“Pepper in Some Fun”
Prepared by Hammer Smash Consulting
Nicky Cox
Gary Houseman
Tyrone Okrainetz
Outline
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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
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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
Bar
Lounge
Restaurant
Hostess desk
Entrance
Mens
Womens
Average Business Day
• Open from 11AM till 11PM, 7days a week.
• Serve lunch menu and appetizers from 11AM till
4PM.
• Serve supper menu and appetizers from 4PM till
11PM.
• Kitchen manager starts at 9 AM to prepare
kitchen for the day.
• General Manager starts at 10AM
• Assistant Manager starts at 6PM
• Supervisors fill in as needed for managers.
Daily Shifts: Managers
General
Manager
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
Organizational Structure
General
Manager
Hostesses
Dining Room
Assistant
Manager
Kitchen
Assistant
Manager
Supervisors
Supervisors
Food Runners
Servers
Cooks
Expos
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
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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
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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
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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?