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Company Research through Website Visit

In the fulfillment of the requirements for


BA 10- Total Quality Management

Submitted by:

Ducos, Eire Lyn L.

Lacre, Venz I.

Plaza, Melody R.

Salon, Jean Irish N.

Wilson C. Bation, DBM

October 05, 2017


Company profile:

Name: Maxs Group Inc.


Sector: Industrial
Subsector: Food, Beverage & Tobacco
Corporate Life: 50
Incorporation Date: Mar 01, 2000
Number of Directors: 9
Stockholders' Meeting as per By-Laws : June - any day except holidays
Fiscal Year: 12/31 (Month/Day)
External Auditor: Reyes, Tacandong & Co.
Transfer Agent: BDO Unibank, Inc.-Trust and Investment Group
Mission:
To build loved brands.
Vision:
To Be The Most Loved Global Filipino Company.
COMPANY BACKGROUND
Max's Group, Inc. engages in the business of catering foods and establishing,
operating and maintaining restaurants, coffee shops, refreshments parlors, and cocktail
lounges. It offers a diverse cuisine covering American, Filipino, Japanese, Chinese, and
French. Its brands include Dencio's, Kabisera ng Dencio's, Teriyaki Boy, Sizzlin Pepper
Steak, Le Coeur De France, The Chicken Rice Shop, and Yellow Cab. The company was
founded by Milagros Basa, Leticia Zamora and Carmen Zaragosa in 1970 and is
headquartered in Makati, Philippines.

COMPANY HISTORY
Max's Group, Inc. (MAXS), formerly Pancake House, Inc. (PCKH), was
incorporated on March 1, 2000 and is principally engaged in the business of catering
foods and establishing, operating and maintaining restaurants, coffee shops, refreshments
parlors and cocktail lounges. In 2014, the Company underwent a change in control and
significant expansion of its business and operations.
CHAPTER 1 MARKETING ASPECT

Marketing aspect to making a study of the market by environmental scanning


through interviews and various data collection methods, in order to know how the
product will be distributed to the consumes (Elisa, 2012). Marketing aspect is done in
order for the company to know what their target market demands. It will describe market
situations where the product can be identified though the demand analysis. It is the
process of the business to build strong customer relationship in order to gain loyalty from
them.

Max's Restaurant Inc (Max's Restaurant) is a quick-service restaurant business


based in Philippines. It offers a wide range of menu items such as fried chicken seafood
combo meals beef and pork vegetables sandwiches bakery items rice and noodles soups
salads beverages and desserts. The company has made its mark in the fast-casual dining
Filipino restaurant industry with its restaurants located in Philippines and other
international locations. The company has presence through its quick-service restaurants
in the US and Canada. It operates restaurants in Metro Manila Northern and Southern
Luzon Cebu and Visayas/Mindanao regions of Philippines and California and other
regions in the US. Max's Restaurant is headquartered in Quezon City Philippines.

Maxs has caught the taste of many Filipinos and has received positive feedbacks
from their customers which gives extra credit to the restaurants reputation or image in the
food industry. Maxs has a wide opportunity to continue expanding the food restaurant
abroad and they as well has been planning on building more branches in order to spread
the Filipino tradition and taste to other counties.

Over the years, fast food chain here in the Philippines are fastly growing and it
has been the most convenient food escapade of many Filipinos. And this fast growth of
food chain is one of the threats of the restaurant that they must give solution and find way
to still stand out from the other fast food chains. Since globalization has been common
now-a-days and Maxs is a Filipino aspired restaurant, it would be a challenge to Maxs
restaurant on how to continue the Filipino tradition that has been serve since 1945.
In this chapter, the researchers will be discussing about the marketing mix done by Maxs
Restaurant, as well as the segmentation, targeting and positioning of the company.

I. MARKETING OBJECTIVES

Promotion of products, creating budget combo meals, and advertisements will help to
attract young market. Therefore, more customers would likely to eat at Maxs restaurant
then the sales will increase. Moreover, their main objective is to increase sales per month
by 3% in a time frame of three years.

II. TARGET MARKET


a. Young, Single, Married with children, married unmarried (consumer market).
b. The restaurant targets a segment with an income of Php 1,000.005,000.00
(Class C).
c. The restaurant targets students and young employees, ages 18-25.
d. Targeted market have a positive approach towards the delicacies offered by
the maxs restaurant.

III. MARKETING MIX

a. Price

Maxs restaurant pricing strategy is based on Direct, Indirect Costs and Overhead
Costs. Direct costs are the ingredient costs associated with the item itself. This includes
the purchasing food, potion sizes, and food waste from spilling, overcooking or spoiling.
Indirect costs are those cost that do not include in the actual ingredients that make up a
dish, but the aspects of the restaurant that add perceived value or quality. The labor to
prepare the menu item is considered also as indirect cost. Menu items that require time,
effort artistry or talent to prepare merit a higher menu price than something that simply
requires heating and plating. Lastly, Overhead Costs are for items such as product
presentations, amenities and marketing efforts. Overhead costs could add perceived value
and validate higher menu item prices.
b. Product

Maxs signature dish is its fried chicken Maxs dubs itself the house that fried
chicken built. Maxs also focuses on Filipino dishes, that would entice Filipino
customers to like the menu and also relate to it for the food that is being serve is familiar
to their taste. These Filipino dishes that Maxs serves are pancit, kare-kare, nilagang
baka, sinigang na baboy, lechon kawali, bicol express, pork adobo, and crispy pata.

c. Place

Maxs restaurant has over 127 branches in the Philippines. They continue to make
franchise to other place and abroad. They have now built a branch in the California,
Hawaii, New Jersey, Canada, and they continue to plan on building more branches
outside the county.

d. Promotion

In earlier television and cinema advertisements, the restaurant usually marketed


itself as a place for Filipino families to get together. It also established its slogan "Sarap
to the bones!" ("Delicious to the bones!").

From April to June 2004, a popular series of television advertisements, entitled


"Forever Yours" told the story of a Max's employee who was the childhood love of a
popular TV celebrity, played by Piolo Pascual. The series showed the two characters as
children, then as adults accidentally meeting at Max's. The denouement of the story is
when the celebrity recognizes the employee from their childhood. This commercial
became so popular that it launched the showbiz career of Isabel Oli, the model who
played the employee.

Aside from its advertising, the story of how Max's Restaurant started has entered into
popular culture. It was portrayed in the episode "Sino si Max?" ("Who is Max?") of the
long-running Filipino drama anthology Maalaala Mo Kaya.
CHAPTER 2 OPERATIONS ASPECT

Everything that happens within a company to keep it running and earning money
is referred to collectively as business operations. Business plans often include a section
dedicated to operations so that company founders understand the systems, equipment,
people, and processes need to make the organization function. (Russell, 2017)
Once a business is established, and particularly after a growth spurt, its important
to periodically assess and analyze business operations to identify inefficiencies and
improve communication. Comparisons with industry benchmarks and best practices can
help a company make sure its business operations are optimum. (Reid & Sanders, 2016)
Maxs Group Inc. (MGI) is the largest casual dining restaurant company in the
Philippines with more than 650 stores across 13 brands locally and internationally,
among which include Max's Restaurant, Yellow Cab, Pancake House, Krispy Kreme,
Teriyaki Boy, Sizzlin' Steak, Dencio's, Jamba Juice and many more. Its mission is to
build loved brands.

A company which started with its flagship brand Maxs Restaurant, a humble
roadside caf in the home of its founders. A simple gesture of welcoming American GIs
in 1945 with Fried Chicken that gave birth to an institution. From its humble beginnings
it has since added brands with a diverse range of food offerings from American staples,
pizza, Japanese meals, coffee, sizzling meals and Filipino fare. With the goal of giving
delight to its customers, it has been expanding with stores in the US, Canada, the Middle
East, China and the Asia-Pacific to serve new customers with fresh, genuine, quality food
and a great dining experience in different formats.

Max's Group, Inc. (MAXS), formerly Pancake House, Inc. (PCKH), was
incorporated on March 1, 2000 and is principally engaged in the business of catering
foods and establishing, operating and maintaining restaurants, coffee shops, refreshments
parlors and cocktail lounges. In 2014, the Company underwent a change in control and
significant expansion of its business and operations. On August 22, 2014, the Securities
and Exchange Commission approved the change in corporate name and stock symbol of
PCKH to the present one.

As a trusted industry leader, MGI prides itself with its ability to nurture the best
talents from within through decades of restaurant operations excellence. Through
responsive leadership and the dedication of its people, MGI had further cemented its
status as one of the most bankable franchises in the Philippines after it bagged four major
awards at the 2015 Franchise Excellence Awards, a platform that recognizes the
countrys best-managed companies in the franchising business. With its projected growth
in store network locally and internationally, and its diversified support systems--MGI
develops and is home to a wide range of professionals from various fields including
restaurant and hotel operations, manufacturing, research and development, supply chain,
accounting and finance, information technology, design and engineering, human
resources, business development, marketing and customer service operating on its core
values of passion, excellence and innovation.

On March 14, 2016, the Board of MAXS approved the amendment in the
Company's primary purpose to include dealing in the business of acquiring and
developing any and all trade names, brand names and master franchises, including other
intellectual property rights necessary to commence and operate the relevant business
enterprises, as well as to grant the use of such trade names, brand names and master
franchises for and in consideration of the payment of fees and royalties, and in
connection therewith, establish management services for the expansion of the business
enterprises

The Company operates under the trade names "Max's"; "Pancake House",
"Yellow Cab"; "Krispy Kreme"; "Jamba Juice"; "Max's Corner Bakeshop"; "Dencio's";
"Teriyaki Boy"; "Singkit"; "Sizzlin' Steak"; "Le Coeur De France"; "The Chicken Rice
Shop"; "Kabisera ng Dencio's"; and "Maple". The Company's subsidiary, RooM Ventures
Corp., pursued the development of Meranti, a hotel project adjacent to the heritage store
of Max's Restaurant in Scout Tuason, Quezon City.

MGI MANILA, Philippines


The 72-year-old Max's Group Incorporated (MGI) is ramping up its capital
spending budget for 2017 to P800 million. The Philippines' largest casual dining chain
operator will use this to fund efforts in staying relevant with the modern times where so-
called fast-casual restaurants and food trucks are quickly growing.

From its first Max's Restaurant in Quezon City to its diverse portfolio of 14
brands all over the world, Maxs Group has cemented its position of being a market
leader in the full-service restaurant industry in the Philippines. But this is being
challenged by the surge of new brands in the market, thanks to customers' more
sophisticated palate, Euromonitor International's 2016 report showed.

The research firm said independent players in the Philippines dominated full-
service restaurants, accounting for a 75% combined value share of the channel during
2015.

Among chained players, Max's Group remained in the lead with a value share of
5% in 2015 due to its diverse portfolio of brands such as Max's, Pancake House,
Kabisera, and Dencio's..

On the international front, Max's Group is not slowing down in expanding its
store network. Max's closed 2016 with 623 stores, 49 of which are in North America, the
Middle East, and Asia. In the pipeline are 141 more international locations, Max's Group
president and chief executive officer Robert Trota told reporters on the sidelines of the
stockholders' meeting. Trota said Max's Group would seek more expansion opportunities
in Southeast Asia and enter "underpenetrated" Europe soon. Now that we are in China,
Singapore, and Vietnam, those particular areas have more room for expansion. North
America will always be growing. Of course, the Filipino community is there and of
course Middle East," he added.

Max's plans to study the European market first, and ensure it can open several
stores there before signing an investment deal.

Innovations, cross-franchise
Euromonitor said Max's Group is able to maintain its leadership due to
"intensified efforts to grow its existing brands and improve underperforming brands."
Trota said his company is on track with its goals, thanks to cross-franchising, where its
flagship franchisees such as Max's Restaurant get franchises of other sister brands like
Krispy Kreme.

Max's Group has been continuously improving its customer service, like bringing
all its brands under one unified and integrated delivery system. With Max's Restaurant,
Yellow Cab Pizza, Pancake House, Krispy Kreme, and Teriyaki Boy operating under a
singular delivery system, a more convenient and seamless customer experience is put in
focus, the company said.

Coupled with other initiatives such as delivery mobile apps and rewards
programs, "Max's Group continued its dominance due to its reputable track record of
delivering quality food and good customer service," Euromonitor said. Max's Group also
set up a multi-brand logistics team with 60 new delivery bikes and riders on top of the
existing brand delivery teams to ensure timely fulfillment of orders across all brands.
This move to strengthen its delivery capability proved to be effective as "delivery sales
posted a 24% year-on-year sales growth in 2016, translating to P1.08 billion or 9% of the
company's revenues," Max's said in a separate statement. "We continue to be positive in
terms of the economic situation in the Philippines and that's why as mentioned we want
to roll out 70 new stores because we feel there's enough room for us to expand in this
current situation," Max's director and chief finance officer Dave Fuentebella said.

Functions and Events

Such a sweet bundle of joy, Deserves a gift more than a toy Throw the perfect
baby celebration, Only Max's makes it a memorable occasion, Delight in our baby
package menu, Relax and enjoy as we do everything for you, Welcome your newborn
with love.

List of Amenities:
Three (3) hours use of
venue

Themed Cake

Gift for the baby

Free use of bassinet

Decorated Party Area

Party Balloons

Balloon Centerpieces

Welcome Banner
International Market

Maxs is financially strong but recently sales have been declining. They realize that the
nationwide family style restaurant segment has been losing market share to fast casual
restaurants. The marketing reports indicate that this will not change in the near future. Another
national concern is that labor unions are growing in the restaurant industry. Labor unions
decrease profits and make doing business more complex. In addition because of the size of a full
service restaurant the initial capital investment needed is large. A larger investment needs a
higher sales volume to achieve an acceptable rate of return on the investment. With their
decreasing sales Maxs cannot project the return on investment, which is financially acceptable.

Given this landscape Maxs has decided to stop building their traditional style restaurant and
open a new concept restaurant. Maxs wants to build on the companys strengths and address its
weaknesses. This restaurant will be smaller and will not be full service. It will still have an
American style menu, but it will be limited and beer and wine will be offered. The employees
needed to run this facility will be far less than their traditional restaurant. They want to staff the
unit with high energy, friendly employees. The unit will be run with two salaried management
employees, a general manager and a manager and one hourly supervisor. One extra salaried
manager will be assigned to the unit for the restaurant opening sales. Four hourly and one-salary
employees will be needed per shift.

Online Services

Max's reserves the right, in its sole discretion, without limitations, conditions and/or
qualifications, and without need of prior notification, to limit, change, modify or cancel any
order, and/or to refuse any service to any customer for any reason attributable to the
unavailability of the items ordered, or other circumstances and conditions beyond the control of
Max's which would render impossible or delay the fulfillment of its obligations; Provided that
such events shall not be caused by any negligence on the part of Max's. Notwithstanding the
receipt of any order confirmation, whether via electronic mail, facsimile, phone call or otherwise,
it is understood by you that the delivery of your order by Max's and receipt of the payment
corresponding to the same, shall constitute the sole act of final acceptance by Max's of such
order. Verification of any information may be required prior to the acceptance or delivery of any
order.

One is asked at the end of the ordering process to choose between online payment and
payment upon delivery. For payment upon delivery, you agree to pay in cash all fees and charges
incurred in connection with your order, including any and all applicable taxes, at the rate in
effect when the charges were incurred.
CHAPTER 3 ORGANIZATIONAL ASPECT

Organization is the process of identifying and grouping work to be performed, defining


and delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing objectives. (Allen, 2017). In
other words, organization is an instrument for achieving organizational goals. The work of each
and every person is defined and authority and responsibility is fixed for accomplishing the same.

Various individual efforts must lead to the achievement of common business goals.
Organization is the structural framework of duties and responsibilities required of personnel in
performing various functions with a view to achieve business goals through organization.
Management tries to combine various business activities to accomplish predetermined goals.
(Pannerselvam, 2016).

Max's Group, Inc. (MGI) operates more than 500 stores across 6 countries with a heritage
in the Philippines dating back to 1945. MGI is now expanding globally. Its International Division
is actively seeking franchise partners across the globe to share in the growth of their much loved
brands.

The Group's product categories which include pizza, chicken, coffee, casual all day
American dining. Japanese and sizzling steak meals ensure that MGI has a brand for every
occasion for every country. The brands are backed up with a world-class multi-functional
support team to ensure sustainable long-term success for our franchise partners.

Expansion

Maxs Group Inc. (MGI), the countrys leading casual dining chain operator, is upbeat on
growth from the rollout of more stores here and abroad alongside rising interest in franchising
and the phenomenal expansion of its food delivery business.
This year, MGI has earmarked P800 million to fund its store pipeline and commissary
upgrades as well as boost warehousing and distribution facilities and other support infrastructure,
MGI chair Sharon Fuentebella said in a written report to stockholders. The capital spending
budget this year is higher than the P700-million outlay in 2016.

Maxs Group Inc. (MGI), the countrys leading casual dining chain operator, is upbeat on
growth from the rollout of more stores here and abroad alongside rising interest in franchising
and the phenomenal expansion of its food delivery business.
This year, MGI has earmarked P800 million to fund its store pipeline and commissary upgrades
as well as boost warehousing and distribution facilities and other support infrastructure.
(Fuentebella, 2017). The capital spending budget this year is higher than the P700-million outlay
in 2016.

MGI expects to continue growing its food delivery business seen as an attractive
proposition especially in urban centers where consumers are becoming more affluent while
traffic gridlock making food delivery an alternative to dining out.

Meanwhile, MGI would continue to work on more overseas deals. In the future, he said
MGI would seek more expansion opportunities in Southeast Asia and enter underserved
markets like Europe. MGIs international team is getting more inquiries from the Middle East,
North America and other parts of Asia. (Trota, 2016)

Last year, MGI signed seven development agreements summing up to 77 outlets for
2016. A total of 72 Yellow Cab Pizza stores and five Pancake House branches were committed
in the following markets: China, Kuwait, Oman, Bahrain, Qatar, Jordan, Egypt and Singapore,
adding to an international pipeline of more than 140 stores slated to open in the coming years.
This expansion is in line with the plan to build a network of 200 overseas stores by 2020.

Board of Directors
Position Name

Chairman Sharon T. Fuentebella

Director Robert F. Trota

Director Cristina T. Garcia

Director Jim T. Fuentebella

Director Carolyn T. Salud

Director Dave T. Fuentebella

Director William E. Rodgers

Independent Director Antonio Jose U. Periquet

Independent Director Christopher Tanco

Management Officers

Position Name

President Robert F. Trota

Chief Finance Officer and Chief Risk Officer Dave T. Fuentebella

Treasurer, Chief Compliance Officer and Corporate


Rebecca R. Arago
Information Officer

International Chief Executive Officer Peter H. King

Ma. Alicia G. Picazo-San


Corporate Secretary
Juan

Carmen A. Basallo-
Assistant Corporate Secretary
Estampador
Position Name

Assistant Compliance Officer Paul C. Cheah


CHAPTER 4 FINANCIAL ASPECT

Max`S Group, Inc. Financial Data

Company name: Max's Group Inc Status: Active


End of fiscal year: December 31 2016 ISIN PHY5906K1026
Year established: 2000 Company sector Consumer Cyclical
name:
Trading currency: PHP Industry name: Restaurants
Place of Philippines (PH) Industry group Restaurants
incorporation: name
Doing business in: Philippines (PH) Address 2305 Chino Roces Avenue
Extension
11th Floor EcoPlaza
Building, 1231
Tel.: +63 27849000 City/Country: Makati City, Philippines
Web address: http://www.maxsgroupinc.com

Company Max's Group Inc, formerly Pancake House Inc is engaged in the business of catering
description: foods and establishing,operating, maintaining restaurants, coffee shops, refreshment
parlors and cocktail lounges.

A. Overview
B. Balance Sheet
In millions of PHP (except for per share items)

Fiscal data as of Dec 31 2016 2016 2015 2014

ASSETS

Cash And Short Term Investments 752 818 957

Total Receivables, Net 1,041 599 725

Total Inventory 487 485 364

Prepaid expenses 266 295 316

Other current assets, total -- -- --

Total current assets 2,546 2,197 2,362


Fiscal data as of Dec 31 2016 2016 2015 2014

Property, plant & equipment, net 2,798 2,403 1,712

Goodwill, net 1,964 1,964 3,803

Intangibles, net 3,061 3,051 322

Long term investments 426 426 433

Note receivable - long term 144 5.25 0.16

Other long term assets 619 690 610

Total assets 12,147 11,316 9,901

LIABILITIES

Accounts payable 725 988 1,196

Accrued expenses 300 409 396

Notes payable/short-term debt 2,195 1,663 2,085

Current portion long-term debt/capital leases 0 466 82

Other current liabilities, total 1,030 603 637

Total current liabilities 4,250 4,130 4,397


Fiscal data as of Dec 31 2016 2016 2015 2014

Total long term debt 1,695 1,584 1,213

Total debt 3,890 3,713 3,380

Deferred income tax 1,003 969 103

Minority interest (8.9) 49 56

Other liabilities, total 261 181 156

Total liabilities 7,200 6,914 5,924

SHAREHOLDERS EQUITY

Common stock 1,087 1,087 1,087

Additional paid-in capital 5,353 5,353 5,353

Retained earnings (accumulated deficit) (1478) (2001) (2496)

Treasury stock - common -- -- --

Unrealized gain (loss) -- -- --

Other equity, total (16) (37) 32

Total equity 4,947 4,403 3,977


Fiscal data as of Dec 31 2016 2016 2015 2014

Total liabilities & shareholders' equity 12,147 11,316 9,901

Total common shares outstanding 1,087 1,087 1,087

Treasury shares - common primary issue 0 0 0

Ma

C. Income Statement
In millions of PHP (except for per share items)

Fiscal data as of Dec 31 2016 2016 2015 2014


Fiscal data as of Dec 31 2016 2016 2015 2014

REVENUE AND GROSS PROFIT

Total revenue 11,439 10,373 4,866

OPERATING EXPENSES

Cost of revenue total 8,256 7,536 3,946

Selling, general and admin. expenses, total 2,101 1,926 855

Depreciation/amortization 131 120 61

Unusual expense(income) 34 31 (13)

Other operating expenses, total -- -- --

Total operating expense 10,521 9,613 4,849

Operating income 917 760 16

Other, net 108 109 (23)

INCOME TAXES, MINORITY INTEREST AND EXTRA ITEMS

Net income before taxes 913 771 (71)

Provision for income taxes 351 270 (4.3)


Fiscal data as of Dec 31 2016 2016 2015 2014

Net income after taxes 562 501 (66)

Minority interest 51 6.45 25

Net income before extra. Items 613 508 (41)

Total extraordinary items -- -- --

Net income 613 508 (41)

Inc.avail. to common excl. extra. Items 613 508 (41)

Inc.avail. to common incl. extra. Items 613 508 (41)

EPS RECONCILIATION

Basic/primary weighted average shares 780 780 558

Basic/primary eps excl. extra items 0.79 0.65 (0.07)

Basic/primary eps incl. extra items 0.79 0.65 (0.07)

Dilution adjustment -- -- --

Diluted weighted average shares 780 780 558

Diluted eps excl. extra items 0.79 0.65 (0.07)


Fiscal data as of Dec 31 2016 2016 2015 2014

Diluted eps incl. extra items 0.79 0.65 (0.07)

COMMON STOCK DIVIDENDS

DPS - common stock primary issue 0.13 0.12 0

Gross dividend - common stock -- 125 0

PRO FORMA INCOME

Pro forma net income -- -- --

Interest expense, supplemental -- -- --

SUPPLEMENTAL INCOME

Depreciation, supplemental 405 366 271

Total special items 69 62 (13)

NORMALISED INCOME

Normalized income before taxes 981 834 (84)

Effect of special items on income taxes 13 11 (4.55)

Income tax excluding impact of special items 364 281 (8.85)


Fiscal data as of Dec 31 2016 2016 2015 2014

Normalized income after tax 617 553 (75)

Normalized income avail. to common 668 559 (49)

Basic normalized EPS 0.86 0.72 (0.09)

Diluted normalized EPS 0.86 0.72 (0.09)

D. Financials

TTM 2016- 2015- 2014-


12 12 12

Revenue PHP Mil 11,670 11,439 10,373 4,971

Gross Margin % 27.8 27.8 27.4 22

Operating Income PHP Mil 907 913 771 -71

Operating Margin % 7.8 8 7.4 -1.4

Net Income PHP Mil 625 613 508 -28

Earnings Per Share PHP 0.8 0.79 0.65 -0.05

Dividends PHP 0.13 0.12

Payout Ratio % * 16.3 17.4

Shares Mil 780 780 780 558

Book Value Per Share * PHP 4.59 6.03 1.2 1.8


Operating Cash Flow PHP Mil 441 821 625 662

Cap Spending PHP Mil -766 -896 -976 -369

Free Cash Flow PHP Mil -324 -75 -351 293

Free Cash Flow Per Share * PHP -0.3 -0.03 -0.04

Working Capital PHP Mil -1,704 -1,933 -


2,035

E. Key Ratios

A. Margins % of Sales

TTM 2016- 2015- 2014- 2013-


12 12 12 12

Revenue 100 100 100 100 100

COGS 72.19 72.17 72.65 78 80.26

Gross Margin 27.81 27.83 27.35 22 19.74

SG&A 19.69 19.51 19.72 19.81 14.87

R&D

Other 1.3 1.32 0.8 4.61 1.95

Operating Margin 7.77 7.98 7.43 -1.42 3.73

Net Int Inc & Other

EBT Margin 7.77 7.98 7.43 -1.42 3.73

B. Profitability
TTM 2016- 2015- 2014-
12 12 12

Tax Rate % 36.53 38.47 34.98

Net Margin % 5.35 5.36 4.9 -0.57

Asset Turnover (Average) 0.99 0.97 0.94 0.72

Return on Assets % 5.3 5.22 4.61 -0.41

Financial Leverage (Average) 2.44 2.46 2.57 2.69

Return on Equity % 13.2 13.11 12.12 -1.16

Return on Invested Capital % 7.99 8.08 7.4 0.69

Interest Coverage

C. Growth

Latest 2016- 2015- 2014-


Qtr 12 12 12

Revenue %

Year over Year 8.62 10.27 108.66 32.52

3-Year Average 45.01 44.6 28.52

5-Year Average 37.33 41.25 22.27

10-Year Average 23.54 29.26 25.75

Operating Income %

Year over Year -2.71 18.38

3-Year Average 85.71 54.38

5-Year Average 41.1 68.65

10-Year Average 31.61 39.48

Net Income %
Year over Year 20.67

3-Year Average 79.7 49.88

5-Year Average 46.71 47.12

10-Year Average 31.33 33.93

EPS %

Year over Year 4.76 21.54

3-Year Average 56.78 30.13

5-Year Average 35.18 30.77

10-Year Average 24.26 24.96

D. Cash Flow

Cash Flow Ratios TTM 2016- 2015- 2014-


12 12 12

Operating Cash Flow Growth % YOY 31.46 -5.64 85.85

Free Cash Flow Growth % YOY 227.69

Cap Ex as a % of Sales 6.56 7.84 9.41 7.42

Free Cash Flow/Sales % -2.78 -0.66 -3.39 5.9

Free Cash Flow/Net Income -0.52 -0.12 -0.69 -10.33

E. Financial Health

Balance Sheet Items (in %) Latest 2016- 2015- 2014-


Qtr 12 12 12

Cash & Short-Term Investments 5.51 6.19 7.23 8.93

Accounts Receivable

Inventory 3.82 4.01 4.28 3.4


Other Current Assets 11.57 10.76 7.9 9.72

Total Current Assets 20.9 20.96 19.41 22.06

Net PP&E 23.23 23.04 21.23 16.36

Intangibles 41.21 41.38 44.32 45.76

Other Long-Term Assets 14.67 14.62 15.03 15.83

Total Assets 100 100 100 100

Accounts Payable

Short-Term Debt 21.59 18.07 14.73 19.55

Taxes Payable 1.13 0.64 0.46 0.35

Accrued Liabilities

Other Short-Term Liabilities 13.17 16.28 21.31 21.16

Total Current Liabilities 35.89 34.99 36.49 41.06

Long-Term Debt 13.96 13.93 11.21

Other Long-Term Liabilities 23.09 10.33 10.67 10.58

Total Liabilities 58.98 59.28 61.1 62.86

Total Stockholders' Equity 41.02 40.72 38.9 37.14

Total Liabilities & Equity 100 100 100 100

F. Liquidity/Financial Health

Liquidity/Financial Health Latest 2016- 2015- 2014-


Qtr 12 12 12

Current Ratio 0.58 0.6 0.53 0.54

Quick Ratio 0.36 0.4 0.33 0.37

Financial Leverage 2.44 2.46 2.57 2.69


Debt/Equity 0.32 0.34 0.36 0.3

G. Efficiency Ratios

Efficiency TTM 2016- 2015- 2014-


12 12 12

Days Sales Outstanding 22.39 23.82 21.37 41.09

Days Inventory 18.83 21.47 20.49 21.7

Payables Period 72.71 86.79 99.91 136.23

Cash Conversion Cycle -31.49 - - -73.44


41.49 58.05

Receivables Turnover 16.3 15.32 17.08 8.88

Inventory Turnover 19.38 17 17.82 16.82

Fixed Assets Turnover 4.33 4.4 4.99 4.48

Asset Turnover 0.99 0.97 0.94 0.72


CHAPTER 5 CORPORATE SOCIAL RESPONSIBILITY

Core Values

a) Customer Service Excellence:


We will meet every customer with the highest level service and quality.
b) Teamwork:
A diverse, teamwork-based work environment will yield the best possible
experience for everyone, including employees and customers.
c) Communication:
Open communication with customers as well as employees is essential to the long
term success of any business.
d) Respect:
We will strive to provide a productive and respectful environment for all.
e) Diversity:
We value, encourage, and recognize diversity.
f) Environment:
Maxs promotes continuous improvement in reducing the carbon footprint created
by our organization.

Community Relations and Involvement


Maxs strives to make a positive impact in the community that we serve. We value the
communities in which we do business and are dedicated in embracing our responsibility to
improve them. Through sponsorships and donations we would be able to fulfill our social
responsibility while gaining familiarity and publicity.

Diversity Mission
As an organization, Maxs strives for excellence. We understand that excellence cannot
be achieved without a creative, diverse work staff. We are located across three different states
and appreciate the ideas brought forth from our diverse culture at Maxs. This culture will allow
Maxs to move forward as we strive for continual improvement through a creative, diverse, and
dynamic workforce. The following slides discuss our tactics for achieving this goal.
Internal Employee Relations
The goal at Max's restaurant is to provide a work environment that is respectful to both
the employer as well as the employees. All employees are expected to comply with the
Company's Code of Conduct. Based on the infraction and noncompliance, different levels of
disciplinary action will be used for different situations. There will be a progression of action
based upon the level of misconduct.

Company Standards of Behavior and Performance


a) Attendance: All employees must be on time and present for all work related functions.
b) Max's is a drug-free work environment which includes, but is not limited to, arriving
to work under the influence of legal substances.
c) Dress code has been defined for safety and to provide an appropriate atmosphere.
d) Theft will not be tolerated.
e) Employees and Managers will conduct themselves in a professional and appropriate
manner while within or around the restaurant.

Disciplinary Process

1. One-to-one council: This gives Supervisors an opportunity to inform an employee that


they are not meeting company standards.

2. Verbal Warning: Employees will be informed, and given a chance to improve when
performance, conduct, or attitude fall below the acceptable level. All verbal warnings will be
documented to provide a pattern of habitual behavior.

3. Written Warning: Failure to improve once a verbal warning has been issued will result in a
written warning. At this point, supervisor will also give an expected path for improvement.

4. Suspension w/o pay (final warning about a given behavior).

5. Termination: This is the last step in the disciplinary ladder when performance, conduct, or
attitude does not improve. Not every step must be utilized. There may be actions to warrant
immediate termination based on the severity of the action. This could include, but is not
limited to, termination.
Grievance or Complaint Procedure

1. Informal- dealt with at the lowest level by approaching your immediate supervisor.

2. Formal-informal complaint is not necessarily a prior action.(The grievance must be in


writing.)

Recruitment Initiative
Maxs seeks to recruit the most qualified candidates for openings as they become
available. It is our mission to perform this function in an ethical, cost effective manner while
targeting the desired labor market. Our organization takes pride in the recruitment process as it
revolves around an opportunity to further branding initiatives.

Performance Expectations
a) Order Takers:
Expectations:
Order take must know the entire menu.
Order takers are responsible for maintaining clean and neat work stations.
Order takers must possess strong interpersonal skills.
Order takers must strive to build relationships with Max's customers.
All order takers (barring allergies and/or for religious purposes) must
sample all menu items prior to beginning the normal functions of the job.
Duties:
Take order
Present price and accurately take tender.
Deliver order to appropriate staff function.
Confirm customer satisfaction and rectify all order and delivery mistakes.
Provide suggestions for possible up-sales and answer (or find the answer)
all questions regarding the menu and recommendations.
General Manager Requirements
In hiring for the General Manager position the geographic area/region that our company
would be recruiting from would be regional based on the location of the restaurant and nearby
areas. Applicants from the region would need to possess certain qualifications including
previous experience and particular skill sets. These can be provided through education or
experience derived from OJT so long as the experience is relevant to the position.
General Requirements would include:
BA/BS in Business, Hospitality, or equivalent; or 4 years of relevant managerial
experience.
Demonstrated Leadership Qualities.
Solid Interpersonal Skills.
Ability to Represent Maxs professionally on all levels and in any occasion.

Compensation
a) All Employees:
Social Security
Unemployment Compensation
Workers Compensation
Family and Medical Leave (FMLA)
b) Part-time Employees:
Free Meal - Employee is entitled to one free meal for every shift worked.
Discounted Meal -10% off check when dining in restaurant during non-work
hours.
Sick leave with pay.
Bereavement time with 2 day pay.
Vacation Time (20+ hours/week)
1 week paid vacation earned after 2 years worked
c) Full-time Employees and Supervisors:
Free Meal - Employee is entitled to one free meal for every shift worked.
Discounted Meal --10% off check when dining in restaurant during non-work
hours.
health care
optional PPO
Effective Immediately.
Sick leave
Bereavement time
Paid Time Off
after 90 days
1 day every 6 months
Vacation Time
1 week paid vacation earned after every 6 months worked
can roll-over

Union Free Workplace


a) Excellent pay. Not only will we pay our salary and hourly employees top wages, we will
ensure that the order takers make a better than living wage during slower shifts.
b) Excellent benefits. We will offer top notch health insurance (for which the employer will
pay the majority of the premium) to all full-time employees.
c) Educational Assistance. As stated above, we are a pillar in the community and seek to
give back to the area that provides Max's an operations opportunity.

Maxs will provide flexible working hours to accommodate the many different types of
people employed at Max's and will only hire and train professional management who will treat
all employees with respect at all times and under all circumstances. This level of respect should
be reciprocated to maintain the most optimal work environment.