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Franchisee Proposal
Tier 2
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Table of Contents
Executive Summary _____________________________________________________________________ 3
Home Automation – Current Scenario_______________________________________________________ 4
Market Reality – South India ______________________________________________________________ 5
Market size and Potential- India + Global trends _______________________________________________ 7
History of Home Theatre Market in India ___________________________________________________ 10
Why Thasmai?_________________________________________________________________________ 11
How do you benefit as a Franchisee? ______________________________________________________ 12
Franchisee Financials and Expected returns _________________________________________________ 16
FAQs ________________________________________________________________________________ 18
Franchise Terms & Conditions (Legal paperwork & term sheet) _________________________________ 19
Franchise Benefit Scheme for FY 2018 onwards ______________________________________________ 22
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Executive Summary
Thasmai Automation, arguably the most aggressive Home Automation and Home Theatre
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
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Home Automation – Current Scenario
Multiple factors have contributed towards the growth of home automation, entertainment and security
systems, namely the growth of smart phones, penetration of mobile apps, coupled with the rise in
income levels of the middle class. The popularity of home automation and controls has been on the rise
due to greater simplicity and affordability through connectivity using Wi-Fi-enabled devices such as
tablets and smartphones.
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 2020. In the current market, the surge of
smart phone usage will contribute significantly to Home automation usage in the upcoming years.
All of these forecasts do not take into account
potential macro trends like Internet of Things (IoT),
or other smart technologies of the future.
If IoT becomes a mainstream technology in the next few
years, then it will alone create a multibillion dollar industry
in India, and as an early mover in the sector,
Thasmai will be well positioned to capture market share!
Since the real estate boom in India, new home
buyers have started to opt for add-ons like
automation in their buildings or houses.
Indians are usually very conscious of energy costs,
and modern home buyers are willing to spend on
luxury, comfort, and security systems with
automated control devices that can regulate utility
services.
As home automation systems become available at
affordable prices, demand will increase for smart
technologies leading to a more digital lifestyle per
square foot in future concepts of home living.
Lighting controls is the key segment in the home
automation market, as lighting consumes a substantial
part of the electricity that is consumed by the
residential sector in India. Lighting is followed by
heating, ventilation, and air conditioning (HVAC)
controls for which automation is highly preferred to
ensure ease of use & comfort.
Opportunities for Home
Automation in India
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Market Reality – South India
a. What is Home automation perceived as, and what matters?
• 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.
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Current trends in the Indian Automation Market
b. What works and why?
Let’s analyze how the Indian Home automation market is structured currently;
Current brackets in Home Automation sales
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
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
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.
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
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Market size and Potential- India + Global trends
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
Current Market (2015-2018)
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.
Growth in Automation Market in India (2018-21)
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.
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Some trends that we foresee for this phase of the industry are
• 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).
The Internet of Things Revolution
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).
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Commoditization of Automation market (2021 onwards)
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.
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History of Home Theatre Market in India
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!
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Why Thasmai?
Tie-Ups with Best Brands Across categories- Best technology & Solution delivered in a single platform
 Home Audio- JBL /Harman (8$B company, world #1 in Audio & Speakers)
 Electronics- Yamaha (15$B company, world #1 in audio electronics)
 Security- Panasonic (Japanese Electronics Giant)
 Lighting- Crabtree from Havells (Largest Indian Electrical Company) Philips (25$B company, world #1
in lightning)
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
 One Stop End to End Solution (Consultation, Design, Execution, Maintenance)
 We have designed a unique Budget Personalizer that helps you get a fair estimate of your budgetary
requirements. You can find it on the home page of our website, www.thasmai.net
 ERP- Customized ERP to suit automation business ensures Fast & hassle free processing for
customer.
Design
 Complete drawing in AutoCAD (product placement + wiring)
 Once order is placed we take details of all workers (electricians, carpenters, contractors) and interact
with them proactively to ensure execution is seamless and customers aren’t disturbed in this period.
 Execution report on a daily basis to customer.
 Project Handbook provided to customer at end of execution so all project details are instantly
referenced by client.
Service:
 Thasmai is the only company that offers Lead time (resolution) of 24 hrs on all queries, 8 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.
Security Lighting Automation
Amplifiers
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How do you benefit as a Franchisee?
In short, you will be tying up with the most professionally run company in the most exciting Home
automation and Home Theatre market. Add to that Internet of Things, and you may be looking at
becoming a first mover in your city in a new billion dollar industry!!
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.
Well Defined Systems and processes
 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 has the largest Automation stall in Bangalore last year)
Business Model
built on Industry
expertise.
Scalable model
based on success
of initial branches
Establishe
d rapport
with
Architects
ERP
system &
Training
COE
Thasmai in Acetech!
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 Robust Back office operations: ERP system is designed to make all procurement and payments
seamless, we have instituted training modules for all employees (technical & Soft Skills), the project
execution and service protocol is also set to run with minimum hassles
 We have 2 unique websites catering to our Automation (www.thasmai.net) and Home Theatre
(www.thasmaiaudio.com) customers. Our Websites are at #1 or 2 position for all Home Automation
and Smart Home related keywords in Bangalore. We have created unique user friendly content for
users such as a Home theatre Almanac which can be downloaded from our site. (Visit us at
www.thasmai.net)
 Dominant presence in Google Maps for Home Automation and Theatre keywords: Our office
locations are usually in top 1-2 for any Automation/Theatre related keywords
 Largest Home theatre experience demo in India, located in our HSR 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!
 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 4000 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
9-Seater Top of the line
experience
JBL Synthesis speakers
with 7.2.4 channel
Dolby Atmos
19 ft screen width with
4k projection and
cinemascope lens
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 Centralized procurement: You will always have material at the best prices than local procurement
due to centralized supply chain. We are already one of the largest vendors for both Crabtree and
Harman
 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.
Procurement
•Lower prices due to bulk
orders and negotiation
stregth with OEMs
•We assume all the
Inventory carrying risk
Marketing
•Central budget for
website/promotions and
other marketing activities
•Tie Ups with all marketing
channel partners
Systems &
Processes
•ERP system centralised for
seamless transactions and
reporting
•Hiring has been
centralized, better
candidates due to
nationwide campaigns
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 When we expand further, we will also aim to establish operations Centre of Excellence (COE) in
multiple locations. The COE will contain technical training academies, mock installation set ups and
manual/technical manuals for employees to keep abreast of latest developments in Automation
technologies. This way, we ensure your investment never becomes obsolete
 Solution Deployment: In the next 2-3 years, we would also to backward integrate our supply chain
by building a solution combining the best options from Interfaces/Controllers and other
components, which we will then market for the Indian audience.
Our team of experts will scour the market across geographies to find the best options available for
each component, and test various scenarios in our labs in Bangalore. And as our franchisees, you will
be exclusive sellers of this solution!
 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!
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Franchisee Financials and Expected returns
Investment
As a Franchisee, you will invest in a one-time capital expenditure of Rs 22 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 – 0.6 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 6-8.
Break up of Capital Expenditure Monthly Expenses
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 11-12.
•Rent advance, Construction, Interior Designing
•Automation, Security and Theatre equipment and
installation
Cap-ex
(One time) 22L
•Overheads (Rent, Electricity, admin costs)
•Personnel costs (Salary, Travel expenses)Op-Ex
(Monthly) 0.5-.6L
S.No Expenditure 22L
1 Advances (rent, material) 3L
2 Home Security & Automation 8L
3 Home Theater + Acoustics 9L
4 Office work/Furnishing 2L
S.No Monthly Expenses .65L
1 Sales Engineer 18k
2 Ops engineer 18k
3 Operations labour 7k
4 Rent 22k
5 Travelling Expenses 3k
6 Receptionist/OfficeBoy 6k
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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;
Branch Growth Cycle
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)
Branch Break even-
Month 5-6
Branch Value after 5
years
65 L
Yearly ROI after 60
months- 40-55%
Expected Monthly
returns from Year 3
(Net)- 0.8-1.1 Lakhs
SetUpPhase
0-6 months
No returns
expected in first
2-3 months of
setup and
construction
Months 4-9
would see
gradual hiring
and ramp up of
sales as well as
the first few
orders
BuildUpPhase
6-14
months
The next 6-8
months will be
spent in
consolidating
processes in
your branch,
getting sales to
100%
performance as
well as
executing your
first few
projects
Maturityphase
1 year
onwards
Once the branch
has stabilized its
operations, you
will see a steady
inflow of returns
both from new
sales as well as
from exectution
of past projects
RewardsPhase
3 years &
onward
Maximum
potential for
franchisee
earnings (yearly
yield of 40-55%
return on
investment)
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FAQs
We’ve listed commonly asked queries with our responses here.
I. What role do I have to play as a Franchisee?
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. For this investment, Thasmai offers an attractive return on investments which
is highlighted further in the financials section.
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 & Theatre 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.
We face a reputational damage on many counts (delayed service response, falling out of
relationship with franchisee or stakeholders) which is not a risk worth taking for a few
orders.
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 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)
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Franchise Terms & Conditions (Legal paperwork & term sheet)
Thank you for reading the document with interest thus far, if you want to join us on this exciting journey by
being a Franchisee for Thasmai, feel provide us an opportunity to present our legal proposal to you where
we can discuss our mutual opportunities in depth! You can call us on +91 9972418578/9880368001 or write
to us at karigirish@thasmai.com or vijay@thasmai.com for any further enquiries.
JP Nagar HT JP Nagar Automation
Sanjaynagar HT
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Appendix Returns calculations to arrive at CAGR (compounded annual growth rate)
Depreciation calculated using straight line method with YoY 30% rate
1 8 0.00 0.20 -0.20 -0.20
2 10 0.00 0.20 -0.20 -0.40
3 4 0.00 0.00 0.00 0.00 0.20 -0.20 -0.60
4 3.00 0.60 0.00 0.10 0.40 -0.30 -0.90
5 5.00 1.00 0.00 0.16 0.40 -0.24 -1.14
6 7.00 1.40 0.00 0.22 0.40 -0.18 -1.32
7 7.00 1.40 3.00 0.61 0.40 0.21 -1.11
8 7.00 1.40 3.00 0.61 0.40 0.21 -0.90
9 7.00 1.40 5.00 0.86 0.40 0.46 -0.44
10 7.00 1.40 5.00 0.86 0.40 0.46 0.02
11 7.00 1.40 5.00 0.86 0.65 0.21 0.24
12 10.00 2.00 5.00 0.96 0.65 0.31 0.55
13 10.00 2.00 5.00 0.96 0.65 0.31 0.86
14 10.00 2.00 5.00 0.96 0.65 0.31 1.17
15 10.00 2.00 10.00 1.60 0.65 0.95 2.12
16 10.00 2.00 10.00 1.60 0.65 0.95 3.07
17 10.00 2.00 10.00 1.60 0.65 0.95 4.02
18 10.00 2.00 10.00 1.60 0.65 0.95 4.97
19 10.00 2.00 10.00 1.60 0.65 0.95 5.92
20 10.00 2.00 10.00 1.60 0.65 0.95 6.87
21 10.00 2.00 10.00 1.60 0.65 0.95 7.82
22 10.00 2.00 10.00 1.60 0.65 0.95 8.77
23 10.00 2.00 10.00 1.60 0.65 0.95 9.72
24 10.00 2.00 10.00 1.60 0.65 0.95 10.67
25 10.00 2.00 10.00 1.60 0.65 0.95 11.62
26 10.00 2.00 10.00 1.60 0.65 0.95 12.57
27 10.00 2.00 10.00 1.60 0.65 0.95 13.52
28 10.00 2.00 10.00 1.60 0.65 0.95 14.47
29 10.00 2.00 15.00 2.24 0.65 1.59 16.06
30 10.00 2.00 15.00 2.24 0.65 1.59 17.65
31 10.00 2.00 15.00 2.24 0.65 1.59 19.24
32 10.00 2.00 15.00 2.24 0.65 1.59 20.83
33 10.00 2.00 15.00 2.24 0.65 1.59 22.42
34 10.00 2.00 15.00 2.24 0.65 1.59 24.01
35 10.00 2.00 15.00 2.24 0.65 1.59 25.60
36 10.00 2.00 15.00 2.24 0.65 1.59 27.19
37 10.00 2.00 15.00 2.24 0.65 1.59 28.78
38 10.00 2.00 15.00 2.24 0.65 1.59 30.37
39 10.00 2.00 15.00 2.24 0.65 1.59 31.96
40 10.00 2.00 15.00 2.24 0.65 1.59 33.55
41 10.00 2.00 15.00 2.24 0.65 1.59 35.14
42 10.00 2.00 15.00 2.24 0.65 1.59 36.73
43 10.00 2.00 15.00 2.24 0.65 1.59 38.32
44 10.00 2.00 15.00 2.24 0.65 1.59 39.91
45 10.00 2.00 15.00 2.24 0.65 1.59 41.50
46 10.00 2.00 15.00 2.24 0.65 1.59 43.09
47 10.00 2.00 15.00 2.24 0.65 1.59 44.68
48 10.00 2.00 15.00 2.24 0.65 1.59 46.27
49 10.00 2.00 15.00 2.24 0.65 1.59 47.86
50 10.00 2.00 15.00 2.24 0.65 1.59 49.45
51 10.00 2.00 15.00 2.24 0.65 1.59 51.04
52 10.00 2.00 15.00 2.24 0.65 1.59 52.63
53 10.00 2.00 15.00 2.24 0.65 1.59 54.22
54 10.00 2.00 15.00 2.24 0.65 1.59 55.81
55 10.00 2.00 15.00 2.24 0.65 1.59 57.40
56 10.00 2.00 15.00 2.24 0.65 1.59 58.99
57 10.00 2.00 15.00 2.24 0.65 1.59 60.58
58 10.00 2.00 15.00 2.24 0.65 1.59 62.17
59 10.00 2.00 15.00 2.24 0.65 1.59 63.76
60 10.00 2.00 15.00 2.24 0.65 1.59 65.35
Overheads Net
Cumulative
Earnings
Set Up time. No returns expected
0
Commission
@ 14%
Month
Capex
Investment
Monthly OB
Advance
Collected
Monthly
Billing
@
1
6
%
Confidential Information- Kindly do not share outside immediate investor interests
Appendix B- List of Brands that Thasmai deals with on various levels
Segment Product Line Company Our partnership with them
Home
Theater
Speakers Harman (Revel/JBL synthesis/Infinity/Mark Levinson)-
World’s largest Audio company
South India Distributor
(exclusive)
Speakers Sonodyne (Best Indian Speaker manufacturer) Experience Partner for South
India
Speakers Dynaudio, Bowers & Wilkins, Golden Ear, Sonus Faber, Triad
(Best High end speaker brands globally)
Regional Dealer (non-exclusive)
Amplifiers/Processors Yamaha, Marantz, Denon (top AV receiver brands globally) Regional Dealer (non-exclusive)
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 Regional Dealer (non-exclusive)
Cables/HDMI QED, Monster, Profigold, Konig Regional Dealer (non-exclusive)
Home
Automation
Wired Automation Crabtree (UK brand owned by Havells) Distributor
A/V Integration Casadigi (Super premium brand catering to high end projects
globally)
RTI, Elan, Control4 (High end AV)
Exclusive S.India Distributor
Regional Dealer (non-exclusive)
Wireless Automation Zipato Exclusive S.India Distributor
Cubical, Fibaro Regional Dealer (non-exclusive)
Home
Security
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)
Video Door Phone
Comelit (Italian company, World #3) South India Exclusive
Distributor
Panasonic (Japanese MNC) Regional Dealer
Intrusion Systems DSC (World’s #2 intrusion brand) Regional Dealer
Typical Projects Timelines
The typical payments/Projects cycle timelines for orders across categories after the initial advance has
been finalized has been estimated below*,
Size of Home Home Security Home Automation Home Theater
Small 2-3 weeks 8-12 weeks 4-6 weeks
Moderate 4-6 weeks 16-28 weeks 12-18 weeks
Large 12-18 weeks 24-36 weeks 12-18 weeks
*the conservative average time for site readiness has been estimated. These are meant to give a representational idea only
Average ticket sizes
Size of Home Home Security Home Automation Home Theater
Small Rs 40,000- 75,000 Rs 150,000- 275,000 Rs 150,000- 425,000
Moderate Rs 100,000- 225,000 Rs 275,000-900,000 Rs 450,000-800,000
Large Rs 250,000-600,000 Rs 10,00,000- Rs 24,00,000 Rs 9,00,000- Rs 40,00,000
Confidential Information- Kindly do not share outside immediate investor interests
Franchise Benefit Scheme for FY 2018 onwards
Home
Automation
Sl
no
Product
Incentive offered (Material
value)
1 Crabtree Automation 20%
2 Fibaro/Zipato Wireless Automation 12%
4 Cubical Automation 10%
5 Accessories 5%
Home Theatre
Sl
no
Product
Incentive offered (Material
value)
1 Revel, Infinity, Synthesis Speakers 20%
2 JBL/Sonodyne/Other Brand speakers 14%
3 AV Equipments (Projectors/AV Receivers) 10%
4 Screen- Milan/Elite 10%
6 Installation Charges 10% of supply value
Home Security
Sl
no
Product
Incentive offered (Material
value)
1 Video Door Phone 10%
2 Digital Door Lock 5%
3 Intrusion System 10%
4 CCTV System 5%
5 Installation Charges 10% of supply value
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.

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Thasmai franchise proposal tier 2

  • 1. Confidential Information- Kindly do not share outside immediate investor interests Franchisee Proposal Tier 2
  • 2. Confidential Information- Kindly do not share outside immediate investor interests Table of Contents Executive Summary _____________________________________________________________________ 3 Home Automation – Current Scenario_______________________________________________________ 4 Market Reality – South India ______________________________________________________________ 5 Market size and Potential- India + Global trends _______________________________________________ 7 History of Home Theatre Market in India ___________________________________________________ 10 Why Thasmai?_________________________________________________________________________ 11 How do you benefit as a Franchisee? ______________________________________________________ 12 Franchisee Financials and Expected returns _________________________________________________ 16 FAQs ________________________________________________________________________________ 18 Franchise Terms & Conditions (Legal paperwork & term sheet) _________________________________ 19 Franchise Benefit Scheme for FY 2018 onwards ______________________________________________ 22
  • 3. Confidential Information- Kindly do not share outside immediate investor interests Executive Summary Thasmai Automation, arguably the most aggressive Home Automation and Home Theatre 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
  • 4. Confidential Information- Kindly do not share outside immediate investor interests Home Automation – Current Scenario Multiple factors have contributed towards the growth of home automation, entertainment and security systems, namely the growth of smart phones, penetration of mobile apps, coupled with the rise in income levels of the middle class. The popularity of home automation and controls has been on the rise due to greater simplicity and affordability through connectivity using Wi-Fi-enabled devices such as tablets and smartphones. 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 2020. In the current market, the surge of smart phone usage will contribute significantly to Home automation usage in the upcoming years. All of these forecasts do not take into account potential macro trends like Internet of Things (IoT), or other smart technologies of the future. If IoT becomes a mainstream technology in the next few years, then it will alone create a multibillion dollar industry in India, and as an early mover in the sector, Thasmai will be well positioned to capture market share! Since the real estate boom in India, new home buyers have started to opt for add-ons like automation in their buildings or houses. Indians are usually very conscious of energy costs, and modern home buyers are willing to spend on luxury, comfort, and security systems with automated control devices that can regulate utility services. As home automation systems become available at affordable prices, demand will increase for smart technologies leading to a more digital lifestyle per square foot in future concepts of home living. Lighting controls is the key segment in the home automation market, as lighting consumes a substantial part of the electricity that is consumed by the residential sector in India. Lighting is followed by heating, ventilation, and air conditioning (HVAC) controls for which automation is highly preferred to ensure ease of use & comfort. Opportunities for Home Automation in India
  • 5. Confidential Information- Kindly do not share outside immediate investor interests Market Reality – South India a. What is Home automation perceived as, and what matters? • 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.
  • 6. Confidential Information- Kindly do not share outside immediate investor interests Current trends in the Indian Automation Market b. What works and why? Let’s analyze how the Indian Home automation market is structured currently; Current brackets in Home Automation sales 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 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 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. 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
  • 7. Confidential Information- Kindly do not share outside immediate investor interests Market size and Potential- India + Global trends 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 Current Market (2015-2018) 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. Growth in Automation Market in India (2018-21) 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.
  • 8. Confidential Information- Kindly do not share outside immediate investor interests Some trends that we foresee for this phase of the industry are • 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). The Internet of Things Revolution 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).
  • 9. Confidential Information- Kindly do not share outside immediate investor interests Commoditization of Automation market (2021 onwards) 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.
  • 10. Confidential Information- Kindly do not share outside immediate investor interests History of Home Theatre Market in India 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!
  • 11. Confidential Information- Kindly do not share outside immediate investor interests Why Thasmai? Tie-Ups with Best Brands Across categories- Best technology & Solution delivered in a single platform  Home Audio- JBL /Harman (8$B company, world #1 in Audio & Speakers)  Electronics- Yamaha (15$B company, world #1 in audio electronics)  Security- Panasonic (Japanese Electronics Giant)  Lighting- Crabtree from Havells (Largest Indian Electrical Company) Philips (25$B company, world #1 in lightning) 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  One Stop End to End Solution (Consultation, Design, Execution, Maintenance)  We have designed a unique Budget Personalizer that helps you get a fair estimate of your budgetary requirements. You can find it on the home page of our website, www.thasmai.net  ERP- Customized ERP to suit automation business ensures Fast & hassle free processing for customer. Design  Complete drawing in AutoCAD (product placement + wiring)  Once order is placed we take details of all workers (electricians, carpenters, contractors) and interact with them proactively to ensure execution is seamless and customers aren’t disturbed in this period.  Execution report on a daily basis to customer.  Project Handbook provided to customer at end of execution so all project details are instantly referenced by client. Service:  Thasmai is the only company that offers Lead time (resolution) of 24 hrs on all queries, 8 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. Security Lighting Automation Amplifiers
  • 12. Confidential Information- Kindly do not share outside immediate investor interests How do you benefit as a Franchisee? In short, you will be tying up with the most professionally run company in the most exciting Home automation and Home Theatre market. Add to that Internet of Things, and you may be looking at becoming a first mover in your city in a new billion dollar industry!! 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. Well Defined Systems and processes  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 has the largest Automation stall in Bangalore last year) Business Model built on Industry expertise. Scalable model based on success of initial branches Establishe d rapport with Architects ERP system & Training COE Thasmai in Acetech!
  • 13. Confidential Information- Kindly do not share outside immediate investor interests  Robust Back office operations: ERP system is designed to make all procurement and payments seamless, we have instituted training modules for all employees (technical & Soft Skills), the project execution and service protocol is also set to run with minimum hassles  We have 2 unique websites catering to our Automation (www.thasmai.net) and Home Theatre (www.thasmaiaudio.com) customers. Our Websites are at #1 or 2 position for all Home Automation and Smart Home related keywords in Bangalore. We have created unique user friendly content for users such as a Home theatre Almanac which can be downloaded from our site. (Visit us at www.thasmai.net)  Dominant presence in Google Maps for Home Automation and Theatre keywords: Our office locations are usually in top 1-2 for any Automation/Theatre related keywords  Largest Home theatre experience demo in India, located in our HSR 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!  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 4000 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 9-Seater Top of the line experience JBL Synthesis speakers with 7.2.4 channel Dolby Atmos 19 ft screen width with 4k projection and cinemascope lens
  • 14. Confidential Information- Kindly do not share outside immediate investor interests  Centralized procurement: You will always have material at the best prices than local procurement due to centralized supply chain. We are already one of the largest vendors for both Crabtree and Harman  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. Procurement •Lower prices due to bulk orders and negotiation stregth with OEMs •We assume all the Inventory carrying risk Marketing •Central budget for website/promotions and other marketing activities •Tie Ups with all marketing channel partners Systems & Processes •ERP system centralised for seamless transactions and reporting •Hiring has been centralized, better candidates due to nationwide campaigns
  • 15. Confidential Information- Kindly do not share outside immediate investor interests  When we expand further, we will also aim to establish operations Centre of Excellence (COE) in multiple locations. The COE will contain technical training academies, mock installation set ups and manual/technical manuals for employees to keep abreast of latest developments in Automation technologies. This way, we ensure your investment never becomes obsolete  Solution Deployment: In the next 2-3 years, we would also to backward integrate our supply chain by building a solution combining the best options from Interfaces/Controllers and other components, which we will then market for the Indian audience. Our team of experts will scour the market across geographies to find the best options available for each component, and test various scenarios in our labs in Bangalore. And as our franchisees, you will be exclusive sellers of this solution!  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!
  • 16. Confidential Information- Kindly do not share outside immediate investor interests Franchisee Financials and Expected returns Investment As a Franchisee, you will invest in a one-time capital expenditure of Rs 22 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 – 0.6 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 6-8. Break up of Capital Expenditure Monthly Expenses 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 11-12. •Rent advance, Construction, Interior Designing •Automation, Security and Theatre equipment and installation Cap-ex (One time) 22L •Overheads (Rent, Electricity, admin costs) •Personnel costs (Salary, Travel expenses)Op-Ex (Monthly) 0.5-.6L S.No Expenditure 22L 1 Advances (rent, material) 3L 2 Home Security & Automation 8L 3 Home Theater + Acoustics 9L 4 Office work/Furnishing 2L S.No Monthly Expenses .65L 1 Sales Engineer 18k 2 Ops engineer 18k 3 Operations labour 7k 4 Rent 22k 5 Travelling Expenses 3k 6 Receptionist/OfficeBoy 6k
  • 17. Confidential Information- Kindly do not share outside immediate investor interests 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; Branch Growth Cycle 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) Branch Break even- Month 5-6 Branch Value after 5 years 65 L Yearly ROI after 60 months- 40-55% Expected Monthly returns from Year 3 (Net)- 0.8-1.1 Lakhs SetUpPhase 0-6 months No returns expected in first 2-3 months of setup and construction Months 4-9 would see gradual hiring and ramp up of sales as well as the first few orders BuildUpPhase 6-14 months The next 6-8 months will be spent in consolidating processes in your branch, getting sales to 100% performance as well as executing your first few projects Maturityphase 1 year onwards Once the branch has stabilized its operations, you will see a steady inflow of returns both from new sales as well as from exectution of past projects RewardsPhase 3 years & onward Maximum potential for franchisee earnings (yearly yield of 40-55% return on investment)
  • 18. Confidential Information- Kindly do not share outside immediate investor interests FAQs We’ve listed commonly asked queries with our responses here. I. What role do I have to play as a Franchisee? 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. For this investment, Thasmai offers an attractive return on investments which is highlighted further in the financials section. 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 & Theatre 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. We face a reputational damage on many counts (delayed service response, falling out of relationship with franchisee or stakeholders) which is not a risk worth taking for a few orders. 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 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)
  • 19. Confidential Information- Kindly do not share outside immediate investor interests Franchise Terms & Conditions (Legal paperwork & term sheet) Thank you for reading the document with interest thus far, if you want to join us on this exciting journey by being a Franchisee for Thasmai, feel provide us an opportunity to present our legal proposal to you where we can discuss our mutual opportunities in depth! You can call us on +91 9972418578/9880368001 or write to us at karigirish@thasmai.com or vijay@thasmai.com for any further enquiries. JP Nagar HT JP Nagar Automation Sanjaynagar HT
  • 20. Confidential Information- Kindly do not share outside immediate investor interests Appendix Returns calculations to arrive at CAGR (compounded annual growth rate) Depreciation calculated using straight line method with YoY 30% rate 1 8 0.00 0.20 -0.20 -0.20 2 10 0.00 0.20 -0.20 -0.40 3 4 0.00 0.00 0.00 0.00 0.20 -0.20 -0.60 4 3.00 0.60 0.00 0.10 0.40 -0.30 -0.90 5 5.00 1.00 0.00 0.16 0.40 -0.24 -1.14 6 7.00 1.40 0.00 0.22 0.40 -0.18 -1.32 7 7.00 1.40 3.00 0.61 0.40 0.21 -1.11 8 7.00 1.40 3.00 0.61 0.40 0.21 -0.90 9 7.00 1.40 5.00 0.86 0.40 0.46 -0.44 10 7.00 1.40 5.00 0.86 0.40 0.46 0.02 11 7.00 1.40 5.00 0.86 0.65 0.21 0.24 12 10.00 2.00 5.00 0.96 0.65 0.31 0.55 13 10.00 2.00 5.00 0.96 0.65 0.31 0.86 14 10.00 2.00 5.00 0.96 0.65 0.31 1.17 15 10.00 2.00 10.00 1.60 0.65 0.95 2.12 16 10.00 2.00 10.00 1.60 0.65 0.95 3.07 17 10.00 2.00 10.00 1.60 0.65 0.95 4.02 18 10.00 2.00 10.00 1.60 0.65 0.95 4.97 19 10.00 2.00 10.00 1.60 0.65 0.95 5.92 20 10.00 2.00 10.00 1.60 0.65 0.95 6.87 21 10.00 2.00 10.00 1.60 0.65 0.95 7.82 22 10.00 2.00 10.00 1.60 0.65 0.95 8.77 23 10.00 2.00 10.00 1.60 0.65 0.95 9.72 24 10.00 2.00 10.00 1.60 0.65 0.95 10.67 25 10.00 2.00 10.00 1.60 0.65 0.95 11.62 26 10.00 2.00 10.00 1.60 0.65 0.95 12.57 27 10.00 2.00 10.00 1.60 0.65 0.95 13.52 28 10.00 2.00 10.00 1.60 0.65 0.95 14.47 29 10.00 2.00 15.00 2.24 0.65 1.59 16.06 30 10.00 2.00 15.00 2.24 0.65 1.59 17.65 31 10.00 2.00 15.00 2.24 0.65 1.59 19.24 32 10.00 2.00 15.00 2.24 0.65 1.59 20.83 33 10.00 2.00 15.00 2.24 0.65 1.59 22.42 34 10.00 2.00 15.00 2.24 0.65 1.59 24.01 35 10.00 2.00 15.00 2.24 0.65 1.59 25.60 36 10.00 2.00 15.00 2.24 0.65 1.59 27.19 37 10.00 2.00 15.00 2.24 0.65 1.59 28.78 38 10.00 2.00 15.00 2.24 0.65 1.59 30.37 39 10.00 2.00 15.00 2.24 0.65 1.59 31.96 40 10.00 2.00 15.00 2.24 0.65 1.59 33.55 41 10.00 2.00 15.00 2.24 0.65 1.59 35.14 42 10.00 2.00 15.00 2.24 0.65 1.59 36.73 43 10.00 2.00 15.00 2.24 0.65 1.59 38.32 44 10.00 2.00 15.00 2.24 0.65 1.59 39.91 45 10.00 2.00 15.00 2.24 0.65 1.59 41.50 46 10.00 2.00 15.00 2.24 0.65 1.59 43.09 47 10.00 2.00 15.00 2.24 0.65 1.59 44.68 48 10.00 2.00 15.00 2.24 0.65 1.59 46.27 49 10.00 2.00 15.00 2.24 0.65 1.59 47.86 50 10.00 2.00 15.00 2.24 0.65 1.59 49.45 51 10.00 2.00 15.00 2.24 0.65 1.59 51.04 52 10.00 2.00 15.00 2.24 0.65 1.59 52.63 53 10.00 2.00 15.00 2.24 0.65 1.59 54.22 54 10.00 2.00 15.00 2.24 0.65 1.59 55.81 55 10.00 2.00 15.00 2.24 0.65 1.59 57.40 56 10.00 2.00 15.00 2.24 0.65 1.59 58.99 57 10.00 2.00 15.00 2.24 0.65 1.59 60.58 58 10.00 2.00 15.00 2.24 0.65 1.59 62.17 59 10.00 2.00 15.00 2.24 0.65 1.59 63.76 60 10.00 2.00 15.00 2.24 0.65 1.59 65.35 Overheads Net Cumulative Earnings Set Up time. No returns expected 0 Commission @ 14% Month Capex Investment Monthly OB Advance Collected Monthly Billing @ 1 6 %
  • 21. Confidential Information- Kindly do not share outside immediate investor interests Appendix B- List of Brands that Thasmai deals with on various levels Segment Product Line Company Our partnership with them Home Theater Speakers Harman (Revel/JBL synthesis/Infinity/Mark Levinson)- World’s largest Audio company South India Distributor (exclusive) Speakers Sonodyne (Best Indian Speaker manufacturer) Experience Partner for South India Speakers Dynaudio, Bowers & Wilkins, Golden Ear, Sonus Faber, Triad (Best High end speaker brands globally) Regional Dealer (non-exclusive) Amplifiers/Processors Yamaha, Marantz, Denon (top AV receiver brands globally) Regional Dealer (non-exclusive) 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 Regional Dealer (non-exclusive) Cables/HDMI QED, Monster, Profigold, Konig Regional Dealer (non-exclusive) Home Automation Wired Automation Crabtree (UK brand owned by Havells) Distributor A/V Integration Casadigi (Super premium brand catering to high end projects globally) RTI, Elan, Control4 (High end AV) Exclusive S.India Distributor Regional Dealer (non-exclusive) Wireless Automation Zipato Exclusive S.India Distributor Cubical, Fibaro Regional Dealer (non-exclusive) Home Security 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) Video Door Phone Comelit (Italian company, World #3) South India Exclusive Distributor Panasonic (Japanese MNC) Regional Dealer Intrusion Systems DSC (World’s #2 intrusion brand) Regional Dealer Typical Projects Timelines The typical payments/Projects cycle timelines for orders across categories after the initial advance has been finalized has been estimated below*, Size of Home Home Security Home Automation Home Theater Small 2-3 weeks 8-12 weeks 4-6 weeks Moderate 4-6 weeks 16-28 weeks 12-18 weeks Large 12-18 weeks 24-36 weeks 12-18 weeks *the conservative average time for site readiness has been estimated. These are meant to give a representational idea only Average ticket sizes Size of Home Home Security Home Automation Home Theater Small Rs 40,000- 75,000 Rs 150,000- 275,000 Rs 150,000- 425,000 Moderate Rs 100,000- 225,000 Rs 275,000-900,000 Rs 450,000-800,000 Large Rs 250,000-600,000 Rs 10,00,000- Rs 24,00,000 Rs 9,00,000- Rs 40,00,000
  • 22. Confidential Information- Kindly do not share outside immediate investor interests Franchise Benefit Scheme for FY 2018 onwards Home Automation Sl no Product Incentive offered (Material value) 1 Crabtree Automation 20% 2 Fibaro/Zipato Wireless Automation 12% 4 Cubical Automation 10% 5 Accessories 5% Home Theatre Sl no Product Incentive offered (Material value) 1 Revel, Infinity, Synthesis Speakers 20% 2 JBL/Sonodyne/Other Brand speakers 14% 3 AV Equipments (Projectors/AV Receivers) 10% 4 Screen- Milan/Elite 10% 6 Installation Charges 10% of supply value Home Security Sl no Product Incentive offered (Material value) 1 Video Door Phone 10% 2 Digital Door Lock 5% 3 Intrusion System 10% 4 CCTV System 5% 5 Installation Charges 10% of supply value 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.