Clothing Production--- Children’s Wear Production ---Children’s Wear Supplier

Requirement

Requirement to applicant
　　Being with independent capacity for civil liability and rich operation experience of branded garment;
　　Having identification to Lulu Bear’s philosophy and values;
　　Being with good commercial credit and certain capability of investment;
　　Being willing to follow Lulu Bear’s operation system, accept Lulu Bear’s systematic training and operation guidance, and adopt the stated prices, services, and regional protection, etc.
Requirement to store
　　It shall be 30sq.m. for specialty store and 20sq.m. for authorized counter in minimum, lies in the local business area, and adopts “Design Standard for Lulu Bear Specialty Store or Authorized Counter” for decoration.
Requirement to capital
　　I. Deposit (Return at contract expiration)
　　1) RMB 5000
　　2) Agent deposit
　　Grade A: RMB 30,000 (provincial)
　　Grade B: RMB 20,000 (capital city or key coastal city)
　　Grade C: RMB 10,000 (municipal or key county city)
　　II. Franchising fund
　　1). Grade C: RMB 3000
　　2). Grade B: RMB 5000
　　3). Grade A: RMB 10,000
　　III. Discount
　　1) Franchiser: 55% discount
　　2) Grade B & Grade C agent: 58% discount
　　3) Grade A agent: 60% discount
　　II. Changing articles
　　Franchiser: 10%, agent: 15%

Franchisers & Chain Stores

　　Applicant’s region is sorted into Grade A , Grade B and Grade C by its administration, local population and economy:
　　Grade A City ---- Upon the date of signing a contract, in which a standard store shall be established in three months, the regional headquarters shall be established in half year, and at least five franchising stores shall be developed in two years;
　　Grade B City ---- Upon the date of signing a contract, in which a standard store with office shall be established in three months, and at least three franchising stores shall be developed in two years;
　　Grade C City ---- Upon the date of signing a contract, in which a standard store shall be established in three months, and at least two franchising stores shall be developed in two years;

Franchiser’s Responsibility

Lulu Bear franchiser shall shoulder the following missions:
　　 1) Taking an active part in exploring franchising market;
　　 2) Training and managing franchisers at lower levels;
　　 3) Having operation guidance to franchisers at lower levels;
　　 4) Supervising and controlling the local franchising network;
　　 5) Establishing logistics system to offer enough goods on time to franchisers at lower levels;
　　 6) Supervising whether franchisers at lower levels organize activities according to standard and abide by the franchising contract or not.

Return Analysis

Specialty Store

Authorized Counter

Presumed
Business Area: 30sq.m. Monthly Rent: RMB 6,000
Price: 20% discount of branded price yearly
Staff: two persons
Average salary: RMB 1,000
Predicated Investment:
Franchising Fee (or deposit): RMB 10,000
Decoration: RMB15,000 (in three years)
Rent: RMB 18,000 (two month deposited)
1st Purchase: RMB 40,000
Promotion: RMB 3000
Cash: RMB 10,000
Total: RMB 96,000
Predicated yearly profit and loss
Yearly sales income: RMB 450,000 (monthly RMB 46,875 x 12 x 20% discount)
Yearly sales cost: RMB 253,125 (x 55% discount x12 months)
Yearly sales gross profit: RMB 196,875
Yearly sales expense
Store Rent: RMB 72,000 (RMB 6,000/month x 12 months)
Staff salary: RMB 24,000 (RMB1000/month/person x 2 persons x 12 months)
Water & electricity bill, tax: RMB 18,000 (RMB 1,500/month x 12 months)Decoration fee: RMB 5000 (RMB 15,000/3 years)
Other expense
RMB 10,000 (RMB 1000/ month x 12 months)
Total expense: RMB 129,000
Yearly profit: RMB 67,875

Presumed
Business Area: 20sq.m.duction:28% of sales income
Price: 15% discount of branded price yearly
Staff: two persons
Predicated Investment:
Franchising Fee (or deposit): RMB 10,000
Decoration: RMB 10.000 (in three years)
1st Purchase: RMB 30,000
Cash: RMB 20,000
Total: RMB 70,000
Predicated yearly profit and loss
Yearly sales income: RMB 380,000 (monthly RMB 37,254 x 12 x 15% discount)
Yearly sales cost: RMB 201,171 (RMB 37,254/ month x 55% discount x12 months)
Yearly sales gross profit: RMB 178,828
Yearly sales expense
Counter deduction: RMB 106400 (RMB 380,000 x 28%)
Staff salary: RMB 19,200 (RMB 800/month/person x 2 persons x 12 months)
Decoration fee: RMB 3,333 (RMB 10,000 / 3 years)
Other expense RMB 3000
Total expense: RMB 131,933
Yearly profit: RMB 46,895

Guarantee System

Eight Edges
　　Mature operation mode: No pains, no gains. Lulu Bear has a decade of experience of franchising, and developed its own characteristic operation mode with simple but powerful operability.
　　Periodical training: Lulu Bear provides franchisers with all kinds of professional trainings, such as operation management, marketing and the latest fashion, to make them progressed in the process of operation.
　　Whole-process operation management: Lulu Bear headquarters provides franchisers not only with a full set of mature operation mode, but also with whole-process supervision and guidance to support franchisers wholeheartedly.
　　Opening operation management: Before opening, Lulu Bear headquarters will offer franchisers operation related guidance and support, including site decoration and goods allocation.
　　Logistics: Lulu Bear headquarters provides franchisers with logistics and delivers them the latest production information and goods.
　　Market protection: Franchisers form their own markets by city to hold the market and ensure the economic benefit.
　　Innovative plan: Innovation is the life of Lulu Bear. At the end of each year, Lulu Bear fixes its topic in the following year. In each quarter, Lulu Bear develops different themes of children’s dress and assorted ornaments to enrich its stores and satisfy customer.
Propaganda & promotion: Lulu Bear headquarters has Propaganda Dept. and has invited brand management corporations to maintain brand image and make Lulu Bear promoted in a professional and systematic way.

噜噜贝尔品牌支持系统

Eight Unities
　　Philosophy: Lulu Bear aims to build the classical fashion for urban children, and bring them back to a colorful world. The philosophy is adaptable to the planning of all Lulu Bear products, specialty stores and authorized counters.
　　Strategy: Lulu Bear’s strategy is to make franchisers in provincial capital city driven those in cities and around. “Lulu Bear” value is internationalized children’s dress. Lulu Bear aims to lead the international fashion of children’s dress.
　　Recognition System: Lulu Bear has united image, including trademark, store decoration, poster, POP, promotion material, product package, and staff’s uniform, etc.
　　Marketing Price: Lulu Bear specialty stores and authorized counters have same marketing prices to establish superior market credit.
　　Service Management: Lulu Bear has a full set of mature management system to provide franchisers with thoughtful service.
　　Store Management: All specialty stores and authorized counters follow the united layout and planning to present Lulu Bear’s distinguished image.
　　Employment: Lulu Bear insists on thoughtful and wholehearted service. All staff shall be employed according to the related standard to ensure Lulu Bear’s image.
　　Training: Lulu Bear is like a school, where there are systematic updated trainings executed by both headquarters and franchisers to strengthen Lulu Bear constantly.

Franchising Procedure

　　A new store shall enter on business in 15 days upon addressing.
　　Application → evaluation → submitting documents → signing contract upon terms of cooperation → receiving authorization upon paying deposit → Lulu Bear offers solution and quotation for design and shelf making → paying the decoration → proceeding with decoration → making counter with image → preparing goods → Lulu Bear delivers goods and shelf to franchisers (in seven days upon receiving payment) → shelf installation, arranging goods, and entering on business → market management → service and management.
　　1. Applicant asks Lulu Bear Headquarters for Application Form, reads and fills in the form carefully.
　　2. Applicant provides Lulu Bear Headquarters with Applicant Form and the related documents that can prove his/ her capability, such as ID, copy of Business License.
　　3. Lulu Bear audits applicant’s qualification. Two parties reach an agreement, and Lulu Bear specialties introduce development planning, marketing strategy, and detailed cooperation agreement to applicant.
　　4. Two parties sign contract, and applicant pays the related fees.
　　5. Applicant addresses his/her store and reports that to Lulu Bear Headquarters for approval.
　　6. Applicant signs store renting contract (or counter renting contract) and passes graphic drawing and photos inside and outside store to Lulu Bear Headquarters.
　　7. Applicant himself/ herself is responsible for the design and decoration shelf, prop and store, and Lulu Bear Headquarters provides applicant with prop and shelf at coast.
　　8. Applicant proceeds with arrangement for entering on business ( including employing staff/ arranging procedures/ installing telephone, etc)
　　9. Two parties coordinate and arrange opening promotion and related issues.
　　10. Lulu Bear Headquarters arranges goods dispatching according to applicant’s surroundings, and applicant pays related fees.
　　11. Lulu Bear Headquarters offers training to franchiser before opening, including product knowledge, marketing sill, and service etiquette.
　　12. Representatives from Lulu Bear Headquarters attend opening ceremony.
　　13. Lulu Bear Headquarters offers management and support in later period.

Avoiding Risk & Withdrawal

To guarantee franchiser’s rights and interests, Lulu Bear avoids risk by the strict network management.
　　Risk Predication:
Before signing contract, Lulu Bear Headquarters will offer feasibility analysis, such as market environment, market potential, investment budget and return, to franchiser to make him/her well understand the prospect.
　　Supervision & Guidance:
After signing contract, Lulu Bear Headquarters will continuously support franchiser, and proceed with real-time monitoring to franchising store through network to assist franchiser for operation management.
　　Operation Diagnosis:
For over half-year franchising store in loss, Lulu Bear Headquarters will assist franchiser make diagnosis and further research and analysis, from store addressing, to product allocation, product structure, management mode and market environment, to propose solution and help him/ her out of dilemma.
　　Complete Withdrawal:
For franchising store incorrigible, Lulu Bear Headquarters will decide if withdrawal can be approved according to the practical situation, and returned franchiser deposit. Meanwhile, franchiser’s stock will be refunded according to evaluation.