4 Moons Pizzeria

4 Moons Pizzeria

May 2005

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Table of Contents

Page 1

1.0 Executive Summary.............................................................................................................................11.1 Objectives ...................................................................................................................................11.2 Mission ........................................................................................................................................21.3 Keys to Success ........................................................................................................................2

2.0 Company Summary.............................................................................................................................22.1 Company Ownership .................................................................................................................22.2 Start-up Summary ......................................................................................................................3

3.0 Services................................................................................................................................................44.0 Market Analysis Summary ..................................................................................................................4

4.1 Market Segmentation ................................................................................................................54.2 Target Market Segment Strategy .............................................................................................64.3 Service Business Analysis........................................................................................................64.3.1 Competition and Buying Patterns .........................................................................................6

5.0 Strategy and Implementation Summary ............................................................................................65.1 Competitive Edge ......................................................................................................................75.2 Marketing Strategy.....................................................................................................................75.3 Sales Strategy ............................................................................................................................75.3.1 Sales Forecast........................................................................................................................8

6.0 Management Summary.......................................................................................................................96.1 Personnel Plan ...........................................................................................................................9

7.0 Financial Plan ....................................................................................................................................117.1 Start-up Funding ......................................................................................................................117.2 Important Assumptions............................................................................................................127.3 Break-even Analysis................................................................................................................137.4 Projected Profit and Loss .......................................................................................................147.5 Projected Cash Flow ...............................................................................................................177.6 Projected Balance Sheet ........................................................................................................197.7 Business Ratios .......................................................................................................................20

4 Moons Pizzeria

Page 1

1.0 Executive Summary

The following plan is based on years of experience, is highly focused and promises to follow a path of prosperity. It is based on conservative sales figures, and actual sales may be higher. The projections contained herein are authentic and will be used as the budget for the business. 4 Moons Pizzeria will show a profit almost immediately, and will increase sales and profits each year thereafter.

1.1 Objectives

The objective is to lease a site at 555 West Blue Plum Lane. We will need to remodel the interior according to the Franchisor's design. We plan to duplicate and massage the successful formula used by Franchisor. We will use our own personal strategies and skills to create our own success in our 4 Moons Pizzeria. We plan to train our crew to ensure outstanding results in quality food and customer service. Our objectives are as follows.

• Be the first 4 Moons Pizzeria in Nevada• Provide the highest quality product, duplicating Franchisor's successful pizzerias in Oregon• Give top notch service in a quick and efficient manner• Keep our menu simple to maintain low food cost• Maintain the competitive, fast-casual dining at the mid-range price point• Use marketing strategies to build volume quickly• First year sales (May 2005 to April 2006) over $677,000 with a 6% growth yearly• Maintain and expand an outstanding reputation as being the best neighborhood pizzeria

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1.2 Mission

4 Moons Pizzeria exists for the purpose of generating sales and profit. Because we are a service business, we will also exist to serve our customers. These two reasons for our existence are inextricable. If one aspect does not exist, the other will cease to exist.

• We will always offer a fresh product and welcoming environment• We will remain cheerful, courteous, well trained, and focused on pleasing our guests • We will strive to become the first destination of choice for those in our neighborhood and

community• Our staff will be offered a workplace where they can prosper and grow in a dignified, fun, and

rewarding manner• We will give support to and contribute to our community schools, churches, groups, and

businesses

1.3 Keys to Success

Our policy of being operating managing members is to make sure we pass by every table to greet, visit with, or at least send a smile to our guests.

We will visit any table or answer to any phone call that has feedback, positive or negative. We will use every means available to satisfy our customers.

We will be committed to the success and happiness of our staff.

We will be committed to providing quality food and beverage at all times.

We will consistently follow the franchisor's proven methods.

2.0 Company Summary

Established in 1958, 4 Moons Pizzerias are an award winning, "Home of the brick oven Pizza". They offer a comfortable, friendly ambience, with its new "Modern Pizzeria" design. The menu features pizza, hot calzones, strombollis, sandwiches, baked pastas, and fresh tossed salads. The pizza dough is made fresh everyday on site. Beverages include soft drinks, imported and domestic beer, micro brews, and an impressive wine list. Food ingredients are the finest available including USDA Choice meats.

2.1 Company Ownership

We are an LLC, limited liability company, with four managing owners holding an equal share (25%) and interest in the franchise.

• Carol Mittani: General Managing Owner - Hands-on management of all daily restaurant and company operations.

• Steve Solutrian: Vice Managing Owner / Sales and restaurant operations. Hands-on management of daily operations and sales trends.

• Diane Solutrian: Vice Managing Owner / All office procedures. Hands-on management of daily operations.

• Rikard Mittani: Vice Managing Owner / Marketing and future finances and investments. Hands-on management of daily operations.

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2.2 Start-up Summary

We hope to take advantage of an existing structure located at 555 West Blue Plum Lane, at Lakeside Center. It is 2,828 square feet. We will remodel according to the Franchisor's designs to make our concept both visually and functionally suitable. Construction is estimated at $214,630 - see attached "Franchisor's Construction Cost Sheet" for item breakdown.* Start-up cash on hand is estimated for 3 months working capital, inventory, labor and rent. Short-term assets include phone equipment, smallwares, booths, chairs, tables, pendants, sconces, and lighting. Long-term assets include all kitchen equipment, POS system, and signage. *Confidential and proprietary information omitted from this sample plan.

Table: Start-up

Start-up

Requirements

Start-up Expenses

Remodel Costs $214,630

Proscreen/Wallpaper-Menu Boards $3,644

Insurance $1,500

Franchise Fee $25,000

1st month rent $4,242

Drafting/Engineering $3,000

City fees/Misc costs $2,491

Beer and wine license $500

Training/travel $2,000

Util ity start-up costs $5,000

Design $4,200

Total Start-up Expenses $266,207

Start-up Assets

Cash Required $87,286

Start-up Inventory $10,000

Other Current Assets $41,775

Long-term Assets $99,732

Total Assets $238,793

Total Requirements $505,000

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3.0 Services

4 Moons Pizzerias are comfortable and inviting. We are a fast-casual operation with dine in, take-out, and delivery. The decor and theme are centered around the cutting edge open kitchen with brick arches and distinctive lighting. Our energy and atmosphere will appeal to families, groups, and schools. The real power and energy of the pizzeria will come from the attentive and courteous service provided by our managers and staff. Our fresh menu will be prepared by our motivated kitchen team, and carefully orchestrated to provide the best service to our customers who are our priority. We will have at least one manager on duty at all times. Our hours are Sunday thru Thursday 11 am. to 10 pm. Friday and Saturday 11 am. to 11 pm. Take out available during store hours. Delivery hours are 4 pm to closing everyday we are open. We will offer delivery all day on Saturday and Sunday and some holidays.

4.0 Market Analysis Summary

Ohno is one of the fastest growing cities in America with Nevada being voted the best small business state in the country. Ohno is a community diverse in the arts and culture. We have a strong labor market, low taxes, affordable housing, and natural amenities making Ohno an attractive place to live and do business. The greater Ohno metropolitan area population has grown one third through the last decade and is projected to grow 11.4% in the next five years. The median age is 36 years old with household incomes averaging $65,895. With a strong local economy we have a population with disposable cash for dining and entertainment.

According to the Nevada Restaurant Association, Nevada restaurants are expected to lead the nation in sales growth at 7.6%. Nevada is also the fastest growing state in the union.

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4.1 Market Segmentation

4 Moons target market is a three mile radius of site location. Within the three mile operating radius is a population of 121,705. The total number of households in this area is 48,839 with an average income of $58,197. This area is densely populated, and a desirable part of town in which to live. It is an under-served portion of town, especially to the west up to the Caughlin Ranch area. It is on one of the most traveled corridors in Ohno, Blue Plum Lane. Located near two of Ohno's most popular malls, Parklane and Shopper's Square. Our target market includes adults 20 to 54 years old who socialize and have families. Children are a big part of our market, at a third of the population is this area. Ages 4 to 19 prefer pizza over any fast food and often influence family dining decisions. According to one study, 93% of the U.S. population eats pizza. If we sold one pizza per month with an average of $17.00 per household, we would generate $721,141 in one month. This illustrates that with effective marketing, superior product, and proper management we will reach and exceed our projected sales goals.

In this area we have some of the best schools. 4 Moons Pizzerias provides support for local area school groups and sports teams, as well as local church groups. We will be involved through providing sponsorships, discounts, and donations.

Table: Market Analysis

Market Analysis

2005 2006 2007 2008 2009

Potential Customers Growth CAGR

Ages 0-19 (preferred fast food) 4% 30,426 31,643 32,909 34,225 35,594 4.00%

Ages 20-54 (w/disposable cash) 4% 61,583 64,046 66,608 69,272 72,043 4.00%

Over 55 3% 26,775 27,685 28,626 29,599 30,605 3.40%

Total 3.87% 118,784 123,374 128,143 133,096 138,242 3.87%

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4.2 Target Market Segment Strategy

We haven't ruled any one group or class out in our target market area. Just about everyone eats pizza. Most residents in this area have busy schedules, and find value in exceptional and timely service, as well as mouth watering, delightful food. We believe most everyone will appreciate our value based menu and family atmosphere. We have a strong commitment to community involvement including sponsorship for school/group teams. We strongly believe we will overcome any competition in our area. The local competition includes Sticky Paws Pizza, Damynos, Gridlow's Pizza, Hoopla Take-and-Bake, Clodhopper's, and Little Sayzar. Most of these are at least two miles from our location and are no competition to our concepts, ideals, fresh products, and welcoming service.

4.3 Service Business Analysis

Pizza Statistics:

• Represent 17% of all restaurants.• Americans eat approximately 100 acres of pizza a day. • Pizza is a $32+ billion per year industry with continuing overall restaurant growth.• Accounts for 10% of all food service sales.• 93% of Americans eat pizza at least once a month.• 67% of Americans order pizza for a casual evening with friends.• Children between 3-11 prefer pizza over all other food groups.

4.3.1 Competition and Buying Patterns

4 Moons Pizzerias are competitive in the mid price point, fast casual dining market. With an average ticket of $17.00, we are priced above Hoopla Take-and-Bake and Damyno but below Squaretable.

Quality, Quick, and Simple is the goal of 4 Moons Pizzerias. The customers are provided with the highest quality product. Store design provides a warm and friendly environment for all.

5.0 Strategy and Implementation Summary

Emphasize serviceWe will differentiate ourselves with SERVICE! We will establish our business offering as a clear and viable alternative for our target market.

Build a relationship-oriented businessBuild long-term relationships with customers, not single-visit deals. Become their restaurant and destination of choice. Make them understand the value of the relationship. Focus on target marketsWe need to focus our offerings on specific population groups as the key market segment we should own. We do not want to compete for the buyers who go to "fast food" or "take and bake" types of restaurants. We definitely want to be able to sell to smart, quality conscious customers.

Utilize the various skills of our Managing Owners and learn through the extensive training program provided by Franchisor.

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5.1 Competitive Edge

Clearly our competitive edge will be our customer service experience and management approach. Our smiling, unassuming, and good natured approach to all of our customers will be evident, and highly appreciated.

We will constantly monitor our product to ensure quality food and beverage at all times. Our recipes are delicious, made fresh daily, and our toppings go all the way to the edge of the pizza crust.

5.2 Marketing Strategy

We will start our marketing during the construction phase. Our main factor in success is simply that a person can enjoy a good pizza, fast service, and friendly familiar faces.

We will all be involved in Sales and Marketing. We will gather information about the neighborhoods, use our POS System to track top sellers and gather a customer base for marketing offers.

• Kids school tours• Gift Certificate Program• Phone book advertisement• Coupons• Door hangers• Sporting events for schools and group events• Eye catching signage• Excellent service and high quality food• Word of mouth

5.3 Sales Strategy

The marketing strategy discussed previously in this business plan will generate the desired sales.

We require our staff to have a thorough and comprehensive understanding of the menus, ingredients and methods of preparation of all of our foods. We train our staff to always describe and recommend items, even to regular customers, and to always up-sell. The key to our employee's success in up-selling is the realization that it almost always brings in better tips because the checks are higher.

We will emphasize service to differentiate ourselves. We will establish our business offerings as a clear and viable alternative for our target market, from the scores of "slow delivery", "frozen dough", and "your average" pizza chains.

We will build long-term relationships with our customers, becoming their destination of choice for delivery, take out, and dine in. We will sell ourselves as the best neighborhood and community pizzeria.

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5.3.1 Sales Forecast

We are forecasting sales of approximately $677,000 in our first fiscal year (May 2005 to April 2006) with an opening date of mid-May 2005. We foresee sales increasing at .5% monthly, an overall yearly rate of 6% per year. Our forecast is conservative and is based on an average of $17.00 average per order.

We are convinced that our business will increase with time. We have a strong management team who will be on property daily to monitor daily operations. We will constantly watch food quality, customer service, and costs.

Table: Sales Forecast

Sales Forecast

FY 2006 FY 2007 FY 2008

Sales

Total Restaurant Sales $677,297 $717,935 $761,011

Other $0 $0 $0

Total Sales $677,297 $717,935 $761,011

Direct Cost of Sales FY 2006 FY 2007 FY 2008

Cost of Sales $135,461 $143,590 $152,206

Other $0 $0 $0

Subtotal Direct Cost of Sales $135,461 $143,590 $152,206

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6.0 Management Summary

4 Moons consists of four members with an equal concern in our franchise. We will owner operate our pizzeria daily. We will keep our starting salaries low to keep labor costs down. Each member contributes with a generalized assignment as well as being trained in all restaurant operations, including making pizza, working the counter, and delivering pizza. We are an extremely experienced, and well balanced team.

• Please see our attached resumes for a precise summary.*

Carol Mittani will be General Manager working every day to insure success. Steve Solutrian, Diane Solutrian, and Rikard Mittani will be on site various hours, and during peak dinner hours to help with general operational tasks, plus opening to closing hours on the weekend.

* Confidential and proprietary information omitted from this sample plan.

6.1 Personnel Plan

We plan to have a part-time staff to include pizza makers, delivery drivers, and counter persons. We are planning on a staff of 10 employees to come on at peak business levels.

Our first month will have a higher labor rate due to training, pre-opening preparation and grand opening labor.

We have forecasted labor at 18% of gross sales. We will strive to keep our payroll at 18% or lower.

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Table: Personnel

Personnel Plan

FY 2006 FY 2007 FY 2008

Wages $126,738 $129,228 $136,982

Other $0 $0 $0

Total People 14 14 14

Total Payroll $126,738 $129,228 $136,982

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7.0 Financial Plan

Our main concerns will be aggressive time management to keep labor costs under control. Proper purchasing, food preparation and handling, and control of cheese consumption to keep food costs down. Growth will be sustained through increased sales.

7.1 Start-up Funding

Our start-up figures are approximate costs for start-up of a 4 Moons Pizzeria franchise as prescribed by the Franchisor.

4 Moons has $160,000 initial investment, $25,000 of which will cover the franchise fee.

Our estimated start up is $505,000. We are seeking an SBA Loan in the amount of $345,000 (see Long term liability line).

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $266,207

Start-up Assets to Fund $238,793

Total Funding Required $505,000

Assets

Non-cash Assets from Start-up $151,507

Cash Requirements from Start-up $87,286

Additional Cash Raised $0

Cash Balance on Starting Date $87,286

Total Assets $238,793

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabil ities $345,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabil ities (interest-free) $0

Total Liabil ities $345,000

Capital

Planned Investment

Solutrian, Steve and Diane $75,000

Mittani, Rikard and Carol $75,000

Additional Investment Requirement $10,000

Total Planned Investment $160,000

Loss at Start-up (Start-up Expenses) ($266,207)

Total Capital ($106,207)

Total Capital and Liabil ities $238,793

Total Funding $505,000

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7.2 Important Assumptions

We are projecting profit based on the performance of other franchises and our own judgement based on the following:

• We assume by using marketing strategies, sales strategies, good customer relationships, fresh food, and good management practices, we will succeed.

• In order to meet the sales goal in the first year, open for at least 360 days, we would have to sell 111 checks each day with a $17 per check average.

• Our sales each day should reach an minimum average of $1,881.43.• Our forecast is based on an average. Some months will increase and others decrease. We do

not predict any major decreases in sales, as Ohno area restaurants are busy all year round.

Table: General Assumptions

General Assumptions

FY 2006 FY 2007 FY 2008

Plan Month 1 2 3

Current Interest Rate 0.00% 0.00% 0.00%

Long-term Interest Rate 7.00% 7.00% 7.00%

Tax Rate 30.00% 30.00% 30.00%

Other 0 0 0

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7.3 Break-even Analysis

Break-even based on fixed costs including rent, insurance, maintenance, investor note, and pre-opening amortization. Additionally, controllables such as service labor, kitchen labor, management labor, excess rent, advertising, royalty, and legal/professional fees are included.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $22,254

Assumptions:

Average Percent Variable Cost 20%

Estimated Monthly Fixed Cost $17,804

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7.4 Projected Profit and Loss

As the Profit and Loss table shows, the company expects to continue its steady growth in profitability over the next three years. We predicted a conservative 6% per year increase in sales.

The first month may have higher payroll due to employee training and restaurant set up.

Our operating expenses include rent at $4,242 estimate per month, royalty fees of 5% of gross sales, equipment rental and repair, utilities projected at 11% of gross sales, administrative charges including PC charges, cleaning supplies, payroll charges, and office supplies.

Marketing fees are 4% of gross sales per month.

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Table: Profit and Loss

Pro Forma Profit and Loss

FY 2006 FY 2007 FY 2008

Sales $677,297 $717,935 $761,011

Direct Cost of Sales $135,461 $143,590 $152,206

Other Costs of Sales $0 $0 $0

Total Cost of Sales $135,461 $143,590 $152,206

Gross Margin $541,836 $574,345 $608,805

Gross Margin % 80.00% 80.00% 80.00%

Expenses

Payroll $126,738 $129,228 $136,982

Marketing/Promotion $0 $0 $0

Depreciation $30,000 $30,000 $30,000

Rent $50,904 $50,904 $52,431

Royalty fees $0 $0 $0

Equip rent/repair $3,000 $5,400 $5,400

Util ities $0 $0 $0

Admin charges $3,000 $3,000 $3,000

Total Operating Expenses $213,642 $218,532 $227,813

Profit Before Interest and Taxes $328,194 $355,813 $380,992

EBITDA $358,194 $385,813 $410,992

Interest Expense $23,367 $21,648 $19,738

Taxes Incurred $91,448 $100,249 $108,376

Net Profit $213,378 $233,915 $252,878

Net Profit/Sales 31.50% 32.58% 33.23%

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7.5 Projected Cash Flow

The cash flow depends on assumptions for good daily operational management, good traffic counts in the restaurant, inventory turnover, payment days, and accounts receivable management. We do not predict any new financing until we open our second franchise.

Principal amounts are based on a loan of $345,000 with a 10 year SBA Loan at 7% interest.

Table: Cash Flow

Pro Forma Cash Flow

FY 2006 FY 2007 FY 2008

Cash Received

Cash from Operations

Cash Sales $677,297 $717,935 $761,011

Subtotal Cash from Operations $677,297 $717,935 $761,011

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0

New Long-term Liabil ities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $677,297 $717,935 $761,011

Expenditures FY 2006 FY 2007 FY 2008

Expenditures from Operations

Cash Spending $126,738 $129,228 $136,982

Bill Payments $276,887 $324,767 $340,189

Subtotal Spent on Operations $403,625 $453,995 $477,171

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabil ities Principal Repayment $22,576 $26,332 $28,237

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $426,201 $480,327 $505,408

Net Cash Flow $251,096 $237,608 $255,603

Cash Balance $338,382 $575,990 $831,592

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7.6 Projected Balance Sheet

The balance sheet is quite solid. We do not project any real trouble meeting our debt obligations--as long as we can achieve our specific sales objectives.

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2006 FY 2007 FY 2008

Assets

Current Assets

Cash $338,382 $575,990 $831,592

Inventory $6,044 $6,407 $6,791

Other Current Assets $41,775 $41,775 $41,775

Total Current Assets $386,201 $624,171 $880,159

Long-term Assets

Long-term Assets $99,732 $99,732 $99,732

Accumulated Depreciation $30,000 $60,000 $90,000

Total Long-term Assets $69,732 $39,732 $9,732

Total Assets $455,933 $663,903 $889,891

Liabilities and Capital FY 2006 FY 2007 FY 2008

Current Liabil ities

Accounts Payable $26,338 $26,725 $28,071

Current Borrowing $0 $0 $0

Other Current Liabil ities $0 $0 $0

Subtotal Current Liabil ities $26,338 $26,725 $28,071

Long-term Liabil ities $322,424 $296,092 $267,855

Total Liabil ities $348,762 $322,817 $295,926

Paid-in Capital $160,000 $160,000 $160,000

Retained Earnings ($266,207) ($52,829) $181,086

Earnings $213,378 $233,915 $252,878

Total Capital $107,171 $341,086 $593,964

Total Liabil ities and Capital $455,933 $663,903 $889,891

Net Worth $107,171 $341,086 $593,964

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7.7 Business Ratios

The company's projected business ratios are provided in the following table. The final column, Industry Profile, shows ratios for the "Pizza Restaurant Industry", as determined by the Standard Industry Classification 5812.0600 with annual sales of $500,000 to $999,000.

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Table: Ratios

Ratio Analysis

FY 2006 FY 2007 FY 2008 Industry Profile

Sales Growth 0.00% 6.00% 6.00% 5.24%

Percent of Total Assets

Inventory 1.33% 0.97% 0.76% 4.34%

Other Current Assets 9.16% 6.29% 4.69% 35.11%

Total Current Assets 84.71% 94.02% 98.91% 43.74%

Long-term Assets 15.29% 5.98% 1.09% 56.26%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabil ities 5.78% 4.03% 3.15% 18.93%

Long-term Liabil ities 70.72% 44.60% 30.10% 25.48%

Total Liabilities 76.49% 48.62% 33.25% 44.41%

Net Worth 23.51% 51.38% 66.75% 55.59%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 80.00% 80.00% 80.00% 61.91%

Selling, General & Administrative Expenses 48.50% 47.42% 46.77% 39.08%

Advertising Expenses 4.43% 0.00% 0.00% 2.55%

Profit Before Interest and Taxes 48.46% 49.56% 50.06% 1.38%

Main Ratios

Current 14.66 23.36 31.35 1.14

Quick 14.43 23.12 31.11 0.79

Total Debt to Total Assets 76.49% 48.62% 33.25% 49.97%

Pre-tax Return on Net Worth 284.43% 97.97% 60.82% 3.97%

Pre-tax Return on Assets 66.86% 50.33% 40.60% 7.93%

Additional Ratios FY 2006 FY 2007 FY 2008

Net Profit Margin 31.50% 32.58% 33.23% n.a

Return on Equity 199.10% 68.58% 42.57% n.a

Activity Ratios

Inventory Turnover 23.52 23.07 23.07 n.a

Accounts Payable Turnover 11.51 12.17 12.17 n.a

Payment Days 27 30 29 n.a

Total Asset Turnover 1.49 1.08 0.86 n.a

Debt Ratios

Debt to Net Worth 3.25 0.95 0.50 n.a

Current Liab. to Liab. 0.08 0.08 0.09 n.a

Liquidity Ratios

Net Working Capital $359,863 $597,446 $852,087 n.a

Interest Coverage 14.04 16.44 19.30 n.a

Additional Ratios

Assets to Sales 0.67 0.92 1.17 n.a

Current Debt/Total Assets 6% 4% 3% n.a

Acid Test 14.43 23.12 31.11 n.a

Sales/Net Worth 6.32 2.10 1.28 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Page 1

Table: Sales Forecast

Sales Forecast

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Sales

Total Restaurant Sales 0% $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Direct Cost of Sales May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Appendix

Page 2

Table: Personnel

Personnel Plan


Wages 18% $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879

Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total People 14 14 14 14 14 14 14 14 14 14 14 14

Total Payroll $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879

Appendix

Page 3

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Direct Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Gross Margin $23,000 $46,000 $46,231 $46,460 $46,693 $46,926 $47,161 $47,397 $47,633 $47,872 $48,111 $48,352

Gross Margin % 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%

Expenses

Payroll $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879

Marketing/Promotion 4% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

Rent $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242

Royalty fees 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Equip rent/repair $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Utilities 11% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Admin charges $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Total Operating Expenses $17,242 $17,592 $17,644 $17,696 $17,748 $17,800 $17,853 $17,906 $17,960 $18,013 $18,067 $18,121

Profit Before Interest and Taxes $5,758 $28,408 $28,587 $28,764 $28,945 $29,126 $29,308 $29,491 $29,673 $29,859 $30,044 $30,231

EBITDA $8,258 $30,908 $31,087 $31,264 $31,445 $31,626 $31,808 $31,991 $32,173 $32,359 $32,544 $32,731

Interest Expense $2,013 $2,001 $1,989 $1,977 $1,966 $1,954 $1,942 $1,930 $1,918 $1,905 $1,893 $1,881

Taxes Incurred $1,124 $7,922 $7,979 $8,036 $8,094 $8,152 $8,210 $8,268 $8,327 $8,386 $8,445 $8,505

Net Profit $2,622 $18,485 $18,619 $18,751 $18,886 $19,020 $19,156 $19,293 $19,429 $19,567 $19,706 $19,845

Net Profit/Sales 9.12% 32.15% 32.22% 32.29% 32.36% 32.43% 32.49% 32.56% 32.63% 32.70% 32.77% 32.83%

Appendix

Page 4

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Subtotal Cash from Operations $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Expenditures May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Expenditures from Operations

Cash Spending $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879

Bill Payments $263 $8,538 $27,619 $26,300 $26,404 $26,506 $26,612 $26,717 $26,822 $26,929 $27,034 $27,142

Subtotal Spent on Operations $10,263 $18,888 $38,021 $36,753 $36,910 $37,065 $37,224 $37,382 $37,539 $37,700 $37,860 $38,021

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $0 $1,993 $2,005 $2,017 $2,028 $2,040 $2,052 $2,064 $2,076 $2,088 $2,100 $2,113

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $10,263 $20,881 $40,026 $38,770 $38,938 $39,105 $39,276 $39,446 $39,615 $39,788 $39,960 $40,134

Net Cash Flow $18,487 $36,619 $17,762 $19,306 $19,428 $19,553 $19,676 $19,800 $19,927 $20,052 $20,179 $20,306

Cash Balance $105,773 $142,393 $160,154 $179,460 $198,888 $218,441 $238,117 $257,918 $277,845 $297,897 $318,076 $338,382

Appendix

Page 5

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $87,286 $105,773 $142,393 $160,154 $179,460 $198,888 $218,441 $238,117 $257,918 $277,845 $297,897 $318,076 $338,382

Inventory $10,000 $4,250 $5,750 $5,779 $5,808 $5,837 $5,866 $5,896 $5,925 $5,955 $5,984 $6,014 $6,044

Other Current Assets $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775

Total Current Assets $139,061 $151,798 $189,918 $207,708 $227,043 $246,499 $266,082 $285,788 $305,617 $325,574 $345,656 $365,865 $386,201

Long-term Assets

Long-term Assets $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732

Accumulated Depreciation $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 $27,500 $30,000

Total Long-term Assets $99,732 $97,232 $94,732 $92,232 $89,732 $87,232 $84,732 $82,232 $79,732 $77,232 $74,732 $72,232 $69,732

Total Assets $238,793 $249,030 $284,650 $299,940 $316,775 $333,731 $350,814 $368,020 $385,349 $402,806 $420,388 $438,097 $455,933

Liabilities and Capital May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Current Liabilities

Accounts Payable $0 $7,616 $26,743 $25,420 $25,521 $25,620 $25,722 $25,824 $25,924 $26,028 $26,130 $26,234 $26,338

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $0 $7,616 $26,743 $25,420 $25,521 $25,620 $25,722 $25,824 $25,924 $26,028 $26,130 $26,234 $26,338

Long-term Liabilities $345,000 $345,000 $343,007 $341,002 $338,985 $336,957 $334,917 $332,865 $330,801 $328,725 $326,637 $324,537 $322,424

Total Liabilities $345,000 $352,616 $369,750 $366,422 $364,506 $362,577 $360,639 $358,689 $356,725 $354,753 $352,767 $350,771 $348,762

Paid-in Capital $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000 $160,000

Retained Earnings ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207)

Earnings $0 $2,622 $21,107 $39,725 $58,476 $77,362 $96,382 $115,538 $134,831 $154,260 $173,828 $193,533 $213,378

Total Capital ($106,207) ($103,585) ($85,100) ($66,482) ($47,731) ($28,845) ($9,825) $9,331 $28,624 $48,053 $67,621 $87,326 $107,171

Total Liabilities and Capital $238,793 $249,030 $284,650 $299,940 $316,775 $333,731 $350,814 $368,020 $385,349 $402,806 $420,388 $438,097 $455,933

Net Worth ($106,207) ($103,585) ($85,100) ($66,482) ($47,731) ($28,845) ($9,825) $9,331 $28,624 $48,053 $67,621 $87,326 $107,171

Appendix

Page 6

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%

Tax Rate Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

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