AVANT GARDE

THE B-PLAN EVENT

 XYZ Ltd., a food joint franchise of the ABC Ltd.
is facing the following major problems:
 Poor quality of forecasts
 Cash problems
 Lack of profit
 Lack of storage space
 Delays in replenishing the existing stock
ABOUT THE CASE
For this, we devise the following 3 step action
plan:
 Conduction of a survey by the proprietor
of XYZ Ltd. for demand-supply analysis
from the customers.
 Terminating the franchise contract with
ABC Ltd. and diversifying the product
portfolio.
 Collaborating with various societies in the
college in their events.
 ASSUMPTIONS

Only food joint on The proprietor can The college will not The enterprise pays
campus. get out of the object to canceling royalty monthly to
franchise contract the contract with ABC Ltd. and had
without any legal the franchise. some security
implications or deposits with the
charges. company.

P and Q are capable The enterprise had a There are societies

of supplying the large refrigerator for in the college that
required goods for the storage of dairy undertake social
diversifying the products which work.
required a substantial
product line.
amount of electricity
and space.
 A number of college students that visit
college every day:
Number of students enrolled in Colleges each
year- 2,85,60,000(source= Ministry of HRD)
Average attendance of an Indian student –
60%
GUESSTIMATES Number of students in Indian colleges on a
day- 1,71,36,000
Number of colleges in INDIA = 38,498
Number of students in any college at a time in
INDIA= 1,71,36,000/38498 = 445 Students.
 FINDINGS
• The proprietor of XYZ Enterprise has failed to analyze the demand for its products due to
which it is losing its customer base. Also, due to the limited shelf life of dairy products,
few items get expire before they can be sold which leads to losses.
• The enterprise is also short on cash as a major chunk of its revenues is spent on ordering
consumables, paying for salaries, and other costs. A very small chunk of cash is left for
daily expenses.
• The enterprise is not able to generate enough cash flow from its core business. Rather it
focuses more on selling evening snacks that have a higher profit margin.
• The enterprise is short on storage. To accommodate more items (if required), it will have
to take extra storage from college/university by paying 15% more rent thereby adding to
the costs of business.
• The distributor of the franchisor firm ABC Ltd. does not replenish the inventory on time
which causes dissatisfaction among customers. The other suppliers of the enterprise XYZ
supply all the required material in one shot, leaving the enterprise with storage
problems.
STEP 1

Conducting a Survey
 ABC Ltd. will conduct a survey with its customers(the
college students and staff) which will cover the
following main points in order to gain information
about their likes and dislikes-
•How often do you eat from canteen?
•Which are our top 3 products which you buy the

SURVEY most?
•On an average, how much do you spend in the
canteen at a time?
•Is there anything which makes you hesitate to buy
food or drinks from the canteen?
•Is there any addition that you would like us to make in
our menu?(give five options and add the three items
which most students wish to get added)
•Any other suggestions from your end to the college
canteen?
STEP 2

Terminating the
Contract
By the above-mentioned findings, we would recommend XYZ enterprises to terminate
their Franchise contract with ABC Ltd and start with their venture as a food joint in the
college campus owing to the following aspects:

1. The products supplied by the distributor of ABC Ltd. are irregular which leads to
dissatisfaction among college students as they do not get the desired item on time while
some items are in excess. Hence, terminating such a contract would leave the proprietor
of XYZ enterprises open to options in terms of the suppliers.
2. This further allows XYZ enterprises to focus on evening snacks which allow for a higher
profit margin, thereby, converting it into the core business of XYZ enterprises.
3. By discontinuing the franchise contract, not only will the enterprise be freed from the
monthly burden of royalties but also receive the security deposit from ABC Ltd. which
would be around 50,000 [1]. This extra cash will be used to expand the product range of
XYZ enterprises to other products such as soft drinks, chips & other brands of ice cream.
4. The new products such as soft drinks, chips which have a longer shelf life as compared
to dairy products, would prevent losses in terms of expiry of items.
5. Venturing into products such as soft drinks and chips would also save
the enterprise a fortune on storage and electricity costs(refrigeration)
which are a major component of operating expenses of the enterprise.
6. Since earlier all the consumables were dairy items and had to be
stored in refrigerators, this required a huge refrigerator but now since all
items are not dairy products and need not be kept in refrigerators, the
same can be swapped for a smaller refrigerator, thereby giving additional
space and some cash in hand.
7. Switching over to other suppliers and wholesalers such as P & Q will
ensure a timely supply of goods and solve the problem of delay
replenishing stock.
STEP 3

Collaborating with
College Societies
All colleges have their respective societies such as Enactus, NSS, etc. which
undertake several social programs that include distributing food to the needy
and poor people. So, the enterprise must collaborate with them to provide
goods at a fair price which would help the societies find a supplier easily
instead of looking for suppliers outside the colleges and also give the enterprise
the following benefits-
1. This would provide the enterprise an opportunity to help in social work as
well as help in developing goodwill among the college faculty and students.
2. Once a supplier for various college societies, the enterprise will have
bargaining power with the college in terms of rent that is to be paid for add-
on storage, thereby helping in saving costs and providing additional storage.
Reference
1. Average of dairy franchise’s security deposit in the country