matters and who will provide legal guidance to the management. He will further provide the guidance regarding the consequences so that the actions can be taken at initial level
• For securing advance bookings as well as revenues the management will carry out researches regarding the preference and demands of the community. For this purpose, few employees will be fully engaged to communicate with the community.
• For minimising the negative impacts, the franchise will establish sound policies regarding management of the environment and will work with the construction partners and architects for improving the building structure.
• Apart from above all these, 10 employees will be there who will be engaged to look after the issues of the members and solve it as early as possible. Further, there will be 24*7 help line desk where the people can communicate regarding their issues.

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