Food Restaurant Business Plan

Executive Summary
This food restaurant business plan, is a candid disclosure of a business venture to be situated in Nsukka, Enugu State. Our intent is to set realistic business expectations, and eliminate any questions about the profitability of this business venture. Entrepreneurs have a tendency to paint the restaurant business plan with a very optimistic brush, highlighting strengths and camouflaging the risks. Our intent is to have a definitive business, financial, and marketing plan that not only serves our need for capital financing, but is utilized as our daily business roadmap. We have taken all precautions to validate our business and financial models, focusing on realistic projections. We have accomplished this as follows:

1.

Our financial model is rooted in industry facts, not optimism. We have based costs on a vast

industry and practical research with similar ventures, validation against National Hospitality Industry cost averages, and analysis against local Nsukka market averages. We have taken a collective look at all figures to make solid business estimates.

2.

Our business concept was derived from detailed Market Analyses. Instead of building a

business around a preconceived concept, we analyzed the market findings and built a concept around our consumers. In other words, our business is built to service an unmet consumer 'want'.

3.

A buffered financial plan that ensures adequate capitalization. A contingency buffer is included

in the start-up cost to ensure the business in not under financed, as well as giving the business adequate funding to sustain it in the first six months of start-up. Industry experts confirm a longer ramp-up stage for restaurants over other retail/service businesses. A common mistake for new entrepreneurs, but fully addressed in this business plan.

4.

A solid Risk Mitigation Plan. We have evaluated traditional and non-traditional risks associated

with Restaurant failure and accounted for them directly in the business plan. Instead of dismissing the risks, we have identified valid mitigation strategies for each.

5.

Deep Management Experience. Our management team has 20 years combined experience, and

deep involvement with the Nsukka restaurant industry. The total capital requirement to launch Classic Restaurant & Lounge is N7, 400, 000.00 of which N6, 430, 000.00 is allocated to start-up capital, and N970, 000.00 as business operations cash reserve.

Mission • Classic will be an inspiring restaurant, combining an eclectic atmosphere with excellent and
interesting food. The mission is to have not only a great food selection, but also efficient and superior service - customer satisfaction is our paramount objective. Classic will be the restaurant of choice for a mature and adult crowd, couples and singles, young and old, male or female.

• Employee welfare, participation, and training are equally important to our success. Everyone is
treated fairly and with the utmost respect. Our employees will feel a part of the success of Classic Restaurant & Lounge.

• Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of
'place' in order to reach our goal of overall value in the dining/entertainment experience. We offer fair profits for the owners and investors, and a rewarding place to work for the employees.

Keys to Success

1.

Unique, Innovative & Contemporary: The creation of a unique and innovative fine dining

atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in an electric atmosphere.

2. 3. 4.

Product quality: great food, great service and atmosphere. ‘Spice of Life' Menu: The menu will appeal to a wide and varied clientele. Our eclectic

menu features regional specialties around the country. Employee Retention Focus: Employee retention and development programs will be a primary

focus and success platform for this business. Through these programs, we will be able to draw seasoned and elite professionals and build a committed work force. We have budgeted for a stock option program for Chef and Management positions to subsidize a lower salary base. This lowers our immediate overhead and attracts quality staff.

5.

Cost Control Focus: We will control costs at all times, without exception. Cost Control will be an

integrated function of the restaurant from the onset. Cost control is about managing the numbers - interpreting and comparing the numbers that impact the bottom line. 80 percent of the success of a restaurant is determined before it opens. Our focus is to reduce the cost of goods sold to meet our profit margin goals by managing the following crucial elements of cost: Purchasing, Receiving, Storage, Issuing Inventory, Rough Preparation, Service Preparation, Portioning, Order Taking, Cash Receipts, Bank Deposits and Accounts Payable. We will use of this restaurant food business plan to track actual costs against our forecasts in managing the business. Due to intense competition, restaurateurs must look for ways to differentiate their business to achieve and maintain a competitive advantage. Midtown/Downtown Nsukka’s redevelopment requires a place that will fit into the 'new look' of the community, one that is contemporary and entertaining. Classic will fill that niche.

Objectives
Classic Restaurant & Lounge's objectives for the first three years of operation include:

• Keeping food costs at less than 35% of revenue. • Improving our Gross Margin from 65.41% in Year 1 to 67.10 in Year 2. These are attainable
targets; our ‘stretch' is to attain 70.73% by Year 3. • Keeping employee labor cost between 37-39% of total sales. • Remaining a small, unique restaurant with eclectic food and service.

finance. reconstruction. furniture. • Expanding our marketing and advertising in Nsukka to increase our customer base. The restaurant features 2 venues in one (a concept called ‘Multi-Branding'): A Lounge. The atmosphere caters to a young but mature adult crowd. painting. This is not a family dining establishment. Our start-up costs are mostly expensed equipment. Fax. • Promoting and expanding the Classic restaurant concept as a unique Midtown destination restaurant.378 Office Equipment (2 Computers. The Management Our management team has over 20 years combined experience in food. 200. and marketing arenas. and Full Service Dining. This concept offers customers variety. For lack of a better term we are launching a ‘multi-ethnic' cuisine restaurant . $97. ft. We will purchase the following $73.500 . _________ and __________. This is a solid start-up forecast based on our market analysis.a restaurant concept that responds to Nsukka's need for selection and choice. 000 per year. In total. since there is a large university community. At the start of business.000 will be allocated for business operations reserve. The Midtown demographics fit this concept perfectly. 500.000 square feet. Company Ownership The restaurant will start out as a private Limited Liability Company. start-up labor. and legal and consulting costs associated with opening our restaurant. the restaurant will provide seating for 110 patrons. Parking and accessibility issues will be reviewed as key criteria. and will open Classic in December of this year. in Midtown Nsukka.1.183 Sound and Televisions: $8. restaurant and hotel. rent. offering multiple dining and entertainment options within a single establishment. consideration will be given to incorporate a dining patio.• Averaging sales between N1.250 Lounge and Dinning Equipment: $26. The spatial and menu divisions will broaden our appeal and provide our customers with a different experience on each visit. Classic is a complimentary mingling of national cuisine on a single menu. • Achieving a profitable investment return for investors for Years 2 . Printer. owned by its founders. Total space requirements are 3. business management. We will draw on our Advisory Board as part of the site selection and lease negotiation. Safe): $6. Company Summary The Design Classic Restaurant & Lounge is unique to Midtown Nsukka.6. The Menu Classic is focused on servicing Nsukka's growing demand for an electrifying eating experience. Enugu State.000 sq.000 . Where possible.311 worth of current assets during start-up: • • • • Fixtures and Lighting: $32. Start-up Summary We are currently negotiating a restaurant space of 3.

2:30 p. The market has been carefully selected and tested for the necessary demographics and retail traffic necessary to meet the goals laid down for profitability.m. This is especially key during the site selection and start-up stage. Dinner: Monday to Saturday. and Retail development.000 cars daily. Parking and accessibility issues will be reviewed as part of this analysis.Long-term Assets in the amount of $65. Location & Operations Restaurant Location Midtown Nsukka is the location selected for the Classic concept.000 square feet. the restaurant will provide seating for 110 patrons.Market brunch takeout only. Developers are infusing over 500 million in Commercial. Service will be available during the following hours: Lunch: Monday to Saturday. dinner. This company will have an integral role in validating the final restaurant location and personnel selection. We have budgeted for the services of a premier Restaurant Consultant familiar with the South-Eastern Market. and after-hour patronage from the entertainment facilities in the area.m. exotic drinks. Restaurant Design Single-Level Design Concept: The total space requirement is 3. The restaurant will service brunch.911 . The restaurant will feature a comfortable and open concept design.000 include all kitchen equipment. The patio setting will be a fun and casual atmosphere for the summer crowd. The central dining area will allocate 88 seats. Residential. and participate on the Classic Advisory Board. Start-up Requirements Start-up Expenses PROJECT MANAGEMENT Restaurant Consultant (4 months) $0 $15. as well as non-alcoholic offerings. In total. 5:30 p. Operating Criteria The restaurant will be located in Midtown Nsukka. The busy Midtown commercial/residential location has been chosen based upon a successful demographic model and a traffic count of more than 33. 9 a. . consideration will be given to incorporate a dining patio. The outlook for the future of Nsukka's Midtown district is exceptionally positive and the most progressive development area in the city. and the lounge 22 seats. Optional Patio: During the busy summer months customers can also sit outside on our patio and we will offer a special summer menu. The restaurant will operate during peak service time to take advantage of street traffic. Where possible. featuring lighter fare. and after-hours dining during the week and weekends.m. – 8:00pm Sundays .

615 .099 $3.615 $4.092 $2.3000 sq.Lease Kitchen Equipment Freight Fees FF&E Taxes (Taxes on Purchase) OPERATIONAL Capitalized Legal Fees (LLC.000 $3. Air Ducts.592 $9. Ice & Glasswasher .080 $5. Investor Agreements) Software: Restaurant/Inventory Software: Cost Control Impact.) Electrical Disposal & Demolition Structural Construction (4 Months General Labour) Facade (Exterior Construction) Plaster (Dry Wall) Mill & Metal Work Interior Finishes (2500 .964 $4.Lease Stools.244 $19. Smallware (Bar & Lounge) Glassware.389 $7.298 $8.988 $0 $7. Interior & Dining) Engineer & Architect Fees CONSTRUCTION Plumbing HVAC (Air Return.122 $52.185 $2.) Flooring Fire Alarm System Security & Phone System EQUIPMENT Liquor Control System . Smallware & Supplies (FOH) Dishwasher.115 $1.119 $7.615 $0 $0 $38.040 $0 $33.Lease Glassware. Flatware. Flatware. ft.195 $1.025 $0 $3.DESIGN Architectural Design Structural & Plumbing Design Mechanical & Electrical Design Graphic Design Electrical & Structural Engineering Fees Design Consultants (Kitchen.061 $8.092 $4.155 $1.500 $6.368 $2.244 $14. Tables. etc. Liquor Licenses $0 $2. Tap & Permit Fees Business License & Temp Certificate of Occ.538 $14. Uniforms POS (Point of Sale System) .250 $7.622 $3.298 $0 $2. Chairs.

119 Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $165.500 $73.250 $5.050 $58. Training & PR Research & Development Start-Up Salary (Mngt & Chefs) Recruiting (Staff) Inspections Initial Cleaning Services Total Start-up Expenses $9.800 $19.550 $750 $1.550 $3. Tax & Insurance Security Deposits (Phone/Elec/Gas/Water) Initial Lease Deposits Bank & Loan Closing Costs Web Site Construction Initial Marketing.910 Total Requirements $690.811 $97.000 $427.881 $146.099 $49.250 $6.Utilities. Disposal.000 $262.980 $312.250 $6.311 $65.099 $27.050 $14.275 $6.119 Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required $427.791 Liabilities and Capital .209 $262.209 Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets $97.910 $690.

Our food will be of the finest quality and prepared with exotic flare.791 Total Capital and Liabilities $312.000 Services Classic Restaurant & Lounge will feature national dishes.000 $0 $440. Customer satisfaction is the driving force behind our success.791 Total Funding $740.000 $0 $0 $300.000 Capital Planned Investment Zander Hunte Peter Smith Investor 1 Investor 2 Investor 3 Investor 4 Investor 5 Midtown Revitalization Grant Additional Investment Requirement Total Planned Investment $60.Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities $0 $300.000 $40.000 $40. and the remaining labels will be available by the bottle.209) $12. Spain. and superior service.000 $50. Portions will be modestly sized. Their creative . Approximately 25% will be available exclusively by the glass. garnished with stunning presentation.000 $130. while maintaining the 'favorites' for loyal patrons. Portugal. We will review our menu every 4 months. and Argentina. an eclectic ambiance. The kitchen staff will have the best in culinary education and work experience.000 Loss at Start-up (Start-up Expenses) Total Capital ($427.000 $40.000 $40.000 $40. Our wine list will be modest and primarily focused on wines from California.

Market Analysis Summary Instead of building a business around a preconceived concept. The lounge and restaurant staff will offer the finest service in an electric atmosphere and offer customers an extraordinary dining experience. Our customers want the option to choose what satisfies their appetite. but our findings indicate that the décor. Our research results do not identify any single ethnic style of restaurant as desired. bar.$9. eating places that identify themselves as ethnic establishments numbered nearly 78. we conducted market research and built a concept around our consumers. The proliferation of international cookbooks. The list below offers a small selection of our opening menu offerings: • Include menu offering here. In fact. allowing budget dining in a fullservice restaurant. but rather suggest that incorporating strong multi-ethnic influences in the menu selection will be popular.talents will compliment one another. 4. lighting. We want everyone to feel welcome and entertained.5 billion. as a whole. Zara takes all these factors in consideration for the design of this cosmopolitan restaurant. Reasonable Prices: This was no surprise given the economic tide. Classic’s Menus Classic's varied national menu will feature basically regional flavors.50 . The menu flows together to create complementary elements. Zara's Tapas concept is built to offer different-sized portions.000 in 1999 and recorded sales of $30. TV cooking shows and imported goods offers ample evidence that America. variety is the underlying element for this concept. This statistic is in line with findings reported by the Tableservice Operator Survey. Portion Selection: Nearly 95% of our surveyed focus group endorsed having a choice of different size portions. with no entrée over $20. We have defined the following groups as targeted segments that contribute to our growth projections: • The Business Person • Downtown Nsukka Couples • The Destination Customer . and other options to improve the dining experience are also factors in customer decisions. 2. Menu Variety: Ethnic restaurants are increasing in Atlanta. In addition we have an extended Tapas and Appetizer selection priced between $3. Market Segmentation Classic's Restaurant & Lounge intends to cater to a wide customer base. Although the restaurant industry as a whole has seen growth in 2002/2003. The Dining Experience: Customer satisfaction with food and service has been and continues to be of utmost importance. is currently on an international tasting spree. Our market analysis identified the following key drivers as areas of opportunity to service Nsukka's restaurant customers: 1. Zara's menu is priced at a mid-tier level. customers are demanding value for their dining dollar. 3. food magazines.50. Again.

95% 6. striking decor. and lounge. They spend the most on drinks. Many of these consumers are new to Nsukka from larger cities. have disposable income. These are the types of people who frequent other restaurants and bars in the area.914 21. away from the kids. and are seeking upscale.499 16. Tourists: Nsukka attracts many vacationers during the ember months of November through January. food wise. Our Destination Clients tend to be new suburbanites that miss the excitement of a city.348 20.688 21.311 4.982 Year 2 Year 3 Year 4 Year 5 CAGR 4. Market Analysis Year 1 Potential Customers Business Person Downtown Atlanta Couples Tourists The Destination Customer High-end Singles Total Growth 18% 32% 13% 8% 29% 5. In most cases they are budgeting to eat out on a regular basis. enticing adult atmosphere that suggests "date. They are likely to spend more on experiences they perceive as unique. excellent service and engaging clientele will confirm the feeling of being in "the in place" in Nsukka.925 17. A large percentage of the tourist populations are vacationing families. as they don't have the time to prepare food nightly. Classic will be a destination restaurant. They are also the most open to trying something new. Afterward. This is especially true for the tourist populations that visit for cultural and social events.950 57.645 7. trendy.724 18.896 4. The Destination Customer: Nsukka is a very 'sectioned' city. and consumers often look only in their own neighborhoods for restaurant options. High-end Singles: We will attract them with our eclectic atmosphere and layout.The Image Seekers. food and tips. they want to relax and use the money they are making (or are expensed by their company). Service Business Analysis . using marketing to draw customers from outside the main city limits. Classic's will be especially appealing to married suburban couples indulging themselves with a "date night" downtown.565 7. They have disposable income." Classic's will be the best date location in town.039 22. Classic's will be a destination dining locale.47% 3. and will spend quite a bit on such outings.673 8. These young Midtown couples are generally very successful working professionals.168 4.991 55.23% 5.215 4.097 12.140 10. These are the individuals that pride themselves on socializing and dining at the premier locations .76% 9.054 4. and sophisticated. accustomed to dining within the city and at non-franchised restaurants.76% Target Market Segment Strategy The Business Person: They work hard all day and often stay overnight in a strange city. here to socialize and be entertained.223 18. with its attractive atmosphere. national menu. Our national menu. and comfortable restaurant options. cosmopolitan. Classic's cosmopolitan flair and comfortable atmosphere will be perfect for sophisticated business people.818 19.348 11. entertainment and events.593 8. They need a competent establishment that helps impress clients and prospects.815 63.• High-End Singles • Tourists • Unviversity Community These particular market segments are 22-45 years old.527 7. Zara will break these habits.411 15. romantic.141 68. Downtown Nsukka Couples: The restaurant will have an intimate.510 11.74% 7.47% 2. whether they live in and around Nsukka or are here for work. and will embrace our national fusion cuisine.944 66.

Nsukka consumers are seeking variety and new experiences. All menu items are moderately priced for the area. Restaurants make money by taking inexpensive ingredients. Competition and Buying Patterns In 2003. taking orders or preparing food is money walking away. National menu with featured menu review every 4 months . we are aiming to offer exceptional food at reasonable prices for the average restaurant diner. but so is atmosphere and distinctiveness. two to three times a day. Therefore. hip interiors and reasonably priced. but only Classic is based on sound market research in the local market. However. We intend to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of successful adults. Our main focus in marketing thereafter will be to increase customer awareness in the surrounding communities. so that word-of-mouth will be our main marketing force. regionally specialized menus. and a unique atmosphere. the execution of our concept is the most critical element of our plan. combining them in creative ways. And half of them were located in Midtown. not only as the "new" restaurant. While we are not striving to be the lowest-priced restaurant. As an exciting and eclectic restaurant. and selling them at a much higher price. the top ten Nigerian restaurants shared two things: cozy. The owners' thorough understandings of opening and running a restaurant 2. we will be the talk of the town. We will keep our standards high and execute the concept flawlessly. cooking them properly. the ability to handle enormous pressure. but as one that offers consistently high quality food.The restaurant industry is highly competitive and risky. Location is clearly important. and management of inventory and staff have a much higher chance of success. Our marketing challenge is thus to stand out from our competitors. Three of them offered traditional cooking. We will focus on establishing a strong identity in our community with a grand opening. you need an understanding of the risks and financial conditions. Our competitors are heading in the right direction. especially when combined with prior experience in the restaurant industry. An extraordinary contemporary restaurant design 3. While some entrepreneurs think that success is as simple as a good location and a trendy concept. we know the truth: To succeed in the restaurant industry. Strategy and Implementation Summary Our strategy is simple. We will direct all of our tactics and programs toward the goal of explaining who we are and what we do. Any time wasted in seating customers. and the organizational skills to bring off what is essentially a giant catered party. those based on solid understandings of the market needs. Competitive Edge Classic competitive edges are: 1. Any ingredients wasted in the kitchen are money thrown out. We will create an appealing and entertaining environment with unbeatable quality at an exceptional price. menu variety. Most new restaurants opened by inexperienced owners struggle or fail.

where is a customer more likely to go? There is no absolute answer to the question. positioning advertisements in or near entertainment/food related editorial. This is part of our Employee Manual. Inner and Outer City Marketing campaign (i. • Scheduling adequate frequency of ads to impact market with menu items and promotions. • Where possible. making certain that they are content and satisfied with their dining experience. and great food served in an eclectic atmosphere. value. Unique. superior service. 7. Marketing Strategy Classic Restaurant & Lounge's Marketing strategy will be to promote our electric food. This is the very definition of value and the concept at the heart of Classic's business model. Wait-staff are thoroughly trained. So. Incentive and Retention program Market Analysis Conclusion: At the end of the day. A primary part of the budget is allocated to create the media and customer buzz for the month prior to opening and the next three months after the grand opening. everyone that sells prepared meals in this district is a Classic competitor. The full Marketing program is as follows:. because we all compete for the same home meal replacement dollar. and every 90 days they undergo a performance appraisal. Media Objectives and Strategy: Establish our image as a unique Midtown restaurant with great service. singles. We will maximize efficiency in the selection and scheduling of advertisements by: • Selecting primary business publications with high specific market penetration. but price has become a factor as a result of the economic turns. Management will demand the wait-staff provide the very best in quality services to the customer. This must be done aggressively in order to accomplish our service goals. and our new sign. 5.e. 8. and destination customers. . We budgeted a great deal into the renovations and decor to generate the aesthetic appeal of Classic. "Come to Town" promotions) Employee Training. if the food and service is better at a fine dining restaurant than a casual restaurant. Marketing initiatives will concentrate on the following: Building and Signage: The most important Marketing tool that we have is the exterior of our building. 6. Customer Service: In our years within the restaurant industry. trainee and featured chef Chef/Management Stock Incentive Program. but the solution is to deliver the best food at the best price with the highest level of service in one establishment. 2-Tiered spatial layout Chef Co-op program to allow new entrants. A healthy budget is allocated for the first year. Food and atmosphere is far out-shadowed by superior customer service that turns a new customer into a repeat customer. Management recognizes the key to success at this time of initial opening is extensive media promotion. there are two segments of the restaurant industry that are our main competition: the casual dining restaurant and the fine dining value restaurant. respectively. Advertising and Promotion: Our Advertising Plan and media schedule call for targeting customers directly through local publications aimed at . and Operations Manual guide.4. and exciting concepts to draw in the local repeat customers. However. couples. customer service has always been the major draw for the dining clientele.

in order to better our community. upcoming attractions and our dynamic menu. Consumers will be encouraged to visit our website to be greeted with a flash media intro that highlights the restaurant. who we are reaching. menu offering. and releases on new menu items will be made monthly. and flash media promotions. Marketing Program In line with our Marketing strategy. we will develop a consistent reach and frequency throughout the year. Our most important tactic will be word-of-mouth/in-restaurant marketing. Publicity Revenues: We anticipate at least 10% of our annual sales will be generated directly from our publicity. Promotional Campaign: The best way to reach our potential customers is to develop an intense advertising campaign promoting our Classic concept of "Spice of Life. we will gain considerable recognition through newspapers. Additionally. • Maximizing ad life with monthly and weekly publications. • Establish contact with editorial staff for the purpose of being included in entertainment "roundups"--product comparisons in dining publications and the local papers. and give something back. We will support this plan with ads that reinforce the Classic dining concept. Press Release/Grand Opening: Classic Restaurant will release a series of press releases on the Grand opening. Public Relations Marketing. Community: Classic will look for key opportunities to pair with local community development organizations and radio stations to interface with our customers.• Redirecting customers to our website to register for upcoming functions. we will employ three different marketing tactics to increase customer awareness of Classic: In-Restaurant Marketing. newsletters and public announcements. keeping key editors abreast of all new promotions. basically. We will continually look for local community programs in which we can participate. This will be by far the cheapest and most effective of our marketing programs. This will also be effective for inclusion in press kits. we will develop an advertising campaign built around our Classic Diner theme. with ongoing contact between key editors • Develop a regular and consistent package update program for the major target media. and decor. and new 'suburbanites. and redirect advertising as effectively as possible.' who still appreciate in-town dining. reservations." In addition to standard advertising practices. • Produce a complete Classic Restaurant history and menu offering piece to be used as the primary public relations tool for all target media editorial contact. Our periodic customer surveys and weekly menu item sales evaluations will help us to understand what advertising is working and what is not. past happenings. targeting each specific customer segment within a five-mile radius. Classic will focus on the following publicity strategies: • Develop a sustained public relations effort. and Media Marketing. Our goal is to understand our customer. . Publicity Strategy: Working with a media company. measure the success of our direct marketing and media activities. VIP lists. Working with a renowned media company (Classic Advisory Board). location. A full media kit will be sent to all local publications. and menu introductions.

Dinner before the 'Grand Opening. navigable. the restaurant will offer a monthly dating night.I.I. chefs and staff to get together to discuss the market and food trends. • Billboard Advertisement: One month prior to the opening. • Media Relations: Several media relations teams will be utilized to market the Restaurant. A perfect night for the local area's restaurant owners. We will approach them to cater business luncheons and private functions. and possible Co-op efforts to promote the Midtown district.P. • Government Relations: There are several Government offices in the Midtown/Downtown area.Word-of-mouth/In-Restaurant Marketing • Restaurant Night: Every first Monday of the quarter. distinct billboard ads will advertise the launch of the Restaurant. • Wait Area Marketing: Wait staff will service appetizers to customers waiting to be seated or on the wait list. Entertainment and Dining segments. • Restaurant and Special Events Website: We have contracted with local design teams to deliver a high-quality. • Private Functions: Target marketing to businesses for regular business lunch and dinner entertaining. menus and prices. This will be a preliminary review. where we will consider constructive input to make minor revisions prior to the true Grand Opening. and private functions. In addition to food and beverages. • • • • Live Entertainment parties Special Events Valentine's Day New Year's Eve party Public Relations Marketing • Georgia Hospitality & Tourism V. Word-of-mouth referral is very powerful and particularly amongst the business community. Party: We will host a V.' This will serve the dual purpose of training our staff and introducing ourselves to the community. • Monthly Dating Connection: With the increasing appeal of Internet and speed dating. . • Brochures: Make a brochure for the in-town hotels and business establishments to provide to their guests and staff. Notices of all live entertainment segments and special features will be posted to local newspapers' calendar announcements. This initial review and input will give critics and media commentators a stake in Classic's success. constantly updated website. through their contributions to the final design. customers can choose from an array of dating packages up for auction. containing interior pictures of our restaurant. • Critics' Choice: Prior to the Grand Opening there will be two preliminary parties catering to the Media and Critics community. We will encourage the media and restaurant critics to meet at the restaurant and review the decor. service and food. we will have a special evening for restaurant people. This will offer us higher visibility for future functions and community events.P. Media Marketing • Newspaper campaign: A much targeted media campaign to obtain featured articles about the restaurant in their Living.

174 $0 $959. service.170 $252. and immediately addressing any problems • Interacting with our customers personally. decreasing word of mouth advertising and leading to poor revenues. We can accomplish this by: • Hiring employees who genuinely enjoy their jobs and appreciate Classic's unique offerings • Continually assessing the quality of all aspects mentioned above.041 $0 $272. We anticipate that the business will not be at full operating capacity until the sixth month of operations. and to tell all their friends and acquaintances about the great experiences they just had at Classic. Sales Forecast Year 1 Sales Total Sales Food Total Sales Bar/Beverages Other $853.006. we will insist on payment at delivery . Our sales strategies must take the next step and encourage customers to become repeat customers. Sales Strategy Our strategy is simple: we intend to succeed by giving our customers a combination of delicious and interesting food in an appealing environment.we will not sell on credit. Our marketing strategies are designed to get critics and initial customers into our doors. or they spend all of their efforts at opening. This is due to the competitive nature of the market and existing customer loyalty. with excellent customer service. All factors governing our sales progress are outlined below in the Important Assumptions section.047 $1. or quality discourages customers from returning. Our sales forecasts for years 3 through 5 are very conservative. Although we hope to do catering for local businesses and government offices with time. so they know that their feedback goes directly to the owners • Evaluating food choices for popularity.595 $220.204 $0 $293. and are unable to maintain the initial quality customers expect on return visits.047. New restaurants often make one of two mistakes: they are unprepared or under prepared for opening. speed. and initial poor service.• Inner & Outer City Marketing: We will budget to attract customers from the suburbs.089.981 $0 $317. compared to industry standard growth rates.999 $1. and atmosphere. and keeping favorites on the menu as we rotate seasonal foods and specials Sales Forecast The following sales graph is based on first year start-up estimates only. whether on their first visit or their hundredth.279 $1. speed. Classic's sales strategy requires consistently high quality food.499 $0 Year 2 Year 3 Year 4 Year 5 .

769 $1.211. Skilled waitresses and lounge tenders on weekends and evenings will make substantially more.407 Year 3 $329. The estimated gross annual payroll of $399.341. and expanding if the concept gains favor with our customers. contemporary and well designed.048 $79. Selections will be based on our pre-packaged meals available during the Sunday Market Brunch.279. prices. Georgia area.276 Year 5 $342.588 (including Partner Salaries) is 37% of total sales.204 $1. reviews and happenings at Classic. busboys. People cleaning the restaurant (4).260 $1. Our site will offer our menus. Kitchen: The Executive Chef will be assisted by: • • • • An Assistant Chef from a national search (1).597 Web Plan Summary Classic Restaurant & Lounge will have a dedicated website. simple. The website will include email capabilities and online reservations and special events scheduling. lounge tenders) do not include anticipated tips.088 $1.976 Year 4 $336. who will work a total of 754 man-hours per week and generate an average monthly gross payroll of $27. Wage salaries for service personnel (wait staff.228 $0 $415. We will also have a monthly Paparazzi Review about what did happen at Classic to get new customers interested in our restaurant. starting with an on-line order feature for the Sunday Market Brunch. A customer will be able to order a selection for pickup using a debit card.687 $0 $406. service employees should average at least twice the minimum wage in any given shift. It will be the virtual business card and portfolio for the company.657 $0 $371.240 $76.167 $0 $398.406. Prep cooks/dishwasher (4). Personnel Plan We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. Personnel Plan .416 Year 2 $322. Cooks that work directly with the chef (3). This is also a potential for customers needing catering.835 $0 $423.308 for the first year in business.758 $72.073. With average tipping rates for the Atlanta.Total Sales $1. The staff will include 13 full-time employees and 8 part-time employees. Our website will be used to try out new offers.762 $80.289 $77. and our menu prices.670 Direct Cost of Sales Total Cost of Sales: Food Total Cost of Sales: Bar/Beverages Other Subtotal Direct Cost of Sales Year 1 $298.

640 $10.640 $5.000 $24.240 $18.000 $48.640 $5.000 $32.400 $32.640 $5.640 $5.000 $48.640 $5.700 $8.000 $25.640 $5.640 $5.640 $5.960 $18.400 $7.000 $28.400 $14.120 $11.640 $5.800 $11.760 $11.000 $14.800 $0 25 $28000 $28.640 $5.640 $5.200 $7.640 $5.120 $7.640 $5.240 $24.640 $5.440 $10.600 $9.440 $10.640 $5.760 $11.500 $9.640 $5.400 $24.240 $18. Manager/Exec.960 $8.640 $5.960 $8.400 $44.500 $25.800 $11.400 $32.500 $48.000 $32.640 $5.760 $11.640 $5.640 $5.200 $44.500 $13.960 $12.640 $5.200 $9.120 $7.640 $5.Year 1 General Manager (Year 2+) Partner/Manager Partner/Asst.400 $32.640 $5.000 $14.960 $18.960 $12.800 $11.288 $12.640 $5.120 $11.200 $7.760 $7.760 $7.288 $12.640 $5.400 $7.160 $26.640 $5.640 $5.960 $12.288 $12.200 $44.400 $32.160 $32.240 $24.440 $10.160 $24.400 $14.640 $5.960 $12. Chef Hostess (Full Time) Hostess (Part Time) Waitperson 1 Waitperson 2 Waitperson 3 Waitperson 4 Waitperson 5 Waitperson 6 Waitperson 7 Waitperson 8 Waitperson 9 Wait/Barperson Bartender 1 Bartender 2 Busboy 1 Busboy 2 Busboy 3 Assistant Chef Sous Chef Cook 1 Cook 2 Prep Cook/Dishwasher Prep Cook/Dishwasher/Cleaning Dishwasher 1 Dishwasher 2 Cleaning/Dishwasher Open Total People $28000 Year 2 Year 3 Year 4 Year 5 $29.800 $8.200 $13.640 $5.400 $24.640 $5.960 $18.500 $9.640 $5.640 $5.640 $5.400 $14.240 $24.300 $5.640 $5.640 $5.640 $5.800 $0 20 $0 24 $0 25 $0 25 .000 $48.120 $7.640 $10.400 $44.400 $44.288 $12.400 $32.640 $5.800 $5.440 $14.440 $14.500 $14.200 $7.760 $11.500 $9.640 $5.640 $5.760 $11.640 $5.800 $8.640 $5.640 $5.160 $32.160 $32.640 $5.640 $5.640 $5.288 $12.960 $12.000 $48.640 $5.640 $5.640 $5.

The key underlying assumptions are: Economy Emerging Economy. Saturday will typically be our best sales for the week. and above average food/beverage cost. recovering from an economic slow down.1.000 in grant monies.828 $431. also ensuring that we do not enter this venture undercapitalized. food & restaurant supplies.000 in long-term loans and $200.Total Payroll $399. The Financial Plan includes: • • • • • • • Important Assumptions Risk Analysis & Mitigation Plan Sales Forecast (5.588 $400. but Manage for the Best.128 $432. Classic is seeking $300. and business success. The financials account for the following growth projections: o Year 2: 6% Year 4: 4% o Year 3: 5% Year 5: 4% Weekly Sales Variance. We have been cautious with our projections.788 $429.3. below average seat turn. and incorporate mitigation for all manageable risks. We anticipate a robust-growth economy. marketing and personnel.728 Financial Plan Classic Restaurant & Lounge financial model is based on a business concept to "Plan for the Worst. legal fees. Therefore our weekly sales will vary as follows: Monday: 55% Tuesday: 60% Wednesday: 75% Thursday: 95% Friday: 90% Saturday: 100% ." We have approached the financial plan as follows: The First Year projections anticipates a below average sales volume. This position will help us ensure sufficient financial planning to accommodate a reasonable ramp-up period. We anticipate modest growth over the coming years. most of which are reflected in the financial statements that follow. Financial Pro Forma In addition to the $110.000 of owner investment and $130. liquor license. above) Break Even Analysis Profit and Loss Statement Cash Flow Statement Balance Sheet Important Assumptions The financial plan depends on important assumptions. The sales volume for all other days is represented as a percentage relative to Saturday. working capital. kitchen equipment. furniture. Business Growth Annual Growth Rate Percentage.000 in investment for renovations.

Brunch = 1. and Average Seat Turns: Daily average for lunch spending is N1.0 • Year 2: After-Hours = 0. Brunch = 87%. 750 per person. 750 per person for After-Hours dining.0. Brunch = 1. The following are baseline assumptions on Average Check Totals. Our Annual Sales Growth is based on attaining the following seating capacity percentage per dining period: • Year 1: After-Hours = 53%. Our experience in the industry confirms a longer ramp-up stage for restaurants over other retail/service businesses. Brunch = 70%. while the summer months tend to be the slowest restaurant period.7. and N1. Pricing & Cost Control Competitive Pricing Model. 050 per person. In Nsukka. Brunch = 82%.0. Dinner = 100% (implied wait period) • Year 3: After-Hours = 80%. and Cost of Beverages (Non Alcohol) below 9%. the ramp-up in customer draw is expected to extend over 6 months. Cost of goods sold have been calculated as a percentage of sales and will be monitored on a daily basis in order to keep Cost of Food within the range of 31 . This trend is reflected in the financials though a seasonal variance as follows (where October is targeted to be our most successful sales month): June: 70% July: 75% August: 80% September: 85% October: 100% November: 95% December: 95% January: 85% February: 95% March: 85% April: 90% May: 90% Industry & Start-Up Fiscal Year-1 Ramp-up. We assume that there are no unforeseen changes in findings outlined in the Market Analysis. we anticipate 6 months to fine tune the restaurant operations and manage our costs within the defined tolerance range. Dinner = 100% (implied wait period) Six-Month Start-Up Stage. Dinner = 1.0 • Year 3: After-Hours = 1. .7.0. This is reflected in a higher than average monthly sales variance shown as follows (Worst-case / Expected-case): • Month 1: 32% / 51% Month 4: 64% / 75% • Month 2: 41% / 58% Month 5: 80% / 90% • Month 3: 52% / 66% Month 6: 90% / 92% Market Analysis findings are static. Seat Turn averages are modestly estimated at: • Year 1: After-Hours = 0. dinner at N2. Revenue calculations are based upon competitive price comparisons and established menu values in the current marketplace.33%. Dinner = 88% • Year 2: After-Hours = 70%. As a new restaurant entry to the Midtown market. Dinner = 1. October through the late season is the most productive sales period. Brunch = 1.Seasonal Sales Variance.0.25 Cost Control. With a focus on Cost Control. Dinner = 1.

Additionally. How do we know we have selected the right location for this concept? . • We calculated worst-case monthly financial shortfall based on the ramp-up sales percentages outlined in our financial assumptions. we have scaled back the size to reduce business overhead. 5. 000. Our Accounting service will be contracted to a firm specializing in Restaurant accounting. The selected firm has experience with over 72 Restaurant launches. How do we ensure we have addressed all resource gaps. rollout. How do we allow an adequate startup period and capital to launch the concept and grow our customer base in a competitive sector? Our financial plan is budgeted to support the Worst-Case business scenario. specializing in the Nigerian Market. and accounts payable are projected to be 30 days. We will be recruiting a seasoned chef (national search) whose style is in accord with the Restaurant concept and our market segment. 4. We have the menu priced at a mid-tier level with no entrée over N2. Operations and Business Management Experience. The Financial Plan incorporates a budget for a Nigerian Restaurant Consulting group. How do we manage a successful restaurant in current market conditions? Our original effort was to open a restaurant twice the proposed size. We will be offering an equity interest to our select Chef to maintain the industry knowledge. 3. Their services are budgeted for the business start-up analysis. How do we confirm that our Funding Requirement is sufficient? We have leveraged our membership with the National Hospitality Industry Association to look at industry averages for this market segment for Restaurant startup and Operations. Risk Analysis/Mitigation 1. In addition. We addressed the financial risk as follows: • We looked at our monthly break-even. we have an extended Appetizer selection priced between N550 – N950. and have the right industry knowledge? Owners have a combined 20 years of Restaurant Management. we included a contingency buffer in the financial estimates to account for any potential cost variance. Another mitigation has been our overall Restaurant concept. allowing budget dining in a distinguished restaurant. We have worked with our Restaurant Consulting firm to validate our cost estimates to their industry knowledge. Inventory is turned on a 7 day cycle as inventory is used daily within all categories. The current Economic slowdown and recovery state was a key consideration in our restaurant concept. startup requirements. as payment is rendered with service. As we are in the midst of an economic recovery. Accounts receivable turnover is calculated to be 0 days. 2.Inventory turnover and Accounts Payable. and business operating capital. and on retainer for 4 months of business operations. • We budgeted operational shortfall in an operational contingency budget that we will utilize if the need arises.

00% 7. 6. we have looked at this risk.204 $1. This transition shows the restaurant managing through its start-up period.276 $423.260 $1.00% 0 Profit and Loss Statement The most important assumption in the Projected Profit and Loss statement is the gross margin.211. we let the Market Analysis define the need.00% 0 Year 3 3 6.00% 30.088 $1.670 $371.00% 0 Year 2 2 6. We have accounted for an operational contingency budget that will be used to supplement any slow periods.407 $406.416 $398.00% 0 Year 4 4 6.00% 7. and functionality.00% 30. and gaining efficiency and customer loyalty. But as we are considering all contingencies.00% 30. Instead of going in with a predefined business concept. We would also look to the partners' capital reserves as another source of funds.976 $415. the restaurant will develop its customer base and reputation and the growth will pick up more rapidly towards the second and third years of business Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Total Cost of Sales Year 2 Year 3 Year 4 Year 5 $1.976 $415. Our next step would be to approach our private investors for capital by extending their return on investment.416 $398. What if there is an additional need for Business Capital after the Restaurant has exhausted its 6month buffer? Our intent is to be a self-sufficient business far in advance of the 6-month probation period.597 . the Classic Restaurant concept was formed specific to Midtown Atlanta. In summary.407 $406. Site selection was based on space.769 $1.073. but we took a very objective approach with our concept.00% 7.341.00% 7.00% 7. Based on the results.406.00% 30.Again we will draw on the Consulting group that has the expertise in site selection and lease negotiation.00% 30.00% 0 Year 5 5 6. In all. visibility.279.597 $0 $0 $0 $0 $0 $371.276 $423. there are no guarantees with location. General Assumptions Year 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 6. We show an adjustment increase in Year 2 as we exit our start-up phase of the business and move into our expected annual sales forecast.

200 $12.400 $2.568 $0 $4.744 $6.000 $6.008 $9.000 $6.744 $0 $9.640 $2.008 $9.656 $6.933 $1.984 $983.500 $12.400 $6.800 $14.200 $25.000 $6.000 $6.124 $4.624 $77.000 $23.200 $3.157 $9.800 $11.400 $23.000 $24.500 $3.000 $18.400 $6.600 $2.760 $9.400 $6.588 $400.19% 69.576 $1.128 $432.600 $2.200 $15.744 $5.705 $79.996 $1.125 $2.156 $3.500 $3.000 $26.200 $15.124 $4.200 $22.500 $12.413 $0 $4. $399.744 $6.744 $6.) R&D Meals General Business Comps Owner Comps Other Expenses (ComAreaMaint.125 $2.200 $3.000 $21.600 $2.000 $6.400 $23.400 $22.89% Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Accounting/Payroll Processing Legal Retainer Fees Business Licenses & Permits Credit Card Expense Bank Fees Music & Entertainment Training / Employee Retention Programs Repairs & Maintenance Utility Services (Gas/Electric/Water/Sewer) Telephone/Communication Expense Insurance: Fire/Theft/Liability/Liquor/Product Restaurant Occupancy Cost (Lease) Payroll Taxes (FICA/FUTA/SUTA) & Employee Benefits Exterminator/Trash Removal Dishware/Uniforms/Cleaning Supplies/Decor Printing/Paper/Postage/Subscriptions Facility (Exterior Cleaning/Grease Trap/Hood/Windows.124 $4.500 $12.000 $28.466 $9.500 $3.496 $1.200 .200 $3.000 $30.821 $1.850 $2.800 $23.10% 68.613 $81.etc.091 $1.000 $6.728 $18.800 $21.131 $1.089 $9.124 $4.Gross Margin Gross Margin % $702.250 $0 $4.000 $22.000 $27.800 $12.600 $2.125 $2.640 $2.500 $12.000 $0 $4.400 $75.107 $1.000 $6.072 65.612 $9.800 $13.04% 69.800 $22.124 $4.200 $3.500 $12.983 $1.640 $2.828 $431.800 $24.008 $9.600 $2.788 $429.955 $0 $4.681 $872.000 $19.800 $13.500 $3.400 $6.000 $6.353 $812.400 $23.008 $9.41% 67.558 $84.210 $1.228 $925.200 $3.400 $6.333 $2.800 $20.640 $2.000 $6.

19% 12.630 Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 35% $54. dropping our break-even value.081.698 $12.309 $148. and utilities.629 $9. and increasing our Gross Margin.071 $260. our monthly break-even point is $92.433 $684.) Total Operating Expenses $656.920 $128.801 $136.189 $8. so our cash flow does not track accounts receivable.703 Cash Flow Statement The cash flow depends on assumptions for inventory turnover and payment days. and .628 6. With direct cost of goods (inventory.020 $15.372 $724.582 $5.809 $154. Break-even Analysis Monthly Revenue Break-even $83.640 $40.158 $721. rent.571 $253. Our projected same-day collection is critical.198 Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred $45.375 $19.546 7.230 per month which includes our full payroll.420 $134. As we exit the start-up phase of the business and focus on cost control.414 $729.712 1.74% $78.570 $211.41% 10.070 $204. We have no sales on credit. and an estimation of other running costs.984 $33.377 Net Profit Net Profit/Sales $18.etc. we will drive the Cost of Goods Sold (COGS) down.692 $173.49% $94. we have an average running fixed costs of $60.296 $58.34% Break-even Analysis For our First Year Break-Even Analysis. We will surpass our break-even point in October of our first year. in this plan) at 35% of sales.875 $52.952 $74.

442 $1.406.406.128 $765.088 $1.088 $1.769 $1. VAT.170 Additional Cash Spent Sales Tax.211. HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment $0 $0 $0 $47.260 $1.772 $0 $0 $0 $47.769 $1.073.406.204 $1.772 $0 $0 $0 $47.211.670 Additional Cash Received Sales Tax. We do not expect to need any additional financial support.204 $1.204 $1.341. Pro Forma Cash Flow Year 1 Cash Received Year 2 Year 3 Year 4 Year 5 Cash from Operations Cash Sales Subtotal Cash from Operations $1.341.670 $1.324 $431.279.341.104 $1.260 $1.989 $429.211.828 $745.279.728 $792.260 $1. even when we reach the less profitable months.788 $724.125. HST/GST Received New Current Borrowing New Other Liabilities (interestfree) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1.772 $0 $0 $0 $47.152 $1.073.114 $400.197.702 $1.777 $1.976 $432.769 $1.is reasonable and customary in the restaurant industry. Month-by-month assumptions for projected cash flow are included in the appendices. VAT.088 $1.073.225.175.772 $0 $0 $0 $47. as the downturns are incorporated into the monthly revenue variance figures.279.588 $601.772 .000.670 Expenditures Year 1 Year 2 Year 3 Year 4 Year 5 Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations $399.

254.000 $52.815 $39.000 $19.942 Net Cash Flow Cash Balance $25.300 $65.315 .097 $65.315 $0 $0 $65. Pro Forma Balance Sheet Year 1 Assets Year 2 Year 3 Year 4 Year 5 Current Assets Cash Inventory Other Current Assets Total Current Assets $172.000 $0 $0 $15.311 $302.Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent $0 $0 $0 $0 $0 $20.500 $58.479 $118.000 $0 $0 $10.048.426 $189.194 $0 $0 $58.398 $0 $0 $61.311 $434.608 $73.839 $73.206 Balance Sheet Statement The projected Balance Sheet is quite solid.000 $354.633 $441. On a linear projection.876 $1.514 $322.095 $86.633 $65.384 $322.843 $73.206 $39.311 $283. Zara Restaurant & Lounge has a positive Net Worth beginning in Year 3.500 $341.276 $17.713 $0 $0 $59. We do not anticipate difficulty meeting our debt obligations based on achieving the specific goals outlined in this plan.713 $61.000 $0 $0 $10.000 $6.109 $73.000 $26.000 $13.000 $39.232.000 $32.175 $73.193.539 $189.924 $1.500 $393.500 $32.311 $554.311 $347.280 $236.287.398 $63.625 Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5 Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities $58.549 $1.194 $59.500 $586.815 $46.014 $65.097 $0 $0 $63.295 $172.300 $236.000 $1.479 $38.125 Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets $65.926 $65.500 $45.000 $473.474 $1.727 $441.276 $37.095 $38.

we see Classic as meeting 80. Expansion will be considered with our financial backers and Investor partners. In addition Year 2 brings an increased sales and profit margin to sustain the addition of a full-time General Manager. In both cases. Exit Strategy to Retire the Business .625 Net Worth $31.000 in cash in the bank after income taxes the second year. profit margins are increasing. 1.628 $90.801 $174. Under a realistic scenario the Company should have over $70.171 $586.Long-term Liabilities Total Liabilities $252.422 $204. At the close of Year 3.625 $460. Expansion (Option 2): Throughout our business plan we have stayed focus that Classic would be successful as a larger venue. Private Sale: We are in the business of making money. our interest is in delivering healthy profits to our Investors and Financial backers.684 $218. Expansion (Option 1): Our overall goal to maintain Classic as a unique and eclectic concept.546 $460.000 ($427.496) ($359.169 $156.140 $126.375) $18. as well as a contingency in the event the business is unsuccessful.455 Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital $440. with greater sales capacity and revenue potential. Payback & Exit Strategy In addressing this question we look at the Exit Strategy as a definition of our business vision and goals.504 $90.000 $440. Financial Solvency: The financial projections indicate that exit will be achievable over 3 years for the operating capital line of credit.633 $173. We have addressed this question at several levels: Expansion as a Business Goal We have set multiple financial goals to grow the success of the Classic concept. Our objective with the site selection and lease negotiation is to have the opportunity to expand the restaurant as a logical growth and profit plan. or B) A larger Restaurant consortium. but another unique restaurant concept with strong growth potential.932 $301. and Classic has established market share.456 $264.000 $440.014 $136.000 $440. and compound the profit return for Classic Investors. 2.228 $310.625 $473.171 Expansion.000 $440. 4. At this stage the business debt is reduced.131 $354.068) ($153.869) ($275. Sales and profit margins will be based on the restaurant valuation in Year 3.932 $393. Based on projections. The entire financial debt would be retired by Year 7.082 $108. the business has captured market share by the end of the first year. By second quarter of Year 2.692 $301.009 $61. 3.300 $94. the owners will look to launch a second restaurant concept. This is not a chain.4% of its optimum sales potential with the current seating and space allocation.926 $78.504 $341. We will look at the private sale of the majority interest via A) Leveraged Buyout.912 $172.209) ($428.712 $31.131 $174.

however sometimes ventures do not fulfill their promise. we will first attempt to sell the operation and use the proceeds to clear all outstanding balances. .We at Classic are committed to our concept and its viability. Any further outstanding balances will be borne by the investors on a weighted percentage basis of the total amounts due. If we are unable to sell the operation for sufficient proceeds we will be forced to default whereby the loan will be in senior standing. We step into this venture with confidence and the success of our respective prior business efforts. No one attempts a business anticipating failure. In the event that our venture cannot achieve profitability and retire the encumbrances.