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Thasmai Franchise Proposal Tier 1 2020
Thasmai Franchise Proposal Tier 1 2020
Thasmai Franchise Proposal Tier 1 2020
Tier 1 City
Thasmai Automation, arguably the most aggressive Home Automation and Home Theater
Integrator in South India, is looking for a Franchisee to cover your District
The Franchisee will be given Exclusive rights and access to sell all Brands/Companies linked to
Thasmai Automation through an exclusive agreement with the company (refer Appendix A)
Thasmai will offer complete On-the-ground support to run the branches on Autopilot
starting from
-Hiring and Training of best employees for Branch Sales, marketing and project engineers
-Central Marketing efforts in local city/Town (outreach to all architects), as well as individual
lead generation in each town by area mapping, engagement with local media, as well as
tertiary sources such as Website (Google, Maps), Facebook, and other social media. Thasmai
will also secure top tier access to Just Dial, Sulekha and other directories to enable lead
generation.
- Central governance of daily Sales and Operations performance.
- Quality Adherence by central Quality and Audit team for all internal processes in the branch
(Quotes/DCs/Project Execution)
- Customer Satisfaction (CSAT) measurement and feedback done from central CRM team, and
also ensuring further lead generation
India is the fastest growing market for home automation. The industry has been witnessing an annual
growth rate of 30-40 per cent. Given the burgeoning demand for electricity in India, conserving energy
also becomes an imperative for the future. And herein lays the opportunity for automation systems,
which control the basic functions of a home automatically or through remote access of a computer and
improve the standard of living, while ensuring energy efficiency.
The home automation market is worth about $300 million as of today and the growth potential of the
sector has been pegged at Rs 20,000 crore ($3.2 billion) by 2021. In the current market, the surge of
smart phone usage will contribute significantly to Home automation usage in the upcoming years.
• Home automation is still viewed as a luxury and not a necessity by Home owners. Due to the high
cost of products currently, Home Automation is considered affordable by Individuals with Net Worth
more than 10 crore. Currently, there are 182,000 millionaire households in India. This number is set
to grow to 294,000 in next 4-5 years
• People with Net Worth of less than 8-10cr can’t relate to Home Automation as an add-on, since
other priorities for the home would then fight over the same budget (for e.g. Kitchen
modules/bathroom fittings/Jacuzzi/ swimming pool/ consumer durables such as high end TVs).
Because Home automation is still viewed as a luxury offering, the Finish, Look and feel of the
product, as well as the brand image associated with the product matter MORE than technical
features of the solution, or the value in pricing.
There are several Indian start-ups that are making solutions that are retrofit and have real
values at affordable price. Being technology startups, they lend a lot of importance to
features, however the look and feel of their products are unimpressive till now
We opine that solutions with cheap look and feel, unknown/new brand with affordable price
point is considered as low quality product in the Indian market.
Hence, Good solutions and reasonable price points are still not able to make impact in Indian
market. Builders are the only segment that has encouraged them, lot sof startups are getting
into Builder trap (Low margin, Higher risk) in recent times
Let’s analyze how the Indian Home automation market is structured currently;
Since the ticket size of each unit is quite high (relative to Indian purchasing standards), the focus is on the
luxury aspects of the product offering (look, feel & finish, and the brand image). This explains why many
successful start-up ventures with promising solutions have not been able to crack the market compared to
global MNCs with refined products
The above graphic shows how the value proposition for Automation will continue to increase, while it becomes a dream for
fewer consumers due to increased affordability
The estimated market size for Home automation in India is currently 300$ million, some characteristic
features of the offerings available in the market today are
• Current suite of Offerings do not cater to the mass market: Automation products are not
manufactured widely, nor are they branded or positioned to fit the needs of the average middle
class Indian consumer. It is still considered a Niche High end add-on for the home which is currently
only targeting HNIs or buyers of premium villas/apartments
• Designing and installing Automation in a home is still a technical process and cannot be done by the
consumer themselves. Most typical electricians in India would lack the know how to use controllers
and the programming involved to set up the protocols.
• Products having good specs and finish are expensive: Some Global companies like Crestron have
good solutions with excellent finish and technical specifications; however they are all priced beyond
the reach of most Indian consumers.
• Lower priced solutions have shabby look and build: Some Indian startups and companies have
some offerings in the tens of thousands Rupees price points, which despite their compelling value
offering, do not have a classy look and finish due to which they have not been embraced by the
market.
The next phase for the Home automation market will occur based on a few key improvements in the
technology available in Automation, such as improvement in Wireless Automation solutions as well as
lowering of price points as the market begins to accept Home automation usage in larger volumes.
• Big companies like Philips, Siemens & Schneider will eventually bring out fairly mass market
automation products with appealing user interface but at a lower price point than today, and more
people will be able to afford the products
• Solution offerings will slowly move to a more user friendly design, where aside from a few key
components, users will be able to buy and use the Automation products themselves without the aid
of any technical expert
• Some foreign players will have niche in high end automation and focus on the premium market (>20
Lakh ticket size).
One of the main buzz words everybody has been mentioning in the last few years is the Internet of Things
(IoT). The Internet of Things is the network of physical objects or "things" embedded with electronics,
software, sensors, and connectivity to enable objects to exchange data with the manufacturer, operator
and/or other connected devices based on the infrastructure of International Telecommunication Union's
Global Standards Initiative. IoT will allow objects to be sensed and controlled remotely across existing
network infrastructure, creating opportunities for more direct integration between the physical world and
computer-based systems, and resulting in improved efficiency, accuracy and economic benefit.
The Internet of Things revolves around increased machine-to-machine communication; it’s built on cloud
computing and networks of data-gathering sensors; it’s mobile, virtual, and instantaneous connection; and
they say it’s going to make everything in our lives from streetlights to seaports “smart.” IoT devices can be
used to monitor and control the mechanical, electrical and electronic systems used in various types of
buildings (e.g., public and private, industrial, institutions, or residential).
As with any industry, as Automation for residences become common place, the market will eventually be
crowded with several players, multiple product offerings and competitive pricing. The market for just Home
automation is estimated to be 3.2$ Billion by 2020. If IoT were to become common place, then we’re looking
at a multi-billion dollar opportunity for Thasmai in the Indian market.
• We foresee that all major players will have a presence leading to competition in prices and lower
margins
• The products themselves will reach a ‘plug and play’ type of usability, where users can simply
purchase pieces from the store and use it themselves without any support from professionals
• Many (most) houses will incorporate some aspect of Automation in the home, from Lighting,
security or HVAC elements. Home Automation will be as commonplace as having a Fridge or
Television in the house.
The Indian market is slowly waking up to the joys of having a Home theatre in the comfort of the house.
Status indicator, the sheer pleasure of having world-class entertainment the comfort & convenience of
your own home.
India has historically been a movie-crazy society with film stars being accorded larger than life status
(and in some southern states, demi-god status). The influence of Movies is noticeable in daily life; with
movie dialogues part of most people’s vernacular, and movie tropes instantly recognizable in peoples
ongoing discussions and opinions. The Bollywood industry, and its smaller regional counterparts in
various states (mainly Tamil Nadu, Andhra Pradesh, Bengal, Malayalam, Bhojpuri) churn out more than
2000 movies a year. The majority of the audience expects escapist and feel-good fare, and many people
watch every movie that releases in theatres.
However, India is also a cost-conscious market and movie watching has increasingly become an
expensive affair with a movie for two in any metro easily adding up to over Rs1000 (along with the tub of
popcorn, add the time spent in queues and traffic).
For a discerning viewer, however, Indian theatre’s do not offer the best cinematic experience with
multiple advertisements (all poorly placed), a forced interval to throw more commercial setting, and an
ill-mannered movie audience, all ensuring that the experience (as with so many other things) is a
community activity, you’re forced to take in everyone’s opinion and mood without being able to enjoy
the subject matter immersively. Until recently (perhaps the turn of the millennium), technology hadn’t
advanced sufficiently in the Home Domain for Home Theaters to ever seriously compete with the real
Theater experience, however with rapid strides in consumer tech on all fronts (Video/Audio/Acoustics)
as well has falling prices with greater volumes, it was just a matter of time before the quality of your
experience in a Home Theater would rival and eventually exceed that of a cinema theater.
Another key factor to consider in the Home theater market is the extremely relentless peer-driven social
and buying behaviour of Indians. Once a product or a segment becomes even minutely fashionable it
then spreads quickly with everyone wanting to replicate the same idea/thing in their lives as well. This
leads to an outsized incentive for brands/companies which are able to get popular and reach a minimum
network of influence.
For a country where spending is heavily dictated by peer-approval and validation, it took a long time for
Home theaters to become a fashionable ‘thing’, through most of the 1990’s and early 21’st century most
Indians had only 2 ways to display their affluence, a big house and then a car. To witness the rising GDP
in India through the years, all one needed to do was check the porch of an upper middle class family, as
Maruti Suzuki changed to Hyundai and Honda and even BMW or Audi!
With an expanding discretionary spend as a result of the country’s relentless economic growth over the
last 10-15 years, more Indians have branched into the upper-middle class and wealthy segments, and
now are looking for newer ways to flaunt their wealth and reiterate their social standing. Cars and
Homes have been the primary means to fulfill the same so far, but recently Home theaters have
emerged as an attractive alternative to distinguish oneself!
Tie-Ups with Best Brands Across categories- Best technology & Solution delivered in a single platform
Home Audio- Harman (Revel/JBL Synthesis) (8$B company, world #1 in Audio & Speakers), Monitor
Audio (UK Hi-Fi Speaker brand)
Electronics- Denon (15$B company, world #1 in audio electronics), Marantz
Lighting- Crabtree from Havells (Largest Indian Electrical Company) Hager (Leading German Brand),
RTI (US Automation Giant)
Amplifiers
Our Business Model focusses on partnerships with the best brands/products available in the market to
create the most optimal solution for the customer. Instead of focussing on R&D or product development,
Thasmai has a de-risked model of focussing on sales and distribution channels thereby ensuring we can
choose to tie up with the best available solutions at any point in time.
Solution Effectiveness
Design
Service:
Thasmai is the only company that offers Lead time (resolution) of 48 hrs on all queries, 12 hrs on
priority calls.
We attend all service calls with a back-up product (which has been logged in the complaint). This is
fitted at the customer’s location while we take back the defective product and send it to factory, this
ensure customer has minimal disruption in his routine.
Few more reasons why it’s a great deal for you as a Franchisee
Our systems and processes, not to mention our Brand Name, are already well-set in the market, so
you don’t have to build anything from scratch. All we’ll be requiring from you is your investment and
we’ll run the show for you, assuring healthy returns for your investment.
ERP
system &
Training
COE
Establishe
d rapport
with
Architects Business Model
built on Industry
expertise.
Scalable model
based on success
of initial branches
You benefit from our Experience curve and technical know-how assimilated over 6 years of being in
the industry, and the prior experience of our founders and employees in this industry.
Established Front Office processes: Multiple sources of lead generation (including Just Dial,
Architects and Sub Contractors), Placements in Media (TV Spots & Social Media) and Large
exhibitions (such as ET AceTech- Thasmai had the largest Automation stall in Bangalore for 4 years)
Thasmai in Acetech!
Largest Home theatre experience demo in India, located in our Banaswadi layout branch in
Bangalore. This serves ultra HNI clients who want nothing but the best specs and experience for
their dream theatre. The configuration in this theatre is mind boggling, with a 1000 sq.ft theatre
using 7.2.4 JBL synthesis speakers with Dolby Atmos, 19 foot screen with 4k resolution and
cinemascope lens. In short, the most awesome Home theatre demo in India!
9-Seater Top of the line JBL Synthesis speakers 19 ft screen width with
experience with 7.2.4 channel 4k projection and
Dolby Atmos cinemascope lens
We have a young, aggressive team and have incorporated a high performance work culture across
our company
We have a vast following on Social media on our Facebook
(https://www.facebook.com/ThasmaiAutomationBlr/) and Twitter pages with close to 5000 Likes! A
strong presence on Instagram (https://www.instagram.com/thasmaiautomation/)
and Quora (https://www.quora.com/profile/Thasmai-Automation), where our account is a Most
Viewed Writer in India on Home Theatre topics
Thasmai has a set process for Centralized hiring, ensuring timely and excellent performance from
carefully selected recruits. The Cost of training, monitoring and guiding the employees is taken up by
Thasmai. Thasmai has tie-ups with all leading Job Internship sites across India. We also visit the top
8-9 engineering colleges in Karnataka, TN and AP to handpick the best available talent for Marketing
and Operations roles
Thasmai will also offer Partial investment on local promotional events (expos or seminars) and any
other promotional material offered by the franchisee to attract new customers
Clear exit clause: Our franchisee terms agreement will clearly define the criterial for non-satisfactory
performance, and an exit strategy for you if the business does not take off as expected.
Macro-Economic trends: One of the main buzz words everybody has been mentioning in the last
few years is the Internet of Things (IoT). With Thasmai’s expertise in this industry, we will stand to
gain from any macroeconomic growth in sales due to IoT and other new booms!
Investment
As a Franchisee, you will invest in a one-time capital expenditure of Rs 30 Lakhs which will be used
for the construction, interiors and material procurement for the branch
In addition, there would be monthly operational expenses in the range of Rs 0.5 – 0.7 Lakhs on
personnel and overhead expenses. Note- Op-ex will ramp up gradually, initial personnel will only be
front office (sales and reception) and the back office (operations & service) will be needed in full
supply from Month 3-4.
Returns
We offer attractive returns on your investment depending on our market estimates for your city.
Your main streams of revenue will be commissions on new orders booked, as well as commission on
projects executed on orders. We expect your branch to break even by Month 5-6, and earn full
potential of returns from Month 24-28.
For more details on the calculations used to arrive at these figures, please refer the Appendix at
the end of this document.
We have also attempted to explain how your returns would start arriving over the duration of your
investment;
Rewards Phase
Set Up Phase
Build Up Phase
Maturity phase
Exit Clause
The Lock-In period for the Franchisee would be 18 Months, during which time the franchisee will not
be able to terminate or move out of the agreement with Thasmai.
Post the 18 Month Lock in period, in the unlikely event of the branch not scaling up and meeting
either party’s performance standards, either party can request for a release from the agreement
upon giving a notice of 90 days.
If the Franchisee requests for a contract release post the lock in period, Thasmai will refund the
initial Capital Expenditure incurred by the Franchisee, minus depreciation (as accounted for each
asset type)
Your primary role as a Franchisee will be as an investor, you will invest capital expenditure
initially to set up the branch and incur regular operating expenses (Overheads, Salaries) on a
monthly basis. Your expertise as a complementary business owner will also ensure that leads
coming to your store/showroom can be easily routed to the Theater/Automation section to
close orders.
II. How do you ensure that Thasmai does not make a sale directly, or route an order
directly themselves without keeping Franchisee in the loop?
Our business (Home Automation & Theater integration) is primary service driven. The cost
incurred for Thasmai personnel coming over from Head office to your city every time on a
service call or for execution is not financially feasible. Also, the timely response expected by
a customer (of 1-2 days) is not possible to achieve if we keep sending personnel from Head
office every time.
Franchise Office also gets a monthly report from HQ on the sales made, and accrual of
commissions for that month.
III. What is to stop us (Franchisee) from procuring our own stock material from the OEMs,
why should be procure it through Thasmai?
While the Franchisee may attempt to procure stock directly through their regional
distributor, they would run into the following challenges;
Most Large OEMs like Schneider or Harman won’t even provide an appointment
with a single city vendor picking up a few pieces of stock
Approaching a dealer directly brings with it the responsibility of stocking i.e.
there will be a pressure of minimum volumes every month and quarter.
Since Thasmai is dealing with Pan India volumes, we would be able to procure
the material at prices well below what your regional dealer would offer
Thasmai is also bearing the cost of inventory and warehousing charges, any
fluctuations in demand or supply (and its subsequent financial risk) is borne by
Thasmai without any impact to the Franchisee.
IV. What support will Thasmai offer to my branch, in terms of promotions or increasing
sales?
On any local promotion, marketing or advertising efforts, the franchisee is encouraged
to propose the business case to Thasmai, and on the basis of the feasibility of the
proposal, Thasmai will partly fund 20-50% of the expenses incurred (to be decided on a
case to case basis)
Depreciation calculated using straight line method with YoY 30% rate
Home Amplifiers/Processors Marantz, Denon (top AV receiver brands globally) Regional Dealer (non-exclusive)
Theater
Projectors Epson (World #1 Projector brand) Exclusive EPP cinema partner
Sony, BenQ, Optoma, Vivitek (Top Projector brands globally) Regional Dealer (non-exclusive)
Screens Milan Screens (Top Indian screen provider) South India Level partner
Elite Screens, Liberty, Harkness Regional Dealer (non-exclusive)
Cables/HDMI QED, Monster, Profigold, Konig Regional Dealer (non-exclusive)
Wired Automation Crabtree (UK brand owned by Havells) Regional Dealer (non-exclusive)
A/V Integration RTI, Elan, Control4 (High end AV) Regional Dealer (non-exclusive)
Home Wireless Automation Hager (German Electrical Major) Regional Dealer (non-exclusive)
Automation Cubical, Fibaro Regional Dealer (non-exclusive)
Digital Door Lock Yale (World’s #1 brand in DDL) Regional Dealer (non-exclusive)
CCTV HikVision (World’s #1 brand in CCTV) Regional Dealer (non-exclusive)
Comelit (Italian company, World #3) South India Exclusive
Home Video Door Phone Distributor
Security Panasonic (Japanese MNC) Regional Dealer
Intrusion Systems DSC (World’s #2 intrusion brand) Regional Dealer
Average ticketsizes
Note:
1. Unit Price for any product should match to the price mentioned in Pricelist.
2. Any deviation in the price other than provided shall not be entertained.
3. Franchisee margin will depend on the discount offered to client.
4. No discount can be given in terms of Cables/wiring or Installation costs