With the IPL (Indian Premier League) gaining ground and carving a ‘niche’ in the history of the sport through franchising, we have come to see how the franchisees have contributed immensely in building their respective teams and their brands and in the process the entire game. I am not going to write about the IPL and Cricket as there is already enough that’s been written and spoken of. My focus is off course other sports and how franchising can contribute to the growth of alternative sports in India. What is the challenges ‘sportpreneurs’ (If I may use the term for Sports Entrepreneurs) face and what could be the possible solutions for them.
Lately, we have seen a renewed interest in all kinds of sporting activity. I was involved in structuring a franchise model for a ‘PaintBall’ company and was thrilled to see, so much is being done to popularise this sport in the country. Adventure sports are gaining ground in the company as we have a huge young population and with increasing incomes and awareness levels, the youth are definitely taking a liking to all kinds of sports.
Billiards & Bowling have already become something that every urban youth has done and does occasionally/regularly based on their interest levels. Combined with entertainment, these 2 sports have become a common leisure activity not to mention the seriousness with which many follow these. Newly crowned World Professional Billiards champion Pankaj Advani and other world champs like Geet Sethi are classic examples of how seriously the game is pursued in our country and how talent is being nurtured for victory in international competitions. We also have Vishwanath Anand who is the numero uno in Chess and has done wonders to the popularity of chess in India. Abhinav Bindra’s sole Olympic medal for India in the last games have raised Archery’s popularity and interest to an all time high. Vijender Singh is amongst the most popular boxer of our times and boxing is being touted as one of India’s stronger claim to medals in the next Olympics. Golf has grown tremendously over the last few decades and with the like of Jeev Milkha Singh and many others, the sport is witnessing growth at unprecedented levels. Hockey and Football are also progressing with icons like Baichung and Dhanraj Pillay.
Having said all of the above, I would like to focus on PaintBall and how we built a scaleable structured franchise programme around the sport and the challenges we foresee in building this sport in India. I would first like to begin with a brief background of the potential of this sport.
Paintball today is touted as the world’s fastest growing extreme sport, with over 10 million people in America playing the sport each year. The game has spread across almost the entire globe with a presence in over 100 countries.
In 1981, twelve friends played the first recreational paintball game using these industrial paintball guns on a field measuring over 100 acres. Since then, the game has exploded into a multimillion-dollar sport with amateur and professional tournaments across the United States and Europe, offering cash prizes in the hundreds of thousands of dollars. In 15 short years, after originating in USA, Paintball has established itself in over 200 countries as a Recreational sport & in over 50 countries as a Professional sport.
According to reports in the US Paintball (All the figures in this section are pertaining to US alone for 2007) Recreation Industry is estimated to be about US$ 750 million.
Corporate Training Industry is estimated to be US $800 million in the US. Most outdoor training programmes are conducted for team initiative and group problem-solving exercises. Current research indicates that the focus of wilderness programmes is primarily on leadership and decision-making (60% and 40% respectively). In contrast, the objectives of outdoor-centred programmes are much more wide ranging. They include team building (90%), self-esteem (50%), leadership (40%), problem solving (20%), decision-making (15%) and encouraging a sense of corporate ownership (2%). Players learn the importance of Teamwork and Strategy, and gain Self-Confidence while developing Leadership abilities.
Paintball equipment industry is worth US$ 350 million. Estimated Number of players worldwide is more than 22 million with 12 million active Paintball Enthusiasts in US alone. There are more than 375 professional Paintball Leagues the world over with Professional Paintball drawing prize purses as high as $500,000. Professional players sign contracts and get paid. There are more than 200 Paintball brands & Manufacturers in the world. Hence making it a sport and a core activity for corporate trainers who work around different modules.
Paintball is also extensively used by the armed forces across the world as a part of the Training Curriculum to their troops and soldiers, as it offers Real War-like scenarios, which serve as a perfect ground for training. The Indian army uses Paintball for its training purposes.
If India's demographic advantage is an opportunity for organisations to ramp up their workforce numbers quickly, the same resource is also presenting another window for the growth of the budding training industry in the country. The country's training industry, is now worth around Rs 5,000-Rs 6,000 Crores. In a country where the knowledge economy is booming, training budgets are an imperative. Traditionally, Indian companies spend anywhere between 0.5 and 2 per cent of their turnover on training their employees. IT and ITES companies, which are essentially people-oriented businesses, spend about 3-5 per cent of their revenues on upgrading employee skills. With focus on experiential learning, which involves learning-by-doing, Paintball is gaining amazing predominance in the Indian corporate training must do’s.
So what do we have on hand: A sport that has immense potential and how do we leverage it using franchising.
Lets Analyse A Few Core Challenges:
1) The sport is beginning to take off in the country and does not have a governing body or association that would play a role in the promotion of the game?
2) Why will a franchisee invest in the sport and create the needed infrastructure?
3) Who would market the sport and bring in the consumers. (In this case the player and the fan…both)
4) What is the role of the franchisor & franchisee? Who is suited to do what best and Why?
5) There are many domestic companies offering equipments and have fields that are promoting the sport in their respective cities? How could you integrate the entire effort?
6) The game presently costs at least Rs 300-500 for 30 Mins/60 Mins (I am not putting in the number of balls for a more generalized understanding), which needs to come down if the masses are to be involved? How does one bring this down?
7) There are 100’s of corporate trainers and training companies using the sport as a tool for their training programmes? How could this be leveraged?
8) How does one ensure and maintain safety standards?
9) Who is the ideal franchisee and how do you go about reaching them, as its not one of those Food, Education, Retail or Service franchise?
10) How much of investment will the franchisor have to put in and at what stages and what would be the recovery period…essentially the business plan?
11) How do you create a team that participates and wins at the international paintball competition?
Hence, we went about analysing the above questions and have come up with a franchise model whose basics were as follows:
1) The Franchisee brings in Rupees 8-10 Lakhs of Investment to build a Paintball field in his city. The equipments and the consumables used would be the best in the world.
2) The franchisor would create a National League and an Annual competition format to market the sport extensively and bring in the masses. At the time of writing this, talks are on with the leading TV channels of the country, a couple of which are very keen to participate.
3) Corporate tournaments and event management companies are already being roped in to participate in competitions that are already being held across the country by the franchisor.
4) The franchisee will be actively involved in the sport and would be trained at the franchisors training facility and thereafter be involved in the day-to-day operations of the field.
5) The franchisee would break even in 2 years from the start of the field. Fields would only be approved in catchments where sustainable sporting activity is anticipated along with backend marketing support.
6) Corporate trainings and trainers would play a vital role in the build up of the sport. Mobile units would be operated and the sport would be taken to college campuses and company premises.
7) The sport would be built additionally around resorts, farmhouses, and entertainment centres to bring in the first set of audiences seeking leisure and fun.
8) A paintball community would be created which would interact, play and promote the sport and to essentially take the game to the masses.
The entire programme is a lengthy one and long drawn and is now being executed. I have just highlighted the basic gist of how we could effectively use franchising as a business model to promote and propagate alternative sports in our country on a profitable note. Please feel free to write in to me if you are keen to understand the various micro’s of how we went about doing this and alternatively if you want to be a part of promoting this game by being a franchisee, we would be more than glad to discuss the same with you.
Amit Nahar
Founder CEO
Sparkleminds
Sr Franchise Consultant
Wednesday, September 16, 2009
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