Foreign [Music] Theater schools and today I'm pitching For 50 000 pounds for 25 of the business Razzmatazz is a part-time Children's Theater school we teach the kids dance Drama and singing and aim to develop Their confidence improve their health And fitness I'm trived a safe and secure Resource for parents Today the kids are going to sing for you And medin has wrote this song it's a Razzmatazz jingle she's only eight years Old so we're gonna do it for you now [Music] Come join us bring your friends it'll be So cool [Music] [Music] I Rise Sing and resume Test yeah [Applause] Present time was established in 2000 in Cumbria I branched out into the north of England and into Scotland at the end of 2005 I franchise the business and in 2006 we successfully launched two in Glasgow to in Edinburgh and one in South Cumbria with Derby launching in February Of this year and other locations in the Pipeline the franchisees pay a one-off Fee for the territory and a 10 Management fee thereafter the kids
Attend Razzmatazz once a week for three Hours a week paying a maximum of five Pounds an hour there's 25 in each class Which is 75 per School those 12 weeks of Term and three terms a year this equates Annually to around about a turnover of 40 000 pounds expenses of ten thousand Pounds so a net profit before tax of Around 30 000 pounds Razzmatazz would Use the dragon's investment to launch 10 More schools in the UK it's a good Investment because the franchise is up And running and it's proving successful I propose at the end of year three you Would get your fifty thousand pounds Back plus an estimated profit of 40 000 Pounds I'm going to ask the kids to leave The Den now and so we can carry on as Discussion thank you [Music] Tartan's entertaining pitch has cajoled A rare smile from at least some of the Dragons but can she tempt any of them to Part with a 50 000 pound investment for A 25 stake in her theater schools Denise hi I'm Theo wow that was Spectacular a bit different How many schools have been total now There's ten in total now how many Schools do you actually own four the Other six yeah A franchise yeah and the master plan Is
Year one to set up 10 more schools in The UK and 10 cities in the UK and then We invest some money to set up 10 more Reinvest the money set up 20 more so With up to 50 over three years yeah Okay Denise is clearly ambitious with plans For Rapid expansion Duncan bannatyne Wants to grill her further [Music] What's your competition and stage Coaches is the main competitor and They've got 600 schools in the UK that's Right yeah my children might be stage Coach Yeah what what is using dancing or is he Done dancing in a bit of acting or They do dance drama and singing so they Have one week they do your musical Theater and the next week it's all pop And Street dance and things like that so They're getting a good mixture can you Tell what your profit is over the last Three years 2005 about 28 000. 28 bottom Nine profit pre-tax yeah right 2004. 2004 probably about twenty two thousand Wait in the previous year 2003 Probably about eighteen thousand And is that after you've taken a salary The first year well the first couple of Years I didn't really take a salary but I do know yeah so when somebody gets a Franchise and they pay you want a fee
Yeah what fee do they pay you between Five to ten thousand right and do you Put any of that money into setting them Up yeah if they paid five thousand about Three thousand so you make about five or Six thousand Outreach Of each franchise open yeah and then ten Percent ten percent of what of the the Turnover which is about If they've got 100 occupancy about 40 000 right well they give you ten percent Whatever the figure is Confidently painting a clear picture of A potentially cash Rich operation But that's raised issues of its own for Peter Jones Denise what do you need 50 000 pounds From me for Well I would use the 50 000 pounds to Set up the franchises so they don't have To approach a bank You're going to become a money lender It's just a quicker way to set up but Denise you're going to go and find Franchisees and then you're going to Lend them the money to pay you that's Just one option we don't have to do that Is it a factor which is affecting your Expansion people not prepared to pay for Five thousand pounds Well if it's not then you should totally Forget it because you've just you take Away one of the key pivotal points of Franchising
I'm not sure I know what you mean the Financial commitment that they gave you Day one Suddenly Denise is in real trouble her Composure crumbling under the Disapproval of theoper fetus Deborah Meaden suspects that Denise's ambition Isn't matched by her business acumen Have you actually decided what you need 50 000 pounds for we obviously need to Spend it please don't tell me you could Spend that fifty thousand pounds Somewhere else no no we can we need to Advertise for more franchises so we use It for marketing and things oh so either We you could spend it to get those 10 Franchises in but if we think that's a Bad idea then maybe we could spend the Money on Advertising well you wouldn't Spend that kind of money on Advertising No Denise I might be reaching a decision Here My worry is that you're not clear On your destiny that's why I've come Here today though because because you're Obviously got so much experience it was For well it's not advice Bureau no and We're not here to run your business for You so I'm really sorry Denise but I'm Out Foreign Has lost her first dragon will any of The other dragons see a clearer Opportunity in Razzmatazz Denise you need to get a very clear
Understanding of your vision and where You're going I'm investing in you and Then you're saying actually Peter you're Not what you're really doing is I'm now Sitting here as Denise the bank I'm Going to take your money and Loan your Money to another 50 people that you Don't even know who I'm talking to No I understand what you're saying I'm Going to decline the offer I'm going to Say I'm out Now Deborah meaden and Peter Jones have Both lost confidence in Denise and Pulled out Richard Farley has been listening Intently Denise Um I think you've given a very good Presentation today I love the kids in Here and I love their performance what The only thing I don't like for an Investor is just that there's a very big Competitor there Called Stagecoach surely they were at my Level at one point as well yeah they Were they were and when they did that There was no big competitor yeah for me As an investor I don't see the return so I'm going to sell them out as well okay Thanks You're looking at me yeah you're looking At someone who's very disappointed okay I do think you need to stop and think
About how you're going to do this Okay Um I don't think you need the money if You go down to proper franchising routes Because that generates income So on that basis it's not an investment For me so I too I'm out now Four dragons are now out and Denise's Chances of securing the fifty thousand Pound investment a hanging by a thread Duncan bannatyne is the only one left in And since his initial grilling he hasn't Said a word I I think you do a lot of things wrong But I know Stagecoach very well not just As a theater school but as a company Because I invested in them And when I sold my investment I did very well I don't know how it works And I think with your enthusiasm You could Possibly build the second stage coach So in that basis If What you said is correct your last set Of accounts audited accounts sure profit At 28 000 pound pre-tax Then I want to invest And I'll invest at the level you've Asked If you want me to Yeah okay
So done deal after you've got a deal wow Okay [Applause] [Music] It's an extraordinary moment Denise has Secured her investment for the precise Amount of equity she was offering and She walks away with an extremely Knowledgeable new business partner to Boot Well done mate thank you The first time I first time I think a Deal's been done without any haggling I Just couldn't how could you handle she Wanted 50 000 for 25 she's got a Fantastic little business How could a Haggle yes great little business Denise you didn't even have to argue and You got your money are you happy I'm Over the moon totally over the moon now We're a bit of a bombshell when Duncan Said I had shares in Stagecoach right yeah Well your enthusiasm you could possibly Build the second stage coach you said he Made an emit money from it so he knows The potential doesn't he so do you think Maybe you should have bid for a bit more Now no I'm happy you really are happy Yeah yeah okay well very well done and Good luck
