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“What is the estimated monthly revenue?”
“I heard the criteria for opening study rooms at each municipal or provincial office education are different, then can I launch study cafés regardless of such restrictions?”
“If there’re no franchise fee or royalty, is the headquarters not involved in management of the store? Is there a separate program by the headquarters to deliver operation know-hows?”
At the ‘CEO Plan Exclusive Model Presentation’ held on the 5th at the Hyundai Card CEO LOUNGE in FKI head office 42F in Yeouido Seoul; Deputy general manager Younggwan Kim from the Startup support team explaining about the brands of the CEO PLAN exclusive model, THE GREEN STUDY and BLACK MOTIV.
At 6pm on the 5th, Hyundai Card·Hyundai Capital·Hyundai Commercial(hereinafter Hyundai Card) employees gathered at the CEO LOUNGE on the 42F of the Federation of Korean Industries head office building in Yeouido. The gathering was held to present the ‘CEO PLAN exclusive model’ which is a franchise brand developed by the ‘CEO PLAN’, a startup support program for retired employees at Hyundai Card. From last year, Hyundai Card has planned and developed the following franchises; ‘THE GREEN STUDY’, a study room and café, and ‘BLACK MOTIV’ which offers coffee and desserts.
Around 60 employees who attended rushed to ask a variety of questions as soon as the presentations on each brand were finished. They showed great interest in the two brands, asking questions on the status of the stores that are currently up and running, their profit volumes as well as any limitations or issues associated with operating the business. In the showroom of THE GREEN STUDY and BLACK MOTIV located in one corner of the CEO LOUNGE, the employees had a chance to experience the atmosphere as well as ask any questions about the facility and the menu.
Showrooms of exclusive models, THE GREEN STUDY and BLACK MOTIV at the CEO LOUNGE.Lower entry barriers and greater brand differentiation through ‘CEO PLAN exclusive model’
‘CEO PLAN exclusive model’ (hereinafter exclusive model) came into being following 4 years of experience with the CEO PLAN launched in 2015, which Hyundai Card ran to support its retired employees to start new businesses. As the majority of the employees considered beginning their own business at the time of retirement, deciding on which item to engage was especially time consuming due to insufficient time for market studies. There were fundamental barriers to start a business in the first place because of the cost and technical gaps between the items they ‘wanted’ compared with the ones that are ‘feasible’. Even after a business was launched, so many of them faced challenges due to the lack of know-hows on managing the store and the services that are provided.
The exclusive model came about in the process of finding new and accessible ways for employees to launch a business while minimizing such issues. The start-up support team that runs the CEO PLAN envisioned the franchise model, which has a relatively lower entry barrier. A franchise has a predefined business model which offers designated products and services to the franchisee, who doesn’t necessarily have to have special skills or know-hows. The items picked by the team were the study café, which is a type of ‘sharing’ service that is recently gaining ground, and a coffee · dessert store.
Relax zone and overall view of THE GREEN STUDY Sangam branch located in Mapo-gu, Seoul.
For the study café and study room, the team partnered with Locus 101 which is a premium study room franchise to develop their own brand – which ultimately led to the creation of THE GREEN STUDY. Hyundai Card manages the planning and design of the brand’s concept and interior while Locus 101 deals with the actual operation of the franchise leveraging its know-hows. For the coffee shop, the team joined hands with BLACK MOTIV, a coffee roaster lab founded through the CEO PLAN, and made it into a franchise as with THE GREEN STUDY. However the access to the franchise is limited to former Hyundai Card employees.
Exterior and interior of BLACK MOTIV Sadang st. branch located in Dongjak-gu, Seoul.
There are other advantages of the exclusive model. When a new franchise opens, there is absolutely no royalty or franchise fee involved, which tend to be the largest cost items. This enables the startup cost to go down significantly. Renovation cost is also at 70~80% of other brands in the same category which drives the total cost down further. At the BLACK MOTIV, franchisees are supplied with high quality beans from the roaster lab at reasonable prices which helps lower the operating cost. Furthermore, Hyundai Card was directly involved in the design process of the brand identity. Various supplies used in the store and the design of products sold to customers were carefully deliberated, making the brand stand out among others.Experience gained from running the CEO PLAN integrated into the exclusive model…contribute to enhancing customer satisfaction
Since the first THE GREEN STUDY which opened in Chungdam-dong, Gangnam-gu Seoul, there are now 6 that have launched with success. It comes in a study café type, study room type and a mixed type of these two; currently four of them are the mixed type while two are study room types. So far, five BLACK MOTIV stores opened their doors. Since the CEO PLAN program began, 76 startups came into being over the last four years. 11 of these were founded in the last 6 months as part of the exclusive model, which proves its efficiency in terms of both time and cost. Customer satisfaction is high too. The average seat occupancy at THE GREEN STUDY hovers around 80%, and in some stores, there’s even a waiting list of people who wish to enter.
The CEO PLAN came about with the recognition that the key to the success of a startup does not solely depend on the strong will of the founder, or the former employee. In fact, according to research by Hyundai Research Institute in 2015, half of the self-employed who closed their businesses were in their 40s, the majority of whom launched their own business after retirement. Considering the growing rate of self-employed persons and increasingly sluggish economy, the situation is likely to have aggravated.
Against this back drop, it would not be a safe and wise choice to have unrealistic dreams of startups and just jump in to launch one’s own business upon retirement. The CEO PLAN on the other hand spends 6 months to train and prepare the business launch, provides a separate fund to support the foundation of the business, then offers up-close management thereafter, for 2 years after opening the store. Won Im, the start-up support team lead, stated that “in this context, the planning and development of the CEO PLAN exclusive model is even more significant,” and added that “we’ll provide continued support to help our employees achieve sound economic independence and social settlement”.
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