Children's Edutainment Centre

Opening a children's entertainment complex that will be unique to HK. It will have both indoor and outdoor children's activities, as well as space for children's educational classes. Funding is required for initial startup, which is projected for Dec 2011.

Total return for investors should be over 170% of initial investment by the end of year 4.

Hong Kong is bereft of places to take children to play, apart from small parks or shopping centres. In recent years there have been a small # of children's play centres that have opened and have proved extremely popular. These usually consist of a small indoor space with a climbing frame, some other toddler games and some birthday party rooms.

Our Co wants to take this to the next level by offering multiple kids play areas, while combining this with educational opportunities.

Our Co has taken the lease of a space in the heart of Kowloon's busy retail / residential area that is over 20,000sqft & consists of both indoor and outdoor space. This makes our place unique due to its size and the fact we can combine such a large array of activities for children.

Our plan for the premises is as follows. We will have a large indoor area for kids to play in, including a toddler zone, a large climbing frame, party rooms, interactive computer games for toddlers, plus a water slide & obstacle course outside.

We are also going to partner with kids activity schools (e.g. toddler football training) to use our rooms during the week. We are also in discussions with overseas educational franchise holders to become the master franchise holder in HK, thus allowing us to hold classes in our premises, as well as in schools / corporates. We will also have the right to sell sub-franchises as well.

For the money invested we expect a payback over 36 months if in the form of a loan, or it can be in the form of equity.

We currently have the premises and are in renovation. We expect to be open around December 2011.

The unique proposition of this business is that currently there is very little competition in this market and no-one has the type of premises we have or is combining the education and play markets under one roof.

The funding would be used for initial working capital and also expansion of the brand both in HK and overseas. We want to establish our brand as the leading supplier of edutainment facilities in HK over the short term.

HK kids entertainement industry is in its infancy. There are 3 Co's in direct competition to us, although they are all on a much smaller scale and only focus on kids play centres. There is also a Jumping Gym USA operation in HK, which is very popular. However this focuses on arcade style games and has no party room facilities.

Other competition include private clubs, plus such things as ice skating rinks, movie theatres.

However no other competitor, direct or indirect, is looking at combining both education and entertainment under one facility.

Our other unique advantage is the site. With both indoor and outdoor facilities kids can enjoy both indoor and outdoor fun.

To fully capitalize on this unique proposition, we are seeking funds to quickly expand the concept into other key areas in HK, as well as tapping in other countries, such as Malaysia, Thailand, Philippines, China, Singapore.

The opportunity for investors is to invest at the beginning of a market trend that has proved extremely popular and profitable overseas. As people can tell you, kids are kids, no matter where they are from and they love to play. We are taking advantage of this by being one of the 1st to open a kids play centre, & being the 1st to combine an outdoor play area into the facility, as well as have educational programmes, plus kids training (e.g. toddler football) supplied by outside Co's.

Our revenue streams will include the following; entrance fees / party bookings / food / water slide usage / franchise lesson costs / merchandise (when available) / JV kids training fees / outside party bookings (as we build up our entertainers roster).

All other play centres are private so no competitor data is available, but the 1st public play centre in HK has been open around 5 years now

Use of financing will include: (All in US$)

1 - Working capital for initial opening stages
2 - To open further centres around HK & Asia

Business in the 1st 3 months has been very pleasing and already the centre has attracted a large ammount of media attention and interest from the public.

We have been written up in over 5 magazines and newpapers already and have generated a loyal following in the short time we have been open.

We have also had interest from people in China to take our concept there and we are looking into this avenue.

One of the main uses of the funds would be for expansion of the idea / operation into other countires in Asia (China / Philippines / Malaysia / Thailand / Korea etc), either as own stores / JV's or franchises.

We are looking to fine tune the operation in HK and then take this model offshore

I am looking for either medium term finance or equity funding of max up to US$1,000,000

Finance could be one of the following
1 - 5 year loan at agreed upon interest rate
2 - Guarantee of bank overdraft of L/C facility (for an agreed to fee while in use)
3 - Small initial funding, with other funds available upon request

Shareholding would be
US$700,000 for a 25% stake in the Co.

Repayment would be via dividends paid out at 40% of N.P.

We expect the business GP to be over 40% within 3 years.

Exit will be with 7-10 years and will either be one of the following:
1 - Management buyback of investors shares
2 - Sale of busienss to related party
3 - Possible IPO
4 - Sale of business to another entertainment Co wishing to expand into Asia