Overseas Consultancy Proposal from
LOLLIPOP'S PLAYLAND New Zealand

Email to Alan Grant at Head Office alang@lollipopsplayland.com

LOLLIPOP'S PLAYLANDs are the leading group of children's indoor entertainment centres in Australia and New Zealand, with 8 centres currently open in NZ, 10 in Australia and 5 more in development. At present LOLLIPOP'S PLAYLAND is concentrating on franchising new LOLLIPOP'S PLAYLAND sites in Australia. However there is an increasing interest in the concept coming from areas where a full 'business format' franchise based out of New Zealand is not practical due to distance, language and/or other reasons. This proposal has therefore been prepared in response to a growing number of requests that have been received in recent months from diverse markets such as France, Shanghai, Switzerland, England, India and Singapore.

A backgrounder on LOLLIPOP'S PLAYLANDs origins is attached. To date LOLLIPOP'S PLAYLAND has had over 6 million customers, and the franchised sites achieve strong financial returns. As the founder of LOLLIPOP'S PLAYLAND in 1992, Alan Grant will be the principal consultant but he will be assisted where necessary, by his team of New Zealand franchisees, some of whom have up to 6 years of 'hands on' LOLLIPOP'S PLAYLAND operating experience.

New Zealand and Australian franchisees pay $40,000 upfront and 4% of turnover royalty for the support and guidance we offer. On an investment of $NZ/A 350-450,000 ($US 250-325,000) all franchisees consider that this money is well spent. If you are contemplating entering this market in your country, the fees proposed below for our consultancy service are a relatively low cost (compared to your likely capital investment) to increase the chances of the success of your new venture considerably. The full benefits of the franchise consultancy relationship are also attached.

LOLLIPOP'S PLAYLAND Background
The Concept in New Zealand and Australia

Located in a large (600-1000 m2) open, high stud building, LOLLIPOP'S PLAYLAND is a 'Pay for Play' playland designed for children 1-11 years. Children between these ages pay to enter, must wear socks, and can stay as long as they like. Children under one and adults enter free in some areas and pay a nominal charge in others. LOLLIPOP'S PLAYLANDs have two main areas of activity - Casual players (with parents) and Birthday Parties. LOLLIPOP'S PLAYLAND is open 7 days per week from 9.30am to 6pm.

LOLLIPOP'S PLAYLAND feature unique and exciting play for children in an indoor, clean, safe and supervised environment. Attractions include: A 150 m2 multi level indoor playground with up to 20,000 plastic playballs, a Merry-go-round, a bouncy inflatable, a play believe area, educational computers, an indoor basketball and soccer area, a quiet area with duplo, books, puzzles etc. 4-6 birthday party rooms, and a café with coffee, muffins etc.

All these are located in a colourful decorated area with easy listening adult music playing continuously. Many of these attractions have unique 'Superplay' features and are not found in outside free playgrounds, or fast food restaurant playgrounds. Staff wear bright colourful uniforms and are selected with an emphasis on personality and ability to enjoy and interact with the children customers. Overall, a very enjoyable and professionally presented environment designed to maximise the children's fun and to encourage repeat visits.

The History

The idea grew from Alan & Rose Grant observing children (including their own) who were visiting fast food restaurants for the playground rather than the food. Research in the USA and UK showed a growing market in indoor 'pay for play' and while the first playlands had been opened in areas of either very cold or very hot weather, they are now being established in all locations.

In early 1993 Alan & Rose felt that there was an opportunity to introduce the concept of 'Pay for Play' into New Zealand and Alan's early research included visiting 30+ playlands in the USA and Canada. The decision was made to proceed in May 1993, and the first LOLLIPOP'S PLAYLAND opened in New Plymouth, New Zealand in 650 sq m on the second floor above a new four Cinema multiplex on 10 November 1993. In the first year over 33,000 children played at LOLLIPOP'S PLAYLAND in a city with only 7500 1-11 year olds and turnover and visits continued to increase in year two. After an initial trial and proving period it was decided to expand LOLLIPOP'S PLAYLAND around New Zealand through franchising. Twelve target areas were identified and the New Zealand Franchise Programme was launched in July 1994.

The first Franchised LOLLIPOP'S PLAYLAND opened in New Zealand in March 1995, and 18 Franchises at present operate throughout New Zealand and Australia. 5 more sites are currently being developed.

'Pay For Play' - The New Opportunity
Why Does It Appeal To People Looking To Buy Or Setup A Business?

'Pay for Play' grew rapidly in the USA in the early 1990s with numerous Independents and one major player, Blockbuster Video (through Discovery Zone) having over 250 sites. There are currently over 600 'Pay for Play' operations in the USA and more opening every year. In 1994/5 the USA Industry started to rationalize and the operators with focused marketing, good management and a wide range of play options have survived this and continue to do well.

While in many areas in Australia and New Zealand, there are already small 'pay for play' operations, LOLLIPOP'S PLAYLAND is the proven, experienced, large scale, professional operator who is now offering the market a higher standard of play and child/parent enjoyment. Our ability to stand out from the existing opposition has been confirmed by our success to date in New Zealand and Australia to date.

The leisure and entertainment industries will continue to grow at an above average rate over the next decade (an example being the growth in Multiplex Cinemas over the last 5 years). We believe that children's entertainment will experience continued growth with the trends to both parents working, higher disposable income and more leisure time encouraging more frequent 'family outings'.

This business suits 'hands on' owner operators, more so than investors or Corporates. Once a site is established, it can be easy, fun work, with reasonable hours and a casual atmosphere, if franchisees put in place a team of good mature supervisors to support them. Staff are easy to find and attract. Overall the business is suited to a husband and wife team.

Why Use Lollipop's Consultancy Rather Than 'Going Alone?

1. Our research has been done in the USA , New Zealand and Australia and we have the trading experience (13 years, opening 20+ sites and 6 million children customers) to know which type of site and what equipment combination works best.

2. Actual trading history is available to base your projections on showing % penetration rates of the population of children in the area, $ spends per visitor, average labour rates, operating costs, birthdays per week, etc.

3. Promotional material, including TV advertising, is available, already developed, tried and tested.

4. Operating systems are available to pick up and use from day one such as: Entry control, Opening, closing & maintenance schedules, Staff rostering systems, Food options, sources and margins, Birthday party formulas, So why reinvent the wheel?

5. LOLLIPOP'S PLAYLAND can provide full training for the new operators and his/her staff in an operating PLAYLAND and their own, prior to and during the opening weeks.

6. Source equipment from LOLLIPOP'S PLAYLAND suppliers in NZ, Australia, USA and the UK. Independent buying will not be able to match LOLLIPOP'S equipment in quality, uniqueness, delivery time or price.

7. Have access to ongoing product development, USA & UK contacts and learning from and sharing with other LOLLIPOP'S PLAYLAND Operators in NZ and Australia. Conferences are held in both Australia and New Zealand every six months.

The Keys To Success In The 'Pay For Play' Market

The eight keys to success in 'Pay for Play' and how LOLLIPOP'S PLAYLAND can help you achieve them.

1 High levels of Repeat Customers generated by:

• Excellent Play options (using LOLLIPOP'S PLAYLAND equipment)
• Professionalism in Standards and Operating Procedures
• The most enjoyable indoor environment for children and adults in Australia and New Zealand

2 Multi Income streams

• Casual Play
• Birthday Parties
• Food
• Merchandising of branded items
• Kiddie Rides, adult games and Redemption games within the LOLLIPOP'S PLAYLAND
• And more being developed

3 Facilities

• In best locations, at most cost effective per metre rental rate
• Right size, shape and height
• Optimal layout for children's play and adult relaxation

4 Minimised Capital investment and start up costs (capitalising on LOLLIPOP'S PLAYLAND learning and sourcing experience)

5 Cost effective Marketing (using LOLLIPOP'S PLAYLAND methods)

• Growing Brand awareness nationally
• Marketing options to drive the off peak trade

6 Labour cost management through:

• $ per hour recruitment targets
• Productivity management systems
• Comparisons with other LOLLIPOP'S PLAYLAND sites

7 Lower operating costs through:

• Group bulk buying discounts on consumables
• Regular financial comparisons with other LOLLIPOP'S PLAYLAND sites to help target areas for improvement in your site

8 Ongoing evolution of the concept and the brand through regular market research, and franchisee input at Conferences etc.

There are three levels of playland development consultancy available from LOLLIPOP'S PLAYLAND:

Stage One
We can provide you with some of our historical actual setup and trading information to assist you assess the feasibility of establishing an indoor playland concept in your country. This will include information on building options, pricing, equipment, layout, care and party add-ons, competition and other crucial aspects. Time to do - one week. Price - $US 3,000.  If required we can also visit your market and assist you assess competitors, potential sites, etc. Cost will depend on the market, but be the base fee of $US 3,000 plus travel, accommodation and $US 1,000 consultancy for three days work

Stage Two
If you decide to proceed, we can assist you setup and open the business including; site evaluation and selection, layout and equipment planning, equipment sourcing, staff planning, recruitment and training, supply of procedures and forms in our 3 volume (600 page) operations manual, opening staff support and preliminary marketing. Timing - will depend on finding a site. Price - we will quote site by site, but as a guide, approx. $US 10,000 plus all travel and accommodation.

Stage Three
If your business goes well and you wish to expand it by franchising, we can assist you set up for franchising and in selling and setting up the first two franchises. After that we will guide you in establishing your own franchise sales and support structure. Our support will include guidance on the franchise contract, and the provision of a full set of Manuals. Alan Grant has had 10 years franchising experience with over 60 franchisees in KFC (NZ) Ltd., LOLLIPOP'S PLAYLAND and Lollipop's Chidlcare. For a nominal ongoing fee your group can become 'associates' of the LOLLIPOP'S PLAYLAND group for interchange of marketing, product, financial, operations and 'evolution' information as appropriate. Time frame and fee for Stage Three - on application, will vary considerably.

Thanks for considering LOLLIPOP'S PLAYLANDs as a concept. We know that it works very well in New Zealand and Australia and we would enjoy assisting you setup something similar in your country.

Lollipop's Franchising Confidential Applicant information form

Email to Alan Grant at Head Office alang@lollipopsplayland.com