STRATEGIC FRANCHISE ALLIANCE PROPOSAL INDIA Long Term Fundamentals Intact Largest Consuming Class by 2030 70% Population Under 30 Rapidly Growing Category QSR QSRs in India Snapshot Total Number of Outlets as of May 2011 McDonalds India 216 Domino’s 369 • Subway 204 Yum Brand 300 + • Nirula’s 85 + Yo! China 50 + A Sizable Opportunity! A Food Service Market in the Magnitude of India's is Growing at a Blazing 25-30% Per year! In fact, India’s Quick Service Restaurant Chain Industry is Expected to Grow Faster than China's at a CAGR of 19% untill 2020, according to a recent report. Jumbo King Vada Pav 43 Café Coffee Day 1200 + Banking on advantages like a young population with rising disposable income and increasing urbanization in the country, the business of quick-service restaurant (QSR) chains in India is expected to grow eight-fold to US$ 5.6 billion by 2020 from US$ 720 million in 2011, at a CAGR of 27 per cent. QSR Growth in India 2012 Fastest growing restaurant companies in India With Huge Headroom to Grow Huge potential! Table II Comparative analysis of major QSR chains in India QSR players 2005 2009 2011 2015 (projected) __________________________________________________________________ McDonald's Pizza Hut Dominos KFC Subway 75 125 100 40 132 147 274 72 145 240 216 392 156 205 400 500 250+ Source: Compiled version of data from Euromonitor, Economic Times and Business Standard “ India may look like a market that is easy to enter, but to be successful one really needs to have a lot of energy invested towards getting the back-end chain in place.” Growth of KFC in India Yum Projections: 2000 stores by 2020 PETRONE PIZZA & PASTA FRANCHISING What is franchising? • • • • It is an exciting business model that aligns entrepreneurs with a reputable brand. It provides an established marketing and distribution system. It allows a license to use the brand and operating system to build market share. Licensing with an established brand name means immediate recognition and credibility. Why should I invest in a franchise? • Franchising is a booming business concept that allows entrepreneurs to be in business for themselves, but not by themselves, providing a potential business owner with a chance to align with a recognized brand and proven method of doing business. Does franchising have a strong future? • Absolutely! Small businesses are the backbone of India, where the brand-driven culture is on the rise. By becoming a franchisee of a growing American powerful brand like Petrone Pizza & Pasta you control your destiny and your future. The concept of franchising remains strong, and is becoming stronger every day! PETRONE PIZZA & PASTA FRANCHISING Why should I choose a new franchise brand over established brands? • The success and strength of a franchise comes from experience in the industry. • Petrone Pizza & Pasta has more than 30 years of experience in the pizza business. We've learned what works through the years, and you benefit from that knowledge. • We are also able to provide ongoing support services from industry professionals, and we offer continuing development opportunities for personal and professional growth besides saving a franchisee from the financial hardship of paying huge Franchise fees for established international brands. QUICK SERVICE RESTAURANT INDUSTRY Why choose the quick serve restaurant industry over other industries? • Sales opportunities are unlimited in the quick serve restaurant industry. The increase in dual-income households means that customer frequency is on the rise. Families have less time for home cooking and are involved in more activities, which means they visit more often because they appreciate the value and convenience offered by Petrone Pizza & Pasta! Why choose the pizza segment over other quick serve restaurants? Pizza is: • one of the world’s favorite foods! • loved by kids everywhere. • a fun meal shared by families and friends. • Petrone Pizza & Pasta has broad consumer appeal. The chain's simple operating system allows easy integration into a successful business. PETRONE PIZZA & PASTA BRAND What are some of the ingredients for Petrone's success? • We focus on what is important to our customers - great tasting products served in a clean restaurant at a great value. Our customers are loyal to the Petrone Pizza & Pasta brand, and we are able to keep costs down by focusing on the basics What sets Petrone Pizza & Pasta apart from the other brands? • • • • • The value, quality and convenience Petrone Pizza & Pasta offers its customers is what truly sets us apart from our competitors. Other differentiating factors include: Pizza and pasta sauces are made from Petrone's Grandmother's recipes Entertaining and memorable advertising A sharp focus on local store marketing Dough made fresh daily in every store and fresh, never frozen cheese Does Petrone Pizza & Pasta have broad consumer appeal? • Of course! Kids and families love Petrone Pizza & Pasta. Pizza is a versatile food, and can be part of a healthy, balanced diet by including vegetable toppings and accompanying the meal with a side salad. Strict vegetarians ( JAINS ) also enjoy Petrone Pizza & Pasta and can fulfill their nutritional needs by ordering a vegetable topped pizza without cheese. SUPPORT Does Petrone Pizza & Pasta provide consultation and business training? • Yes! We provide a comprehensive training program that focuses on all aspects of our business. The curriculum includes product preparation, marketing, finance, cash management, human resources, multi-store supervision, customer service, loss prevention, and real estate site selection, among other topics. We also continue to work with you as your business grows, providing expert analysis and consultation to help you succeed. • We strongly believe that your success is our only business COST How affordable is a Petrone Pizza & Pasta Franchise? • Petrone Pizza & Pasta remains very competitive relating to start up and operating costs. Our royalty and advertising fee structures are lower than most, and fees associated with franchising the brand are modest. How much does it cost to open a Petrone Pizza & Pasta Franchise? • The estimated initial investment required per franchise location ranges from approximately $75000 to $125000 for a standard Petrone Pizza & Pasta carry-out location. Costs vary based on a variety of factors. What are the financial requirements for potential franchisees of Petrone Pizza & Pasta? • Petrone Pizza & Pasta requires candidates desiring to open one store to have a net worth of $150,000 with a minimum of $50,000 in liquid, unencumbered assets (like cash). You must also be able to obtain financing to cover the total costs of opening a franchised location. If I don't meet the financial or operational criteria to become a franchisee, can I partner with someone who does qualify? • Yes. Petrone Pizza & Pasta requires a complete application package for each member of your potential franchise group, including investors. EXPERIENCE If I don't have experience in the food service industry, can I still be a Petrone Pizza & Pasta Franchisee? Yes. Prior food service experience is helpful, but not essential. Petrone Pizza & Pasta offers a comprehensive training program, covering all aspects of operating a restaurant. You will also have access to operations and marketing professionals as you establish your business. AREAS OF DEVELOPMENT Where can I franchise? • Many prime areas are available for franchising the Petrone Pizza & Pasta in Maharashtra state of India. However, this depends on your performance in first 18 months and successful operation of 5 or more outlets. PROFIT How much money will I make? • The amount of profit is based on a number of factors, including sales, costs, and the franchisee's ability to manage the business. Petrone Pizza & Pasta does not, however, make or release earnings claims and it does not authorize anyone (including its employees) to make such claims. PROCESS What is the process for becoming a Petrone Pizza & Pasta Franchisee? • • • • • • • • • • • • Complete and submit a franchise inquiry form and application Receive a Uniform Franchise Offering Circular as applicable Attend an interview at world headquarter or in Country of operation Obtain preliminary approval Begin the site selection evaluation Complete the Petrone Pizza & Pasta approval process Once a lease is signed, you will receive store design and floor plan Permitting and construction occurs Attend training (often coinciding with construction) Pre-opening marketing and hiring Grand opening The total amount of time will vary due to issues such as the local permitting process. A franchisee can expect this process to be between three and 6 months. Contact Victor W. Petrone, Jr., CEO Petrone Pizza & Pasta 3844 Pine Lake Drive, Weston, Florida 33332 USA E-Mail: VPetrone@PetroneFoodWorks.com or Tel: 855-BY-PETRONE