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Franchise Sandwich Shop Business Plan
Start your own franchise sandwich shop business plan
Franchise Sub Shop
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
The purpose of this business plan is to secure additional, long-term funding to open a QSR (Quick Service Retail) franchise in Ashland, Oregon. The owners of the company are willing to invest $30,000, and assume over $110,000 in short-term liability to secure the funding for inventory, and early operations. The SBA 504 loan we seek is in the amount of $200,000, and if approved, will be amortized to 10 years.
The franchiser, “The Sub Shop Corp.,” is one of the fastest growing franchises in North America. Sales last year topped $800,000,000. The chain is positioned somewhere between traditional fast food restaurants, and sit-down restaurants. This segment of the market is attuned to the health benefits of their eating habits, are more conscious of their buying habits than the general population, and more importantly, they have higher incomes and are willing to pay more for a better fast food choice. Our goal is to be that choice in the Ashland Metro area.
To succeed with our goal, and to encourage a healthy lifestyle, we will sponsor local sporting events, and give 3% of profits to local charities. We will build roots into the community. We will also market our products with local businesses, the famous Shakespearean Festival, to local hotels, and offer catering services through local party supply stores and through close ties to local hotel managers and executives.
Our primary goal for this plan is that it help us secure this $200,000 SBA loan. Once we have done that, our goal will be to build value for our constituents, ourselves, our employees, our customers, and the community. We see these goals as being consistent with the goals the SBA expects of itself and its guarantors.
1.1 Objectives
Our first objective is to open the Franchise restaurant four months from the day that our site is confirmed by the realtor. Our site was confirmed in April, therefore our goal is to be up and running by August. Our P&L and Balance Sheet all begin in August. Start-up costs between April and August may be found in the Start-up Summary Section.
The Sub Shop will turn a profit by the beginning of our second fiscal year of operations.
We will pay down our $200,000 SBA loan to $180,000 by the end of year one.
Repeat customers will constitute 70% of our overall business by the end of year one. We will track customer habits and loyalty through a local marketing research firm, and publish the results of these findings to our employees once a quarter.
Net Profit for year one will be 21%.
1.2 Mission
Our mission is to bring to market the tastiest and healthiest fast food in Ashland, at a slight cost premium over other fast food restaurants. Our high standards of quality and cleanliness will establish our reputation as the cleanest fast food restaurant in Ashland.
Our community is as important to us as making a profit. We will devote 2% of profits to a local women’s shelter, and 1% to a local environmental conservation fund. This company is founded on the concept that good works and good deeds not only serve the needs of the community, but will also keep our company healthy and committed to the success of its customers.
1.3 Keys to Success
The most important key to success is our location. It is very important that our location live up to our expectations, and is convenient to as many potential customers as possible. As stipulated by the franchise agreement, our “Type A – Profile 1” location must contain a minimum of 6,000 customers within a four block radius (or five minute walk time). The pedestrian traffic must be adequate and the lunch habits of the customers must be conducive to eating out.
Another key to success lies with our ability to execute our plan. If we neglect one or more aspects of our plan, whether that is our numbers, our employees, our cleaning and food standards, or our commitment to customers, we will not succeed and thrive.
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- Business Plans Handbook
- Business Plans - Volume 02
- Restaurant Franchise Business Plan
Restaurant Franchise
BUSINESS PLAN
STEPHENSON'S, INC., dba REUBEN'S DELI
413 S. Kraut Ln. Akron, OH 43905
Stephenson's, Inc. operates Reuben's Deli, a franchise delicatessen. This business plan features a discussion of factors unique to a franchise, such as the history of its performance in other areas, the applicability of the concept in the new area, special trademark and image issues, and the advantages of a franchise as opposed to an independently-owned restaurant.
RISK FACTORS
Company status, proprietary features, community benefits, the product, competition, planned development, sales and advertising programs, management duties and responsibilities, financial estimates, the company.
Stephenson's, Inc. was formed as a Delaware Corporation in July of 1995. The Company was formed to establish operating Reuben's Deli restaurants in Akron, OH. The Company will develop this concept, which currently has a time-tested, proven market acceptance of its food and beverage group(s). In addition to other considerations, the Company in its evaluations elected to execute this concept based upon the simplicity of the concept overall, the training by the Franchisor, the support offered by the local area developer group, and the ease and costs of entry and the likelihood of success at the store level under the various market conditions and environments. Initial efforts in this development shall be primarily focused upon the commitment and execution of an initial Reuben's Restaurant located in the Akron, OH area. It is the intention of the company to establish its headquarters in Akron, OH during its first year of operation.
Company History
Stephenson's, Inc. was co-founded by Caren and Eddie Stephenson. Mrs. Stephenson acts as President and Mr. Stephenson acts as Executive Vice President. Both are Directors of the Company. The Company is a start-up situation, however, and it should be recognized that it also represents an extension of a successful 23 year-old chain of more than 400 operating restaurants. Further, the company will have very effective guidance provided by the local Area Developers who will be working day to day with the Company to help insure its success. The Area Developers are Mr. Wilson and Mr. Jones. Mr. Wilson has extensive experience in the food and beverage industry. Mr. Wilson was formerly with Wendy's International Inc. of Columbus, OH and worked for its chairman Mr. Dave Thomas for over five (5) years. He was also Co-Founder and President of Calibre Inc., a publicly held company in the business of building and operating various restaurant concepts. These concepts include Chuck E. Cheese Pizza Time Theaters, RAX Restaurants, and G.D. Ritzy's. In addition, Mr. Wilson began his restaurant career with his family as they owned and operated one of the first Kentucky Fried Chicken restaurants and a full-service family restaurant known as Wilson's Drive-In located in Lima, OH. Mr. Jones has over 15 years' experience in developing startup and ongoing businesses. Mr. Jones has worked closely with successful entrepreneurs, including the nationally recognized billionaire and insurance magnate Clement Stone; America's leading real estate educator and author, Dr. Albert J. Lowry; and others, including Charles J. Givens, ZigZiglar, and Mr. Bob Harrington (Chaplin of Bourbon Street). Mr. Jones spent six years doing national platform speaking engagements on investment strategies, business management, and motivational topics. He has extensive experience in formulating and executing start-up businesses for others as well as himself. He has spent the past eight years involved with law firms specializing in tax planning strategies to high net worth individuals and clients of these law firms. Additionally, Mr. Jones taught attorneys and CPAs methods of tax and estate planning with the use of both domestic and off-shore trusts.
Company Objectives
The Company's first priority is to establish its first operating Reuben's Deli restaurant. Prior to opening the first restaurant, the principals shall obtain complete training from both the parent company, Reuben's Inc. of Boise, Idaho, and the local Area Developer, Yukon, Inc. Second, it will continue to pursue sites for the future development of subsequent restaurants. The Company has entered into an Agreement with Reuben's Inc. to build and develop additional franchise units.
It is the long-term objective of the Company to obtain adequate financing for the project, identify sites, and develop successful Reuben's Deli restaurants. The selection of this specific concept was made as a result of the likelihood of success in a new business venture of this type. Significant risks that are usually inherent in start-up businesses are reasonably mitigated as a result of Reuben's history and track record. Reuben's Inc. has developed a 24-year track record of success and profitability with over 400 operating franchises. The Company believes that the timing of this sector of the food market is most desirable. Food industry experts agree that a specialty sandwich with unique flavors offered at competitive prices will be the fastest growing segment for the next ten (10) years. However, in all events, there are certain risks that need to be addressed appropriately since the Company is directly competing for transactions with other existing restaurant chains as well as independent operations.
Operating History
Stephenson's, Inc. is in its first year of operation. It has located and established its headquarters in Akron, OH. The Company has submitted a lease proposal on a site located at_____________________. Further consideration is under evaluation for a site in___________, OH. It is anticipated that construction and completion of the initial company store shall be not later than_______________. Stephenson's, Inc. will expedite additional efforts during 1995 and into 1996 to build and operate additional company-owned stores and increase the depth and strength of management of the company.
Dependence on Management
The success of the Company will depend on the ability of management to operate daily. The Company plans upon growing its base of management as needed and when it becomes financially feasible. There is no assurance that management can do this in a timely or profitable manner.
Competition
All aspects of the retail food industry are highly competitive, but the competition in the quick serve food segment is particularly intense. The Company will be competing with a large number of other quick serve food stores. Some of the competitors have greater financial resources and more established reputations that this company. However, the Reuben's chain does have a 24-year successful operating history.
Dependence on Company Support Personnel
The Company's ability to develop and manage franchises will require significant time commitments from management. The Company intends upon staffing two persons by the end of the second year to manage the franchise with its owners. The placement of these persons will be difficult in light of the competition. Therefore, no assurance can be given that the Company will attract or be able to retain qualified individuals to satisfy the Company's requirements for such personnel. In such an event, the management may need to continue to maintain and operate the stores and their growth.
Dependence on Manufacturers and Suppliers
The Company has no production facilities for food and equipment and is dependent upon obtaining the services of outside manufacturers. Although the Company anticipates that it will be able to purchase sufficient products, equipment, and agreements with approved manufacturers, no assurance can be given that the Company will be able to always obtain such products, equipment, or agreements.
The Company has entered its first full year of operations and has started to develop relationships with area professionals to advise the Company in the areas of Real Estate, Banking, Accounting, and Legal needs. Its activities include the establishment of initial store financing. The Company has also recently submitted a proposal to acquire a lease in Akron, OH. Upon obtaining a commitment for financing for its first store, the Company will then execute a Franchise Unit Development Agreement with Reuben's, Inc. Currently, the Company has executed a Unit Development Agreement with Reuben's and has paid $_____.00 in franchise fees to the franchisor. The Company anticipates building a minimum of_____units.
Capitalization
The Company is currently seeking to obtain a loan of $ 170,000 to develop the first store. The terms of that loan shall be determined when management has negotiated what is going to be realistic to offer based upon projected earnings. Further, the Company anticipates providing an additional amount of cash between $75,000 and $90,000 towards its first store development.
Use of Proceeds
The amounts set forth in this business plan represent the Company's present intentions with respect to promised expenditures. Actual expenditures may vary substantially, depending upon future developments such as marketing, sales activity, corporate opportunities, and certain other recognized or unforeseen factors. Any change either in the allocation of funds or in the order of priority will be at the discretion of the Company's Board of Directors.
The Company may utilize trade and other commercial credit, if available. Working capital, lines of credit, secured by orders and accounts receivable, will likely be used during the routine course of its business.
The Company and Reuben's Inc. intend to mutually protect all patents, trademarks and other proprietary rights to the extent such action is feasible. The packaged goods, advertising, logos, recipes, local promotions, and any other product, service or idea deemed proprietary will also be protected appropriately. The intent is to preserve the integrity of the concept and to hold the protected property to certain standards and monitor use of these trademarks as they are supposed to apply to certain promotions and products as directed by the parent company. The Company and Reuben's Inc. rely upon certain recipes and proprietary products to present a unique atmosphere, ambiance, aroma, food taste, and overall consistent presentation to the customer. Any representation of these items or trademarks should only be as directed by Reuben's Inc. and the Company as an area developer. The Company primarily relies upon the laws of unfair competition and confidentiality agreements to protect its designs and other proprietary information.
The Company believes it will be an asset within its development area as it will generate new job opportunities for the residents of the respective communities in which it builds stores. The Company plans to hire as many employees as possible from the local community residents for each store. It will also give the cities increased revenues through payroll and sales taxes and increased consumer spending by employing the local residents. The Company believes that as a franchise owner for Reuben's Inc., that Reuben's Deli will become a well-known brand name nationwide and create a company that the local communities will be proud to have. Further, Reuben's has established a tradition that the Company plans on supporting along with other area franchise owners and the Area Developers for the benefit of local charities. For the past several years Reuben's Inc. has sponsored a 5K race to benefit various charities by raising significant dollars through the participation of the public. It is noted to be one of the most successful 5K races in the U.S. Stephenson's Inc., in cooperation with other franchise owners plans on co-sponsoring this race in the greater Akron market.
The Company together with Reuben's Inc. is providing an opportunity designed to fulfill the needs of an active population who find themselves in a busy working environment with schedules that are pressing because of circumstances which cause them to have their time restrained for various reasons. Therefore, this population who appreciates a quality product at a fair price will use their disposable income to eat at a quick service restaurant offering outstanding customer service in an effort to obtain both convenience and entertainment. Reuben's Deli enjoys a base of customers that have traditionally developed during the past 24 years, into a heavy user profile (more than 4 visits per month). This allows for a solid customer base. Therefore a Reuben's franchise fulfills a need for a small business owner of a single unit or a larger business organization which would include multi-unit operations. The franchise provides a time-tested business opportunity with a successful track record and products proven to be widely accepted.
Customer Response
The Company has observed and spoken with customers of other Reuben's Deli franchise units who have indicated their overwhelming acceptance of the products in this market. Indications are strong that as the Reuben's system grows nationally and internationally, the recognition will continue to cause further interest in the concept. Many studies point out that if you' re interested in operating a restaurant your odds of success are greatly enhanced with a concept that has been in business for at least 10 years and offers a unique product. In fact, it has been statistically shown that the odds are that if you start your own restaurant without any history, it will fail 85% of the time, while if you develop afranchise with a proven track record, like Reuben's Deli, you will be successful 85% or more of the time. Reuben's Deli certainly is a proven entity. The customer responds for the following reasons:
The wide appeal and the quality of Reuben's Deli products. Reuben's enjoys one of the highest customer responses in the food industry today. The average customer visits a Reuben's Deli 4-6 times per month.
- The universal acceptance of the old and especially new restaurant designs.
- The affordable price of the products as compared to other competitive food operations.
- The cleanliness of the overall operation.
Any restaurant is certainly considered competition in this industry. However, the food segment that we are in, the specialty deli type sandwich is rapidly becoming the fastest growing segment in the food industry. Reuben's Deli and similar food operators in this category are showing impressive results as featured in various industry publications like "Restaurant News."
Competitive Advantage
The Reuben's restaurant concept has a 24-year operating history which gives it a vast amount of past operating history and proven stability. The products in a Reuben's Deli have stood the test of time. The quality is unequaled and truly unique and that is why so many franchise owners already operating in this system have experienced success. The new updated building layouts and designs, together with the quality of the product and expanded menu is encouraging a very high level of repeat business. The addition of many new store, approximately 15-20 per month, is creating an awareness of Reuben's Deli nationwide and will fuelits popularity through this growth. In 1993, system-widesalesexceeded$71,000,000.00, an increase of over 20% from the previous year. In 1994, sales reached in excess of $100,000,000.00 system-wide. Itis anticipated that by 1999, there will be in excess of 3800 stores producing almost two (2) billion in annual sales. The Area Developer program has further enhanced this growth and success of the nationwide development of the Reuben's Deli system due to the increase in support to the local franchise owners by their area developers.
Industry and Market Overview
The Reuben's Deli restaurant concept is involved in one of the largest dollar volume industries in the world. However, those who excel in this category are generously rewarded both personally and financially. The largest cross section of population in the world spends money daily in this industry and those trends are continuing to increase rapidly. Reuben's Deli has a 24-year operating history and has now entered the mature growth stage of their development. This is the time in the development history when restaurant chains historically experience explosive growth and effective market penetration. The markets are growing nationally and internationally, and the specialty sandwich segment is viewed by experts in the industry as the segment clearly offering the most dynamic opportunities. The blended flavors of the sandwich menu and the popular gourmet pizza products, together with the new flavored coffee program, have combined to attract industry attention. "Entrepreneur Magazine" again recently named the Reuben's Deli concept as the Number 1 franchise in the sandwiches, soups, and salads category, representing the second consecutive year that award has been won by Reuben's. This is an impressive list to be on at any level and to be named Number lisa tribute to the concept. Reuben's Inc. and Yukon, Inc. (Area Developers) have been the focus of several national and local periodicals.
Yukon, Inc., Area Developer, anticipates and estimates that the territories under their control for development will support over 667 Reuben's Deli restaurants. The minimum development contract demands that at least 317 stores be developed over the next five years. This growth is affected by seasonality, market share achieved, market trends, pricing strategies, and product line strategies. Management has determined that after evaluating all of these criteria and spending valuable due diligence time, that the growth in our respective areas will significantly enhance the credibility and visibility of Stephenson's, Inc. in its efforts to develop.
Stephenson's, Inc. plans on using several methods of local store marketing as suggested by the Reuben's, Inc. marketing department and the area developer. The primary method for obtaining sales is initially contacting surrounding businesses and residents and inviting them to visit the store through special local store promotions. Coupons, radio, and frequency cards will be utilized early as pre-opening sales tools. Reuben's has also contracted a number of national magazines and/or newspapers to continuously prepare and run advertising for exposure of the concept. Stephenson's, Inc. will contribute 1% of total gross store sales to the national marketing fund for the overall corporate wide system marketing program. Additionally, the Company will spend at least 3% annually of its gross revenues of Companyowned stores on local advertising and promotions and will participate with these funds in the area co-op programs. The Company will develop working relationships with various advertising agency's and will receive quality guidance from the co-op members and its area development company, Yukon, Inc., in choosing the most effective advertising.
The Company consists of a Board of Directors and two (2) full-time management employees including Mr. Eddie Stephenson and Mrs. Caren Stephenson who are also officers of the Company. The principals will be managers in these stores. The functions of managements are structured according to the operating requirements for the successful execution of the business. These functions include but are not limited to corporate strategic planning, sales and marketing, implementation and updates of operations, advertising and promotions. Additionally, management currently is responsible for the daily operations of Companyowned stores. Outside professional services will support the needs for legal and accounting functions. Also, the Company will utilize the services of a life insurance professional and an advertising and public relations firm based in the greater Akron, OH area.
Major Management Objectives
The Company has outlined as its 1995 major management objectives the following points in order to continue to successfully execute its business plan:
- Complete the Company's need for financing
- Locate, negotiate, obtain, develop, and open store #1
- Complete training in operations at Boise, Idaho, per Reuben's, Inc. requirement
- Increase the depth of knowledge in management of the Company organization
- Participate closely with Reuben's Inc. to further enhance the overall improvement of the Reuben's Deli concept
- Promote awareness of the Reuben's Deli in the local trade area through in-store promotions
- Select and hire quality employees who appropriately represent the image of the success of Reuben's Deli
- Operate a clean profitable store
Projected Statement of Earnings
For years ending December 31, 1996-1998
Projected Balance Sheet
Adjusted Projections: Cash Flow Only
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Restaurant business plan example.
Posted : September 6, 2022
Category : How To
Making a business plan is important no matter what industry you’re in. If you’re opening a restaurant, your business plan needs to reflect the unique needs and services that your restaurant provides. This guide will walk you through the process of writing a business plan if you’re starting a business as a restaurant owner.
Executive Summary
Every business plan should begin with an executive summary, and a restaurant is no different. This section should provide a high-level description of your restaurant, its services, and your overall goals. Aim for around 500 words or less since you’ll want this section to be an easy read for lenders, investors, and potential business partners.
Restaurant Description
This section is really where your restaurant business plan truly stands out from other businesses. For starters, you’ll include your business name and geographic location, but you’ll also want to cover items such as:
- Restaurant size and seating capacity
- Service style (casual dining, fine dining, counter, drive-thru, etc.)
- Operating hours
- Style of cuisine (American, Italian, Asian fusion, etc.)
- Ambiance and atmosphere (décor, music, etc.)
You might also include any unique selling points that can add to your business. For example, if you’re located near a business complex or college, this may give you a greater chance of doing business during lunch hours.
Sample Menu
When making a business plan for other industries, it’s usually common to include product descriptions. The same is true for a restaurant, though this means creating a sample menu to help others understand what you’re selling.
Your sample menu should abide by several considerations, such as:
- Tailoring your design and descriptions to your customer base
- Including descriptions that capture what the item is
- Using the same branding as the rest of your restaurant
You might also use call-out boxes or other design features to highlight unique menu items or direct attention to high-revenue items that can help expand your business.
Target Market Analysis
If you’re starting a business for the first time, you’ll need to understand who you’re trying to reach. This section should include some information about your target market. Think through questions like:
- What type of diner would your restaurant attract?
- Are there any trends related to your type of restaurant or cuisine?
- How is your restaurant different from others in your area?
If your restaurant occupies a specific niche, it might be helpful to talk about how you intend to capitalize on these trends.
Marketing Strategy
Next, you’ll discuss your marketing strategy. For restaurants, this might include digital marketing as well as distributing your menu through a direct mail campaign.
Make sure your marketing strategy matches your restaurant brand and that you lead your customers to actions that fit your dining options. For example, you might use digital marketing tools that prompt viewers to place a to-go order online or direct them to the reservations page of a fine-dining restaurant.
Chefs and Managers
A restaurant business plan should communicate who’s in charge. This approach means explaining the credentials of the business owner (or owners in the event of a partnership).
If your restaurant is tailored around the culinary contributions of a unique chef, then you’ll want to include their credentials when making a business plan. What is their background, and what is their specialty? These features can add value to your restaurant and can give you a greater sense of legitimacy.
Financial Projections
When you’re first starting a business, your financial projections won’t be much more than an educated guess. And that’s okay. At the very least, make sure that you tabulate your anticipated costs, such as supplies, payroll, equipment, and commercial real estate.
Your financial projections should aim to cover these costs and develop a plan for generating profits within the course of business.
Financial Requests
The chances are that you’ll need additional funding to get your restaurant off the ground. This section is particularly important if you’re presenting your business plan to a lender or investor. Make sure to include a specific number, which will help others understand how much money you’ll need to open your doors.
Why Not Choose a Franchise?
Franchise owners also have to create business plans for their restaurants, but it’s a lot simpler when the franchisor guides the startup process.
Why not consider applying to become a franchise owner? Franchise Gator offers a locator tool that you can use to find opportunities near you . Use this tool today and get started as the owner of your own restaurant.
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Food Franchise Business Plan
Are you thinking of starting a food franchise business We have prepared a solid food franchise business plan sample that guides you on every stage of your business plan writing
If you are planning to start a new food franchise in your town, the first thing you will need is a business plan. Use our Subway – food franchise business plan example created using upmetrics business plan software to start writing your business plan in no time.
Before you start writing your business plan for your new food franchise business, spend as much time as you can reading through some examples of food and restaurant business plans .
Reading some sample business plans will give you a good idea of what you’re aiming for and also it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.
We have created this sample food franchise business plan for you to get a good idea about how a perfect food franchise business plan should look like and what details you will need to include in your stunning business plan.
Food Franchise Business Plan Outline
This is the standard food franchise business plan outline which will cover all important sections that you should include in your business plan.
- Introduction
- A BON Fide Enterprise
- Marginal Enterprise
- Irrevocable Commitment
- Doctors Associates, Inc.
- Company Values
- Business Model
- Keys to Success
- Summary Operating Forecast
- All Day Value — includes the famous $5 foot long and the $3 Six-Inch Select
- Featured Products
- All Sandwiches
- Fresh Fit Choices
- Fresh Fit For Kidz
- Sides, Drinks, Extras
- The Subway Old Cut
- The Subway PM Sub
- The WM Meer
- Demographic Trends
- Health Consciousness
- Convenience
- Lithe Rock, AR Demographics
- Operating Policies
- Operating Philosophy
- Strict Inventory Controls
- Purchasing Cost Controls
- Recipe a Portion Controls
- Sanitation a Food Handling
- Management’s Role
- Software a Systems
- Money a Profit Management
- Hiring the Best
- Training for Excellence
- Retaining the Best
- Staff Turnover / Training Costs
- Target Market
- Market Positioning a Branding
- National Advertising
- Local Marketing
- Grand Opening Budget
- Competitive Landscape
- Direct Competitors
- History and Structure
- Professional Services
- Tarek El Amarani
- Staffing a Compensation
- External Issues
- Pre-Ownership Expenses
- Revenue Assumptions
- Direct Costs
- Income Statement
- Balance Sheet
- Cash Flow Statement
After getting started with Upmetrics , you can copy this food franchise business plan example into your business plan and modify the required information and download your franchise business plan pdf and doc file . It’s the fastest and easiest way to start writing your business plan.
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How to Write a Restaurant Business Plan in 2023 (Step by Step Guide with Templates)
Jan 31, 2023 6:30:00 AM
Have you decided to open a restaurant? Has it been something you've thought of doing for years and are finally in a position to make it happen?
Regardless of how much time you've spent conceptualizing your idea and researching the industry, without proper planning, your restaurant is doomed for failure.
That's where a restaurant business plan comes in. A restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations; from menu design, location, financials, employee training, and a lot more, and helps develop your restaurant ideas into a reality.
Read on for everything you need to know about writing a restaurant business plan along with samples and tips.
Why is a Restaurant Business Plan Important?
Many new restauranteurs fail to put together a well-thought-out restaurant business plan because the process can be a bit difficult and time-consuming. But without a proper restaurant business plan, you're shooting in the dark without an aim. It's unlikely that you would be able to secure an investor to help fund your restaurant dream without a proper plan. And even if you do, the lack of proper planning, regulations, and forecasts will set your restaurant up for failure.
Your restaurant business plan is what is going to map out how you plan on turning a profit from your business as well as where your restaurant fits into the saturated market and how you plan on standing out.
A little time and pain early on are worth the reward of a successful restaurant in the long run.
11 key steps a restaurant business plan should include
A good business plan varies from restaurant to restaurant and takes into account factors like style of restaurant, target market, location, etc. If you're new to the restaurant game, the idea of creating a business plan can be daunting. To help you get started, we have highlighted the key elements you need to include when writing a restaurant business plan.
Depending on who you are presenting your business plan to, you can change the order of the sections to reflect priority.
Here are the main components of a restaurant business plan
- Executive Summary
- Company Description
- Market Analysis
- Restaurant Design
- Market Overview
- External help
- Financial Analysis
1. Executive Summary
A restaurant business plan should always begin with an executive summary. An executive summary not only acts as the introduction to your business plan but also a summary of the entire idea.
The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.
Common elements of an executive summary include:
- Mission statement (learn more about how to write a good mission statement here )
- Proposed concept
- A brief look at potential costs
- Expected return on investments
An executive summary is imperative for those looking to get investors to fund their projects. Instead of having to comb through the entire restaurant business plan to get all the information, they can instead just look through the executive summary.
2. Company Description
This is the part of the restaurant business plan where you fully introduce the company. Start this section with the name of the restaurant you are opening along with the location, contacts, and other relevant information. Also include the owner’s details and a brief description of their experience.
The second part of the company description should highlight the legal standing of the restaurant and outline the restaurant’s short and long-term goals. Provide a brief market study showing that you understand the trends in the regional food industry and why the restaurant will succeed in this market.
3. Market Analysis
The market analysis portion of the restaurant business plan is typically divided into three parts.
3.1 Industry Analysis
What is your target market? What demographics will your restaurant cater to? This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.
3.2 Competition Analysis
It's easy to assume that everyone will visit your restaurant, so it is important to research your competition to make this a reality. What restaurants have already established a customer base in the area? Take note of everything from their prices, hours, and menu design to the restaurant interior. Then explain to your investors how your restaurant will be different.
3.3 Marketing Analysis
Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others? How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.
The most important element to launching your restaurant is the menu . Without it, your restaurant has nothing to serve. At this point, you probably don’t have a final version, but for a restaurant business plan, you should at least try to have a mock-up.
Add your logo to the mock-up and choose a design that you can see yourself actually using. If you are having trouble coming up with a menu design or don’t want to pay a designer, there are plenty of resources online to help.
The key element of your sample menu though should be pricing. Your prices should reflect the cost analysis you’ve done for investors. This will give them a better understanding of your restaurant’s target price point. You'll quickly see how important menu engineering can be, even early on.
5. Employees
The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant management team.
The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.
6. Restaurant Design
The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine. Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.
The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment.
7. Location
The location you end up choosing for your restaurant should definitely be in line with your target market. At this point, you might not have a precise location set aside, but you should have a few to choose from.
When describing potential locations to your investors, you want to include as much information as possible about each one and why it would be perfect for your restaurant. Mention everything from square footage to typical demographics.
8. Market Overview
The market overview section is heavily related to the market analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.
Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the restaurants that could prove to be competition and what your strategy is to set yourself apart.
9. Marketing
With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world. The marketing and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.
Read more: How to write a restaurant marketing plan from scratch
10. External Help
To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running. This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems . Explain to your investors the importance of each and what they will be doing for your restaurant.
11. Financial Analysis
The most important part of your restaurant business plan is the financial section . We would recommend hiring professional help for this given its importance. Hiring a trained accountant will not only help you get your financial estimates in order but also give you a realistic insight into owning a restaurant.
You should have some information prepared to make this step easier on the accountant. He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.
In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator.
Restaurant Business Plan Template
Ready to get started? Download our free restaurant business plan template to guide you through the process.
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Writing a restaurant business plan.
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Introduction
If you're considering opening a restaurant, your first step should be writing a business plan. A well-written business plan can help you raise money, manage your restaurant and succeed. Here's what you need to know about writing one:
Executive Summary
An executive summary is a short but powerful document that can help you to get your point across quickly and effectively. Although it is usually the first section of a business plan, it should be the last piece written. It should be one page at maximum and clearly describe your business plan's critical points in a way that makes sense to anyone who reads it. The purpose of an executive summary is to convince potential investors or lenders that they will profit from investing in your restaurant idea, so avoid unimportant details or lengthy descriptions of how great your food tastes.
An excellent way to write an executive summary is by starting with an introduction paragraph that summarizes what the rest of your plan contains—this helps readers understand why they should continue reading further into the document. Then go into discussing why this particular project is worthwhile; why people need it. How will it benefit them? Next comes some background information about yourself: include any relevant experience or education related to running this business. Finally, end with future goals: where do you see yourself after opening the shop?
Here are some items to include in your restaurant business plan:
Concept Validation and Business Model Testing
Before you launch your business, it's important to validate your concept and test the viability of your business model. You can do this by conducting market research, talking with potential customers, and interviewing industry experts with similar business experiences. You can also test the viability of your plan by completing an "experience economy" analysis. That is, looking at ways people enjoy spending money on experiences rather than goods (such as dining out). For example, if people value experiences over material goods, opening a restaurant may be a good idea!
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Best covid-19 travel insurance plans, labor costs and staffing plan.
Labor costs, including direct and indirect labor, are essential to your labor budget. Direct costs refer to wages paid directly to employees, while indirect expenses include benefits like healthcare coverage and payroll taxes. To calculate these figures, you'll need to estimate the number of full-time equivalents (FTE) positions you'll need and their average salaries. This calculation can be tricky because each restaurant has its unique staffing plan based on its size, location, cuisine type, and reputation among customers, not to mention any other factors that might affect staffing decisions (e.g., whether it's open 24/7).
The first step is deciding whether or not you want full-time staff or part-time workers who work only during peak times such as lunchtime rush hour or Friday night dinners out with friends at restaurants nearby yours. As tempting as it may seem, wait to write anything down until after reading through the following sections because several factors are explicitly related to determining how many people we'll need overall.
You want your menu to be focused and simple. Try to add only a few items, as too many menu items may confuse customers, making it difficult for them to choose what they want.
If there are any "signature" items on your menu, include them first when listing off your offerings so that people know what kind of food you serve before even stepping inside the restaurant. Also, incorporating local ingredients into these specialties will help build community spirit around supporting local businesses.
Site selection is a critical factor in your success. After conducting a comprehensive market study, the site selection is based on the data you discover to determine if your customers are in and frequent that area. David Simmonds, Founder and CEO of ResolutRE , a Commercial Real Estate firm in Austin, Texas, states: "More than ever, entrepreneurs opening a restaurant need to analyze what their own customers look like on paper (demographics, psychographics, etc.), so then when they are examining a market, they can find the highest concentration of their customers within that market. From that data, they are able to determine the number of restaurants that the market could support, and from there, create the blueprint for their expansion."
Your plan should describe your ideal location . Your chosen location must be close to your target market and similar businesses, such as restaurants or cafes. The site should also have high foot traffic and be accessible by car, bike, and public transportation. Simmonds goes on to say: "Analytics reinforces or disputes instincts. It is a necessary part of the expansion process, whether the restauranteur has 1 unit or 37.
Marketing Strategy
When developing your business plan, think about the marketing strategy you will use. Your plan should consider and explain the following marketing tactics:
- Advertising: You can use print or online ads on social media sites like Facebook and Instagram. Also, consider running commercials on local television stations.
- Public relations: This can include writing articles about your restaurant in local newspapers or magazines, hosting events at your restaurant (such as wine tastings), speaking at community events like Chamber of Commerce meetings with other business owners in the area, participating in charity events related to foodservice industries like Feeding America—the possibilities are endless! The idea is to get people talking about what makes YOU unique so they think of YOU first when ready for their next dine-out experience!
- Social media: Let's face it—most millennials don't even pick up the phone anymore; they prefer texting over talking face-to-face because it feels intimate somehow, and guess what? By interacting directly with customers through social media platforms like Facebook Messenger or WhatsApp (which allows users from all over the world access 24 hours per day, seven days per week), we can offer immediate customer service support during high-demand times such as weekend brunch hours without having employees sitting idle during slow periods throughout weekdays when traffic drops off significantly due the lack of demand generated elsewhere.
Profit and Return on Investment Analysis
- Profit is the difference between your sales revenue and your costs. To calculate it, you need to know the following:
- Sales revenue (how much money you expect to make from selling food)
- Cost of goods sold (the cost of ingredients and supplies)
- Other operating expenses (including labor, rent, and utilities)
The reader of your business plan should be able to find these numbers in your budgeting worksheet and financial projections spreadsheet.
Financial Plan
The financial plan is the most critical part of your business plan. It should clearly show how much money you need to start, run and grow your restaurant.
You will need to show a projected profit and loss statement. The projected profit and loss statement (P&L) shows how much revenue comes in, what expenses are incurred, and what profits are made over time. In addition, the P&L shows all revenue sources, including but not limited to sales of food/alcoholic beverages and income from private parties. It must also project all costs associated with operating the restaurant, such as Cost of Goods (raw materials) and salaries for employees - these include both front-of-house roles such as waiters or bartenders, as well as back-of-house roles like chefs who prepare food during off hours so it can be served fresh upon opening each day - cleaning supplies needed throughout each week, etc., depreciation costs associated with long term assets such as ovens that wear down over time and waste of unused food product.
Multi-Year Projections of Revenue and Costs
Accurate projections are the key to a successful business plan. They help you to understand how much money you will make and how much you will need to make it happen. Projections also help with understanding what your costs will be.
For example, if I were starting a restaurant today and wanted my business plan projections for opening day and going out one, three, and five years.
Then I would look at similar restaurants that serve similar foods, noting their prices, portion sizes, and any specialties they offer, such as breakfast all day or lunch specials every Friday during football season. This research of other restaurants will give you a basis for your projections. Include the documentation of this research in the narrative of the plan.
A Business Plan Is Your Road Map To Success.
A business plan can help you raise money by demonstrating that you have a viable idea for a restaurant. In addition, investors want to see that others are interested in investing in your vision, so they'll be more likely to give you money if they see other investors involved with it as well. An excellent example is when an investor wants to invest but only if another investor does first; this way, both parties feel comfortable investing because they know someone else believes in the project enough to put their own money into it too!
A well-written business plan helps manage restaurants by giving owners information about how much money will be coming in over time, so there aren't any surprises when bills come due every month - which could lead businesses into trouble if left unchecked."
This article has given some insights into how to write a business plan for opening a restaurant. Do your research and learn other aspects of good business plan writing. I know that it can be a lot of work, but I also know that the payoff is worth it. Not only will you have a better understanding of what it takes to open up shop and run it successfully but also potential investors will be more likely to fund your project if they see that you've done your research. And remember: don't be afraid to ask other restaurant owners for help or advice; many of them have been where you are now.
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Fast Food Restaurant Business Plan
Starting or growing a fast food business? Use this fast food restaurant business plan example as your guide to create your own custom plan. You can even download it for quick editing.
After all, it’s always easier to edit something that to write it from scratch. That’s why we provide this fast food business plan free for downloading. You can modify the concepts presented in this plan to fit your specific needs and goals.
Download this Fast Food Business Plan free for easy editing in Google Docs or Microsoft Word:
Table of Contents
1.0 Fast Food Business Plan – Executive Summary
1.1 company & industry.
Nudlez, a Washington Corporation, is in the fast-food service industry. The company has developed a unique business model that reduces overhead by utilizing mobile vending units as opposed to brick and mortar stores. This is a very popular alternative to dining in larger business centric cities.
1.2 PRODUCTS & SERVICES
Nudlez provides high quality, fast-served Asian-styled meals, based on a central theme of noodles. The meals cater for variety and are delivered fresh faster than other noodle-based products. The meals are provided to the consumer initially through mobile Noodle Vending Units (NVU’s), which provide widespread point of sale coverage. The NVU’s are state-of-the-art, complying with health regulations. The first trial NVU was tested in Seattle in July 20XX, receiving great response. The NVU will become a product in itself, as Nudlez expands rapidly through franchising. Nudlez is a globally transportable business.
1.3 MARKET ANALYSIS
Valued in 20XX at $105 billion, the domestic market for “fast” food is large and segmented, with Asian style foods representing 1 of the top 3 choices in Seattle at 35% of the market. Nudlez will initially target central business district (CBD) lunchtime crowds, where high-income earning but time-poor individuals are most greatly concentrated. Shopping malls, university campuses, weekend markets, and local business areas will then be targeted. Event catering and supermarket convenience foods will be markets that Nudlez then diversifies into.
1.4 STRATEGY & IMPLEMENTATION
Nudlez will build brand recognition through its Noodle Vending Units being placed strategically throughout large cities’ business districts. Once brand recognition has been achieved, catering services will be offered, and the Nudlez products will be available in supermarkets. Additionally, Nudlez offers franchise opportunities to help further expand its reach, along with adding an additional revenue stream.
1.5 MANAGEMENT
The owners have significant experience in: the hospitality industry, advertising, and business management. The founder previously owned two very successful Thai restaurants in Seattle but grew tired of paying exorbitant rent hoping customers would turn up each night. His Nudlez concept takes the product to the street!
1.6 FINANCIAL PLAN
Nudlez has strong financials, and is always cash flow positive. Revenues are projected to grow to nearly $58,000,000 by Year 5, with EBITDA totaling $15,000,000. An initial analysis indicates that only 100 meals per day per NVU must be sold to break even. The strong financial plan ensures that the company will be attractive as an acquisition for exit.
1.7 FUNDS REQUIRED & USE
The purpose of this business plan is to raise $1,500,000 from an investor, in the form of a convertible and redeemable note, providing a 32% compound annual return. Nudlez is committed to the rollout of its ‘wok-fresh’ fast food business in 20XX.
2.0 Company Summary
2.1 legal entity & ownership.
Nudlez is trademark registered. Nudlez Inc. was incorporated in the State of Washington in March 20XX. Nudlez is currently equally owned by Mr. Dan Billings and Mr. Bill Cook. They have already spent over $75,000 in direct costs of product testing and development, and will commit a further $200,000 in 20XX, prior to funds being required from the investor. Both owners will each hold two voting rights on the Board with the investor holding one.
2.2 HISTORY
After running two successful Thai restaurants in Seattle for five years, Dan Billings spent most of the past two years in Thailand looking at business opportunities. While living there he ate almost exclusively as the locals did, from street vendor food outlets. Not only was the food freshly cooked in front of him, but the visual entertainment combined to augment the vibrant street culture. His initial thoughts were, “this is what’s missing from our staid cities in the United States.” Using this as his motivator he began to realize that there were also major commercial benefits to running a fast-food network where the majority of outlets were not restricted to one location.
For a start, shop fronts in good locations are expensive. The key to making such a venture successful domestically would be to ensure that the vendor outlets are very hygienic, comply with health standards, serviced by an efficient re-supply network producing consistent meals, with professionalism and quality paramount. He spent considerable time designing a purpose built Noodle Vending Unit. He also moved back to Seattle and renewed his ties in the culinary community to elicit the design of fresh and tasty meals to be served from the NVU. The Nudlez brand was born! Realizing the opportunity to seize a market niche through rapid expansion, the inventor also joined forces with an experienced international business team to develop and implement that initiative.
2.3 FACILITIES & LOCATIONS
During the start-up phase of the business, food sales revenue will come from NVU lunchtime customers in busy Seattle CBD locations. A small office will be setup in Seattle that will serve as the headquarters of the company.
3.0 Products and Services
3.1 product description.
The principal product of Nudlez is fast-served, quality, Asian-styled individual meals. The meals are based on a central theme of noodles, but have a flexible degree of customization to suit the purchasers’ tastes. The second, but equally important supporting product, is the mobile cooking unit used to prepare the individual meals. This Noodle Vending Unit (NVU) has been specifically designed to produce the Nudlez meals in the shortest time possible. While Nudlez will own and operate some NVU’s, the bulk of the fleet will be purchased and operated by franchisees.
These two products symbiotically solidify the Nudlez brand name. Nudlez is a state-of-the-art stir-fry noodle street vending system. While Nudlez’s footprint in the three major metropolitan cities in Washington will be underpinned by the NVU fleet and a smaller number of strategically placed Nudlez stores, the aim in year-3 is to diversify the revenue stream by selling the meal product alone in supermarkets for home preparation and consumption.
3.2 FEATURES & BENEFITS
Fast & affordable meals.
The NVU operator cooks the meals in front of the customer within sixty seconds, using fresh ingredients. As implied by the Nudlez tagline ‘wok fresh’, each serving of noodles is a taste sensation, freshly cooked-to-order and served piping hot in a convenient cardboard pail. Customers are invited to create their own noodle dish following three easy steps: Step 1: Select Noodle Type; Step 2: Add Sauce; Step 3: Choose Protein. Compared to the meals offered by competitors, Nudlez offers a fresh, tasty, nutritious alternative. Nudlez may be slower than some fast food from the point of order, but it is significantly fresher, more nutritious, and almost 50% more profitable.
One secret to the speed of Nudlez meals is that the meats and vegetables are pre-blanched and hygienically sealed in the same pail that the customer eventually receives. The operator simply removes from the fridge, and combines with noodles and sauce in the wok.
Noodle Vending Unit
Each NVU is completely self-contained, mounted on wheels and totally mobile. It is delivered on-site each day by a custom designed mini-van and simply wheeled into position. Stabilizing legs are deployed, the roof pops up and it is ready to go! At the end of the day it is simply wheeled back into the mini-van and returned to base for cleaning and waste removal. Ensuring the speed of the NVU operation is the Nudle-Rac. The Nudle-Rac is essentially a lightweight grid that is packed in the meal production facility with the various meal options. The Nudle-Rac is self-leveling and designed to fit perfectly in the NVU’s fridge.
Each NVU cart is immaculately presented in stainless steel and branded in strong colorful graphics. At night the noodle stand benefits from its own internal lighting. Construction is of the highest quality kitchen-grade stainless steel. It is designed to be versatile for use in just about any place where it is legal to sell food from a temporary stall. In comparison to standard ‘caravan-type’ vendor units, the NVU has major advantages in that it is: cheaper to produce, smaller size for better site access, self-sustaining power (no mains required short-term), easily moved by one person, unique look, hygienic and cheap to service.
3.3 COMPETITION
The range of competitors spans the market dominants like McDonalds to sandwich and sushi bars to ‘vendor’ foods like kebabs. However, when looking for closer similarity to Nudlez’s offering, we arrive at the specialized noodle-based products provided by such companies as ‘Noodlist’. A storefront operation located close to Pioneer Square in Seattle, the meal variety at ‘Noodlist’ is slightly broader. However speed of preparation is significantly slower than Nudlez, necessitating the addition of standard pre-cooked, oily and somewhat bland Asian fare to satisfy the ‘time-poor’ consumers. It is only this time constraint that is satisfied though, as taste and nutrition are compromised. The lack of speed in the fresh cooked Asian fast food market is emphasized by another competitor, ‘Hot Wok’, offering noodle-based meals in the Sea-Tac International Airport, where a sign on the counter informs consumers that meals may take up to thirty minutes to prepare. A captive consumer group is not being exploited here. Nudlez will change that.
‘Wok in a Box’ is an Oregon competitor that intends to open stores in Washington beginning in 20XX. The company currently operates 16 stores in the Pacific Northwest. Market research indicates company revenue for 20XX reached $5 million, representing a growth rate of 78 percent over the prior year. This growth is encouraging to Nudlez, which through the use of its NVU’s and its other competitive advantages will gain broader exposure. The existence of such competitors makes Nudlez an attractive acquisition or merger proposition.
3.4 COMPETITIVE EDGE/BARRIERS TO ENTRY
- Unique modality of fast-food availability, with unmatched preparation times
- Lower capital costs and overheads and high margin unit sales through broad exposure.
- Healthy, fresh, fast, quality, price competitive alternative
- New funky, identifiable brand, professional approach and solid management
- Aimed at segment of large market not currently exploited by the competition
3.5 DEVELOPMENT
The founders of Nudlez have invested a total of $75,000 in development of the NVU, and plan to spend an additional $200,000 over the next year on development of the second generation NVU. The ‘Generation-2’ NVU is currently under design, maintaining versatility yet improving with the introduction of inventions such as the Nudle-Rac.
4.0 Market Analysis Summary
4.1 target market.
With Nudlez, the term “customer” holds two meanings; firstly as a reference to “consumers” who may purchase a meal from a Nudlez point of presence, and secondly as “entities” with an interest in owning a Nudlez franchise. The primary target “consumer” group for the first phase of Nudlez fits the profile of a medium to high-income earner, with a healthy and fresh lifestyle orientation. The first phase of the business plan is about growing brand awareness quickly with customers of this profile. Shortly after growing the brand awareness, as part of the Nudlez rapid growth plans, franchisee customers looking for a self-employment opportunity providing good income relative to the hours worked will be targeted. Institutions such as university campuses will also be targeted as potential franchisees.
The profile will then extend through catering to the customer who is looking for a relatively low cost, value-adding product to support private or corporate events. This customer will be served at both the supermarket (DIY) and event catering levels.
4.2 MARKET SIZE
With sales in excess of $105 billion, the market for fast food is substantial, and the opportunity to build and grow a new exciting product with a strong brand is real. Asian style food represented approximately 35% of this revenue. Although the market is mature with heavy buyer/seller saturation, it is heavily segmented on quality, style, modality and price, presenting opportunity for niche market products such as Nudlez. Customers’ perception of ‘healthier’ is an important value proposition. Nudlez provides this, with the added bonus of serving the meal quickly.
The idea that desirable food could be prepared in a quick fashion appeals to a sizeable portion of the market; those in tourism, people engaged in a commercial capacity, busy homemakers and students. These few examples are indicative of a large and growing collection of “time poor” individuals placing increasing value on every spare moment of their day. Nudlez has the ability to match the ravenous need for convenience with the utility that modern, fast paced lifestyles drive. Nudlez negates boundaries of culture, age and preference, through a daily mission to satiate appetites.
4.3 MARKET TRENDS
Today the contemporary food outlet must maintain its appeal within an increasingly health-conscious market. Worldwide the “diet” continues to gain momentum and this means that products with less appeal to the diet-conscious will suffer reduced success. Entrepreneurs continue to derive extraordinary profits from ‘health-conscious’ ventures, for example ‘Jamba Juice’ (Jamba Juice is a fruit-based snack e.g. smoothies and drinks, which offers a fresh and healthy alternative to the major players’ product. Jamba Juice expects $70 Million in revenue from its 150 stores in 20XX.) Nudlez is designed to make the most of the public’s increasing nutritional conscience.
The economic environment for the successful outlet will take into account the factors and conditions that influence the ability of its target market to afford its product. Consumers today, particularly in business-centric cites, have a relatively high disposable income. Nudlez will be priced competitively with existing alternatives and will strive to attract market share through product differentiation.
4.4 FAST FOOD RESTAURANT SWOT ANALYSIS
The following represents our strengths, weaknesses, opportunities and threats for this fast food business plan:
- Strong product supported by great tasking meals with a strong focus on quality, healthy and competitively priced meals in addition to the speed of producing meals
- Strong brand, which has been tested before full implementation. Emphasis on a fund brand culture
- Market conditions are favorable with Nudlez offering new niche spark in an otherwise static market
- Low development risk as the product currently exists
- Easy, low risk growth through short time to market and short time for NVU construction as well as low cost per unit
- Transferable business model as a result of similarities in trends and the US culture of street style food vending. Ability to capitalize on brand and concept with expansion through franchise and other market segments
- Low management risk due to experienced team and the strong diversification of skills and expertise = holistic results
- High gross margins on meal products, which can be maximized by negotiating bulk purchase agreements with wholesalers.
- Defendability of concept as the meal products cannot be patented; this needs to be addressed by building strong brand awareness and establishing copyright on total quality system. Focus also on rapid growth and securing prime sites in target markets
- NVU restocking logistics is being addressed through NVU design, which ensures breakeven results for a day’s trade without restocking. Central production facilities also being established to support restocking
- Site permits for street vending need to be established before implementation of NVU’s, but also private sites will be secured to reduce exposure to local government issues
- Product may be vulnerable to weaken over time, which can be minimized through product innovation and diversification
Opportunities
- Niche-specific opportunities through monopolizing niche market by building strong brand awareness and leading the street food vending culture through being vigilant with other vending business opportunities.
- Low restriction to NVU operating hours means there can be diversity of venues and access to a very diverse target customer group
- Capitalize on diversity of venues and consumer groups to promote and market expansion through event catering and franchise ownership
- International expansion to Europe, which has a strong culture for street food vending and pre-prepared meals. Target strategic partner for joint venture, master franchise or sale of Nudlez
- Local government regulations in relation to street vendors means permits secured have minimum life period, however change in this area is slow
- Vulnerability to imitation products from competitors will be reduced through rapid development of Nudlez products and brand.
- Short-term site permits means the Nudlez brand needs to be diversified through catering, franchise and supermarket placement
- Seasonal demand for NVU’s meaning inconsistent returns. This can be minimized through diversifying brand through catering, franchising and a supermarket product line.
5.0 Fast Food Business Plan Strategy & Implementation
5.1 philosophy.
“To forge a new, vibrant, high quality brand in the fast-food sector; to challenge the established market by offering a fresh, tasty and professional alternative; and to build a robust business model founded on high-yield, low capital outlay products.”
It is our vision that Nudlez will expand predominantly through franchising domestically and then to appropriate international markets. It will diversify through catering and product placement in supermarkets. The possibility of trade acquisition or merger also exists.
5.2 MARKETING STRATEGY
Given that the United States is positioned 1st in the top 10 global markets for weekly fast food consumption, the marketing strategy is based on penetrating the market rapidly. This will be achieved by placing the NVU’s in strategic locations where the likelihood of consuming a takeaway meal is extremely high. Expansion of numbers of NVU’s and stores through franchising will ensure that first mover advantage is optimized. The network is supported by an integrated total quality management system ensuring consistency, which will be leveraged in the marketing strategy. Capital outlay for franchisees will be low with owners earning more dollars per hour worked than other franchise options. Expected net profit after tax for franchisees is 20%.
5.3 SALES STRATEGY
The marketing objective of Nudlez is to position itself so that consumers of fast food are confident they are purchasing and consuming a healthy and fresh product, enhanced by the overall delivery experience. The marketing objectives are to:
- Rapidly establish a recognized brand through street vendor points of sale supported by a smaller number of strategically placed hardstand stores
- Position itself as a fresh, tasty and healthy alternative to traditional fast food
- Maintain high gross margins on meal products
- Capitalize on the brand through expansion using franchising and product diversification, which will include catering and supermarket placement
Nudlez’s initial strategy will be focused within Washington, commencing in Seattle then within 18 months expansion into Spokane and the Vancouver/Portland metropolis. Beginning with company owned NVU’s and central production facilities, rapid expansion will then be achieved through franchising in all target areas.
5.4 OPERATIONS
NVU production will be outsourced to a manufacturer in Seattle and has been estimated at $12,500 per NVU. Each city will have company owned NVU’s, shops, a central kitchen premises and support kitchens (hubs).
Product Production and Preparation
Raw product has been sourced from selected Seattle suppliers. It is a competitive quality market, with room for a number of suppliers to diversify risk. The secret to Nudlez’ fast delivery to the customer from moment of order is the blanching and preparation process of the raw product at the central kitchen premises and hub sites. This will be overseen by our master-chef teams, adhering to strict health regulations. All ordering, stocking and quality controls will be managed on an in-house computer based system enabling usage patterns to be monitored maintaining ordering efficiency and minimizing wastage.
5.5 NVU Stocking
A unique system for NVU and store restocking, the Nudle-Rac is currently under design. Essentially providing completely removable internal sectioning to the refrigerators to hold the different meals available, it is spring-loaded so that when one meal is removed, the next meal raises to the top for easy access. At the beginning of each day, a franchisee will arrive at their support kitchen where the Nudle-Rac, preloaded with the day’s meals, will be loaded directly into the NVU’s fridge without having to remove the NVU from the van providing an efficient stocking system and minimizing the time meals spend out of refrigeration. For large catering events, support vans will provide additional pre-stocked Nudle-Racs to onsite NVU’s.
5.6 FAST FOOD RESTAURANT EXIT STRATEGY
It is Nudlez objective to be acquired by another fast food company within five years by posting large revenues and a substantial EBITDA. Additionally, merger options, as well as an IPO may be considered at that time.
6.0 Management Summary
6.1 organizational structure.
Nudlez will be lead by Bill Cook, CEO. He will report to the founders and investors, which will make up the board. The CEO will oversee the CFO, CIO, Food and Human Resources departments.
6.2 MANAGEMENT TEAM
With over 80 years of sector diverse, international strategic and operational combined experience, professionally qualified and with energetic personalities critical to ensuring the Nudlez values, the owners and the management provide the skills to deliver:
- Bill Cook has run start-up business operations, with broad management skills
- Dan Billings has owned and managed 2 successful restaurants and an advertising firm
- David Noor is a financial wiz with broad entrepreneurial appreciation
- Angela Gates is not your typical CIO, with a creative flair and eye for efficiency
- Sheila Arch brings the important HR skills combined with a marketing bent
Bill Cook – CEO & Director (Systems, Strategy & Finance)
Bill is a Seattle boy, born and bred, with an intimate knowledge of the cultural and niche diversities of Seattle. Originally with an honors degree in Civil Engineering, Bill worked in the Seattle construction industry from the 80’s boom time through the recession of the early 90’s. From there he traveled overseas working in such places as the UK, Bosnia (during the war), Romania and Holland. The bulk of his experience in these eight years centered on strategic management of start-up ventures. These ranged from establishing critical engineering support facilities for the UN in Bosnia, to expending Shell’s retail network across Eastern Europe, to property development ventures in Romania. Bill returned to Seattle in 20XX to utilize this broad strategic experience on home soil, initially focusing on the property sector. Bill has known Dan for over 20 years and quickly assessed the potential of his Nudlez idea, convincing Dan that rapid expansion was key to securing the market niche. Bill graduated his MBA with High Distinction in 20XX.
Dan Billings – Director (Marketing & Food Technology)
After a successful career in advertising culminating in the establishment of his own Seattle based agency, Dan entered the hospitality industry. His first venture, Pad Real Thai, a Thai restaurant and takeaway situated on bustling Pine Street, was an instant hit. An innovative and funky menu, supported with clever marketing (including the use of real Bangkok Pad’s for delivery vehicles) saw the business achieve critical acclaim. Rave reviews in Short Black and Cheap Eats to name a few, were followed by televised appearances on ‘Seattle Weekly’ and Seattle’s Food Lover’s Guide. A second Pad restaurant opened in Bellevue, and was awarded the prestigious ‘Bent Fork” award. Dan sold the Pad enterprise in 20XX to pursue business interests in Thailand. It was here, while enjoying Bangkok’s vibrant street food culture, where the Nudlez concept was born. Dan has a degree in Science from the University of Washington.
6.3 PERSONNEL NEEDS
In the long term, the employee/income ratio will be approximately $125,000 per employee. Nudlez will run a lean operation with an emphasis on sales and food production. In years two and three the sales staff will grow from 20 to 110 people, and the production staff will grow from 12 to 277 people. Administration will grow as needed to support this fast food business plan.
7.0 Fast Food Restaurant Financial Plan
7.1 requirements.
Nudlez will require $1,500,000 from an investor. The funds will be used primarily for the completion of one central and five suburban meal production facilities. The funds will be expected in two rounds, $750,000 to begin operations, and a further $750,000 seven months later (four months after revenues have commenced).
The investor’s $1,500,000 will be structured as a redeemable note, convertible to 15% shareholding in Nudlez at the end of year-3. Alternatively, redemption can be done at this time providing a return of $3,450,000 (2.3 times investment), equating to a compound annual return of approximately 32%. The end of year-3 is good point for possible investor exit, as decisions on product expansion into supermarkets will be made at this time.
7.2 USE OF FUNDS
Funds will be used to initially finish development of the NVU and to establish fit out central premises in Seattle, including IT infrastructure. 5 hubs and 5 sites will initially be established in Seattle, following that expansion into Vancouver/Portland and Spokane will begin.
7.3 INCOME STATEMENT PROJECTIONS
Nudlez will be profitable by the end of its first fiscal year, as shown in the attached financial statements. The business will grow dramatically in years two and three.
Break Even Analysis
A break even analysis, assuming zero catering and acquisition stores, reveals less than 100 meals per NVU and 150 per store need to be sold per trading day to achieve break even.
7.4 FAST FOOD BUSINESS PLAN ASSUMPTIONS
We are using the following assumptions in this fast food business plan:
- Number of average rain days for the 3 cities is 12 per month. This equates to approximately 40% of the month, which we have conservatively applied, despite its low probability. The conservatism also allows for logistics accidents, staff truancy, etc. to arrive at 13 trading days/month for NVU’s. (Exclude catering)
- Total employment in the expanded Seattle CBD areas is estimated at over 350,000. Nudlez expects to capture less than 2% of this daily market from CBD NVU’s and stores
- Seattle and Portland/Vancouver are similar sized markets, with Spokane being approximately half the size. Revenue estimates reflect these ratios.
- Gen-1 and first Gen-2 NVU, testing and development costs totaling around $75,000 already spent by inventor are not included in financials.
- First Gen-2 NVU will obtain homologation, meaning that the design has blanket pre-approval with local government, reducing time and cost for individual site permits.
- First 10 NVU’s cost $125,000, including homologation.
- Wastage is estimated at 15% across all food related product (validated in Seattle trials). This will reduce once the ‘Nudle-Rac’ and associated IT systems are in place
- Training, Quality Management Systems and Franchise Operations Manuals will be completed effectively for $220,000 by the end of year 1.
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