“Pepper in Some Fun”

Prepared by Hammer Smash ConsultingNicky Cox

Gary HousemanTyrone 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

Back Entrance

Kitchen Office Mens Womens Bar Lounge Restaurant Hostess desk Entrance

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: ManagersGeneralManager

Front Manager

Kitchen Manager

Supervisors

Monday 10AM-7PM 9AM-6PM As needed for relief

Tuesday 10AM-7PM 9AM-6PM As needed for relief

Wednesday 10AM-7PM 6PM-12AM 9AM-6PM As needed for relief

Thursday 10AM-7PM 6PM-12AM 9AM-6PM As needed for relief

Friday 10AM-7PM 6PM-12AM 9AM-6PM As needed for relief

Saturday 6PM-12AM (1)10AM-7PM(2)6PM- 12AM

Sunday 6PM-12AM (1)10AM-7PM(2)6PM- 12AM

Capital Budget

Operating Expenses

Human Resources

General Manager

Dining Room Assistant Manager

Supervisors

Hostesses

Food Runners Servers

Kitchen Assistant Manager

Supervisors

Cooks Expos

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• Email 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?