Executive Summary
Booster juice franchise offers a wide variety of smoothies comprising of pure juice, fruit
sorbet, vanilla frozen yogurt, frozen fruit, fresh yogurt. The store will be located at
Preston Crossing at the mini mall strip, opposite Walmart. The shop will be incorporated
with one manager, four part-time and two full time employees. The manager will be on
salary and will oversee all operations. Two supervisors will oversee day to-day
operations of the shop and the four part-time employees will be responsible for customer
services. Both full time and part-time employees will be paid hourly wages. Initial
requirements for all furniture, fixture, computer software and hardware and equipment
will be supplied by Booster Juice Inc as part of the turnkey operation. All other supplies
will be purchased from Booster Juice Inc. Our shop will be incorporated. Richard
Azinwi, Nadia Maqbool and Ravi Brar will be the equity owners. We will have a total of
seven employees comprising of one manager, two full time supervisors and four parttime employees. As part of our franchise deal, Booster Juice Inc will offer continuous
training and support to our employees.
Marketing for the Booster Juice is done by the franchisee and franchisor. The franchisor
will do large scale marketing for all of the franchisees, as per the royalty agreement. Our
Booster Juice will concentrate on local advertising. We will be doing an aggressive
advertising in the first year to create store awareness. First, we will send out flyers to
everyone in the S7N postal code area through Canada Post. We will also promote our
location at the U of S by offering students and staff a 5% discount with the presentation
of their student and employee card. Secondly, we will also work with the other
franchisees in the Saskatoon area by providing all local gyms with a one time 10% off
coupon for their members. Therefore, the gym members can visit the Booster Juice
location most convenient to them and increase the Booster Juice brand awareness in the
whole city. A long term strategy for our Booster Juice would be to build a relationship
with one of the gyms in Saskatoon and in the long term open small locations within their
gyms.
Our target market will be healthy active people in the University area. The people will
attend the gym and also like to eat healthy but may not have time to do it themselves;
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1
therefore they can come to our location and quickly pick a healthy shake while they are
on the go.
The estimates for developing the financial model of Booster Juice have been derived
from the marketing, operations and Human Resources plan. The sales prices are expected
to grow at 2% inflation rate. The aggressive advertising and marketing will help the
business to grow by 20% in the first two years. From the third year onwards, the sales
growth will start stabilising. The business intends to borrow $200,000 at 6%, this debt
will be amortized over a ten year period. There will be a 50-50 debt to equity ratio.
Dividends will be distributed from the first year of operations. The proposed dividend
policy is to hold $20,000 cash in hand from the second year onwards. The required rate of
return on this business has been taken as 15%. With the projected cash flows and an
investment of $200,000, the expected rate of return on investment is 18%, which means
making an additional $45,000 on the investment. The profitability ratios have also been
calculated, which indicate that the business will start making profits and generating cash
from the second year of operations. The return on assets and return on equity will be 11%
and 15% from the third year and this will keep on growing in the next years.
Risk analysis has also been done. The critical factors for our Booster Juice are the
number of customers and interest rate. The business has its economic breakeven on 77
customers in the first year and an interest rate of 11% for ten years. Apart from that even
if the business is not able to grow by 20% as projected, the sales growth breakeven is less
than 15% in the first two years. The scenario analysis has been performed and it shows
that in the worst case scenario, if the number of customers drops to 60 and the interest
rate rises to 7%, the business will be having an NPV of -$48,000. On the other hand as
the best case scenario, if the number of customers increases to 100 and interest rates fall
to 5%, the business will have a 36% IRR and $538,000 NPV.
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2
Operations Plan
Booster juice franchise offers a wide variety of smoothies comprising of pure juice, fruit
sorbet, vanilla frozen yogurt, frozen fruit, fresh yogurt (refer to appendix 3). Our
smoothies are ideal as meals on the run, power breakfast, afternoon treats and work-out
snacks We intend to promote a healthy lifestyle by providing freshly squeezed fruits
juices with added nutritional supplements. Our target customers typically are health
conscious and are interested in obtaining fresh and nutritious food. The store will be
located at Preston Crossing at the mini mall strip, opposite to Walmart. This is a fast
developing area that currently does not have any healthy alternative to the typical fast
food restaurant chains. Figure 1.0 is an aerial photo of a 1 kilometre circumference of the
actual site of the location
Figure 1.0 Site Location
This location is a fast developing area with a mini strip mall containing major shops such
as Walmart, Canadian Tires, The Gap, Future Shop etc. Apart from McDonalds located
in Walmart, there is no healthy food store in this area. This site is easily accessible with
parking lot for customers.
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Site Location
We will lease 900 square feet space from an extension of the strip mall across the street
from Walmart We believe this space is enough to accommodate 10 to 15 customers at a
time. As part of the franchise deal, the Franchiser will provide the furniture, equipment,
fruits, food and merchandise. There are three other booster juice shops in the city, but
they do not offer the unique customer services we intend to provide to our customers.
Furthermore, there is a need for a healthy food store in this location.
Legal Structure
Booster Juice will be incorporated.
Organizational Structure – Refer to appendix 1
The Booster Juice shop will be managed by co-owner, Ravi Brar. The other two coowners Nadia Maqbool and Richard Azinwi will hold the positions of supervisors for
morning and evening shifts. Four other part time employees will be hired; two of them
will work in the evening shift and the other two in the morning shift. The manager and
the supervisors will monitor the day –to-day operations with the part time staff
responsible for sales and services.
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4
Average Business Day- refer to appendix 2
The shop will be open from 10am to 9pm. The manager and supervisors will work full
time while different time slots will be allocated to part – time employees based on their
availability. The manager will take the week-end off while supervisors will fill in for
Saturdays and Sundays. On Sundays, the shop will be open from 10am to 5 pm.
Job description
Manager’s responsibilities are as follows:

Open shop along with one supervisor and part-time employees

Oversee staff scheduling

Approve day’s cash float

Approve expenditures

Assist in customer services during peak periods

Resolve any problems that might have occurred the previous day

Cash drop at the closest Royal Bank of Canada on College Drive
Supervisors will be responsible for the following duties:

Order suppliers if needed

Review days inventory

Assist manager in opening and closing shop

Serve customers

Ensure everything is up and running

Open and close shop on Saturdays and Sundays
Part-time employees
This position will require shift work with a lot of flexibility to accommodate the needs of
the employees. Their responsibilities will include:

Display fruits and merchandise for easy access and where customers can see

Empty garbage, clean the floor and tables.

Organize the sitting area
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5

Clean mugs and utensils

Get everything ready for open at 9am

Serve customers
Weekly duties
This will include re-stocking of merchandise, fresh fruits and vegetables and nutritional
supplements. Weekly counts will have to be made to ensure that inventory numbers are
correct and fruits and vegetable spoilage are accounted for.
Supply Analysis
Initial requirements for all furniture, fixture, computer software and hardware and
equipment will be supplied by Booster Juice Inc as part of the turnkey operation. As part
of our franchise deal, all suppliers will be purchased from Booster Juice Inc. We will
maintain an inventory turnover of 7 days or less for fruits and vegetables. This ensures
that the drinks we serve are fresh. Merchandise and nutritional supplements will be kept
till expiry dates while food will have one day inventory turnover.
Table 1.0
Capital Budget
Equipment:
Full Size Refrigerator
Mini Refrigerator
2010
2012
2013
2014
2015
2016
2,500
600
Freezer
3,500
3 Blenders
6,000
2 sofars and 10 stools (
$400per)
Mini oven
1600
Dishwasher
3,800
Cash Register (2)
5,000
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2011
Capital Budget
800
6000
6
2017
Display Case
209
Refrigerated Deli Case
2,748
Ice maker
3,000
Office Equipment
3,098
Total Capital cost
38,055
800
Explanatory notes : Complete capital budget is provided in our financial assessment
Table 1.1 Operating and Marketing Expenses
2010
1011
2012
2013
2014
2015
16042
19459
22825
25610
28734
30774
7000
4000
4000
4000
4000
4000
22500
22950
23409
23877
24355
24842
5,000
5,100
5202
5306
5412
5520
3375
3443
3511
3582
3653
3726
5625
5738
5852
5969
6089
6210
115529
117840
120197
125053
127554
130105
26736
32431
38042
42683
47890
51290
250
40
40
40
12000
11674
11328
10961
10573
10161
214057
222673
234406
244629
255798
264118
Royalty Fee
Local marketing
Rents ( $25@900)
Insurance
Repairs & maintenance
Phone & utilities
Salaries and wages
General suppliers
Incorporation fees
40
40
Start up franchise fees
25,000
Interest on long term loans
Total
Explanatory notes: Refer to our financial assessment for complete operating and
marketing expenses
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Human Resources Plan- Refer to appendix 1
Richard Azinwi, Ravi Brar and Nadia Maqbool are the equity owners of the booster juice
shop. Nadia brings a lot of experience in operational management and finance while Ravi
and Richard have more than 4 years each in the food and beverage industry. The four
part-time employees have previous experiences working with Booster Juice and/or Jugo
Juice franchise. Appendix 2 provides a work schedule for each employee. Daily and
weekly hours are outlined.
Salaries and wages
The manager will be on a salary of $50,000 a year while all full time and part time
employess will be paid $9.00 and $8.25 an hour respectively. Supervisors will make more
money than part-time employees since they will be allocated more working hours.
Training and Support
As part of our franchise deal, training will be provided by the franchiser. The co-owners
will undergo training for 10days at Booster Juice headquarters. There will be another 1 to
3 days training offered by Booster Juice Inc at our location. This training will include
part-time employees. Further training will be required as necessary. During the operation
of our business, the following support will be provided.

On-going advice and consultation regarding operations and management of our
business.

Access to promotional programs and material

Train replacement or additional managers in their head office in Edmonton

Offer refresher training courses and convention to our employees
The following quality controls will be put in place to ensure best services are provided to
our customers.

Any employee hired must have relevant work experience with the food industry.
It is expected that these individuals will have the knowledge necessary to help
satisfy customer’s needs.
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
Employees will be required to meet Booster Juice organization’s culture and
values.

We will continuously monitor and ask for feed back from customers to ensure that
our services and the quality of our food satisfy their needs. This will be done
through customer satisfactory survey. Monthly meetings will be held for review
and suggestions.
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Marketing
Saskatoon is a city of approximately 233,000 people and is in one of the only provinces
expected to have an expanding economy this year. There are also approximately 15
gyms located around the city. Saskatoon also has a river valley which is used by its
citizens for walking, running and cycling. The city also has many sports leagues
throughout the year in a wide variety of age groups.
Currently, 4 Booster Juices are present in Saskatoon and another one is about to open.
However, none of them is in or around the Preston Crossing area, which is in close
proximity to the University of Saskatchewan.
The competition for Booster Juice in Saskatoon is quite limited. The only direct
competitor, Jugo Juice, has now closed on the University of Saskatchewan campus and
there are no other locations in the city. However, there are many substitute products in
the market. These products are; energy drinks, health shakes, and homemade fruit
smoothies. Energy drinks and health shakes can be purchased from any grocery and
convenience store. Energy drinks are quite popular today, but do have a negative image
for the health conscious individuals. Some research has shown energy drinks may have
long-term side affects and the benefits may not out weigh the costs. Various health
shakes are also available. Some are simple drinks that can be purchased pre-made and
others are sold in powder form and have to be mixed with milk or water before taking.
The price can range on these drinks from very inexpensive to very expensive. The simple
shakes are inexpensive but do not come with all the vitamins and benefits that a Booster
Juice drink does. The expensive shakes are usually made for individuals who want a lot
of protein or a quick burst of energy before they work out so they can work out longer
and harder to build up their muscles. Booster Juice is not made as that kind of drink,
even though we have a protein booster, it has not as much as those protein drinks contain.
Therefore, Booster Juice is not in direct competition with those drinks and will not
directly target those users. Booster Juice is mixed and prepared in front of the customer
and is fresh and convenient. There are also many different types of drinks that range
from energy, protein, diet, metabolism, and vitamins (refer to appendix 3).
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Another trend that will benefit Booster Juice is the social trend towards a more healthy
active living. There is a growing number of people, who are becoming more active at
any age. People are running, cycling, and going to gyms. Gyms are one of the fastest
growing industries in North America. Also, the lifestyle of Canadians is busy. People
are trying to work, have a life, and stay healthy. These individuals are always on the go
and Booster Juice provides a quick healthy option for active people on the go.
The Booster Juice will target at the local area around our business and the University of
Saskatchewan. The area could be described as everyone that falls within the postal code
area of S7N. Within that area, we would like to target active individuals on the go.
These individuals like to eat healthy and nutritious. Booster Juice can give them a
healthy and nutritious shake at their convenience. They can quickly drop by our location
on their way to work, gym or school and pick up a drink that they know is good for them.
The opportunity in the area we are looking for is great. Jugo Juice is no longer present at
the University and the closest Booster Juice is on 8th street. Also, the commercial
development of Preston Crossing is still growing and has a large traffic due to Walmart,
Sobeys, Future Shop, and Canadian Tire. People from different areas of the city come to
the Walmart, which we will be in close proximity to. Also the neighbourhood around
Preston Crossing has many students who attend the U of S. Students are fairly active and
attend the gym, but are also very busy to have a healthy diet. Students will be one of our
key target markets.
The pricing strategy for our business is set by Booster Juice, since we are a franchise.
Therefore, we do not have much control over the price, but we may offer discounts.
Booster Juice corporate will also do some of our advertising on our behalf, paid through
our royalties. Any large scale advertising, such as television will be provided by the head
office for all Booster Juice franchises. However, we will still spend some money on
advertising for the local area. We have a strategy to spend more money on the first year
to build awareness and attracting people to the store. This will be done by sending out
flyers to the whole postal code area of S7N through Canada Post. We will also offer
students of the University and their staff a 5% discount on all shakes with presentation of
their student or employee card. The offer to students (one of our target market) and mail
out to the local area will create the awareness of our store in the local area and also attract
Business Plan
11
many individuals to try Booster Juice from our locations. And our close proximity to the
University will allow students and staff to come at lunch and have a healthy shake.
Another strategy we will do is to work will the other Booster Juices franchisees in
Saskatoon and target all of the gyms in the city to promote all of our locations. We could
offer the gyms a one time couple of 10% off for all of their members. All of the
franchisees can also work with our corporate office to sponsor some local sports
tournaments throughout the year. This will show Booster Juice and their franchisees as
members of their community and also help promote the brand and attract more customers
to all of our locations.
The long term strategy for our franchise will be to build a relationship with one of the
local area gyms and in the coming years open small Booster Juice shops within their
locations. This has been very successful for Booster Juice in Alberta where they have
partnered with Club Fit.
SWOT Analysis
We will derive from this SWOT analysis an understanding of how we could use our
opportunities and strengths to leverage our weaknesses and threats.
Strengths

Partnership with Saskatoon Health Authority, U of S gym and Lululemon
Athletica shop will offer access to target markets that share the same healthy
lifestyle vision

Comfortable lounge for our customers to sit and relax. A different atmosphere
from fast food chains

Innovation and product development – new Acai Brazilian Power Berry smoothie
a big success

High quality control standards. Support from Booster Juice Inc to ensure that we
have consistency in operations.
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12

Growing juice and smoothie bar markets. Canadian Restaurant and Foodservices
Association (CRFA) named smoothies, the third fastest growing food and
beverage category behind cappuccino and wrapsé
Weaknesses

Teaching potential customers what a smoothie is and why they might need one is
key to our success. Though this is a fast growing industry, most people are still
unaware of the health benefits they could derive from smoothies.

Price is a concern. Some customers believe Booster juice is more expensive than
its competitors.

Several Booster juice and Jugo Juice are already present in Saskatoon with
established customers.
Opportunities

People are becoming more health conscious in their diet.

More people go to gyms today than 10 years ago, this physical mentality reflects
the increasing new trend in healthy lifestyle

Saskatchewan economy stable amid financial meltdown, thus, more disposable
income and projected higher sales.
Threats

Intense competition from other juice and smoothie bars such as Jugo Juice ( 65
franchise in Canada, 8 in US) , Julius ( 68 franchise in Canada, 124 in US) ,
Jamba Juice (525 franchise in US) and Smoothie king (380 franchise in US)

Preliminary research conducted by the American Institute for Cancer Research
warns that smoothies may contain more fat, sugar and calories than its perceived
healthy appearance. Such information may slowdown sales.
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13
Financial Plan
The financial plan includes 10 year projections of income statement, balance sheet and
cash flow. The estimates have been derived from the following:

Revenue estimates from the marketing plan.

Cost of goods sold and capital budget from operations plan.

Operating expenses and capital budget from the operations plan.

Wages and salaries from the human resources plan.
Economic Forecast:
The inflation rate has been taken as 2% and the growth in sales prices have been assumed
to be the same as inflation. Booster Juice will be aggressively advertising in the first year
of the business, which would help the business grow by 20% in the first two years. After
that, the sales growth will start stabilising at 15%, 10%, 5% and eventually 2%.
Debt Amortization Schedule:
Since the current rate of borrowing is low these days, we will be borrowing $200,000 at a
rate of 6% and this rate will remain constant for Booster Juice business. The debt will be
amortized over 10 years time period. Schedule 7 of the financial model shows the total
payments and interest payment each year over the projected ten years of Booster Juice.
Dividend Policy:
The business will start distributing dividend in the second year of operations. We plan to
have $20,000 cash in hand, all above that would be distributed as dividends to the equity
holders.
Investment Analysis:
The investment analysis has been shown in Schedule 9 of the financial model.
Considering this as a risky business, the required rate of return has been taken as 15%.
With the projected cash and an equity investment of $200,000, the expected return on this
business is 18% and the projected cash flows are producing a value of $245,000 in this
business (Net Present Value).
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Ratio Analysis:
Since this is a new business, only the relevant ratios i.e. the profitability ratios of the
business have been presented in this report. Booster Juice will have a negative net profit
margin in the first year, however, this would start improving when the business stabilizes
by the end of the second year. There will be 12% net profit in the third year and this will
keep on improving in the coming years.
The return on assets and return on equity also indicate negative figures in the first year.
These turn to slight positive in the second year, then increase to 11% and 15%
respectively in the third year and finally continue to grow in the next years.
Risk Analysis:
For analysing the risk of this business, some critical factors have been identified, which
can either boost or adversely affect the business. The following are these critical factors.
1. The number of customers
2. Interest rate
In order to cover the risk from the first critical factor, we will be creating awareness
among the target market by aggressively advertising as suggested in the marketing plan.
For the next critical factor, we are looking forward to maintain 50-50 debt to equity ratio
and not borrow any more in the projected 10 years.
Scenario Analysis:
Scenario analysis has been performed on the critical factors and the best case, base case
and the worst case have been studied by varying these factors. The results are shown in
appendix 4. As a worst case, if the number of customers expected at Booster Juice drops
to 60 customers a day and the interest rate goes up to 7%, then there would be a negative
NPV of $ 48,000 and the expected return on this business will be -6%. As the best case
scenario, if the number of customers increases to 100 customers a day and the rate of
interest decreases to 5%, then the expected return on investment will be 36%, with an
NPV of more than $500,000.
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Breakeven Analysis:
Breakeven analysis has also been done. The critical variables have been observed for the
economic breakeven of the business, In order to have an economic breakeven, the
business can have the following:
1. 77 customers per day in the first year instead of 80 customers.
2. 14.7% growth in sales instead of 20% in the first two years
3. An interest rate of 11% instead of 6% for the ten years of business projections.
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Appendix 1: Organizational chart for Booster Juice shop
Manager
Ravi Brar
Business Plan
Supervisor
Supervisor
morning shift
evening shift
Richard Azinwi
Nadia Maqbool
Part-time staff
morning shift
Part-time staff
evening shift
17
Appendix 2 - Total Weekly Schedule by hours
Monday
Tuesday
Manager
( Salary)
10am-9pm
10am-9pm
Wednesday 10am-9pm
Thursday
10am-9pm
Friday
10am-9pm
Saturday
Sunday
Total hours
Supervisor
Supervisor
1am– 9pam
1am– 9pm
10am-9pm
10am-9pm
1pm-9pm
1am – 9pm
1am – 9pm
10am-5pm
47
1pm-9pm
1pm-9pm
10am-5pm
31
Total part-time hours per employee (per year)
Total full time hours per employee (per year)
Business Plan
Part-time
10am-2pm
10am-2pm
10am-2pm
10am-5pm
40
Daily
total
30
30
23
23
31
15
14
166
520
2028
18
Appendix 3: Booster Juice menu
Banana Beach - Health Kick Smoothies
Bananas-A-Whey - High Protein Smoothies
Banango Burst - High Protein Smoothies
Berry Cream Sensation - Spirit Smoothies
Berry Twister - Berry Smoothies
Blaster - Power Smoothies
Blue Banana - Berry Smoothies
Brazilian Thunder - Açai Smoothies
Breezy Banana - Tropical Smoothies
Canadian Colada - Spirit Smoothies
Citrus Swirl - Tropical Smoothies
Cranberry Crave - Health Kick Smoothies
Firefly - Juices
Ginger Hammer - Juices
Go Mango - Tropical Smoothies
Green Hornet - Juices
High Impact - Açai Smoothies
Kickstart - Health Kick Smoothies
Lemon Charger - Juices
Mango Hurricane - Tropical Smoothies
Marathon - Power Smoothies
Maui Juice - Juices
Mean Mocha - Spirit Smoothies
Orange Breeze - Juices
Original - Berry Smoothies
Raspberry Rapture - Spirit Smoothies
Red Sunrise - Juices
Ripped Berry - High Protein Smoothies
Sonic Soy - Power Smoothies
Soymilk Slam - Health Kick Smoothies
Strawberry Storm - High Protein Smoothies
Strawberry Sunshine - Berry Smoothies
Tahiti Squeeze - Juices
Terminator - Power Smoothies
Tropical Tornado - Tropical Smoothies
Very Berry - Berry Smoothies
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