Entrepreneurship Participating Event

(Franchising)

Moukthika Obulareddy
 Table of Contents

I.EXECUTIVE SUMMARY One-page description of the project

II.DESCRIPTION AND ANALYSIS OF THE BUSINESS SITUATION

A.Rationale and marketing research
B.Introduction: type of business, brief description of major product(s)/service(s) involved
C.Self-analysis: actual personal experience and/or training in proposed field
D.Analysis of the business opportunity, customer and location: geographic, demographic
and economic analysis of trading area, customer and locale of proposed business
E.Proposed organization: type of ownership, steps in starting to form business, planned
personnel, management knowledge and skills

III. PROPOSED MARKETING/PROMOTION PLAN

A.Proposed product or service: details of product(s) or service(s) to be offered; potential
suppliers or manufacturing plans NPF2014 | ENPI2014
B.Proposed pricing policy: costs, markups, relationship to competitors
C.Personal promotion: non media sales plan, staffing and merchandising appeal
D.Non Personal promotion: media, basic appeal and initial promotion plan
E.Place: channel of distribution from manufacturer or service provided to consumer

IV. PROPOSED FINANCING PLAN

A.Projected income/cash flow statement: projected budget describing income and
expenditures for the first year
B.Projected three-year plan: describe planned growth, including financial resources and needs
C.Capital and repayment plan: earnings, short-term and/or long-term borrowing, long-term
equity, plan to repay borrowed funds or provide return on investment to equity funds

V. BIBLIOGRAPHY

VI. APPENDIX An appendix is optional. Include in an appendix any exhibits appropriate to the written
entry but not important enough to include in the body. These might include sample questionnaires used,
letters sent and received, general background data, minutes of meetings, etc.
I. EXECUTIVE SUMMARY

Urban Air Trampoline park is an interactive and family friendly trampoline park with state of
the art safety features to ensure your child gets the most out of his experience while doing so safely.
With already seven locations around Texas and one in Kansas, Urban air has received many awards
and certifications for one of the best places to go with the family.

Urban Air offers many different packages from open jump to full service birthday parties. Some
different types of open jumps include fitness jump, homeschool jump, and toddler/preschool time.
Urban Air is well centered around spending time with the family: every Thursday after 5 pm is family
night Get dinner, fun and family time all in one! If not interested in this, there are other various fun
events including dodgeball tournaments, Teen night, Middle school night and corporate events.

Urban Air currently has seven locations throughout Texas in Austin, Frisco, Mansfield,
Midland, Rockwall, Tyler, Waco, and one in Wichita, KS. I have chosen to franchise a location of
Urban Air in Flowermound, TX, which is located 45 minutes away from the Frisco location. I believe
that the location I have leased is also ideal for this type of franchise as the surroundings around the
desired location are restaurants, salons, and retail stores.

As a proposed marketing plan, I plan to spread this new franchise through two offers and
through word of mouth. The first promotion we are looking forward to is our Pump It Up Pass. This
pass will allow each child (plus one parent) to have a full month of open jump time at our upcoming
Flowermound location. The passes will be given to the first 50 kids who arrive at our Spring Break
Bash on June 12th, 2015. Adding to our initial advertising plan, there will be referral program
running during the first 15 days of operation as our second personal promotion, which gives the referral
and referee a 10% discount on their purchase and an additional coupon.

The proposed pricing policy will remain the same as the other four locations as this is a LC
(Limited Partnership). Our main channel of distribution will be through the manufacture who already
creates and sells Urban Air equipment located in Houston, TX.

Our projected revenue before expenditures for 2015 is $2,035,000. After expenses, which are
$1,224,000 our net income after taxes for our first year would be $762,340. Since this is only our first
year, the net income is that low. There are many startup costs, and one-time-buy items such as the large
trampoline pads. We aren't going to replace equipment every year unless it's damaged, thus some costs
will dissipate. In 2016, we are projected to make $3,850,000 before expenditures. After expenses and
tax, we are left with a net income of $2,746,210 for the next year.

As per our capital and repayment plan, we have decided to take out a $1.3 million loan. We will
use any of the remaining money towards our expenses for the following year. I plan to pay the investor
back by paying around $46,200 a month. This repayment will take approximately 28-29 months, or
around 2.5 years.
II.DESCRIPTION AND ANALYSIS OF THE BUSINESS SITUATION

A.Rationale and marketing research

Over 52% of families want to go out and have a good time on Friday and Saturday night,

however, many are tired of going to a bowling alley or a movie. Urban Air Trampoline Park is a fun

and interactive way to have fun with family and friends. With over 25,000 square feet of family fun,

Urban Air is suitable for all ages from 7-77 and has a variety of activities like wall-to-wall trampoline

arenas, a trampoline runway, a foam pit, a slam dunk track, and a trampoline dodgeball arena. With

strong competition from companies like Jump Street , Urban Air focuses on target market as one of

their main tactics. Urban Air also offers aerobic, fitness, and physical activities depending on interest

levels, thus supporting the older generation. Each location has an experienced and prepared staff and

party host crew ready to deal with any situation that comes their way. With eight locations in Texas and

one in Kansas, Urban Air is becoming a fun, family night activity all around!

B. Introduction

Urban Air brought the idea of an indoor trampoline park first to the Dallas/Fort-Worth

metroplex by opening its flagship location in Southlake, Dallas back in October 2011. Since then, there

are seven locations throughout Texas in Austin, Frisco, Mansfield, Midland, Rockwall, Tyler, Waco,

and one in Wichita, KS. Some services Urban Air offer are noted some of the best in the DFW area:

Award winning birthday parties, Fitness and Aerobics classes for adults, Preschool jump time,

Dodgeball tournaments, family night and corporate events. Compared to JumpStreet , Urban Air

compliments all age groups and has a wider range of activities and play space. JumpStreet has up to

20,000 ft of space where Urban Air has more than 25,500 ft. of jumping, fun space: an additional 5,500

ft of space can fit up to another 500 kids! In addition, even though Urban has a slightly higher price, it

has more activities and various other courses compared to JumpStreet .

 C. Self Analysis

I am one of the senior party hosts/team member at the Urban Air in Frisco. I personally love

going to work everyday as the environment is very customer friendly and cheerful. One of the best

parts about my job are the birthday parties. I love attending to customers and making sure the birthday

boy/girl is having the time of their life. Their smiles and laughs are contagious and with Urban Airs

affordable party packages, the parents are not stressed about their credit card and can have fun as well.

After working here for 2 years, I can see the potential to expand this business idea and be successful.

With a degree in business administration and a minor in entrepreneurship from the University of Texas

at Dallas, I am familiar with the procedure on how to develop a franchise of this company and what is

needed to make this project successful. Additionally, I am very familiar with the surrounding inner

Dallas area, which will give me an advantage as I am aware of population and demographic factors.

D. Analysis Of Business Opportunity

I plan to franchise my location of Urban Air in Flowermound, TX, around west 24 miles (40

minutes) west of Plano, TX. A small suburb outside of Dallas Downtown, Flowermound, commonly

referred to as Flo-Mo, is a lively town with academically acclaimed school districts, fun family

activities and a great community feel. One of the hardest parts about franchising a trampoline park is

dealing with real estate. We need buildings with high ceilings and a unique structure. At 7890 Long

Prairie Road, there is a 35,500 square ft space for lease, which can be used for this project as it is

shaped in a unique way with different heighted ceilings, thus able to suit the different activities. This

location is conveniently located next to The Highlands of Flower Mound, a family-fun shopping center.

With restaurants such as Cotton Patch Cafe, Chilis, Smoothie King, and Yogurt Story, guests can have

a fun filled evening at Urban Air and then have dinner all in less than 5 minutes from each other. This

is a great location to franchise Urban Air because of the fact that there isnt competition in this area;

there is no other entertainment sector in The Highlands of Flower Mound.. Figure 1 below shows the
list of restaurants and stores in this mall: There are various department stores, restaurants, fast food

places, and some other stores, however, there are not any entertainment venues. I think that our Urban

Air will flourish in this location as there wont be much competition and if parents do not want to stay,

they can drop their kids off and go shopping. In comparison, the Frisco location has some competition.

Right next to the Urban Air in Frisco is Pole Position Raceway, a go-karting venue. As good at that

location is doing with competition right next to it, imagine how well this location will do.

E. Proposed Organization

The Urban Air Trampoline Park in Flowermound would be a Limited Partnership (LC) just like

the other locations. To begin the process, I will have to file a file 207 form, which is a certificate of

formation for a limited partnership. As stated by the Texas Secretary of State, John Steen, A Texas

limited partnership is a partnership formed by two or more persons and having one or more general

partners and one or more limited partners. The limited partnership operates in accordance with a

partnership agreement, written or oral, of the partners as to the affairs of the limited partnership and the

conduct of its business. While the partnership agreement is not filed for public record, the limited

partnership must file a certificate of formation with the Texas Secretary of State. Planned Personnel

code is very strict when it comes to hiring at Urban Air. Since these employees will be dealing with

children as young as 4, they will be under a strict code of conduct. Initially, all employees will go

through several thorough drug and background checks. If employees are under 18 and in high school,

they must be of good student standing conduct: all above average grades in all classes, little to no

write ups, etc. Bi-monthly, all employees will take a drug test and every month, there will be a random

check on how employees are performing at their position. If such tests are failed, consequences include

attempt to bring improvement, an off-cycle appraisal, oral warning, written warning, probation,

suspension, and termination, respectively.

III.PROPOSED MARKETING/PROMOTION PLAN

A. Proposed Product or Service

One of Urban Air's main services include their daily deals and normal ticket prices. There are

different timings for various other activities such as fitness jump, homeschool jump, toddler/preschool

time, and open jump. Some fun events Urban Air likes to offer are night events with discounts all

around. For example, one highly acclaimed park activity is neon night, an event held on select Friday

and Saturday night. Another much anticipated night is Family night: every Thursday after 5 pm is

family night Get dinner, fun and family time all in one. Some other examples of fun events are

dodgeball tournaments, Teen night, Middle school and open jump!

B. Proposed Pricing Policy

Urban Air has been noted to be affordable, and Well worth the money! In figure 2, the pricing

policy for daily entrance and open jump is listed. However, prices for park activities are slightly

different and often are packaged in a bundle. Such other activity bundles are shown in figure 3.

Something that many customers love and come back to us all the time and express their happiness are

our birthday bash party packages. Starting at $175, the Classic Kid's Birthday Parties include either a

party zone table or a private party room. With the ability to add pizza, drinks, and party favors, the

combinations are endless. One of Urban Airs most prestigious party themes is the Glow-In-The-Dark

theme. Starting at $199, the Glow-In-The-Dark theme is enhanced as the lights are off, the lasers,

strobes and black lights are on while the kids play glow-in-the-dark dodgeball and jump to their

favorite songs. In figure 4 to the right, the Glow Party Room is one of the bestsellers in birthday

parties. Kid's get everything from dodgeball games, unlimited access to ALL park activity areas, glow

sticks, balloons and parent's don't have to worry too much as all party areas are monitored with trained

staff and set-up and cleanup are all taken care of. At $275, this is one of best-selling packages.

C. Personal Promotion
 We plan to promote this new location of Urban Air through our previous already existing

locations throughout Texas. One such promotion we are looking forward to is our Pump It Up Pass.

This pass will allow each child (plus one parent) to have a full month (30 days from acquiring pass) of

open jump time at our upcoming Flowermound location. The passes will be given to the first 50 kids

who arrive at our Spring Break Bash, an event full of fun, food, bounce houses, and giveaways with the

purple and yellow black-light theme: Lots of shirts, hats, pens, phone cases, and custom headwear will

be thrown into the crowd at random times! This event will be held at our Frisco location, 10570 John

W. Elliott Dr. #900 Frisco, TX 75033 on June 12th, 2015 beginning at 5:30 PM. This will be held in

the summer because it will give us time to develop a finalized plan, blueprints, financial plans, etc for

the Flowermound location. We expect to finish this location by the middle to last weeks of June if we

start planning by December 2014. This is a good time for a promotion as many kids are out of school

by June 7th and are ready to have some fun during their summer vacation.

D. Non-Personal Promotion

Urban Air at Flowermound is appealing to kids of all ages from 9-99. Its basic appeal is a fun

trampoline park with many activities such as dodgeball tournaments and aerobic classes. As an initial

promotion plan, we plan to coordinate with the other Urban Air locations around Texas and get them to

promote our new location. This would be around the time when the location is almost ready and open

for business. In addition to our Pump It Up Pass offer that was earlier discussed in the personal

promotion plan, we plan to use the referral program, which is successfully used by many other

businesses. If a customer refers another friend to the new Flowermound location within the first 15

days after its grand opening, both the initial customer and referee will receive 15% off their next

purchase at Urban Air and an additional coupon that permits One free child ticket with the purchase of

an adult ticket. We know that this technique will be very successful because most kids love coming

with their parents and the parents enjoy the discount they are getting. Other than the two forms of
promotion, we are focusing a lot of our effort into social media- Facebook, Twitter, Instagram- as most

of our jumpers are youngsters.

E.Place

I plan to franchise my location of Urban Air at 7890 Long Prairie Road Flowermound, TX

75022. This location is well placed because of its ideal location in the Highlands of Flower Mound. As

mentioned before, this location is perfect for the future Urban Air location as it would be centered

around retail stores, restaurants and services such as nail salons. Our main channel of distribution will

be through the manufacture who already creates and sells Urban Air equipment; We will go through the

main factory, which is already assimilated with the other locations in Austin, Frisco, Mansfield,

Midland, Rockwall etc and will receive our materials, trampoline frames, play areas, safety equipment

and such all from that one distributor located in Houston, TX. We will also need to deal with patents

and safety features as safety is the number one thing that most parents are concerned with when they

hear of a trampoline park. Unfortunately, broken bones do happen. Even when we are most careful,

there are sudden accidents that just happen that we can't prevent. From our side, we make every jumper

watch a safety video and a few of our empolyees run through a list of rules that must be abided to.

IV. PROPOSED FINANCING PLAN

A. Projected income/cash flow statement

In the 2015-2016 year, we are planning to make a gross profit of $762,340. This is determined from

the interviews I had with one of the main sales employee at Urban Air in Frisco. I discussed how to

franchise a location of this trampoline park, how much it would cost me, and how much of a loan I

should be taking out; We discussed the financial parts of this franchise. Total sales are expected to be

$1,850,000. We cut our advertising cost in half during the 2016 year because after the first year, much

of the advertising will take care of itself. Additionally, we won't be spending that much on advertising
because we have experienced with past locations that word of mouth works best as people tend to

believe and relate to when another family tells them about their experiences. Advertising for our first

year is significantly larger than our next projected year because of the startup costs that we have; the

summer bash, the loss in income from the two coupons we are offering, etc. Our franchise fee is

$60,000 as pertaining to Urban Air co. Our equipment cost for the first year is going to average

$415,000 and then drop down significantly to $100,000 for any additional new equipment we will

introduce. Some of our major expenses are the main trampoline frames, the main trampoline pads,

payroll, startup costs, utilities, rent on location, maintenance and the annual franchise fee. Insurance

would be $23,000 our first year and then extend to $27,000 our second year. Insurance was one of the

biggest challenges for us. Trampoline accidents happen because there are no nets and usually occur

because there wasn't supervision. It took quite some time to find an insurance company that would

realize all the safety features we installed and the caution our employees take. Our interest revenue is

10%, adding $185,000 and $350,000, respectively. After deducting our income tax expense, which is

6%, our net income for the 2015 year is $762,340.

B. Projected Three Year Plan

In the next three years, we plan to increase our customer base and our revenue. Our location is already

big enough, so there is no reason to move into a new facility. The facility is well-positioned as it is

surrounded by facilities that will support Urban Air's growth. We have predicted that we will have at

least 1,200 more jumpers in the 2016 year, 1,800 in 2017, and 2,100 in 2018. This information was

from the interview I had with one of the main sales employees. I discussed all the financial matters

with this employee and I brought up what the projected increase in jumpers would be, in relation to the

other Urban Air locations. In terms of pricing, as the number of jumpers increase throughout the years,

the pricing may rise a bit just to stay in lane with the ratio of jumpers to income.

C. Capital and Repayment Plan

Looking at my expenses and advances I must pay before starting the company as external capital, I

have decided that I will need a $1.3 million loan; the remaining amount that is unused from the loan

will go into savings and future spending like any sudden repairs. Our income statement affirms that we

will need a minimum of $1,224,000. I am going off the expenses part of the income statement because

if we fall short of the net income or revenue, the expenses will still be there and starting off with debt is

not the right thing to do. I know that taking a little bit more in the loan is better than having debt later

that can impact the growth of the company. I plan to pay, whoever or wherever I get the loan from,

back in increments of $550,000 a year. This will take around 2 years. In that amount of time, we would

have doubled our income, so in case we perform less than expected in the 2015 year, we have the

income in the 2016 year to back us up.