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April 27, 2020
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Why a business case approach, to costs of owning an IPL team, is more prudent?

Why a business case approach, to costs of owning an IPL team, is more prudent? https://qwixpert.com/wp-content/uploads/2020/04/Picture28.jpg 1080 720 qwixpertadmin qwixpertadmin https://secure.gravatar.com/avatar/392f1042eaff5c1f343a179d15026010?s=96&d=mm&r=g April 27, 2020 July 12, 2023

Executive summary

In the previous article, the major revenue streams – Central Rights income, Sponsorships, Match day incomes were detailed and compared with mature leagues across the globe (Premier League, NBA, NFL, etc.). Growth opportunities were identified and enumerated. This article, discusses the 3 major expense streams – player fee, BCCI commission & other commission expenses. The critical question every franchisee faces with each cost element is the trade-off between the expense and its potential income generation capability. This article highlights these associations and integrates a business case approach to decision making on cost optimization.

Introduction

Franchises on an average spent around ₹430 crores¹ ($90 million) to bid and purchase an IPL team 12 years ago. They come from backgrounds previously unconnected to cricket, the sports growing profile & popularity in the country testified a long-term investment. The business strategy to own a team varied across the franchises.

Brand extension to the original business. Reliance used the platform to launch the brand in the sports industry. Vijay Mallya wanted to link the team to either Royal Challenger or McDowell no.1 for surrogate advertising to meet the Advertising Standards Council of India (ASCI). India Cements built marketing programs on the CSK- India Cements connection. Sun TV network purchased Sunrisers Hyderabad from its previous owner Deccan group with a strategy to increase revenue and eventually sell a stake of the cricket team for profit². This strategy has been seen globally – For example: In the Premier League, Venky’s chicken own Blackburn Rovers. Etihad is using the 10-year agreement with Manchester City FC to brand the sports arena in the city as Etihad Campus and further improve the airline business in the region through a new hub and airport. Many of the Japanese baseball leagues are owned by companies and bear the company’s name like Chiba Lotte Marines which is owned by the Lotte group.

IPL’s Entertainment value as a key to its success. The founders believed a large part of IPL’s success will depend on its entertainment value as much as its sporting value. This led to the two biggest box-office draws of the country – cinema and cricket combining. Several high profile actors and actresses either partly own franchisees or have been/ are endorsers of these franchisees ever since its inception³.

While, yes, these strategies do make business sense. The key question is, on a standalone basis, is owning an IPL a valuable business proposition? It is indeed the case. On average, IPL teams have a strong 24%⁴ EBITDA. In comparison, Premier league teams EBITDA is 17.8%⁵ while most of the teams in other nascent leagues like Pro-Kabaddi League or ISL are yet to make money.

More than 90% of all the expense is from 3 major heads

Player fee accounts to 30%-35%⁴ of the team revenue and is the largest expense

In comparison with other major global leagues, IPL’s player fee expense is the least. Most mature leagues like NFL, NBA & NHL spend >40%⁶ of their revenues on player fees

Since the first edition of IPL, there has been a cap on the total spend on players. Initially, the player fee cap was ~₹20 crores. Till 2014, the Indian domestic players were not included in the player auction pool and could be signed up by the franchises at a discrete amount while a fixed sum of ₹1 million (US$14,000) to ₹3 million (US$42,000)⁷ would get deducted per signing from the franchise’s salary purse. This received significant opposition from franchise owners who complained that richer franchises were “luring players with under-the-table deals”; following which the IPL decided to include domestic players in the player auction. In 2014, a strict overall team cap was set at ₹60 crores⁸ and grew around 3% per year. As shown in the chart below

Avg. Growth Rate – 3%

In 2018 the IPL- Star India broadcasting rights deal, generated a huge revenue and teams could afford to pay higher salaries. The BCCI increased the salary cap by ~21% (2017- 2018). In the 2020 edition of IPL, the team salary cap was ₹85 Crores⁹.

From 2015 to 2018, the median utilization of salary cap was ~88- 89%¹⁰ with RR, SRH, and KXIP below 83%. To ensure that teams spend a minimum portion of their budget on salaries and the general salary level increases, a salary floor was introduced in 2018, which increased the utilization to 99% in 2018.

Basis table positions, SRH seems to have achieved the best balance with player salaries, it has spent ~88% of the allotted player fee over five seasons from 2015 to 2019 and secured an average table position between 3-4. This has monetary advantages as teams earn money basis table position (being in the top 4 list). SRH had won the 2016 season and secured runners-up in 2018. RCB, on the contrary, has spent more than 95% of the salary cap and has secured an average table position between 5-6. Till the 2019 season, the total prize money was ₹ 50 crores. Winner getting ₹ 20 crores, runner-up ₹ 12.5 crores and 3^rd & 4^th getting ₹ 8.75 crores each. BCCI has decided to slash the prize money by half from the 2020 season¹¹.

The distribution of budget across players tends to be rather unequal with a few highly sought-after players going for big bucks. The top 25 players get more than 55% of the salary share while the other 100 players share the remaining 45%. At a team level, ~50%¹² of the salary cap is spent on the top 5 players.

Franchises like CSK, MI, KKR & RCB spend a major share of the player fee to have popular players like MS Dhoni, Rohit Sharma, Kieron Pollard, Virat Kohli or AB de Villiers in the team. These teams have the highest number of followers and are generating more sponsorship revenue and stadium ticket utilization compared to the rest of the teams.

Players fees is indeed a major expense component as top players usually come with high salaries. But they can contribute in two critical ways to revenues – increased fan following (directly correlated to major revenue streams – sponsorships & ticketing income) and prize money. Teams have to be astute about rationalizing the spend on players as one my end up being penny wise and pound foolish.

20% of the total revenue paid to BCCI as a commission is the second-largest expense

IPL was supposed to be an auxiliary project of BCCI. It now makes 16 times¹³ more profit in the 45-day window than the rest of the year. Major sources of IPL revenue for BCCI are Broadcasting Rights & Media Rights and Franchise fee together contributes to more than 88% of the share and title sponsorship which is 10% of the share¹⁴.

BCCI accords 50% of the total revenue from media and title rights, and league sponsors to the franchises as central sponsorship. ₹200-250 crores from 2018-2023 i.e. till the Star- IPL deal is active. Before the deal teams were getting ~ Rs 65 crores. In return, they collect a franchise fee of 20% of their total revenue from the teams¹⁴.

Globally sports leagues are managed in two ways it can be a single business entity where the team owners are shareholders in the league. There are no individual owners or investors, with all teams centrally owned and operated by the league. The league, not the individual teams, have contracts with the players. It functions as a highly centralized structure. The support staff is shared between all the teams and a single entity takes care of all aspects of team activities: Marketing, Promotion, broadcast and Intellectual property. The teams are not bound by anti-competitive laws. The business is also easily transferable and the entire league can be sold as one asset. XFL football league operates in this model

The second type is a central association that franchises the ownership of a team usually based on locality. The franchises have the contractual rights to own and operate the team. Most of the major global leagues are based on this model. The premier league, NBA, NFL, La Liga and most of the Indian leagues such as Pro-Kabaddi, Super league, and the IPL. Most of the global leagues do not collect franchise fees from the teams. But IPL does. With the reduction in prize money, in the future will the franchises demand for reduction in commission rate or follow the global trend of no franchise fee?

Commissions spent on event management, ticketing & sponsorship accounts to around 10%⁴ of the revenue

Teams typically outsource stadium & stand décor expenses to third party agencies. The type and cost décor are directly proportional to the ticket price of the stand. Event management expenses include expenses such as brand signages, cheer girls, generators, licenses & permissions and security.

For selling tickets online on Bookmyshow or Ticketgenie teams have to shell out commissions to these agencies. To get the right sponsors teams generally, outsource the rights to get sponsors to experts and share a percentage with them.

The split of expenses between the three categories varies between the team. Typically, the majority of the spend is from event management expenses, followed by either ticket sales commission or sponsorship commission.

These expenses are important and have several indirect benefits. For instance, creating the right environment for the spectators in the stadium drives the ticket sales as well as TV viewership leading to increased sponsorship incomes and future auxiliary brand extension opportunities. Managing the sponsors, allocating right player and player times to each sponsor, keeping the franchise & sponsor engaged through the year builds a connection between the two and is crucial & beneficial for both the parties. Franchisees need to access professional help and look at this expense strategically. A smooth management of these functions keeps sponsors, players and fans happy, encourages loyalty and steady income generation. Decisions to curtail these expenses, should assess their impact on income and not solely be taken on the outflow.

A large selection of important operational expenses account for approximately 10%

Support staff fee is the largest component in these expenses, ranging between 3%- 4% of the revenue and has been in this range from a couple of years across the IPL franchises.

Stadium rent accounts for less than 1% of the revenue. Till the 2019 season, teams used to pay ₹30 lakhs/home match to the state association as rent to use the stadium. It amounts to around 1% of the expense for the franchise. From 2020, IPL Teams have to pay ₹50 lakhs/home match to the state association. The fee is used for the upkeep of the stadium, ground and other facilities by the state association. ¹⁵

While four of the 32 NFL teams have a home ground, the rest of the 28 teams pay rent to use the stadium¹⁶. A team plays 8 – 10 games at home out of the 16 games of the NFL regular season. The average annual rent is approximately $ 2 million, i.e. about ₹1.5 crores per match¹⁷. Of the 30 teams in the NBA, 12 teams own a stadium and 18 teams rent a stadium. In a season of NBA which is played over six months, each NBA team plays 41 games at home. All the 20 teams in the premier league own a stadium & play 19 games at home. An IPL team plays only 7 games at home and the calendar is only for 2 months leading to a stronger business case for renting over owning a stadium

Summary

Assessing the expenses indicate an inextricable link of each expense head to several revenue streams. There are significant skews to certain costs (eg: player fees) and some expenses seem unavoidable (eg: BCCI commission). It is hence prudent for a franchisee to pivot their views on these costs by focusing not on optimizing them but by maximizing their returns. Every cost element in a franchisee’s P&L hence needs to be evaluated with its associated business case with a view on long term benefits prior to investing in them or rationalizing.

References

1. CricInfo Staff (2008) ‘Big business and Bollywood grab stakes in IPL’ ESPN CricInfo 24 Jan Available at https://www.espncricinfo.com/story/_/id/20427511/ipl-announces-franchise-owners

2. Leena, S. Bridget (2015) ‘Sun TV open to stake sale in Sunrisers Hyderabad: CFO, live.com, 4 August. Available at https://www.livemint.com/Money/HQhby1MGaO9UFuukWeTE9O/Sun-TV-open-to-stake-sale-in-Sunrisers-says-CFO.html

3. Kholi, Rajeev (2011) ‘The Launch of Indian Premier League’ Columbia.edu, Available at http://www.columbia.edu/~rk35/IPL.pdf

4. Financial reports from MCA filings of company financials

5. Deloitte Report (2019) ‘Annual Review of Football Finance 2019’, Deloitte.co.uk, May. Available at https://www2.deloitte.com/content/dam/Deloitte/cz/Documents/consumer-business/cz_annual_review_of_football_finance_2019.pdf

6. Sporting Intelligence ‘Global Sports Salary Survey 2019’. Available at https://www.globalsportssalaries.com/GSSS%202019.pdf

7. Wikipedia ‘Indian Premier League’ Available at https://en.wikipedia.org/wiki/Indian_Premier_League

8. ESPNCricInfo Staff (2013) ‘Player Regulation for IPL 2014’ ESPN CricInfo 24 Dec Available at https://www.espncricinfo.com/story/_/id/21581720/player-regulations-ipl-2014

9. Wikipedia ‘List of 2020 India Premier League Personnel Changes’ Available at https://en.wikipedia.org/wiki/List_of_2020_Indian_Premier_League_personnel_changes

10. Mishra, Aryan (2019) ‘IPL 2020: Complete list of all eight teams’ Inside Sports 20 Dec. Retrieved from https://www.insidesport.co/ipl-2020-complete-list-of-all-eight-teams/

11. BS Web Team and Agencies (2020), ‘IPL 2020 champions’ prize money to be cut as Indian cricket hit by slowdown’ Business Standard, 4 March. Available at https://www.business-standard.com/article/sports/ipl-2020-champions-prize-money-halved-as-indian-cricket-hit-by-slowdown-120030400392_1.html

12. Sportekz (2020) ‘IPL 2020 Player Salaries’ SportEKZ 24 Feb. Retrieved from https://www.sportekz.com/cricket/ipl-2020-players-salaries/

13. Basu Arani (2018) ‘BCCI set to earn over Rs 2000 crore from IPL’, Times of India, 13 Feb. Available at https://timesofindia.indiatimes.com/sports/cricket/ipl/top-stories/ipl-to-give-bcci-95-percent-of-its-surplus/articleshow/62894670.cms

14. Sharma, Rajendra (2018), ‘For once, each IPL Franchisee poised to earn 150+ Crore Profit’, Inside Sport, 2 May. Available at https://www.insidesport.co/ipl-franchisee-poised-%E2%82%B9150-crore-profit-0602052018/

15. Gollapudi, Nagraj (2020), ‘IPL halves play-off reward, hikes staging fee for franchises – owners object’, ESPN CricInfo 9 March. Available at https://www.espncricinfo.com/story/_/id/28872214/ipl-halves-play-reward-hikes-staging-fee-franchises-owners-object

16. Farmer, Drew (2019), ‘The NFL has 28 teams that don’t own their own stadiums’, Inside Sport, 8 Aug. Available at https://www.americabet.com/football/nfl/the-nfl-has-28-teams-that-dont-own-their-own-stadiums/

17. Las Vegas Review Journal (2017), ‘Stadium and rent details for all 32 NFL teams’, 6 March. Available at https://www.reviewjournal.com/sports/raiders-nfl/stadium-and-rent-details-for-all-32-nfl-teams/

qwixpertadmin
October 20, 2019
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How do IPL teams make money?

How do IPL teams make money? https://qwixpert.com/wp-content/uploads/2023/06/Cricket-Bat.jpg 1080 720 qwixpertadmin qwixpertadmin https://secure.gravatar.com/avatar/392f1042eaff5c1f343a179d15026010?s=96&d=mm&r=g October 20, 2019 July 12, 2023

Executive summary

IPL is now among the top 10 leagues in the world by broadcasting revenue. For a brand which is growing at an astonishing 22% year on year, Qwixpert explores the business behind the league. In 2 articles we wish to detail the financial business case of an IPL franchisee and what more can they do, to improve its lucrativeness. Here, in Part 1, the 4 major revenue streams – Central Rights income, Sponsorships, Merchandise sales and Match day incomes are delved into in detail and compared with mature leagues across the globe (Premier League, NBA, NFL etc.). While the much-improved central rights income has made every IPL franchisee profitable, teams need to continuously engage with fans outside the 2 month season while simultaneously addressing efficiency gaps and untapped opportunities in-season in line with global peers.

With a valuation of ~US $6 Bn, IPL is bigger than Ola, Swiggy and Oyo

For an Indian brand to have grown to ₹45,000 crores¹ in 11 years sounds astonishing. That is precisely what the Indian Premier League (IPL) has done. IPL is now a household name and its brand value has been constantly on the rise. A recent report by Duff and Phelps indicates that IPL’s brand value is growing at ~22% YoY since 2014¹. Along with the league, franchisee brand values are also rising at an even pace. Mumbai Indians with a valuation of ₹810 crores and a growth of 7% over last year is the most valued franchisee 3^rd year in a row. Kolkata Knight Riders (KKR) closely follows with a valuation of ₹746 crores¹.

Graph 1: Average annual broadcasting revenue earned by top 10 leagues in the world

Any discussion about IPL begins with eye-popping broadcasting deal numbers – Star India’s contract with BCCI worth more than ₹16,000 crores for five years is as huge and has been a major contributor to the rapid growth of the league. This figure (~Rs. 3,200 cr. annually) pits IPL at No. 8 across all leagues globally as per data from ICICI securities². This contract was four-fold more than the previous one of ₹800 Cr. with Sony pictures³ for 10 years.

Followed by tens of thousands at the ground every match and millions on screen, IPL is one of the most followed sports leagues across the globe

According to BCCI, IPL contributed to 0.6% of the Indian GDP⁴. BARC, which publishes viewership data, believes 462 million people watched IPL’s 12^th season, up 12% from 2018. The finals between MI and CSK, was watched by a record 18.6 million simultaneously. With a total consumption of 338 billion minutes IPL 2019 was viewed for ~13% more minutes vs IPL 2018⁵. IPL ranks fifth in the world in attendance for outdoor sports, with an average of 30,000 fans per match. And has a total attendance of 1.9 million for 60 games⁶.

Graph 2: Average attendance per game in top 5 international leagues

This massive viewership should not come as a surprise. The league is played during April and May when the schools are closed for the summer and during the evening prime time of 8PM. This has led to increased IPL penetration among women viewers while keeping its traditional base of kids and men intact. The fast-paced nature of the T20 game bringing together the best cricketers from across the world and popular movie stars as owners or ardent fans of franchisees have added to IPL’s ever-growing fan base.

Success of IPL depends on the success of its franchisees. While the franchisees are teams that fans root for, they are also business investments for their owners who evaluate not just league standings but also returns generated. To understand the success of IPL, it is therefore imperative to understand the financial performance of its franchisees.

In a 2-part analysis, we wish to break down these numbers – ones on their financial records to make sense of their valuations. Here we try to shed light on how franchisees generate revenue and what more can be done to further improve toplines.

Sports franchisees across the world have 4 major revenue sources and IPL is no different

Central rights income contributes to as much as 50% – 60% and has turned most franchisees profitable

As part of the revenue sharing agreement between BCCI and IPL franchisees, a portion of the broadcasting rights money from Star India is divided equally among franchisee teams. A part of the central sponsorship incomes is also divided among the franchisees. These are called central rights income and teams earn ~Rs. 200 – 250 Cr. annually.

This revenue stream contributes to ~50%-60% of total topline. In comparison with other international leagues such as NBA, EPL or NFL where the share is 45%-55%. Further, this has helped all teams turn profitable from IPL 2018 – a first since the inception of the league. Analysis by ICICI securities², as shown below, on Sunrisers Hyderabad and Delhi Capitals highlights the impact between the years of transition.

Graph 3: 2018 vs 2019 – Revenue and PBT comparison for Delhi Capitals (DC) & Sunrisers Hyderabad (SRH)

Sponsorship Income

Any brand which wants to get associated with the teams and use players and other franchisee brand imagery pays “sponsorship fees”. This is the next biggest revenue source constituting 20% – 30% of the total. Qwixpert’s benchmarking exercise points to a similarity with major international leagues such as NBA, EPL or NFL who have a similar share (20%-25%). Franchisees can earn sponsorship through 4 key avenues, further classified into 11 sub-groups as shown below.

Figure 1: Eleven types of sponsorships in sports leagues

Financial express reports that in 2018, the total jersey sponsorship deal signed by all eight teams in IPL was in the range of ₹300-₹320 crores, growing by 44% over 2017. Mumbai Indians replaced its Jersey front sponsor Videocon with Samsung for ₹75 crores for three years⁸ (@₹25 crores each year). Same year CSK switched from Aircel to Muthoot Finance for ₹25 crores per year⁸. Comparatively, in the 2015-2016 season of EPL, revenue from jersey sponsorship was ₹1,820 crores. Case in point, Manchester United signed a seven-year deal with a US car manufacturer Chevrolet for a whopping ₹482 crores for branding on the front of jersey⁷.

Sponsors generally associate with franchises with similar brand imagery and target customer groups. Fans of a team can potentially be or are target customers for the sponsor. For example, Muthoot group which is a south India based firm, sponsors CSK whose fans are densely concentrated in the south.

ESP properties, the entertainment and sports division of GroupM, estimates that CSK, KKR and MI are the most followed teams across the country⁹

Graph 4: Number of followers on television and social media (Facebook, Twitter & Instagram)– 2019⁹

Revenue from sponsorships are correlated strongly to the team’s followers as seen in the graph below.

Graph 5: IPL teams of followers on Facebook by % share of sponsorship revenue^10 11

Presence of marquee players and celebrity owners have a say in franchisee popularity. These marquee players give an upper hand to the franchises while negotiating with sponsors. In most cases, the sponsors are willing to pay a premium to be associated with that team.

Merchandise sales

Merchandising is majorly an unexplored area for IPL franchises with less than 1% of the revenue coming from this, compared to foreign leagues which earn 10% – 20%.

On one hand Sports franchisees can market and sell products themselves. Teams across major sports leagues such as New York Yankees (NFL), Green Bay Packers (NFL), Manchester United (EPL), Boston Bruins (NHL) etc. sell a wide range of own branded products from (doormats to car windshields) via their online stores with worldwide shipping and few Experience-centres/ showrooms. Among IPL franchises, Chennai Super Kings has its line of merchandises (men & women’s wear, watched, kids’ toys, collectables, school kit, board games, mobile case etc.) which are sold on their website and online platform – prepsportswear.com. Even teams with newer leagues such as Jaipur Pink Panthers (Pro-Kabaddi League franchisee) are selling merchandise on their official website & app.

On the other hand, some franchises/ individual players choose to enter into a fixed fee/percentage income arrangement with one or more companies licensing them to market branded products. Manchester United had entered into a £750 Mn merchandising deal with Adidas for 10 years in 2014, where Manchester United gets £75m ($128m) a season¹². This is a 3-fold jump from its previous deal with Nike for £23.5 m a year¹². Liverpool FC has collaborated with CRC Sports to open 3 retail stores in Thailand to sell co-branded products¹³.

Match day Income

Proceeds from ticket sales during the seven home matches contribute to ~15% – 20% of total revenues. Qwixpert’s analysis indicates mature leagues such as NBA or Premier League generate almost 1/4^th of their revenues from ticket sales

Revenue generated is a factor of number of seats in the stadium and individual seat price. While the number of seats in the stadium is fixed, the key is to optimize the number of seats sold, which is constrained by the number of complimentary seats allocated and utilization of the available seats sold per match. Complimentary seats given out to sponsors, associations, players and others come with its pros and cons. The disadvantages are the potential loss of sale from these seats and an expense of 28% GST on the price of each ticket. Our project experience in Indian Sports League indicates an opportunity to rationalize the number of complimentary seats and reduce the loss from GST on complimentary seats.

Under-utilization of stadiums is a constant concern for IPL franchisees. Utilization is seen to be driven by opponents and their popularity/ rivalry. When popular teams play 95%+ utilizations are seen compared to 70%-80% utilization for other matches, bringing down the overall utilization of the stadium in the season.

IPL planning committee, with adequate push from franchisees, try and ensure scheduling of high profile matches during prime time (Friday/ Saturday 8PM) as much as possible. Promotional offers on ticket sales such as “buy one get one” or discounted rate sales are some tactics adopted by franchisees to drive up seat utilizations.

Ticket prizes typically range between ~₹300 and ₹40,000, varying for each stadium. For matches against popular teams, there is a high demand for tickets. Stand and seat level dynamic pricing can be evaluated to enhance utilizations and improve contribution per ticket. Mature leagues have been dynamically pricing tickets for 15+ years. In 2004, MLB (Major League Baseball) teams priced their tickets differently basis the season, day of the week, holidays, opposition quality & stars in the opposition¹⁵. Qwixpert’s proprietary algorithm helps franchisees gain ~10 – 15% more revenues from ticket sales by measuring price elasticity by evaluating the aforementioned factors and more.

Tracking ticket sale data live helps decide price dynamics. Shifting 100% of ticket sales to online platform aids in gathering data, which sports franchisees across the globe use to draw insights on customer behavior and aspirations to tailor their ticketing approach.

Prize money

The 4 teams qualifying for the knock-out phase are incentivized with an additional prize money. In 2019, the total prize money was ₹50 crores and were distributed as mentioned in Graph 6. IPL rules mandate that at least 50% of it is distributed to the players. Teams are also entitled to receive an additional prize money basis their league standings, prior to their final finish post the qualifier stage.

Graph 6: IPL 2019 Prize money

Other income

On match day open spaces in the stadium are rented out to food & beverage stalls or for stalls for brands who want to promote their products. An underutilized part of revenue levers, as major global leagues generate as much as ~5% of their revenues from concessionaire incomes¹⁴. Player trades mid-season between teams may generate incomes or expenses depending on the trade conducted.

Conclusion

Inspite of its overwhelming popularity and aggressive valuations, IPL remains a maturing league with several revenue growth opportunities for individual teams. Reducing dependence on central rights incomes and increasing saliency of other income levers will grow and sustain franchisee valuations. Match day revenue enhancement opportunities by plugging leakages and efficient utilization of seating exist. Further, franchisees have only skimmed the surface when it comes to merchandising and sponsorship revenues. IPL teams need to also evaluate themes around concessionaire incomes and leveraging social media to continuously engage fans throughout the season. With cricketing passions continuing to rise, India being able to unearth world beating talent at increasing frequencies and IPL style regional leagues mushrooming all around the country, the future is bright for the product. It is therefore imperative for franchisees to act along the major themes discussed here, in earnest to ride this wave, or should we say tsunami.

Stay tuned as we analyze the expenses in a similar vein in the second part of this study to recommend solution themes to improve franchisee profitability.

Author: Giridharan Raghunathan, Gopika Hemachander