Loan Proposal for
North Raleigh Jazzercize Franchise
in the amount of: $57,000
Submitted to
Ms. I. Hogg, President
First National Bank
December 1, 1997
Mary Frank
Mike Maxx
4249 Avent Ferry Rd
Raleigh, NC 27606
(919)850-4138
Executive Summary
According to the News and Observer, the Raleigh area has been
growing at an unprecedented rate, with a continual influx of athletic
young professionals into the Triangle. To date, the only Jazzercise
franchise is located in Cary, a sign)ficant distance from Raleigh and
North Raleigh. While there are many workout facilities scattered
throughout Raleigh, our proposal to add a Jazzercise in a busy
residential area of North Raleigh would draw a large crowd with its
unique combination of dance and aerobics. The following proposal
outlines advantages of opening a North Raleigh Jazzercise and requests
a loan totaling $57,000 to cover start-up expenses and the first three
months of operation.
Jazzercise is a proven successful business. It was started by a
woman and is rated as one of the top five businesses for a woman to
start by Working Woman Magazine. The Cary Jazzercise operates under
limited space and its classes are bursting. We, as entrepreneurs and
health conscious workout veterans, feel this business would provide a
great opportunity to combine our business and personal skills in a
profitable enterprise.
Many women and men would be glad to take a break from the usual
workout routine of the gym and enjoy exercising in a more upbeat way.
Our location provides convenience for employees on their way to or
from work, on their lunch break, and in the evenings after work. The
growing commercial area in North Raleigh attracts homemakers and
shoppers who would find Jazzercise's workouts fun and convenient with
child care, snack bar, and outfitting facilities under one roof. The
easy to follow routines are created by Jazzercise, Inc., and provided
to the instructors, to eliminate lengthy time for choreography.
Our proposal includes allowances for lease, salaries, operating
costs and advertising costs. Most business set-up details are provided
by Jazzercise, Inc., as well as assistance with starting up.
This proposal benefits all parties involved. For many Raleigh
residents, it will provide a needed change to their workout routines
and make exercise appealing to a new audience. The North Raleigh
location provides accessibility to neighborhoods, shopping centers,
area businesses, the wellness center of a nearby Hospital, the I-440
belt-line and, more recently, the proposed I-540 outer loop belt-line.
Furthermore, Jazzercise lends itself to off-site classes and
demonstration seminars at area businesses. With two energetic, former
exercise instructors as managers, Jazzercise will create a profitable
business opportunity for both entrepreneur and financier.
Incorporation of Jazzercise into North Raleigh business will benefit
the community, entrepreneur, and potential investor.
Table of Contents
NOTE: The following list of sections does not include
page numbers since they are not relevant in this online presentation.
Background - History of Jazzercise
Market - Analysis of the need for Jazzercise
Location - Why North Raleigh needs Jazzercise
Patrons - Who would use Jazzercise
Advertising - How to attract new clintele to Jazzercise
Organization - Jazzercise franchise structure
Budget - Operating Expenses
Profits - Projected Income
Conclusiong - Final Remarks
References - Works Cited
Tables and Figures List
Proposed Budget
Organization Chart
Background
Jazzercise was started in 1969 as a fun dance fitness class by
Judy Sheppard Missett, a professional dancer. Since then, Jazzercise
has expanded into a network of franchises across the nation, reaching
all 50 states by 1983. Jazzercise now has over 4,700 instructors,
teaching in 38 countries. Many businesses incorporate Jazzercise into
their corporate fitness programs with classes held on-site at
thousands of locations. Communities have also joined in, with many
classes held at area churches, community centers, and schools.
Jazzercise Headquarters are located in Carlsbad, CA. Jazzercise,
Inc., also includes the Jazzertogs brandname fitness apparel and the
Know More Diet program. Jazzercise videos and books are now available
in retail stores or through catalogue orders.
In 1996, system wide sales for franchises and Jazzercise, Inc.,
approached 45 million, and revenues for Jazzercise, Inc., was 13
million dollars. Franchise fees accounted for 55%, while merchandise
and production videos together accounted for 38%. Miscellaneous
profits and royalty fees account for the remaining profits.
Jazzercise was the first organization to have a certifcation
program for instructors, which includes safety and CPR training.
Jazzercise continues to remain a leader in the ftness industry with
its proven exercise program and innovative marketing approaches. With
Jazzercise's popularity and high visibility programs, it is sure to
remain the leading exercise franchise.
Market
According to Prevention magazine, Americans become more concerned
with improving their health and physical appearance each year. Many
articles focus on gimmicks to "loose 10 pounds" or "shed those holiday
inches" by eating just grapefruit or expensive health bars. However,
studies conducted by Walking magazine tout "a healthful lifestyle" as
the "proven route to long term dieting success." Part of that
"healthful lifestyle", for many Americans, includes a weekly trip to
the health spot that has fumed aerobics into the innovative new
pastime known as Jazzercise.
Only the Jazzercise franchise combines dance and aerobics to
provide fatburning workout routines for both beginning and advanced
patrons. The low impact structure of the routines provides fat-burning,
muscle-toning exercises that will not damage joints. Other ftness
facilities provide expensive equipment or saunas that produce
unsatisfactory results for new applicants who have no experience
"working out". However, Jazzercise classes provide instructors and
choreography at convenient times to ensure a productive, safe workout
each time. Furthermore, only Jazzercise instructors are fully certified
by Jazzercise Inc, so that each class will provide professional
consultations at no added expense to members. A facility with
convenient operating hours and two dance studios, child care, massages,
snack bar, and equipment shop would certainly draw a large crowd for
its unique atmosphere and convenient location.
Location
North Raleigh provides a growing number of young professionals
with fitness m mind. As area business flourishes and plans for a new
I-540 outer loop emerge, traffic and business continue to flock to
North Raleigh and surrounding areas. Currently, the only area
Jazzercise exists in Cary and means considerable delay for North
Raleigh residents seeking to attend the facility's already bursting
classes. North Raleigh needs a Jazzercise facility to serve the area's
existing residents as well as its future population. Old Wake Forest
Rd, which turns into Falls of the Neuse heading further North Raleigh,
provides an excellent location for a new Jazzercise. Area neighborhoods,
nearby Wake Hospital, the I-440 belt-line, North Hills Mall and area
businesses all provide likely candidates for enrollment in Jazzercise-
North Raleigh. Since no other national aerobic chains exist in that
area, Jazzercise would have no competition and freedom to conduct
seminar classes at all area businesses and Wake hospital.
Patrons
Among its patrons, Jazzercise could expect area businessmen and
women, homemakers with children, hospital employees or patients, as
well as 1-440 commuters who find its proximity to the belt-line
convenient. Since flexible hours provide easy workouts any time of
day, area businesses would find it innovative to incorporate a daily
workout into their agendas. Some businesses also prefer to hire
Jazzercise instructors for in-house seminar classes with employees
and their families. Jazzercise routines are fully "transportable"
since they require only music and an instructo r therefore Jazzercise
can serve clients who live farther away from the Jazzercise facility
as well as neighborhood clients. Jazzercise also provides full time
child care as well as a snack bar and outfitting shop with convenient
one-stop shopping. Furthermore, with North Hills Mall and dozens of
shopping centers nearby, Jazzercise would have advertising
opportunities to attract clients with a convenient location as well
as a trendy workout program.
Advertising
Opening a new exercise franchise in January enables us to utilize
a powerful advertising tool: the New Year's Resolution Special. Our
grand opening campaign will target people hoping to lose those holiday
pounds, and will also offer savings for the post-Christmas money
crunch. Additionally, the Jazzercise name has name recognition and
will build credibility into our ads. Our initial advertising blitz
will include mail circulars, newspaper ads, and radio spots, and will
highlight our New Year's price specials and free trial classes. This
will attract a large customer base for the first month, after which we
predict a steady increase in membership by word of mouth and continual
advertising.
Budget
Jazzercise company requests a loan for the amount of $57,000 to
cover startup and operational expenses for the first three months. A
breakdown of this request appears in table 2 of the appendix. The
proposed budget shows immediate profit, but operating expenses for the
first three months are requested as a precautionary measure.
Anticipated expenses for the first six months are:
January $20,174
February $19,057
March $19,240
April $19,424
May $19,607
June $19,790
-------------------------------------
Total: $117,292
Profits
The North Raleigh Jazzercise franchise will be immediately
profitable according to the budget. A summary of the first six months
profits is found below:
January $1,660
February $3,693
March $4,426
April $5,160
May $5,893
June $6,626
---------------------------------------
Total: $27,458
Conclusion
In conclusion, we are sure that a North Raleigh franchise of
Jazzercise would be an immediate success. Jazzercise has a solid
history as a profitable business. The Raleigh market needs new,
innovative exercise options. A location in North Raleigh on Old Wake
Forest Rd. provides a large pool of patrons. An initial advertising
blitz after the holidays will give us a strong start with a large
initial membership. This business is sure to be beneficial for owners,
financiers, and the Raleigh economy.
Click here to see the proposed budget.
Click here to see the organizational chart.
References
Boehler, Anne. "The Dieting Game." Walking. December 1997.
Eisley, Matthew. "Raleigh Marks 30 Years of Growth." News and Observer
29 June 1997.
"Franchises for Women." Working Woman. May 1996.
Grauman, Janet. "Slim Down for the Holidays." Prevention October 1996.
Internet, http://www.jazzercise.com
Refried Jeans Business Proposal. 25 March 1995.
Salihu, Theresa. Personal Interview. 3 November 1997.