Tennis Master Pro Shops, Inc. manages retail tennis shops known as Tennis Master Pro Shops. Each retail location offers indoor tennis instruction and custom-fitting. Both of these revenue streams have high profit margins and require low inventory. Custom-made rackets are manufactured on site using components. These rackets are sold under the name « Tennis Master » In-store instruction and training in tennis are provided by a USTA professional at every store.

A Tennis Master Pro Shop occupies 5,000 feet. It contains two virtual reality simulations of tennis, two swing analysis systems and four additional net combinations. A variety of brand and private label tennis merchandise is also available.

Tennis Master anticipates a growth of 15 stores to a combined total of 380 stores within the next three year. Ten stores will be owned by the company and the rest will be franchised. Qualified regional marketers will be qualified to sell 40 Master Franchise’s licenses in order to realize the high growth rate this expansion plan aims for.

Tennis Master franchise operations and company owned stores will all be included under the corporate umbrella of Tennis Master Pro Shops, Inc. Combined revenues are forecast to be $6.8 million in Year 1, $14.3 million in Year 2, and $23 million in Year 3. In Year 1, profits are expected to reach $1.8 million, $5 million in year 2, and $9.3 million by Year 3. In the same timeframe, profits will rise from 26.7% down to 40.3%. These highlights are shown in the chart below.

1.1 Objectives

Tennis Master has the objective of becoming the nation’s largest retail indoor training facility. As our ultimate goal, we are targeting 400 retail outlets. As our ultimate goal, we have targeted 40 Master Franchises. Each Master Franchise has ten retail locations.

• Year 1&#821110 Master Franchises.
• Year 2&#821120 Master Franchises with 120 retail stores (Cumulative, 30 Master Franchises with 180 retail stores).
• Year 3&#8211’10 Master Franchises, 200 Retail Stores (Cumulative: 40 Master Franchisings and 380 Retail Stores).

A table to illustrate this expansion plan is included in Appendix #8220/D&#8221.

Every store must achieve 25% training time utilization as its overall retail goal. This plan is based on 25% utilization. The attainment of this level of utilization will produce highly profitable retail stores. It is essential that the plan has profitable stores and franchise sales.

1.2 Mission

Tennis Master Pro Shops, Inc. strives to offer the finest indoor tennis training available. We want to encourage the enjoyment of tennis through helping players of all levels play better. This product can be delivered through individual instruction in the basics of tennis and individual fittings of equipment for tennis players. We provide all products and services at convenient locations and times.

Tennis Master Pro Shops, Inc. promises to provide outstanding business opportunities to franchisees, and to provide ongoing training and support as outlined in the franchise program.

Success Keys 1.3

The keys to success in Tennis Master’s business are:

1. Attainment our store expansion goals (both for company stores as well as franchise stores).
2. Attainment of 25% minimum utilization of training time in each retail location.
3. Obtaining initial capitalization.
4. Execution of franchise marketing programs
5. Executing retail marketing program.
6. Converting existing stores to training/racket fitting format.
7. Careful attention to store locations by using economic and tennis playing demographics.
8. Control of both the franchise and company stores by management
9. Management of cash flow; maintaining the pace of franchise sales; and obtaining additional investments in year one to keep pace with company-owned stores expansion.