LOLLIPOP'S PLAYLAND
Is The Market Leader In This Exciting
Children's Entertainment Business

Email to Alan Grant at Lollipop's Franchising Office alang@lollipopsplayland.com

Franchising Vacancies, Australia - January 2007

      Vic - Keilor (Northwest Melbourne), Epping (North), Ringwood (East), Geelong

      NSW - Sutherland Shire (South Sydney), Wollongong

      Qld - Brisbane North, Springfield (West Brisbane), Gold Coast, MacKay

      Other - Adelaide, Perth, Canberra, Hobart

What is a Lollipop's Playland?

Located in a large (600-1000 m2) open, high stud building, LOLLIPOP'S PLAYLANDs are 'Pay for Play' indoor entertainment centres, 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 enter free.

LOLLIPOP'S PLAYLANDs have two main areas of activity - Casual players (with parents), and Birthday Parties. Most LOLLIPOP'S are open 7 days per week (including most Public Holidays) from 9.30am- 6pm.

LOLLIPOP'S PLAYLANDs feature unique and exciting play for children in an indoor, clean, safe and supervised environment. Attractions include most of the following features:

• A large multi level indoor playground
• Ball pools (with up to 20,000 plastic playballs)
• Merry-go-round and bouncy inflatable
• A special toddler area for younger children
• Play believe and dressup area
• Educational computers
• Indoor basketball and soccer area
• Quiet area with painting, books, duplo etc.
• Birthday party rooms
• A café with good coffee and a tempting range of food.

All these are located in a colourful, decorated area with easy listening music playing continuously. Many of these attractions have unique 'Superplay' features and are not found in outside free playgrounds, or in fast food restaurant playgrounds.

Security and safety are very important features in a LOLLIPOP'S PLAYLANDs, with security gated entry, wristbands on all children, restricted access for adults without children and special children's toilets with vision windows into them.

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.

LOLLIPOP'S PLAYLAND - The Beginning - New Plymouth, New Zealand

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 early 1990s 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 based on their research, which included Alan 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.

After an initial trial and proving period it was decided to expand LOLLIPOP'S PLAYLANDs 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 March 1995 and eight franchised LOLLIPOP'S PLAYLANDs are now open in New Zealand including two in Auckland and others in Hamilton, Tauranga, New Plymouth, Palmerston North, Wellington and Christchurch.

Research in Australia in May 1996 confirmed that LOLLIPOP'S PLAYLANDs were more professional, multifaceted and financially successful than anything open in Australia at that time, so expansion into that market started with the first site opening in Brisbane in December 1997. Because of the success of that first trial site, the expansion of LOLLIPOP'S PLAYLANDs through Australia has gathered momentum.

Since then 9 more Lollipop's have opened and four more are now in development, and over 6 million children have played in a LOLLIPOP'S PLAYLAND in Australia and New Zealand.

As our success unfolds, we plan to expand into all major Australian cities over the next few years. Early trading experience in New Zealand has confirmed the need to have a large (100,000+) population in the area surrounding a LOLLIPOP'S PLAYLAND site. For Australia we have increased that to 200,000, so development in the Australian market will be concentrated in the larger cities.

LOLLIPOP'S PLAYLAND Franchising

The Franchising Company is owned by Alan and Rose Grant and operates from an office in Hamilton, New Zealand. They are supported by locally based Master Franchisees in both countries, with Tim Newman-Morris in Melbourne for Australia and Barry Malcolm in Lowerr Hutt for New Zealand.   By being locally based, the Master Franchisees are be able to provide better support service to individual site franchisees and they are also able to continue to develop the market for LOLLIPOP'S PLAYLAND at a greater rate. This is being done with the assistance, guidance and support of the Franchisor, as needed, who will remain living in New Zealand.

The LOLLIPOP'S PLAYLAND name and the Cat logo are registered trademarks in New Zealand and Australia.

LOLLIPOP'S PLAYLAND is a professional, ethical and long term franchisor and we have a full disclosure document as required by law in Australia to comply with recent changes in the Trade Practices Act that become mandatory from 1 October 1998.

'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.

There is a significant opportunity in Australia and New Zealand to enter this new and exciting business with the support of the most experienced operator in the region. While in many areas there are already small 'pay for play' operations, LOLLIPOP'S PLAYLANDs is the proven, experienced, large scale, professional operator who is now offering the market a higher standard of play and child/parent enjoyment.

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 10 years). We believe that Childers 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, not investors or Corporates. Once the 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.

To enter this business you need the following:

• Funds $350-450,000 (this depends on how much alteration is necessary to the building we lease)
• 'Hands on' operator
• Space- area, location, stud height, right $/sq.m
• Equipment, Name, Systems, etc.

A potential $100,000 plus income can be achieved by owning and operating a 'Pay for Play' in the right location with the right equipment, systems and pricing structure.

LOLLIPOP'S PLAYLAND can facilitate you into this business with minimal cost and risk to assure you the best potential return.

Why Buy A LOLLIPOP's PLAYLAND Franchise Rather Than 'Going It Alone' ?

1. Our research has been done in the USA , New Zealand and Australia and we have the trading experience (13 years, opened 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 plans to be in every major Australian city within the next few years, so benefit from the rapidly growing Brand awareness of LOLLIPOP'S PLAYLAND

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

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

8. Purchasing of consumable supplies, food and additional equipment sourcing will benefit from 'Bulk Buying' discounts that we have in place with the likes of Coke and Streets, thereby improving your gross profit margin.

9. Each franchisee will have access to ongoing product development, USA & UK contacts and learning from and sharing with other LOLLIPOP'S PLAYLAND Franchisees in NZ and Australia. Franchisee Conferences are held in both Australia and New Zealand every six months.

For the same reasons that McDonalds is 75% franchised and there is a queue of applicants for their Franchises, Franchising with LOLLIPOP'S PLAYLAND is the lower risk, cost effective and fast way to enter the 'Pay for Play' market in Australia.

Franchising is often referred to as- "Being in Business for yourself but not by yourself".

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

The eight keys to success in 'Pay for Play' and how a LOLLIPOP'S PLAYLAND Franchise 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

2 Multi Income streams

• Casual Play
• Birthday Parties
• Food
• Merchandising of LOLLIPOP'S PLAYLAND 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.

LOLLIPOP'S PLAYLAND Franchising Structure

1. Initial Franchising Fee- $45,000

Benefits

• You can use the registered LOLLIPOP'S PLAYLAND name and Cat Logo, saving the need to develop your own and capitalising on future national brand awareness.
• You will have access to all LOLLIPOP'S PLAYLAND systems and information to help setup and operate you business including a regularly updated three volume Franchise Manual.
• You will receive full assistance to secure a suitable site, obtain financing, source and setup equipment. Training will be provided and experienced people will be there to help you through your opening weeks.

Each of these benefits will save you $10-20,000 and also valuable time.

Payable - $8,000 on signing of a Heads of Agreement prior to securing the site and sourcing equipment. If no suitable site is found after six months either party can void the agreement and the $8000 is not refunded.

-  $15,000 when a suitable site is found and goes unconditional.

-  $22,000 on opening day of your Franchise

2. Ongoing Royalty

The Franchise contract is for 10 years with one 10 year right of renewal.
4% of sales payable monthly
For the use of the Name and ongoing assistance with development, marketing and operations.
Franchisee applicants are welcome to contact existing Franchisees to gain their perspective of the concept, the integrity of the LOLLIPOP'S PLAYLAND franchise system and the level and quality of franchisor support

3. Ongoing Advertising Contribution

To be spent on pooled Statewide Advertising.
Initially the advertising budgets will be set by the Franchisee and spent on local advertising at each franchisees discretion. When there are at least three sites in your State a committee representing the Franchisees and Franchisor/Master Franchisee will be set up which can call on 0.1% to 5% of turnover for group State Advertising if it is agreed to by the majority (75%) of Franchisees in that State.

And What Will It Cost Me And How Much Will We Make?

Up Front Investment

Franchisee Fee       $ 45,000
Equipment              $ 200,000
Building Fitout         $ 50,000 - $150,000
Pre Opening Costs  $ 55,000
________________________________
Total                      $ 350,000 - $450,000

The building fitout will vary depending on the size and condition of the selected building, and how much the Landlord will spend to attract a quality long term tenant, like LOLLIPOP'S PLAYLAND. Where possible we prefer to get the Landlord to do the majority of the building fitout, to keep the franchisees capital investment down, and in return we are prepared to pay a little extra in ongoing rent.

Income And Expenditure Projections

Income- Based on customer projections and actuals from established sites

• x % of local population of 1-11 year children visiting per annum
• $x.xx per head ticket average
• Number of Parties per week
• Cafe sales per visit

Other income
Expenses - Labour - Hours per week and per 100 customers and average cost per hr

• Food cost percentages
• Fixed costs including rent, power, insurance, royalty, etc
• Other variable costs including marketing, consumables, etc.

To give a Cash Trading Profit and the deducting Owners Drawings, Interest, Depreciation and Tax

As mentioned earlier, a potential $100,000 plus Cash Trading Profit can be achieved by owning and operating a LOLLIPOP"S PLAYLAND. Full financial information will be provided to qualifying applicants (with the necessary financial resources) once they have signed a 'Confidentiality and Restraint of Trade' Document.

Lollipop's Franchising Confidential Applicant information form

Email to Alan Grant at Lollipop's Franchising Office alang@lollipopsplayland.com