Can you REALLY own a PVR Franchise? – Analysis, Cost, & Profit

Are you and your partner interested in investing in a multiplex franchise? Have you been scouring the internet for information on PVR Cinemas franchise but haven’t come across any reliable details? Do you have the required funding, or does PVR offer franchise opportunities in India?

If you have answered “yes” for any of the query, you should be curious to learn more about PVR, which has garnered an enormous customer base and shares an interesting story.

In this exciting blog series, we’ll dive further to understand more about the PVR Franchise, along with its financial details, cost, profit margin, and myths about the same – and answer some common questions about the chain.

• Company: PVR Inox Ltd
• Founded: 1997
• HQ: Gurgaon
• Industry: Cinema & Entertainment
• No. of outlet: 800+ Screens
• Model: Self-owned
• Area served: India & Sri Lanka
• Franchise Fee: NA
• Profit Margin: 3-6%
• Area Required: Min. 5000 sq ft
• Total Initial Investment: up to ₹5 Crore

Overview of PVR Franchise

Founded in 1997 by Ajay Bijli and his co-founder Sanjeev Kumar, PVR is one of India’s leading, well-established, and rapidly growing film exhibition company, specialized in offering best-in-class cinema experience. It has everything, right from exceptional seating arrangement, loyal customer service, soothing cinema experience, and many more.

Over the past 25 years, PVR has introduced the latest technologies to elevate the audience’s visual and auditory experience and expanded Food & Beverage offerings, all to revamp the legacy cinema experience.

PVR Cinemas offers a complete movie-watching experience in a lavish and luxurious ambiance, aiming to establish itself as the go-to destination for cinema enthusiasts in India.

With a remarkable presence in 74 cities across India and Sri Lanka, the PVR Cinemas franchise boasts an extensive network of 173 cinemas, offering a staggering 854 screens in total. Additionally, PVR recorded an impressive footfall of 101.7 million admissions for the financial year 2021-2022.

According to its latest financial report, PVR has garnered an average ticket price of ₹235 and an average spend of ₹124 per head, that has certainly helped the chain to expand its reach to various metro and smaller cities in India and some locations in Sri Lanka.

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PVR – The Journey

In a simple word, they had a crisp start;

At a time when many believed that the era of cinemas was coming to an end, and theaters were shutting down, a visionary individual with unwavering determination stepped in and launched India’s first multiplex, PVR Anupam.

Their remarkable journey has not only revitalized the entire Indian film industry but also paved the way for a new era in cinema exhibition. A name synonymous with the word ‘movies,‘ PVR has become a trailblazer in redefining the finest cinema experience in India for the past 25 years.

Key Facts on PVR

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Key USP and Achievement of PVR Franchise

As per the March 2019 report by CRISIL Limited assessing the film and multiplex industry in India, the following facts were highlighted:

1. The franchise were recognized as leader in terms of number of screens, admits and operating revenues amongst the multiplex players in India.
2. PVR Holds a market share of over 22% in the Bollywood segment and 29% in the Hollywood (including Hollywood dubbed) segment.
3. They are also renowned as Leader in 7 of the 8 key cities in India in terms of screen count.
4. In FY18, PVR Cinemas stood out among the top 4 multiplex players in India, boasting the highest average ticket price and spend per head.
   • Additionally, PVR achieved the highest share of advertising income compared to its peers, contributing to its overall operating income.
5. PVR garnered Highest revenue per screen and EBITDA per screen amongst the top 3 multiplex players in India.

Is PVR a Franchise?

Regrettably, PVR does not offer franchise opportunities to any individuals/entrepreneurs for operating its multiplex. Despite its widespread presence in over 74+ cities and the potential for further expansion in the future, PVR has chosen to operate without a franchising model.

This decision is influenced by the challenges associated with operating a multiplex in India, the limitations of the franchise model in terms of control, and the substantial initial investment required to establish a PVR multiplex.

Is PVR and Inox same?

Upon merging in March 2022, PVR and Inox became one company, which is now known as PVR Inox Ltd. With more than 1,650 screens spread across 350 buildings in over 110 cities, this consolidation would create a strong presence in the multiplex business.

How Much Does a PVR Franchise Cost?

As mentioned earlier, PVR is a company-owned and operated business, which doesn’t offer any franchising opportunities to any individuals or entrepreneurs.

However, In order to own and operate a multiplex like PVR will certainly require an initial investment of at least ₹2 Crore to ₹5 Crores and a dedicated floor area of min 6000 – 7000 square feet to set up a brick-and-mortar cafe space.

Additionally, The above-mentioned initial investment for multiplex does cover the expenses or fee such as Franchise fees, Marketing Fees, Equipment, Branding, and other necessary fees.

Presently, PVR operates three models that have a significant presence in Tier 1, Tier 2, and Tier 3 cities. This expansion into smaller cities will undoubtedly assist the brand in enhancing its reputation and expanding its reach.

Model and costs are listed down for reference;

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How much is the PVR Franchise Profit Margin?

Indeed, establishing and operating a PVR cineplex necessitates a significant upfront investment, and the profitability of the chain can fluctuate based on factors such as the chosen multiplex model, location within a city, the quality of cinemas currently available or planned for the year, as well as the average number of customers and their spending capacity.

Despite the challenges faced by the entertainment industry in recent years, particularly due to the impact of Covid-19, PVR has demonstrated resilience and expertise in multiplex operations.

The wide range of offerings including food options, advertisements, and more have contributed to the chain’s ability to maintain a reasonable net profit margin of 5-6%.

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How Does PVR Makes Money?| Revenue sources for PVR

Typically, a multiplex generates revenue from multiple sources, which can vary based on factors such as brand reputation, location, customer loyalty, and the range of services provided.

However, PVR revenue streams are diversified, encompassing various sources of income. In addition to generating revenue from movie screenings, the chain also generate income through the sale of food and beverages, advertisement revenue, convenience fees, and income derived from movie distribution, among other sources.

Sources are also listed down for your reference;

1. Sale of Movie Tickets:
   • This particular streaming platform serves as a significant source of revenue for PVR, contributing to over 50% of their total income.
2. Sale of Food and Beverages:
   • The consumption of food at multiplexes has increased quite significantly in recent few years, that contributes around 1/4 of the total income.
3. Advertisement Income:
   • The advertising industry has experienced remarkable growth, with both offline and online channels contributing significantly to the increased revenue generation for multiplexes.
4. PVR implements convenience fees and movie distribution charges as additional sources of revenue, contributing to a robust stream of income.

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What are the requirements to Start a PVR Franchise(If offered)?

1. Interested candidates should should possess the necessary funding amounting to ₹2 Crore to ₹5 Crore with a proper entertainment space of minimum 5000 sq feet.
2. Interested applicants are advised to dedicate themselves to the PVR business and follow the company standards and maintain their legacy.
3. Interested franchisees should have passion to work in the Multiplex & Entertainment industry and should possess the leadership and financial skills to operate a PVR Cine business.
4. One should be capable of hiring at least 15-20 employees, including a manager to operate the business hassle-freely.
5. Interested candidates may require to undergo the necessary training and support program to understand and operate the complete business.

How to Get PVR Franchise?

Regrettably, PVR does not offer franchise partnerships as the company has chosen to refrain from utilizing the franchise system. There are various reasons behind this decision, including concerns related to limited control over operations, brand protection, the need for flexibility in innovation, extra expenses in training & support, and other factors.

If PVR were to adopt a franchising model, you could visit their official website to inquire about potential franchise opportunities. You would be required to provide personal details such as your name, email address, phone number, prior experience, and a project proposal.

Final Thought – Should you Buy a PVR Franchise?

Undoubtedly, owning a PVR location necessitates a substantial investment capital, along with thorough planning, sufficient financial backup, comprehensive market analysis, meticulous area survey, and a team of trained professionals. Without these essential elements in place, it would undoubtedly pose significant challenges to successfully operate any kind of multiplex in India.

It is worthwhile to note that there are several complication involved in owning a license for running a PVR location in India. and some of the licenses required are;

1. NOC’s from several local administration, such as DM, Nagar Nigam or Municipality.
2. Government development authority approval
3. Fire department and electricity department approval.

So, more or less, Before owning or starting your multiplex, one should buckle themselves for lot of paper work, investment, entertainment space with plenty of parking space, and many more.

Good Luck!! Happy Franchising!!

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