“Pepper in Some Fun” Prepared by Hammer Smash Consulting Nicky Cox Gary Houseman Tyrone Okrainetz

Outline Introduction Operations plan Human Resources Plan Marketing Plan Financial Plan Questions

Introduction Chili’s is a high quality franchise family restaurant Serves a variety of food Similar restaurants would be Applebee’s, Montana’s and East Side Mario’s No franchise in Saskatoon yet

Mission Statement “To be the leading Canadian Chili’s franchise in Saskatchewan, with a commitment to providing great food and service to the people of Saskatoon, while achieving growth through core competencies of our people.”

Operations Plan Need $1.5 million to start up business Serve American style Tex-Mex cuisine. Serve alcoholic and non alcoholic beverages. Lunch and Supper menu with appetizers. One general manager and 2 assistant managers. Highly visible, accessible, high traffic location.

Location C

Floor plan

Average Business Day Open from 11AM till 11PM, 7days a week. Serve lunch menu and appetizers from 11AM till 4PM. Serve supper menu and appetizers from 4PM till 11PM. Kitchen manager starts at 9 AM to prepare kitchen for the day. General Manager starts at 10AM Assistant Manager starts at 6PM Supervisors fill in as needed for managers.

Daily Shifts: Managers

Capital Budget

Operating Expenses

Human Resources General Manager Dining Room Assistant Manager SupervisorsHostessesFood RunnersServers Kitchen Assistant Manager SupervisorsCooksExpos Organizational Structure

Marketing Plan Target – mid to high income families – Young Adults Competitive Price Excellent location – Located on Preston Avenue and in close proximity to Circle Drive and College Drive – University – Sutherland/Erindale/Silverspring/Willowgrove areas Quality food and service

Marketing Plan Franchise marketing – Website club Pepper in Some Hope – Advertising Local – Radio – Billboards

Financial Plan Need $1.5 million for startup $1.0 million bank loan $500,000 invested by us Royalty fees up front of $40,000 5% of gross margin per year for royalties 4% of gross margin per year for advertising Capital expenditure of $95,800 to renovate Salaries and wages of about $690,000 a year Cost of Goods Sold is 60% of revenues Other marketing of $15,000 a year

Financial Plan Highly profitable IRR of 69.9% NPV of $2.1 million Positive net income after first year Dividends paid out as well to investors Long term debt paid off in 6 years at annual payments of $209,796 All ratios look good for an investor in this business

Financial results Sales is the most critical variable Assumed average meal is $22 Supper $25 – 70% Lunch $15 – 30% Open 360 days a year Maximum capacity of 3000 people First year excitement 1000 people a day ($7.92 mil) Second year decline to 800 people per day ($6.34 mil) Level off for next 4 years at 900 people per day ($7.13 mil)

Risk Analysis Sensitivity analysis showed the company to be successful Break even analysis is at 585 customers per day for a 20% return on investment Feasible due to it being a franchise and our personal advertising along with the quality of the food

Conclusion Quality restaurant for families Profitable in the suggested location IRR of 69.9% Positive net incomes for 6 years with dividend payouts SASKATOON IS READY TO PEPPER IN SOME FUN WITH A CHILI’S

Questions?