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A brief history of the school
The idea of opening a play school was first conceived by my parents Bimla Arora (founder & director) and DK Arora (chairman). The immediate trigger for the venture was the need for a pre-school for my younger sister. My mother was not really satisfied with the pre-schools she checked out. Based on the 30 years of academic experience in India and abroad, my parents started a model school that aimed to create a child-friendly environment. The first play school was opened in 1989 in New Delhi.
When and how the idea of evolving into a chain developed
After the success of the first Shemrock school, we opened a second branch. The second pre-school also did well. Children started coming from far off places. The system that we created was working wonders and parents were satisfied with the quality of education we were providing. People wanted to replicate our style of imparting a stress-free learning experience in their schools.
However, there were limitations on how much capital and real estate we could invest in. So in 1992 when we heard the advantages of franchising, we though it was the right model through which we could expand and reach a wider audience with our limited resources. This gave birth to the Shemrock chain.
Business model for expansion
When the demand for a third pre-school arose, we feared that quality might suffer as it would be difficult to manage so many branches. Since real estate was also expensive and it was difficult to source money, we opted for a franchisee-led model for expansion.
We had local partners who were convinced about our model. They found the right location and invested according to the guidelines established by us. This model allowed us to focus more on the education part. While we invested our time and energy in research and development, our partners looked after the local issues.
Word-of-mouth worked well for us as a strong promotional tool. The early mover advantage also provided us enough time to recover and understand the benefits of franchising.
For the first 10 years, we restricted our presence to Delhi and the national capital region. Gradually, we started receiving franchising demands from smaller towns and cities. It was only in the late nineties that we started venturing outside our core territory. Now, there are 175 operational schools and we plan to increase it to 350 in the next four years.
How to decide on a new location
First of all, we consider the area requirement. We prefer opening a school on the ground floor. A minimum of Rs 5 - 10 lakh investment and 2,000 sq ft covered area is required to open a pre-school. Second, the area selected should have sufficient population that a pre-school/school can cater to. Third, we make sure that the location is easily accessible.
One also has to consider the cost of monitoring such a location and also the implications of not being able to visit the location regularly. If a new location is not well developed, it may require additional support. A good balance is imperative so that the franchisee has a long rope but he does not over modify a successful system, thereby losing all the reasons that made us successful in the first phase.
Maintaining consistency of service across locations
It is important to maintain quality and consistency right from the start by choosing the right partner for franchising, as well as staff members and school heads. We regularly conduct training programmes for our people so that they can manage our schools without compromising on the quality. The training programme also gives a complete insight into our comprehensive, child-friendly curriculum, so that they can incorporate the same curriculum in their schools exactly the way we designed it at our corporate office. Also, we provide them complete support so that minimum planning is left to be done at the branch level and the same standards are applied all across.
The corporate office also remains in constant touch with the branches. We also have direct communication with the parents for regular feedback.
Challenges faced & lessons learnt
Being pioneers in the pre-school sector, we did not have a ready model before us that we could replicate. We had to learn as we went along. We had to design better systems so that same problems and issues did not crop up over and over.
Scaling up: At what point does a chain became financially viable
Since we had a very conservative growth in the past decade, it has been a very profitable venture for us as we had enough time to evaluate all the factors before we could offer the franchise to anyone. However, today, if an entrepreneur plans to develop a school chain, the venture requires substantial capital and a lot of effort to gain franchisee's confidence to sign up with them. The economies of scale play a very important role now. One needs to sign up with at least 50 schools to reach the breakeven point.
If you had to start again, would you do anything differently?
We think we took the right decisions all the way. We got the opportunity to start over when we had to launch our senior school chain. We replicated the same model that we developed two decades ago.
FROM THE HORSE'S MOUTH
3 things to keep in mind when building a chain
Location
Area selected should have sufficient population and easily accessible. If a school branch is not doing well, closing it and seeking to open another branch in the same area is not a trait of a good franchiser
Budget
A minimum of Rs 5 to 10 lakh investment and 2,000 sq ft covered area is required. One needs to sign up with at least 50 schools to reach the breakeven point
Customer service
Be honest in your communication and commit what you can do. People need time to trust your model. Patience is important
HOW TO BUILD A CHAIN
Amol Arora, vice-chairman & MD, Shemrock & Shemford Group of Schools
