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Fast Food Business Plan


PASTA NOW!

74250 Mainline Rd.Las Vegas, NV 89101

January, 1995

Franchises continue to be the most secure form of small business start-up, requiring less money and less risk than a brand new venture. The franchiser often supplies assistance, ranging from financing to hiring and training staff This plan details a fastfood franchise that specializes in quick and healthy pasta dishes.

  • EXECUTIVE SUMMARY
  • DESCRIPTION OF BUSINESS
  • MARKET ANALYSIS
  • COMPETITIVE ANALYSIS
  • DESIGN & DEVELOPMENT PLANS
  • OPERATIONS & MANAGEMENT PLANS
  • FINANCIAL COMPONENTS

EXECUTIVE SUMMARY

The market demand has never been greater for food that is healthy, economically priced, and great tasting. This is the last market with wide open potential for growth. Traditionally, pasta has been consumed in fine restaurants, usually in a more formal or sit-down atmosphere at high prices. As pasta has moved to the center stage as a product that both tastes good and is good for you, Pasta Now! has positioned itself to provide the services in demand by the American consumer: a variety of healthy pastas, moderately priced and with very good taste. The basic focus is to provide the consumer with a healthy, quality meal which is economically priced. This is a concept that will never grow old.

Pasta Now! is a franchise system with ongoing support from the national franchisor. National assistance includes site selection, restaurant design, comprehensive training, and support of ongoing operations through marketing assistance, quality control programs, research and development.

Pasta Now! of Las Vegas will require a total financial commitment of $100,000. The franchise fee for the Las Vegas store will be $10,000, with an additional $12,500 to purchase the rights for all of Nevada. The remaining money will be used in opening the first Nevada store in Las Vegas. The Miller's equity contribution will be $15,000 in cash. Additionally, the Millers have $60,000 of equity in their residence.

Pasta Now! of Las Vegas will have the right to sell stores throughout Nevada. As these additional franchises are sold, Pasta Now! will retain $7,500 of each franchise fee paid. Monthly royalties from each of these Nevada stores will be 3% of gross.

DESCRIPTION OF BUSINESS

History

Pasta Now! of Las Vegas is being structured to operate franchises of the national chain Pasta Now! Additionally, we will sell a limited number of franchises of the national chain. Pasta Now! is headquartered in the Cleveland, OH area. Pasta Now! of Las Vegas has the exclusive right to operate and sell franchises in Nevada.

The national Pasta Now! chain was established in 1987 with the opening of the original Pasta Now! The company has been franchising since 1991. Recent growth has been in the Cleveland metro area, where there are currently eight stores in operation. Pasta Now! has recently signed a master franchise agreement to open ten additional stores in the state of Michigan in the next five years.

Ownership Structure

Ownership of the business is in the form of a Nevada corporation with 51% of the stock owned by Roland Miller and the remaining 49% owned by Sheila Miller. This Nevada corporation will in turn own Pasta Now! of Las Vegas.

Sheila Miller has prior business experience in the ownership of a mobile Ice Cream/Catering business. Mrs. Miller has also acquired human resource experience while employed as a Human Resources Assistant for St. Mary's Hospital.

Roland Miller has gained management and budget experience through his work as a Captain with the Las Vegas Fire Department.

Both Mr. & Mrs. Miller have been educated in the Total Quality Management concept used by many of today's successful major corporations.

Pasta Now! is a fast food pasta chain that focuses on the drawing power of an Italian restaurant that meets the needs of people on the go who still want a healthy product at reasonable prices.

For many years, the only place you could get a variety of quality pasta was at sit-down Italian restaurants that were expensive and did not meet the needs of the customer in a hurry.

Products/Services

The Pasta Now! menu is centered around a variety of pasta dishes with a variety of sauces. The majority of sauces are cooked on site. For diversity, Pasta Now! also offers individual pizzas, a line of Italian sandwiches and a selection of salads. Pasta Now! menu items are available for eat-in or take-out. Pasta Now! also features a complete party menu. Catering for any size occasion is available.

The service will be exceptional. The#l goal of each employee will be customer satisfaction. Pasta Now! believes in the old fashioned motto, "the customer is always right." In today's society, where customer service is often lacking (or nonexistent), we will structure our business to provide the best service possible in a friendly, helpful atmosphere.

Geographical Area

Pasta Now! will draw customers primarily from Las Vegas, with some penetration in to neighboring counties.

Pasta Now! will draw on the Las Vegas community's growing reputation as a regional shopping hub. Pasta Now! franchises are structured to operate in areas with populations between 25,000 and 30,000 people.

There are no physical limitations to the market area since the Las Vegas location is well served by several state highways. There are many competing, well-established fast food outlets in the area; however, none of them are currently providing a similar product.

Major Customers

Pasta Now! relies on customer volume with no identifiable major customers. However, the customers can be categorized as:

  • baby boomers and their children
  • state employees
  • adults age 50 and above
  • tourists

Facilities/Equipment

Pasta Now! is structured to operate in strip mall-type locations. The corporate headquarters provides detailed site selection assistance, including lease negotiations.

Pasta Now! is designed to function in a 1500 to 2000 square-foot store. A drive-up window can be utilized if a suitable site for such is located.

Prospective sites which have been preliminarily identified include; the Bryson's shopping center in south Las Vegas, the Forest center in Northern Las Vegas or the Daly shopping center on Highway 12.

The equipment necessary for the operation of Pasta Now! will be purchased from any of the several restaurant supply companies located in the area.

Organization

Pasta Now's staff will be divided into two functional areas, Operations and Administration. Each division will he headed by one of the principals.

MARKET ANALYSIS

Geography/Demographics

The national trend toward eating out has increased over the last 5 years. In 1993, the amount of money spent on eating out was equal to what was spent for consumption inside the home. This is the first time that consumers spent as much for "eat out" food as they did for "at home" food. According to American Demographics magazine, by the year 1996, spending on restaurants and take-out food will overtake the nation's grocery bill. The market demand has never been greater for food that is healthy, economically priced, and great tasting. The recent health-oriented menu options added to national chains like Taco Hut and even Smith's, point to the nation's desire for healthy food. In an analysis of casual dining, Restaurant Business Magazine noted that baby boomers, and others, are coming face-to-face with the realization that youth is ephemeral. With that realization has come more emphasis on healthy dining alternatives like pasta.

Customers

The customers for restaurants in the geographical area served by Pasta Now! can be categorized as follows:

  • Baby boomers and their children
  • State employees
  • Adults age 50 and above
  • Tourists

There are several identifiable characteristics of the market area that determine the segmentation as listed. Since this area is rapidly growing, as opposed to mature, there are new home buyers who tend to have families and dine out often. According to American Demographics Magazine, baby boomers and their families eat out an average four times per week.

Since Las Vegas is such a busy area, there are a large number of tourists and state employees who are looking for a place to take lunch. During a recent, non-scientific, interview session, state employees from the Department of Transportation and the Department of Motor Vehicles were asked at random how many times per week they dine out for lunch. The average number of times the respondents dined out for lunch was 2.7 days per week.

Adults over 50 dine out an average of 2.4 times per week. Recent trends indicate that adults age 50+ are dining out less often, but they are more attracted to restaurants that offer food to be eaten at home. Pasta Now! can satisfy their needs.

Assumptions

The strategic goals and plans for Pasta Now! are based on the following assumptions:

The national and local trends toward consumption of healthy food will continue. All indications from national publications consulted agree that healthy food which is reasonably priced will continue its popularity well into the next century.

The trend toward dining out will remain steady. Indications are that dining out will actually increase over the next five to seven years.

Supply & Demand

The restaurant industry in the U.S. has been characterized by rapid change. During the 50's and 60's, dining out was a new experience for a country feeling the effects of post-war affluence. Also, the various wars have increased the awareness of many Americans with foods from different cultures. This has spawned a trend toward restaurants featuring food from Europe and Asia.

An American original, the diner, spread across the country and soon evolved into chain restaurants operated by local and regional corporations. During this period, a new restaurant concept grew up from the corner hamburger stand. The fast food restaurant was started from such humble beginnings and quickly multiplied.

Over the next two decades fast food matured and changed at the same time to meet the changing tastes of the public.

While fast food chains experienced significant growth, restaurants evolved also. During the late 60's and 70's, "natural" food restaurants became popular, only to give way to nouvelle cuisine in the 80's. The trend in the 90's is to healthy food low in fat, cholesterol and sugar.

The national restaurant industry includes approximately 125,000 restaurants plus 235,000 fast food restaurants, according to the National Restaurant Owners Association (NROA). NROA estimates that combined restaurant sales reached 4.5 billion dollars last year.

The local market reflects the national trends. As pasta has moved to the center stage as a product that both tastes good and is good for you, Pasta Now! has positioned itself to provide the services in demand by the American consumer: a variety of healthy pastas, moderate price, and very good taste.

Growth Factors

The number of restaurants will grow at an annual rate of 7.3% for the next five years according to the latest report from the U.S. Department of Agriculture.

The growth can be attributed to many factors, such as a continued trend toward two income families, thus eating out more for lunches and having little time to prepare a meal after work. The biggest potential for growth involves food prepared for consumption, or take-out food. As the name Pasta Now! implies, we are positioned to take advantage of either market segment.

The local area will experience a growth rate above the national average due to the rapid growth of the population throughout Nevada.

Product Lifecycle

The restaurant industry is in a rapidly growing phase. Although this growth trend means opportunities for increased sales volume and higher profit margins, overhead must be closely monitored. The importance of quality control, purchasing, low overhead, advertising and marketing cannot be overstated.

At all of the Pasta Now! franchise locations, customer loyalty has been developed through its excellent service and popular menu. Attention must be paid to trends, however, and changes should be made early in both the menu and the decor before customers become bored and move on to a newer experience.

Price Structure

Pasta Now! is structured to present good food and reasonable prices. As such, Pasta Now! operates with food costs at 34% of gross. This figure is somewhat higher than industry standards for the same type of menu; however, Pasta Now! strives to maintain affordable prices. Pasta Now! will keep menu prices at reasonable levels to attract the largest share possible from its demographic base.

Marketing Process

Pasta Now! will market the food and service of its restaurant using a custom designed campaign by the Jules Advertising agency in Cleveland.

Advertising campaigns will utilize newspaper, radio, and direct mail coupon marketing. Pasta Now! also markets its catering services through fax advertising to local businesses.

The ad agency has developed several creative direct mail promotions for use throughout the Pasta Now! system.

COMPETITIVE ANALYSIS

Pasta Now! will have no direct competition in the Las Vegas market. City records show that there are a total of 89 businesses listed in the broad category of restaurants. Of these, 12 feature some form of pasta as a menu item. Additionally 4 Italian restaurants are listed, each with several pasta items. None of the local restaurants specializes in quality pasta at affordable prices in a fast food setting.

Disadvantages

Name recognition

As a fast food outlet, Pasta Now! does not have the name recognition of other national chains.

New food concept

Italian food in general, and more specifically pasta, are new concepts in fast food.

Rental costs

Prime rental locations are extremely costly.

Advantages

Healthy food

The current fast food market does not provide for fast healthy food. Pasta Now! fills that void by allowing customers to obtain fast food which is healthy for them and their children.

Price

Pasta Now! offers Italian food at lower prices than typical sit-down Italian restaurants.

Service

Pasta Now! will operate with the motto "the customer is always right." In today's busy world, the customer service aspect of the restaurant business is often overlooked.

Untapped market

Pasta Now! will offer an alternative not currently available in the Las Vegas area.

DESIGN & DEVELOPMENT PLANS

Goals

Goal 1

Opening of first Pasta Now! in Las Vegas by October 1 of 1995.

Goal 2

Achieve $250,000 - $300,000 in gross sales in the first year of operation.

Goal 3

Sell 5 additional franchises within the first 7 years of operation.

Risk Analysis

The following risks are inherent in the pursuit of the stated goals:

  • The lack of name recognition in our area will impede sales potential.
  • Attracting potential franchise owners will be difficult.
  • Opening of our first store will be dependent on receiving financial assistance through loans.

Evaluation Methods

Pasta Now! will evaluate the achievement of its stated goals by measuring financial factors.

Pasta Now! will monitor monthly sales volume as compared to monthly operating costs. Monthly increases will be expected in the gross sales category.

Sales of additional franchises will be measured by the actual opening of new stores in Nevada. Contacts with potential franchisees will be measured in terms of the number of inquiries obtained on a monthly basis.

Strategic Actions

Strategy 1

The goal is to open the first Pasta Now! in Las Vegas by October 1, 1995. The area is growing rapidly and presents many opportunities to take advantage of the shopping market.

Strategy 1 calls for finding financing to the level necessary to satisfy our needs. The estimated level necessary to accomplish this goal is $65,000 to $ 100,000.

Additionally, a location will need to be secured. Location assistance is provided by the corporate headquarters. Location considerations include traffic patterns and counts, immediate area demographics, and location of a suitable strip mall facility.

Strategy 2

The goal is to achieve $250,000 - $300,000 in gross sales in the first year of operation. This will be accomplished through a marketing plan which is constructed by the corporate office. The franchisor requires that 4% of the monthly gross be spent on advertising. 2% of this goes directly to a local marketing campaign. The remaining 2% goes to the corporate headquarters to be used to develop radio and print material for our local franchise stores. The plan includes advertising, direct mail marketing and promotional activities. In addition, corporate headquarters structures food preparation and management styles to maximize profit while keeping the overhead to a minimum.

Strategy 3

The goal is to sell 5 additional franchises within a five-year period. This will be accomplished through an extensive training program provided to Mr. & Mrs. Miller by the president of the corporation. In addition to the sales assistance provided by the corporate headquarters, a franchise consultant has been retained.

Schedule/Timetable

Schedule for Goal 1 - Opening of first Pasta Now! in Las Vegas.

Develop a business plan for presentation to bank/investors by April 14.

Finalize franchise and master franchise agreement with corporate headquarters by April 17.

Await approval of financing and obtaining of funds. Deadline is May 15.

Complete all preliminary administrative work, such as incorporating, etc. by May 15.

Review traffic studies and demographic information. Consult with corporate headquarters regarding site selection. Site selection committee from corporate headquarters to visit area. Negotiate lease and leasehold improvements. Deadline by June 30.

Remodeling of site location to specification of Pasta Now! by August 15.

Obtain bids for supply of inventory and equipment (including signage) from various local restaurant supply companies. Select best company and set delivery date by September 1.

Receive delivery of equipment by September 10.

Obtain marketing package from corporate headquarters advertising agency and customize to our local by September 1.

Printing of all menus, forms, and promotional items by September 15.

Arrange local advertising for grand opening celebration by September 15.

Hire and train employees during soft opening period from September 15 to September 30.

Grand opening on Monday, October 1, 1995.

Schedule for Goal 2 - Achieve $250,000 - $300,000 gross sales in first year.

Evaluate monthly sales to provide for increases on a monthly basis, allow for seasonal adjustments.

Meet with president of Pasta Now! who will review entire operation and make recommendations for improving sales. Deadline January 5, 1996.

Review menu for items which are popular and unpopular, make adjustments accordingly. Deadline February 15, 1996.

Implement new PTA marketing plan by end of February, 1996.

Schedule for Goal 3 - Sell 5 additional franchises within Five years.

Obtain training in the sale and finalization of franchise selling by March 30, 1996.

Develop advertising material for the sale of franchises for use in local and regional publications by April 15, 1996.

Provide for immediate response to inquiries for interest in franchise purchase.

Make a minimum of five presentations on a quarterly basis for individuals or corporations interested in purchasing a Pasta Now! franchise.

OPERATIONS & MANAGEMENT PLANS

Key Individuals

Sheila Miller-President

Mrs. Miller graduated from high school in Hartford, Connecticut in 1981. Employment out of high school was with Rocklin Corporation as a Senior Data Entry Operator. After moving to Nevada in 1983, Mrs. Miller served in various capacities with the State of Nevada - Department of Motor Vehicles.

Mrs. Miller's past business experience includes operation of her own mobile ice cream/catering truck. She was entirely responsible for the complete operation of the business. This included dayto-day operations, accounting, advertising and marketing, personnel matters, and equipment maintenance.

Mrs. Miller has experience in the personnel field having worked as a Human Resource Assistant for St. Mary's Hospital. Her responsibilities included compliance with state and federal Equal Employment Opportunity mandates, processing and training of all new employees, recruitment, advertising, insurance and benefits coordination, and payroll accounting. Mrs. Miller is currently employed with the Nevada Department of Transportation. She will resign her position upon the opening of the first store.

Roland Miller - Vice President

Mr. Miller graduated from Las Vegas High School in 1980. Mr. Miller is pursuing an education at Nevada Community College, and has earned 54 credits towards a fire science degree.

Mr. Miller has worked in the broadcasting industry since 1980, having functioned as operations manager for a local radio station. Mr. Miller currently works as a freelance radio broadcaster, covering sporting events throughout Nevada for radio stations throughout the United States. Mr. Miller has been employed by the Las Vegas Fire Department since 1984, currently holding the rank of Captain. His duties include supervising the operations of one of three city fire stations, commanding equipment and personnel at the scene of various types of emergencies, responding with a regional hazardous material team to mitigate hazardous materials incidents, and providing training and instruction to department members. In addition, Mr. Miller serves as the Department's Public Information Officer. Mr. Miller also serves in the information Officer role for the Fire Management team, responding to major emergencies. Mr. Miller's fire department work schedule, which is ten 24-hour shifts per month, allows him the freedom to pursue outside employment.

Andrew Kline - Assistant Manager

Mr. Kline is currently in retirement. His previous experience includes ownership and operation of Guido's Italian Delicatessen. The deli was located in Redwood City, California. Mr. Kline first opened his deli in 1972. In 1976, Mr. Kline moved to Las Vegas. He was completely responsible for all aspects of the store's operation. He had direct responsibility for all operations, including food preparation, customer relations, personnel relations, marketing, catering, etc.

Lynn Sher - Assistant Manager

Mrs. Sher is Andrew Kline's mother. Mrs. Sher was involved in the previously mentioned deli. Mrs. Sher's involvement was centered around direct assistance to Mr. Kline. Mrs. Sher had the added responsibility of handling all accounting activities, relations with state/city agencies, payroll, and like administrative functions.

Staff Positions

Sheila Miller will be responsible for the functions within the operations department. Including supervision of day-to-day operations & food preparations. Mrs. Miller will also be responsible for personnel relations. Mrs. Sher will assist within the operations department as necessary.

Mrs. Sher will be responsible for the administrative department. Including marketing, advertising, franchise sales, and franchise operations. Mrs. Sher will assist in the administrative department by handling all accounting responsibilities.

Mr. Miller & Mr. Kline will have responsibility for assisting with day-to-day operations, food preparation, and bookkeeping advice and support.

FINANCIAL COMPONENTS

Sources & Uses

Financial requirements are as follows:
Franchise fee and purchase of area agreement $22,000
Equipment package and signage $35,500
Initial inventory $4,000
Leasehold improvements $13,000
Pre-opening expenses, travel and lodging for training $7,500
Grand Opening $5,000
Working Capital $13,000
Total Financial Requirement $100,000

Financing to be obtained through local bank loans, secured through the Small Business Association or USDA if necessary. Equity of property owned in Las Vegas will be used as partial collateral. Loan term to be discussed.

Income/Cash Flow Statement

The following income and cash flow statements are based on information supplied by Pasta Now's corporate headquarters. Figures used are pro-forma; however, they reflect results obtained at other Pasta Now! franchise locations.

The statement is based on a fiscal year which begins with the opening date of the business.

Projected Income Statements—Best Case
Oct Nov Dec Jan Feb Mar Apr May
Gross Sales
Sales 36,000 30,000 33,000 15,000 19,500 24,000 28,500 33,000
Total Sales 36,000 30,000 33,000 15,000 19,500 24,000 28,500 33,000
Cost of Sales:
Food/Drink/Spoilage 12,240 10,200 11,220 5,100 6,630 8,160 9,690 11,220
Total Cost of Sales 12,240 10,200 11,220 5,100 6,630 8,160 9,690 11,220
Gross Profit 23,760 19,800 21,780 9,900 12,870 15,840 18,810 21,780
Expenses:
Accounting 100 100 100 100 100 100 100 100
Advertising Local 720 600 660 300 390 480 570 660
Advertising National 720 600 660 300 390 480 570 660
Bank Charges 15 15 15 15 15 15 15 15
Depreciation 292 292 292 292 292 292 292 292
Franchise Fee 83 83 83 83 83 83 83 83
Insurance 188 188 188 188 188 188 188 188
Interest 636 632 627 622 616 611 606 601
Legal and Pro. 100 100 100 100 100 100 100 100
Licenses & Permits 15 15 15 15 15 15 15 15
Office Expense 50 50 50 50 50 50 50 50
Outside Services 200 200 200 200 200 200 200 200
Rent - Property 2,673 2,673 2,673 2,673 2,673 2,673 2,673 2,673
Repairs & Maint. 100 100 100 100 100 100 100 100
Royalties 1,440 1,200 1,320 600 780 960 1,140 1,320
Telephone 300 300 300 300 300 300 300 300
Travel 250 250 250 250 250 250 250 250
Utilities 558 558 558 558 558 558 558 558
Wages 5,760 4,800 5,280 2,400 3,120 3,840 4,560 5,280
Employer's Burden 1,319 1,156 1,238 748 870 993 1,115 1,238
Manager Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Misc. 720 600 660 300 390 480 570 660
Total Expenses 18,239 16,511 17,368 12,193 13,481 14,768 16,055 17,342
Net Operating Income 5,521 3,289 4,412 (2,293) (611) 1,072 2,755 4,438
Other Income 0 0 0 0 0 0 0 0
Other Expenses 0 0 0 0 0 0 0 0
Net Profit (Loss) Before Tax 5,521 3,289 4,412 (2,293) (611) 1,072 2,755 4,438
Jun Jul Aug Sep Year l % Year 2 % Year 3 %
36,000 37,500 34,500 33,000 360,000 100.00% 450,000 100.00% 495,000 100.00%
36,000 37,500 34,500 33,000 360,000 450,000 495,000
12,240 12,750 11,730 11,220 122,400 34.00% 153,000 34.00% 168,300 34.00%
12,240 12,750 11,730 11,220 122,400 34.00% 153,000 34.00% 168,300 34.00%
23,760 24,750 22,770 21,780 237,600 66.00% 297,000 66.00% 326,700 66.00%
100 100 100 100 1,200 0.33% 1,500 0.33% 1,650 0.33%
720 750 690 660 7,200 2.00% 9,000 2.00% 9,900 2.00%
720 750 690 660 7,200 2.00% 9,000 2.00% 9,900 2.00%
15 15 15 15 180 0.05% 225 0.05% 248 0.05%
292 292 292 292 3,500 0.97% 4,375 0.97% 4,813 0.97%
83 83 83 83 1,000 0.28% 1,000 0.22% 1,000 0.20%
188 188 188 188 2,250 0.63% 2,813 0.63% 3,094 0.63%
596 590 585 580 7,302 2.03% 6,513 1.45% 5,626 1.14%
100 100 100 100 1,200 0.33% 1,500 0.33% 1,650 0.33%
15 15 15 15 180 0.05% 200 0.04% 220 0.04%
50 50 50 50 600 0.17% 750 0.17% 825 0.17%
200 200 200 200 2,400 0.67% 3,000 0.67% 3300 0.67%
2,673 2,673 2,673 2,673 32,076 8.91% 33,680 7.48% 37,048 7.48%
100 100 100 100 1,200 0.33% 1,500 0.33% 1,650 0.33%
1,440 1,500 1,380 1,320 14,400 4.00% 18,000 4.00% 19,800 4.00%
300 300 300 300 3,600 1.00% 4,500 1.00% 4,950 1.00%
250 250 250 250 3,000 0.83% 3,750 0.83% 4,125 0.83%
558 558 558 558 6,700 1.86% 8,375 1.86% 9,213 1.86%
5,760 6,000 5,520 5,280 57,600 16.00% 72,000 16.00% 79,200 16.00%
1,319 1,360 1,278 1,238 13,872 3.85% 16,660 3.70% 18,564 3.75%
2,000 2,000 2,000 2,000 24,000 6.67% 26,000 5.78% 30,000 6.06%
720 750 690 660 7,200 2.00% 9,000 2.00% 9,900 2.00%
18,199 18,624 17,757 17,321 197,860 54.96% 233,340 51.85% 256,674 51.85%
5,561 6,126 5,013 4,459 39,740 11.04% 63,660 14.15% 70,026 14.15%
0 0 0 0 0 0.00% 0 0.00% 0 0.00%
0 0 0 0 0 0.00% 0 0.00% 0 0.00%
5,561 6,126 5,013 4,459 39,740 11.04% 63,660 14.15% 70,026 14.15%
Statement of Cash Flows—Best Case
Oct Nov Dec Jan Feb Mar Apr May
Sales 36,000 30,000 33,000 15,000 19,500 24,000 28,500 33,000
Expenses 30,479 26,711 28,588 17,293 20,111 22,928 25,745 28,562
Depreciation 292 292 292 292 292 292 292 292
Principal 502 507 512 517 522 527 533 538
Net Cash Position 5,310 3,073 4,191 (2,519) (841) 836 2,514 4,191
Previous Cash Position 13,000 18,310 21,383 25,574 23,056 22,214 23,050 25,564
Cumulative Cash Position 18,310 21,383 25,574 23,056 22,214 23,050 25,564 29,756
Projected Income Statements - Worst Case
Oct Nov Dec Jan Feb Mar Apr May
Gross Sales
Sales 22,000 18,333 20,167 9,167 11,917 14,667 17,417 20,167
Total Sales 22,000 18,333 20,167 9,167 11,917 14,667 17,417 20,167
Cost of Sales:
Food/Drink/Spoilage 7,480 6,233 6,857 3,117 4,052 4,987 5,922 6,857
Total Cost of Sales 7,480 6,233 6,857 3,117 4,052 4,987 5,922 6,857
Gross Profit 14,520 12,100 13,310 6,050 7,865 9,680 11,495 13,310
Expenses:
Accounting 100 100 100 100 100 100 100 100
Advertising Local 440 367 403 183 238 293 348 403
Advertising - National 440 367 403 183 238 293 348 403
Bank Service Charges 15 15 15 15 15 15 15 15
Depreciation 292 292 292 292 292 292 292 292
Franchise Fee 83 83 83 83 83 83 83 83
Insurance 188 188 188 188 188 188 188 188
Interest Loan 636 632 627 622 616 611 606 601
Legal and Pro. 100 100 100 100 100 100 100 100
Licenses & Permits 15 15 15 15 15 15 15 15
Office Expense 50 50 50 50 50 50 50 50
Outside Services 200 200 200 200 200 200 200 200
Rent - Property 2,673 2,673 2,673 2,673 2,673 2,673 2,673 2,673
Repairs & Maint. 100 100 100 100 100 100 100 100
Royalties 880 733 807 367 477 587 697 807
Telephone 125 125 125 125 125 125 125 125
Travel 83 83 83 83 83 83 83 83
Utilities 458 458 458 458 458 458 458 458
Wages 3,520 2,933 3,227 1,467 1,907 2,347 2,787 3,227
Employer Burden 938 839 889 589 664 739 814 889
Manager Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Misc. 440 367 403 183 238 293 348 403
Total Expenses 13,777 12,719 13,241 10,076 10,861 11,646 12,430 13,215
Jun Jul Aug Sep Year 2 Year 3
36,000 37,500 34,500 33,000 450,000 495,000
30,439 31,374 29,487 28,541 386,340 424,974
292 292 292 292 4,375 4,813
543 548 554 559 7,152 8,039
5,310 5,869 4,751 4,191 60,883 66,799
29,756 35,066 40,935 45,685 49,877 110,760
35,066 40,935 45,685 49,877 110,760 177,559
Jun Jul Aug Sep Year l % Year 2 % Year 3 %
22,000 22,917 21,083 20,167 220,000 100.00% 275,000 100.00% 302,500 100.00%
22,000 22,917 21,083 20,167 220,000 275,000 302,500
7,480 7,792 7,168 6,857 74,800 34.00% 93,500 34.00% 102,850 34.00%
7,480 7,792 7,168 6,857 74,800 34.00% 93,500 34.00% 102,850 34.00%
14,520 15,125 13,915 13,310 145,200 66.00% 181,500 66.00% 199,650 66.00%
100 100 100 100 1,200 0.55% 1,500 0.55% 1,650 0.55%
440 458 422 403 4,400 2.00% 5,500 2.00% 6,050 2.00%
440 458 422 403 4,400 2.00% 5,500 2.00% 6,050 2.00%
15 15 15 15 180 0.08% 225 0.08% 248 0.08%
292 292 292 292 3,500 1.59% 4,375 1.59% 4,813 1.59%
83 83 83 83 1,000 0.45% 1,000 0.36% 1,000 0.33%
188 188 188 188 2,25 01.02% 2,813 1.02% 3,094 1.02%
5% 590 585 580 7,302 3.32% 6,513 2.2% 5,626 1.86%
100 100 100 100 1,200 0.55% 1,500 0.55% 1,650 0.55%
15 15 15 15 180 0.08% 200 0.07% 220 0.07%
50 50 50 50 600 0.27% 750 0.27% 825 0.27%
200 200 200 200 2,400 1.09% 3,000 1.09% 3,300 1.09%
2,673 2,673 2,673 2,673 32,076 14.58% 33,680 12.25% 37,048 12.25%
100 100 100 100 1,200 0.55% 1,500 0.55% 1,650 0.55%
880 917 843 807 8,800 4.00% 11,000 4.00% 12,100 4.00%
125 125 125 125 1,500 0.68% 1,875 0.68% 2,063 0.68%
83 83 83 83 1,000 0.45% 1,250 0.45% 1,375 0.45%
458 458 458 458 5,500 2.50% 6,875 2.50% 7,563 2.50%
3,520 3,667 3,373 3227 35,200 16.00% 44,000 16.00% 48,400 16.00%
938 963 913 889 10,064 4.57% 11,900 4.33% 13,328 4.41%
2,000 2,000 2,000 2,000 24,000 10.91% 26,000 9.45% 30,000 9.92%
440 458 422 403 4,400 2.00% 5,500 2.00% 6,050 2.00%
13,736 13,994 13,462 13,194 152,352 69.25% 176,455 64.17% 194,100 64.17%
Oct Nov Dec Jan Feb Mar Apr May
Net Opr Income 743 (619) 69 (4,026) (2,9%) (1,966) (935) 95
Other Income 0 0 0 0 0 0 0 0
Other Expenses 0 0 0 0 0 0 0 0
Net Profit (Loss) Before Tax 743 (619) 69 (4,026) (2,996) (1,966) (935) 95
Statement of Cash Flows - Worst Case
Oct Nov Dec Jan Feb Mar Apr May
Sales 22,000 18,333 20,167 9,167 11,917 14,667 17,417 20,167
Expenses 21,257 18,952 20,097 13,193 14,913 16,632 18,352 20,072
Depreciation 292 292 292 292 292 292 292 292
Principal 502 507 512 517 522 527 533 538
Net Cash Position 532 (835) (151) (4,252) (3,227) (2,202) (1,176) (151)
Prev Cash Pos 13,000 13,532 12,698 12,547 8,295 5,068 2,866 1,690
Cum Cash Pos 13,532 12,698 12,547 835 5,068 2,866 1,690 1,539
Projected Income Statements—Most Likely Case
Oct Nov Dec Jan Feb Mar Apr May
Gross Sales
Sales 27,500 22,917 25,208 11,458 14,896 18,333 21,771 25,208
Total Sales 27,500 22,917 25,208 11,458 14,896 18,333 21,771 25,208
Cost of Sales:
Food/Drink/Spoilage 9,350 7,792 8,571 3,896 5,065 6,233 7,402 8,571
Total Cost of Sales 9,350 7,792 8,571 3,896 5,065 6,233 7,402 8,571
Gross Profit 18,150 15,125 16,638 7,563 9,831 12,100 14,369 16,638
Expenses:
Accounting 100 100 100 100 100 100 100 100
Advertising Local 550 458 504 229 298 367 435 504
Advertising - National 550 458 504 229 298 367 435 504
Bank Service Charges 15 15 15 15 15 15 15 15
Depreciation 292 292 292 292 292 292 292 292
Franchise Fee 83 83 83 83 83 83 83 83
Insurance 188 188 188 188 188 188 188 188
Interest 636 632 627 622 616 611 606 601
Legal & Pro. 100 100 100 100 100 100 100 100
Licenses & Permits 15 15 15 15 15 15 15 15
Office Expense 50 50 50 50 50 50 50 50
Outside Services 200 200 200 200 200 200 200 200
Rent - Property 2,673 2,673 2,673 2,673 2,673 2,673 2,673 2,673
Repairs & Maint 100 100 100 100 100 100 100 100
Royalties 1,100 917 1,008 458 5% 733 871 1,008
Telephone 167 167 167 167 167 167 167 167
Travel 167 167 167 167 167 167 167 167
Utilities 517 517 517 517 517 517 517 517
Wages 4,400 3,667 4,033 1,833 2,383 2,933 3,483 4,033
Employer Burden 1,088 963 1,026 652 745 839 932 1,026
Manager Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Jun Jul Aug Sep Year l % Year 2 % Year 3 %
784 1,131 453 116 (7,152) −3.25% 5,045 1.83% 5,550 1.83%
0 0 0 0 0 0.00% 0 0.00% 0 0.00%
0 0 0 0 0 0.00% 0 0.00% 0 0.00%
784 1,131 453 116 (7,152) −3.25% 5,045 1.83% 5,550 1.83%
Jun Jul Aug Sep Year 2 Year 3
22,000 22,917 21,083 20,167 275,000 302,500
21216 21,786 20,611 20,050 269,955 296,950
292 292 292 292 4,375 4,813
543 548 554 559 7,152 8,019
532 874 191 (151) 2,268 2,323
1,539 2,071 2,945 3,136 2,985 5253
2,071 2,945 3,136 2,985 5253 7,575
Jun Jul Aug Sep Year l % Year 2 % Year 3 %
27,500 28,646 26,354 25,208 275,000 100.00% 343,750 100.00% 378,125 100.00%
27,500 28,646 26,354 25,208 275,000 343,750 378,125
9,350 9,740 8,960 8,571 93,500 34.00% 116,875 34.00% 128,563 34.00%
9,350 9,740 8,960 8,571 93,500 34.00% 116,875 34.00% 128,563 34.00%
18,150 18,906 17,394 16,638 181,500 66.00% 226,875 66.00% 249,563 66.00%
100 100 100 100 1200 0.44% 1,500 0.44% 1,650 0.44%
550 573 527 504 5,500 2.00% 6,875 2.00% 7,563 2.00%
550 573 527 504 5,500 2.00% 6,875 2.00% 7,563 2.00%
15 15 15 15 180 0.07% 225 0.07% 248 0.07%
292 292 292 292 3,500 1.27% 4,375 1.27% 4,813 1.27%
83 83 83 83 1,000 0.36% 1,000 0.29% 1,000 0.26%
188 188 188 188 2250 0.82% 2,813 0.82% 3,094 0.82%
596 590 585 580 7,302 2.66% 6,513 1.89% 5,626 1.49%
100 100 100 100 1200 0.44% 1,500 0.44% 1,650 0.44%
15 15 15 15 180 0.07% 200 0.06% 220 0.06%
50 50 50 50 600 0.22% 750 0.22% 825 0.22%
200 200 200 200 2,400 0.87% 3,000 0.87% 3,300 0.87%
2,673 2,673 2,673 2,673 32,076 11.66% 33,680 9.80% 37,048 9.80%
100 100 100 100 1200 0.44% 1,500 0.44% 1,650 0.44%
1,100 1,146 1,054 1,008 11,000 4.00% 13,750 4.00% 15,125 4.00%
167 167 167 167 2,000 0.73% 2,500 0.73% 2,750 0.73%
167 167 167 167 2,000 0.73% 2,500 0.73% 2,750 0.73%
517 517 517 517 6200 2.25% 7,750 2.25% 8,525 2.25%
4,400 4,583 4217 4,033 44,000 16.00% 55,000 16.00% 60,500 16.00%
1,088 1,119 1,057 1,026 11,560 4.20% 13,770 4.01% 15,385 4.07%
2,000 2,000 2,000 2,000 24,000 8.73% 26,000 7.56% 30,000 7.93%

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