KPN Music Academy planned for Singapore in strategic location

The group aims to build up KPN Music Academy as a regional brand by 2020, and Singapore is regarded as an advanced market for other countries in the region to follow. Hence having a presence in that country will help make the KPN brand widely known in the region, said group chief executive officer Nuttawut Phowborom.
Once it has established itself as a regional brand and has branches throughout Southeast Asia, revenue from the Asean region should be 20-30 per cent of the total by 2020, he said.
The company recently expanded its KPN Academy franchise into Laos, as investors there wanted to bring this business into their country. Meanwhile, the company is negotiating with a private school in Indonesia on adding the KPN music programme to its curriculum. The business model in that case will be profit-sharing, he added.
He said many countries in the region lacked systematic music and voice training, so KPN saw an opportunity to build its brand, while businesspeople in those countries are also interested in KPN’s business model.
“We want to go China, but that market is not easy. Therefore, we will focus on Southeast Asia, especially Cambodia, Laos, Myanmar and Vietnam, which have similar cultures as Thailand,” he said.
In Thailand, KPN Music Academy has 60 branches, all run by franchisees. A franchisee will have costs from Bt3 million to Bt7 million, depending on the scale of the branch.
There are only two players in the music-academy business in Thailand, so marketing is not difficult. He said the company helps franchisees in terms of mass marketing via events and singing contests, while franchisees must handle local marketing themselves.
Courses at the academy cost around Bt3,000-Bt5,000 a month. Even though the economic slowdown has had an impact on purchasing power, parents continue to support their children’s ambitions to acquire musical skills, he said.
A key to the success of KPN franchises is that the franchisee has to share revenue with the teachers, which gives them incentive to stay with the academy long-term, he added.
To help the company spread its franchises throughout Thailand, Kasikornbank designed a loan programme for general investors interested in opening a KPN Academy.
Patchara Samalapa, executive vice president of KBank, said the bank had set aside Bt700 million for loans to KPN Music Academy franchisees.
If, for example, one wants to invest Bt6 million, the bank will offer a loan of Bt5.5 million and require collateral of 60 per cent of the loan amount.