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As a brand strategy, of course the consumer products company will first break into the domestic first-line cities. But as China's economic growth, economic prosperity, cities and coastal areas from the corresponding extended to other areas, deep in China's inland cities, secondary cities and small towns of wealth, many companies will be the next important factor in business growth . Data show that China's small cities and towns attractive market potential, its potential aspirants population (135 million) is roughly equivalent to a second-tier cities, the total population (137 million), both of average family income is quite. In terms of relatively large cities, small cities, rental costs and personnel costs are relatively low, so once the logistics and distribution costs can be decreased, the store will be much better than the profitability of stores in large cities. If the success of the flagship store cities to determine their overall market position and profitability, it is a small town market intensity and distribution network capacity to determine profitability. In fact, a franchisee of a regional brand, and its logistics and distribution costs are mostly borne by the headquarters. Therefore, investors choose to join the line outside the city a brand and the brand in the local market, take a certain position, then it may be a controllable cost, the market can be seen, substantial investment income behavior, Cornell Footwear is one of the options. So, to Cornell, for example, how it can become a franchisee? It is how the investment outlook for it? Second and third tier cities in favor of joining Vice President Marketing Corporation Group Limited Cornell Fan Jimin told reporters, according to incomplete statistics, in 2007, Cornell's head office in the country about the number in 2700, of which 15% Direct operating, while the other 85% was joining the dealer. The planning is in 2010 more than 4,000 head office number. In addition, it in New York, Paris, Berlin, Rome, Amsterdam and other world fashion more than 10 countries have opened 120 stores. In the domestic market, according to the different levels of local economic, Cornell will be the market is divided into three grades. Among them, the primary market as well as coastal municipalities of Shanghai and other economically developed cities such as Ningbo, Qingdao, Dalian. Secondary market for the prefecture-level cities and county-level cities along the coast. West and north county and city is listed as three small-scale market. "At this stage, a market-based store or to Direct. Because of the high cost of operating the primary market, investors often can not afford. On the contrary, now the secondary and tertiary markets in the income of residents increased significantly quality of life become increasingly demanding, the consultation is clear, therefore, certain brands of clothing have a considerable demand. "Fan Jimin said. According to reports, in the market, Cornell is in the high-end positioning of footwear, the main target customers targeting ages 25 to 45 years old, stable and good income groups. "In the secondary and tertiary markets, this part of the population of the occupation are concentrated in government agencies, banks, power supply systems, mobile communication units." Requirements on the experience of franchisees For the selection of franchisees, in the Fan Jimin, experience and ideas relative to the more important factor in terms of funds. According to Fan Jimin introduction, a Cornell joining the store, do not need to pay the franchise fee. However, a certain amount of security deposit paid is still necessary, according to the different regions, the margin increased from 1 million to 2 million range. Cornell first to prefer hands-on experience with brand management to investors. Fan Jimin, said: "Because the brands and general non-branded products in the course of business there are many differences, but also a higher demand more from the image requirements, shopping guide service requirements, to the product requirements, promotion requirements and so on. Only a brand management concept in order to ensure quality during operation, and the consistency and overall brand image. " "Second, know how to cultivate the market, cultivating customers easier for investors to gain a firm foothold in the market quickly, and the benign development. In addition, the cultural quality of franchisees is also considered an important factor. Only a good investment in cultural literacy with the headquarters who can form a good and effective communication, but also more receptive to new ideas, and reach a consensus on the issue. " Appropriate focus on Commercial Street site Shop in the secondary and tertiary markets in the process, the site is still one of the most critical part. "Investors must be on the local market have considerable understanding. Of course, some franchisees take into account cost factors, he joined the city is not his life and is most familiar with the city, but we will send someone to assist the investigation to the area, and learn more about the city economic conditions, such as commercial distribution, the income situation, shopping capabilities, and shopping habits, and competition in the local brand. "Fanji Min says," for example a commercial arrangement, the city needs to be broken down Commercial Street, Commercial Street is some lively, a great crowd, but the observation and analysis, find that it is mainly the forms of household appliances or mobile phones and restaurants, then it is not suitable for the operation Cornell. generally dress more concentrated commercial street location is ideal. Specific it is the main shopping district of local, commercial street, brand apparel Street and the pedestrian street. " In the specific choice of shops, Cornell's proposal is: "a small city to open a large store." The so-called "big shop", that is, in the second tier cities in the two-bay store, the area of 60-80 square meters. So the store decoration, according to Fan Jimin estimated cost of 3 million. "This fee includes the first door, container, windows, cash registers and other basic parts of the decoration, if you want to keep improving on the floor and the top of the other, this cost is not enough. According to reports, the selection and fitting in shops, the headquarters will have someone to help, including specific location, store image and the specific decoration. After the first renovation, the headquarters required that every single shop fitting and then every two years to ensure the store's image and freshness to the customer, then the cost of renovation by the franchisor and franchisee share the burden for the 50% ratio. Three-four hundred thousand yuan initial investment Cornell joining a store, including initial investment deposit, store decoration, pre-purchase, rent and staff wages down for money. By the previously described, the margin for the 10,000 to 20,000 yuan, store decoration is 3 million. According to Fan Jimin said to secondary and tertiary markets in the 60-80 square meters of shops, for example, the amount of the first purchase to 200 styles, each style of the purchase amount is 6-10 pairs, about 1,500 pairs of shoes . Shoes pricing due to seasonal differences, there are some differences, to each pair of 150-200 yuan estimates, the pre-purchase the investment from 225,000 to 300,000 yuan. Wages and salaries of the preparations in order to store radiation fifty or sixty thousand urban population in terms of a single shop, be equipped with eight employees, is divided into two shifts, respectively, 9:00 to 15:00, and 15:00 to Closed at night. Fan Jimin told reporters that, in general, the secondary market level wages of 800 yuan per person per month, while wages in three markets 600-800 yuan. Normally be prepared early in the investment staff of 3 months salary.

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Before opening the new store, headquarters sales staff will be a period of one week of the training includes two aspects, one is Cornell's corporate culture, such as the brand history, brand positioning and honor, etc.; second, focus on the actual operation From product knowledge, service standards to receive after-sales service management and store management processes and so on. In addition, the Corporation for the store manager or franchisee with training courses each year to new ideas, new requirements for re-training. Average annual profit of 100,000 yuan stable For the most sensitive franchisees profit, Fan Jimin told reporters details of the retailer's pricing system. "Products issued by the Corporation to the agent and ex-factory Direct offices, distributors, and directly managed branches on the basis of the ex-factory price increase 25% to 30% of the price of delivery to the franchisee, the franchisee After this foundation is * 1.6 * ± 10%, 10% of this is because regional differences and set the room for price adjustment. However, in the same region, must do the same in principle the same price. "that is, franchisee sales product gross margin of 37.5%. After the gain margin, with many joining the system is different is that the franchisee does not need to pay a portion of costs based management fees as a consultant, and their access to all Maori. Joined the Cornell press shop for the monthly profit and loss data to the secondary market is simulated, the cost of the monthly rent or a large expenditure of around 10,000 yuan per month. Employment eight employees in two shifts, wages and other benefits expenses at 6400 yuan per month. Once every two years, renovation, decoration amortized cost of 24 months, spread over 1,300 yuan a month. According to reports, in general, the income tax of such shops in the form of a fixed amount of tax paid, the amount of 800 yuan per month. 2,500 yuan per month plus electricity and water expenses, the operating costs of at least a month more than 21,000 yuan. According to the purchase of the gross margin of 37.5%, to reach break even, just the monthly turnover of 56,000 yuan can be. Calculated to 30 days a month, a day just to reach 1,867 yuan in sales will be able to preserve capital. For a brand of footwear stores, this figure is not very harsh. Fan Jimin told reporters that the existing franchise business position, the first year mainly because the market cultivation period, most remain in the case of break-even or profit to the second year or third year stability period, the average annual profit 10 million. "In general, ground-level shops in the city of stable profits in the 20,000 yuan a month. Of course, there will be any investment risk, if the franchisee does not match the concept of brand management and headquarters, looking forward to get rich, or the affordability of the limited lack of follow-up supplementary sources of funding, or lack of business skills, will contribute to eventual failure. " A variety of business process support

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Prior to joining, investors received in the course of business based upon a number of policies. In order to franchisees as the main distribution is very concerned about is a return of the problem. According to Fan Jimin said Cornell proportional control the overall return of 10% ~ 20%. "The proportion of control in the hands of branch offices and distributor, because of their understanding of the market for many years, in practice the basic rate of return are below this value." Sales, franchisee can not discount the product development and other promotional programs. "Because if not properly handled such cases, would brand some impact. So, at regular intervals, the local subsidiary or distributor in accordance with market conditions, to develop a unified marketing programs." Fan Jimin said. As for the cost of advertising and promotional activities, Fan Jimin explained there are three circumstances, if the head is very necessary that an important market, the headquarters will be fully bear all costs of promotion, the brand in the local campaign, to expand its influence; when the new store openings , branch, or distributor will support advertising expenses; another is to join in when it deems necessary, to promote his own money. In addition, logistics and transport links, join in the need to purchase and replenishment of the time, just at a higher level after the company or agency contact, you can get free. Need to be reminded, and Cornell to join the contract period is one year, full time after the operation a good case can be renewed, and do not need to pay for other expenses. "Given that the deadline is to give franchisees a certain degree of pressure and power. In the performance evaluation of service failure or poor image of the retail owners and franchisees will have the image of its supervision of training and guidance, if still not quite satisfactory, will be carried out in the contract when it expires out. "Rather, a longer duration of cooperation and normal sales, and many other franchisees will be the headquarters of the reward, the opportunity to study not only learning, but also a certain amount of credit support. Is to say, join up to the first extract 5 million items, and then again the headquarters of the order. This cash flow needs of franchisee working to expand the business in terms of, is a very favorable conditions.

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