Fast Food Van

Fast Food
Van
Fast Food Van 2017
1 Executive Summary
This report is a detailed feasibility study on the Fast Food van in Bhutan basically selling fast
food on a mobile vehicle. Fast food industries grow rapidly worldwide, country like Bhutan is
no more an exception as fast food hotels and restaurant in the country is increasing yearly.
Bhutanese people are fascinated by the junk foods, western foods and there is increased number
in restaurants, hotels, cafes and even local restaurants as well.
Fast food van in Bhutan will completely be a new business as there never had been such
business commercialized. The proposed business would be providing fast food mainly to the
areas where people are surrounded during the time of special events like Tshechus and special
occasions.
The feasibility study report presents in detail the justification of the project, market analysis of
fast foods providers, resources required, and equipments used environmental aspects,
regulations, implementation of the project, cost presentation and financial analysis.
(i) Justification of the Project: If the fast foods are provided in a mobile vehicle than the
sit-down restaurants, there will be huge customers every place you go. For many in the
food industry, creating a mobile presence through the use of fast food trucks is the
logical next step. It's a way to create profits with little startup costs
(ii) Market Analysis: It's a newer way to test markets especially in a country like Bhutan.
There are numerous festivals and events celebrated in Bhutan and during every such
occasion, the first most priority for the people is the food. Thus, there is a tremendous
demand for the food all over the places. No such businesses have been operated in
Bhutan so far.
(iii) Resources required: The main raw material for selling fast foods are vegetables and
flours.
(iv) Technology required: There is no need for the technology in this business and all it
needs is a movable vehicle (food truck).
(v) Environmental Aspects: The proposed business will have no environmental issues. The
waste created by the sales of fast foods will be properly managed as it will have proper
garbage bins attached to the vehicle. The proper hygiene is maintained according to the
norms of BAFFRA.
1 Compiled By iBEST Consultancy Services

Fast Food Van 2017
(vi) Cost Presentation and Financial Analysis:
Table 1: Project Summary
Fixed Cost Nu. 5,54,455
Working capital Nu. 1,20,394
Total Investment Nu. 6,74,849
Break Even Point (BEP) 47,340 units
Return On Investment (ROI)) 133%
Payback Period 9 months
The total project startup cost is Nu 554,455 which consist of working capital Nu 120,394 with
the total investment of Nu 674,849.

Fast Food Van 2017
Table of Contents
1 Executive Summary ...................................................................................................................................... 1
1.1 Business Model Canvassing ............................................................................................................... 5
2 Justification of the project ......................................................................................................................... 6
2.1 The need of the project...................................................................................................................... 6
2.2 SOCIAL CAUSE ...................................................................................................................................... 6
2.3 ECONOMICAL BASIS ........................................................................................................................... 6
2.4 Competition Analysis ......................................................................................................................... 7
2.4.1 COMPETITORS ............................................................................................................................. 7
3 Market Analysis............................................................................................................................................. 7
3.1 Demand vs. supply .............................................................................................................................. 7
3.2 Pricing and Marketing Strategies .................................................................................................. 8
3.3 Competitiveness of the project.................................................................................................... 10
4 Resources ..................................................................................................................................................... 10
4.1 Sources of raw material ................................................................................................................. 10
5 The Plant ....................................................................................................................................................... 12
5.1 Rate of consumption of power, fuel, utilities and consumables. .......................................... 12
5.2 Man power requirement and organization chart ...................................................................... 12
6 Environmental aspects- Regulation & environment issues ...................................................... 12
6.1 BAFFRA (Bhutan Agriculture and Food Regulatory Authority) ..................................... 13
7 Project Implementation Schedule....................................................................................................... 14
8 Financial Analysis...................................................................................................................................... 15
8.1 Total Project capital Costs ............................................................................................................. 15
8.2 Working Capital Costs..................................................................................................................... 16
8.3 Cost of Production per unit........................................................................................................... 16
8.4 Human Resource cost ..................................................................................................................... 17
8.5 Marketing Cost................................................................................................................................... 17
8.6 Project profit and Loss Statement .............................................................................................. 18
8.7 Projected Cash flow statement .................................................................................................... 19
8.8 Projected Balance sheet statement............................................................................................ 20

Fast Food Van 2017
8.9 Financial Ratio analysis.................................................................................................................. 21

8.9.1 Interest on loan......................................................................................................................... 21
8.9.2 Break Even Point ...................................................................................................................... 21
8.9.3 Return on Investment ............................................................................................................ 22
8.9.4 Net Present Value and Internal Rate of Return ............................................................ 22
9 Final Finding and Recommendation .................................................................................................. 23
10 Conclusion- Is project feasible? ....................................................................................................... 24
11 Annexure .................................................................................................................................................. 25
12 References ............................................................................................................................................... 26

Fast Food Van 2017
1.1 Business Model Canvassing
Key Partners Key Activities Value Propositions Customer Customer

Relationship Segments
 Local Vegetable  In-person  Fast-food

Dealers  Production of  Instant fast food  Telephone lovers
 Groceries fast food  Fast food available  Youngsters
Suppliers  Door to door at your door steps  Office goers
 Meat Dealers service
Key resource Channels
 Experienced and  Direct marketing

skilled cook  Local Channel Ads
Cost structure Revenue Streams
 Ingredients and raw materials  Income from the sale of instant

 Salaries fast foods on van
 Marketing

Fast Food Van 2017
2 Justification of the project
2.1 The need of the project
There are several benefits of the proposed business as it follows:
Less of a risk: When it comes to being a business owner, minimizing your risk is one of
your top priorities. As a result of a sit-down restaurant costing more to start up than a food
truck, it is easy to come to the conclusion that food trucks are less of a risk.
Easier to maintain: It is much easier for maintaining the fast food van compared to buying
a restaurant. These issues can be incredibly expensive to repair – especially if you’re still
building your business.
Easily accessible: The proposed business will be easily accessed by the customers because it
will be operated in an open space.
Fresh products: The proposed business will be providing fast foods which have been made on
the spot as and when the customer’s order.
Cheaper price: The foods provided will be relatively slow and thus it would attract more
customers.
2.2 SOCIAL CAUSE
1) The proposed business will be employing people and it would help in reducing
unemployment somehow.
2) One major benefit that the proposed business will provide to the society is the availability
of the food that they desire which is right in front of their footsteps.
2.3 ECONOMICAL BASIS
The proposed business will ultimately help in boosting up the economy as it will be paying a
huge some of amount as a tax to the government.

Fast Food Van 2017
2.4 Competition Analysis
2.4.1 COMPETITORS
So far there is no such business being operated in the country commercially; however, some
local vendors are selling vegetables and fruits on the vehicle. But those local vendors are selling
fruits and vegetable items on small scale, and the proposed business will be selling fast food
which is completely a different item. There are 1123 hotels and restaurants in Thimphu itself as
per the Report of CMI, 2014 (MOEA). They provide fast food items to the customers, however
these hotels, restaurants are situated in a particular place where in the customer have to
personally visit and avail the services, so the idea of fast food van which is movable and would
serve the customers at their footsteps which is a new concept in the market.
3 Market Analysis
3.1 Demand vs. supply
With the increasing number of hotels and restaurants there is equally increasing number of the
food eaters. Most of the people prefer fast food despite their age. So basically there is a huge
demand in the market for the fast food restaurant. The proposed business will be providing fast
foods on mobile vehicle, which will solely be a new venture business in the country like Bhutan
as there hasn’t been any business that provides meals on wheels. Thus there will be demand from
the people as it will be new to the market.

Fast Food Van 2017
3.2 Pricing and Marketing Strategies
The prices for the fast food will be comparatively low than the usual sit-down restaurants as they
won’t be paying rent and moreover the proposed business will have varieties of fast food items
like those of food trucks given in the western countries.
The following are the fast food items and the prices that would be provided:
Price per piece

Year French Cheese Egg
Burger momo
Fries Thukpa sandwich roll pakora Tea Coffee
1 45 30 35 20 35 50 10 25 35
2 47 32 37 21 37 53 11 26 37
3 50 33 39 22 39 55 11 28 39
4 52 35 41 23 41 58 12 29 41
5 55 36 43 24 43 61 12 30 43
The prices of items are set upon considering the existing market price. Moreover, since the
products would be provided personally, it would further help in the promotional strategies;
Customers’ taste and preferences and feedbacks can be obtained thus business can work
accordingly.

Fast Food Van 2017
Products
Burger Non-veg Momo Veg- Momo
French Fries Porridge (Thukpa) Cheese Sandwich
Egg Roll Pakora Coffee Tea
The above items will be fast foods available in the van. The more items will be available as from
the succeeding years.

Fast Food Van 2017
3.3 Competitiveness of the project

 New to the market: The idea of fast food van is new to the market and thus it would act
as monopoly business.
 Meals on Wheels: Unlike other usual sit-down restaurants, this business will be
providing fast foods on the vehicles through which the customers can easily access
services.
 Reduction in cost: The proposed business not only serves the purpose of reducing cost
of the business but it also reduces the cost of customers’ expenditure and afford as they
don’t have to travel in order to access the services.
4 Resources
4.1 Sources of raw material

The required raw materials for the production of fast food are as follows:
vegetables (kg)
flour (kg)
meat items (kg)
rice (kg)
milk powder
Sugar
Salt
tomato sauce
Gas cylinder fill up
The above mentioned raw materials will be purchased from vegetable supplier in
Phuentsholing and the other groceries as well.

Fast Food Van 2017
Approx Price: Rs 5 Lakh
Product Details:
Max Speed >80
Brand Sah Empire
Supplier Details: SAH Empire located at Park Street, Kolkata, and West Bengal.
“SAH Empire” is a Sole Proprietorship (Individual) Firm, indulged in manufacturing, retailing

and wholesaling a premium quality range of Food Truck, Tasting Truck, etc

Fast Food Van 2017
5 The Plant
5.1 Rate of consumption of power, fuel, utilities and consumables.

The consumption of the fuel by the vehicle will be Nu.5000 per month as it will be traveling
from places to places selling the fast food items.
5.2 Man power requirement and organization chart
MANPOWER REQUIREMENT
Monthly
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Salary
Driver cum
1 1 1 1
manager 15,000 1
Cook 1 2 2 2
12,000 1
Total
2 2 3 3 3
The proposed business will have a mobile vehicle and it would employ two people which
consists of a manager cum driver and a cook who will do all the ground works from carrying and
selling the foods.
6 Environmental aspects- Regulation & environment issues

 The issues regarding waste management may arise since the van would be moving
from place to place providing its services creating waste from various packaging.
 The proposed business is based on movable vehicle; thus the parking congestion will
arise.

Fast Food Van 2017
6.1 BAFFRA (Bhutan Agriculture and Food Regulatory Authority)

Sections 24 to 28 of the Food Rules and Regulations of Bhutan (2007) aims at the enhancement
of food safety and the orderly development of the food industry by defining hygienic minimum
requirements for food businesses and procedures for licensing of food businesses and their
operators.
All food businesses, big or small, whether operating from a business premises, at home or from a
mobile unit or food stall, must be aware of the legislation regarding food hygiene and food
safety. Ultimately, you are primarily responsible for ensuring the safety of the food you produce.
Food business operations must comply with the Criteria for Good Hygienic and Manufacturing
Practices for Licensing of Food Business.
The issuance of the Food Safety License will be done in accordance to the Food Safety Licensing
of Food Businesses – Licensing Process which provides details on:
1. Application Review
2. Legal requirements
3. Conducting Inspections
4. Evaluation
5. Conditional Food Safety Clearance
6. Licensing Decision
7. Food Safety Clearance
According to the BAFFRA the important thing for the food business is that the business
premises should be hygienic and food safety must be considered. The proposed business will
comply with the regulations by having the properly maintained premises and waste disposal
garbage. It will also abide with the food safety measures.

Fast Food Van 2017
7 Project Implementation Schedule

PROJECT TIMELINE
2017
Activities
1st Month 2nd Month 3rd Month 4th Month 5th Month
Feasibility study and

development of the
project proposal
If the project is going to

be funded:
Purchase of Machineries
and Installation
Purchase of Inventories
and Start of Production

Fast Food Van 2017
8 Financial Analysis
8.1 Total Project capital Costs

COMPONENTS OF PROJECT COST
Amount in Nu.
Forex.
PARTICULARS Domestic Component Total Cost Remarks
Component
Plant & Machinery
Food truck 500,000
Transportation 5000
fixation of mini kitchen 20,000
commercial Gas cylinder 5,500
Total 530,500 530,500
Miscellaneous Fixed Assets:
Worker's Uniform 1,200
Tools 2,755
Total Cost 3,955 3,955
Preliminary Expenses 20,000 20,000
Total Project Startup Cost 554,455

Fast Food Van 2017
8.2 Working Capital Costs

WORKING CAPITAL
Particulars Monthly Yearly
Advertising 12,000 144,000
Inventory Purchases 41,520 498,240
Payroll 27,000 324,000
Taxes and Licenses 32,074 384,883
Utilities & Telephone - -
Others: 7,800 93,600
Loan Principle
Total 120,394 1,444,723
8.3 Cost of Production per unit

Year 1 Year 2 Year 3 Year 4 Year 5
Total Units
77,760 85,536 94,090 103,499 113,848
Cost of Production 1,189,246

1,051,280 1,346,943 1,527,319 1,733,766
Unit Cost of
13.90
Production 13.52 14.32 14.76 15.23

Fast Food Van 2017
8.4 Human Resource cost
MANPOWER COST
Particulars Monthly Year 1 Year 2 Year 3 Year 4 Year 5
Salary &
Allowances 27,000 324,000 340,200 357,210 375,071 393,824
Total
27,000 324,000 340,200 357,210 375,071 393,824
8.5 Marketing Cost
The annual marketing cost incurred would be Nu.12000 through various media channels such as
Television, websites and radios. More over there will be personal marketing as it involves direct
selling.

Fast Food Van 2017
8.6 Project profit and Loss Statement
INCOME STATETMENT PROJECTION FOR 5 YEARS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue
2,419,200 2,794,176 3,227,273 3,727,501 4,305,263
Cost of Goods Sold

519,840 545,832 573,124 601,780 631,869
Gross Profit / (Loss)

1,899,360 2,248,344 2,654,150 3,125,721 3,673,394
Expenses
616,418 643,418 671,768 701,536 732,792
Net Operating Income

/ (Loss) 1,282,942 1,604,926 1,982,381 2,424,185 2,940,603
30% BIT on NOI

384,883 481,478 594,714 727,256 882,181
Net Income / (Loss)

after BIT 898,059 1,123,448 1,387,667 1,696,930 2,058,422

Fast Food Van 2017
8.7 Projected Cash flow statement
Projected Cash Flow Statement

Beginning Cash
Balance - 990,074 2,071,852 3,402,872 5,026,279
Accts. Rec.
Collections 241,920 279,418 322,727 372,750 430,526
Loan Proceeds
674,849
Sales & Receipts
2,177,280 2,514,758 2,904,546 3,354,751 3,874,737
Total Cash
Inflows 3,094,049 2,794,176 3,227,273 3,727,501 4,305,263
Available Cash
Balance 3,094,049 3,784,250 5,299,125 7,130,373 9,331,542
Advertising
144,000 151,200 158,760 166,698 175,033
Inventory
Purchases 498,240 523,152 549,310 576,775 605,614
Payroll
324,000 340,200 357,210 375,071 393,824
Taxes & Licenses
384,883 481,478 594,714 727,256 882,181
Other:
93,600 98,280 103,194 108,354 113,771
Subtotal
1,444,723 1,594,310 1,763,188 1,954,153 2,170,423
Capital Purchases
554,455
Loan Principal
104,797 118,088 133,065 149,941 168,957
Subtotal
659,252 118,088 133,065 149,941 168,957
Total Cash
Outflows 2,103,975 1,712,398 1,896,253 2,104,094 2,339,380
Ending Cash
Balance 990,074 2,071,852 3,402,872 5,026,279 6,992,162

Fast Food Van 2017
8.8 Projected Balance sheet statement
Projected Balance Sheet For 5 Years

Assets
Cash & Bank
990,074 2,071,852 3,402,872 5,026,279 6,992,162
Accounts Receivable
241,920 279,418 322,727 372,750 430,526
Prepaid Expenses
25,000
Other Current Assets
Total Current Assets
1,256,994 2,351,269 3,725,599 5,399,029 7,422,688
Net Fixed Assets
433,037 356,619 280,200 203,782 127,364
Other Assets
Total Assets
1,690,030 2,707,888 4,005,800 5,602,811 7,550,052
Liabilities & Capital

Accounts Payable
221,920 1,132,477 2,299,235 3,736,924 5,491,630
Total Current
Liabilities 221,920 1,132,477 2,299,235 3,736,924 5,491,630
Long-Term Notes
Payable 570,051 451,963 318,898 168,957 0
Total Long-Term
Liabilities 570,051 451,963 318,898 168,957 0
Total Liabilities
791,971 1,584,440 2,618,133 3,905,881 5,491,630
Net Profit
898,059 1,123,448 1,387,667 1,696,930 2,058,422
Total Capital
898,059 1,123,448 1,387,667 1,696,930 2,058,422
Total Liabilities &

Capital 1,690,030 2,707,888 4,005,800 5,602,811 7,550,052

Fast Food Van 2017
8.9 Financial Ratio analysis
8.9.1 Interest on loan

Interest 75,342 62,051 47,075 30,199 11,183
Loan Principle 104,797 118,088 133,065 149,941 168,957
Loan Balance 570,051 451,963 318,898 168,957 0
EMI 180,140 180,140 180,140 180,140 180,140
8.9.2 Break Even Point

BREAK EVEN X BREAK EVEN Y LABEL
47,340 1,472,800 break even unit =47340
UNIT COST = TOTAL SALES/TOTAL UNITS
Total sales Total Units
2,419,200 77,760 31

Fast Food Van 2017
8.9.3 Return on Investment

RETURN ON INVESTMENT ON SALES
Product Year 1 Year 2 Year 3 Year 4 Year 5
Burger 42% 50% 61% 73% 86%
Momo 23% 28% 34% 40% 48%
French fries 16% 20% 24% 28% 34%
Thukpa 15% 19% 23% 27% 32%
Cheese sandwidch 38% 46% 55% 66% 78%
egg roll 38% 47% 56% 67% 80%
pakora 11% 13% 16% 19% 22%
Tea 27% 33% 39% 47% 56%
coffee 48% 59% 71% 85% 101%
Total ROI 258% 314% 378% 452% 538%
8.9.4 Net Present Value and Internal Rate of Return
Net Present Value (NPV) 4,339,284
Internal Rate of Return (IRR) 149%

Fast Food Van 2017
9 Final Finding and Recommendation
 The proposed financially feasible and has a scope in the market as it would be first of
its kind to exist in the market. However due to legal restrictions and drawbacks stated
by the Thromde, the concept has not been implemented.
 Only if Thromde could allow to implement the proposed idea, could the business be
able to enter into the market and provide their services. Provided with the condition
that the proposed business will properly manage their waste and abide by the rules
and regulation imposed by the Thromde.

Fast Food Van 2017
10 Conclusion- Is project feasible?
The project is feasible since: The food truck business carries lots of benefits and advantages to be
established however there are legal restriction from the government. According to the Chief
Environment Officer of Thimphu Thromde, mobile fast food in Bhutan is not allowed due to
following reasons:
 Complaint received on waste disposal

 Parking congestion
 No such business has been approved so far by Thimphu Thromde
 Halt of mobile fast food for further discussion
 If given approval to one, possibility of rising similar mobile businesses which maybe
hampering the environment.
Recently the Oranges where being sold on Mahindra and then people started to receive
complaints on thrashing the peels of oranges everywhere. Therefore, after considering all those
matters, Thromde restricts such proposal from being commenced especially in Bhutan.
Therefore, keeping in account all those matters, Fast Food van is not feasible in Bhutan.

Fast Food Van 2017
11 Annexure
Misc. Fixed Assets
Sl. No. Particulars Units Cost Amount
1 Workers Uniforms
A white T shirt 2 250 500
B cap 2 200 400
C Apron 2 150 300
Total 1,200
2 Utencils
A tea pot 2 350 700
B frying pan 1 1,000 1,000
C Sieve 3 200 203
D napkin paper (packets) 10 35 350
E spoons (set) 1 150 150
2 350 352
2,755
Grand Total 3,955
BREAK EVEN ANALYSIS

Sales Fixed Total Cost break even unit =47340
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
- 20,000 40,000 60,000 80,000 100,000 120,000
Units

Fast Food Van 2017
12 References
 Cottage & Small Industry Report 2014, Department of Cottage and Small Industry,
Ministry of Economic Affairs, Royal Government of Bhutan (2014)
 www.alibaba.com
 www.indiamart.com

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1 Compiled By iBEST Consultancy Services

(vi) Cost Presentation and Financial Analysis:

Table 1: Project Summary

Fixed Cost Nu. 5,54,455

Working capital Nu. 1,20,394

Total Investment Nu. 6,74,849

Break Even Point (BEP) 47,340 units

Return On Investment (ROI)) 133%

Payback Period 9 months

2 Compiled By iBEST Consultancy Services

3 Compiled By iBEST Consultancy Services

8.9 Financial Ratio analysis.................................................................................................................. 21

4 Compiled By iBEST Consultancy Services

1.1 Business Model Canvassing

Key Partners Key Activities Value Propositions Customer Customer

 Local Vegetable  In-person  Fast-food

Key resource Channels

 Experienced and  Direct marketing

Cost structure Revenue Streams

 Ingredients and raw materials  Income from the sale of instant

5 Compiled By iBEST Consultancy Services

2 Justification of the project

2.1 The need of the project

There are several benefits of the proposed business as it follows:

2.2 SOCIAL CAUSE

2.3 ECONOMICAL BASIS

6 Compiled By iBEST Consultancy Services

2.4 Competition Analysis

7 Compiled By iBEST Consultancy Services

3.2 Pricing and Marketing Strategies

Price per piece

8 Compiled By iBEST Consultancy Services

Burger Non-veg Momo Veg- Momo

French Fries Porridge (Thukpa) Cheese Sandwich

Egg Roll Pakora Coffee Tea

9 Compiled By iBEST Consultancy Services

3.3 Competitiveness of the project

4.1 Sources of raw material

meat items (kg)

Gas cylinder fill up

10 Compiled By iBEST Consultancy Services

Approx Price: Rs 5 Lakh

Max Speed >80

Brand Sah Empire

“SAH Empire” is a Sole Proprietorship (Individual) Firm, indulged in manufacturing, retailing

11 Compiled By iBEST Consultancy Services

5.1 Rate of consumption of power, fuel, utilities and consumables.

5.2 Man power requirement and organization chart

6 Environmental aspects- Regulation & environment issues

12 Compiled By iBEST Consultancy Services

6.1 BAFFRA (Bhutan Agriculture and Food Regulatory Authority)

13 Compiled By iBEST Consultancy Services

7 Project Implementation Schedule

Feasibility study and

If the project is going to

14 Compiled By iBEST Consultancy Services

8.1 Total Project capital Costs

Plant & Machinery

Food truck 500,000

fixation of mini kitchen 20,000

commercial Gas cylinder 5,500

Total 530,500 530,500