Franchise Sandwich Shop Business Plan

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Franchise Sandwich Shop Business Plan Powered By Docstoc
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                                                            Table of Contents

1.0 Executive Summary.............................................................................................................................1
           Chart: Highlights ......................................................................................................................1
     1.1 Objectives ...................................................................................................................................2
     1.2 Mission........................................................................................................................................2
     1.3 Keys to Success ........................................................................................................................2
2.0 Company Summary.............................................................................................................................2
     2.1 Company Ownership .................................................................................................................3
     2.2 Start-up Summary ......................................................................................................................3
           Table: Start-up .........................................................................................................................4
           Table: Start-up Funding ..........................................................................................................5
           Chart: Start-up .........................................................................................................................6
     2.3 Company Locations and Facilities ..........................................................................................6
3.0 Products ...............................................................................................................................................6
     3.1 Product Description...................................................................................................................6
     3.2 Competitive Comparison..........................................................................................................7
     3.3 Sales Literature ..........................................................................................................................7
     3.4 Sourcing ......................................................................................................................................7
     3.5 Technology..................................................................................................................................8
     3.6 Future Products ..........................................................................................................................8
4.0 Market Analysis Summary..................................................................................................................8
     4.1 Market Segmentation ................................................................................................................9
           Table: Market Analysis ...........................................................................................................9
           Chart: Market Analysis (Pie)................................................................................................10
     4.2 Target Market Segment Strategy...........................................................................................10
           4.2.1 Market Needs ..............................................................................................................11
           4.2.2 Market Trends .............................................................................................................12
           4.2.3 Market Growth .............................................................................................................12
     4.3 Industry Analysis.......................................................................................................................12
           4.3.1 Industry Participants....................................................................................................12
           4.3.2 Distribution Patterns ...................................................................................................13
           4.3.3 Competition and Buying Patterns .............................................................................13
           4.3.4 Main Competitors .......................................................................................................13
5.0 Strategy and Implementation Summary..........................................................................................13
     5.1 Strategy Pyramid .....................................................................................................................14
     5.2 Value Proposition ....................................................................................................................14
     5.3 Competitive Edge....................................................................................................................14
     5.4 Marketing Strategy ..................................................................................................................14
           5.4.1 Positioning Statement ................................................................................................15
           5.4.2 Pricing Strategy...........................................................................................................15
           5.4.3 Promotion Strategy.....................................................................................................15
           5.4.4 Distribution Strategy ...................................................................................................15
           5.4.5 Marketing Programs ...................................................................................................15
     5.5 Milestones ................................................................................................................................16
           Table: Milestones..................................................................................................................16
     5.6 Sales Strategy..........................................................................................................................16
           5.6.1 Sales Programs ..........................................................................................................17
           5.6.2 Sales Forecast ............................................................................................................17
                                                                                                                                                   Page 1
                                                           Table of Contents
                 Table: Sales Forecast.................................................................................................18
     5.7 Strategic Alliances...................................................................................................................19
6.0 Management Summary ....................................................................................................................19
     6.1 Personnel Plan.........................................................................................................................19
           Table: Personnel ...................................................................................................................20
     6.2 Organizational Structure..........................................................................................................20
     6.3 Management Team .................................................................................................................20
     6.4 Management Team Gaps .......................................................................................................21
7.0 Financial Plan ....................................................................................................................................21
     7.1 Long-term Plan.........................................................................................................................21
     7.2 Important Assumptions............................................................................................................21
           Table: General Assumptions ...............................................................................................22
     7.3 Key Financial Indicators ..........................................................................................................22
           Chart: Benchmarks ...............................................................................................................22
     7.4 Break-even Analysis................................................................................................................23
           Chart: Break-even Analysis .................................................................................................23
           Table: Break-even Analysis .................................................................................................23
     7.5 Projected Profit and Loss .......................................................................................................24
           Table: Profit and Loss ..........................................................................................................24
           Chart: Profit Monthly .............................................................................................................25
     7.6 Projected Cash Flow...............................................................................................................25
           Chart: Cash ...........................................................................................................................25
           Table: Cash Flow..................................................................................................................26
     7.7 Projected Balance Sheet ........................................................................................................27
           Table: Balance Sheet ...........................................................................................................27
     7.8 Business Ratios .......................................................................................................................27
           Table: Ratios .........................................................................................................................28
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................3
Table: General Assumptions ....................................................................................................................4
Table: Profit and Loss ...............................................................................................................................5
Table: Cash Flow .......................................................................................................................................6
Table: Balance Sheet ................................................................................................................................7




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                                     Franchise Sub Shop

1.0 Executive Summary
   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 consc ious 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 loc al sporting
   events, and give 3% of profits to loc al charities. We will build roots into the community. We
   will also market our products with loc al businesses, the famous Shakespearean Festival, to
   loc al hotels, and offer catering services through loc al party supply stores and through close
   ties to loc al 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 expec ts of itself and its guarantors.




                                                                                                 Page 1
                                     Franchise Sub Shop

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 fisc al 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
   trac k customer habits and loyalty through a loc al 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 loc al
   women's shelter, and 1% to a loc al 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 loc ation. It is very important that our loc ation live up
   to our expec tations, and is convenient to as many potential customers as possible. As stipulated
   by the franchise agreement, our "Type A - Profile 1" loc ation must contain a minimum of
   6,000 c ustomers within a four bloc k 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
   aspec ts 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.



2.0 Company Summary
   "The Sub Shop" Corporation franchises, and sometimes owns and operates quick-service Italian-
   style sub sandwich shops called, appropriately, "The Sub Shop" subs.

   The Sub Shop's upsc ale concept fits a niche between fast food and fine dining--offering the
                                                                                                 Page 2
                                     Franchise Sub Shop
   customer the best benefits of both segments. The company provides the convenience of fast
   food with rapid response times, affordability, as well as carry-out and home meal replac ement
   options. The Sub Shop also offers a fresher and tastier alternative to typical fried fast food
   products such as hamburgers and french fries.

   The Sub Shop's concept was born in the kitchen of a popular Italian sit-down restaurant called
   Gianni's. The goal of the original owner was to provide great Italian food in a clean, urban
   environment, and at a reasonable price. After two years as Gianni's, the owner changed the
   name to The Sub Shop and began selling subs and soup to go. In 1993, the company
   expanded to two stores and sales tripled. Financing was secured in December of 1993, and
   the company bec ame a loc al Franchise, then a national Franchise. Now with 53 stores in 23
   states and four countries, The Sub Shop has taken the Fast Food segment by storm by
   producing a better product than its competitors, and at a moderately low price.



2.1 Company Ownership
   Ninety-seven percent of the restaurant belongs to Walsh and Walsh LLC. The company was
   formed in Oregon in 1995, and is owned by Jack William Walsh and his father Luke Walsh. Luke
   owns 77% and Jack owns 30% of Walsh and Walsh LLC. The remaining 3% is held by Lisa
   Mc Kewan, Store Manager.



2.2 Start-up Summary
   The start-up table shows a summary of our overall start-up costs. The highest initial outlay
   is for the franchise fee. This is required to launch the franchise. After paying our Franchise
   fee, our only liability to the franchise will be the 7% cost of sales, and 2.2% advertising
   charge. Normally the franchise fee would be paid in interest ac cruing installments, but we
   dec ided to forego this to keep the books as clean as possible and to reduce the possibility of a
   "parent/c hild" conflict between our company and the constituents.

   Cash requirements for start-up are $19,700, and most of this will sit in a zero interest bearing,
   highly liquid bank ac count. The first month our change in accounts payable will top $61,000,
   so we need this $19,700 in c ase sales are not what we expec ted. If sales are 30% off projected,
   this $19,700 will help us gather enough cash to pay off our ac counts payable within 30 days.
   The principles will invest a combined $30,000 to start-up the franchise. We expec t that the
   majority of this will be paid bac k to the owners within two years of operations, in the form of
   dividends. This investment makes up over 8% of the total start-up requirements for the
   company. The remainder consists of one $65,000 short-term interest bearing, unsecured
   personal loan, one $15,980 interest-free "First Card Visa" 0% promotional loan, and a $200,000
   long-term loan guaranteed by the SBA 504 program. The term of the expec ted loan is 10 years.

   The SBA loan that we are seeking will be secured via the pre-appraised market value of the
   land and property, as well as the improvements to be made on the property through 2001. The
   estimated net market value of the property following all improvements is approximately $320,000.




                                                                                                Page 3
                           Franchise Sub Shop

Table: Start-up
Start-up

Requirements

Start-up Expenses
Business License                     $180
Refrigerator/Freezer               $5,500
Building Improvements             $35,000
Franchise Fee                     $45,000
3% Loan Originition Fee            $7,800
Insurance                          $1,500
Research and development           $1,500
Total Start-up Expenses           $96,480

Start-up Assets
Cash Required                     $19,700
Start-up Inventory                $15,800
Other Current Assets               $4,000
Long-term Assets                 $205,000
Total Assets                     $244,500

Total Requirements               $340,980




                                                Page 4
                                            Franchise Sub Shop

Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund                          $96,480
Start-up Assets to Fund                           $244,500
Total Funding Required                            $340,980

Assets
Non-cash Assets from Start-up                     $224,800
Cash Requirements from Start-up                    $19,700
Additional Cash Raised                                  $0
Cash Balance on Starting Date                      $19,700
Total Assets                                      $244,500



Liabilities and Capital

Liabilities
Current Borrowing                                  $65,000
Long-term Liabilities                             $200,000
Accounts Payable (Outstanding Bills)               $30,000
Other Current Liabilities (interest-free)          $15,980
Total Liabilities                                 $310,980

Capital

Planned Investment
Luke Walsh                                         $15,000
Jack Walsh                                         $15,000
Additional Investment Requirement                       $0
Total Planned Investment                           $30,000

Loss at Start-up (Start-up Expenses)              ($96,480)
Total Capital                                     ($66,480)



Total Capital and Liabilities                     $244,500

Total Funding                                     $340,980




                                         
				
DOCUMENT INFO
Description: Franchise Sub Shop is a business plan written to secure long-term funding to open a national franchise sub sandwich quick-service restaurant.
This document is also part of a package Restaurant Business Plan Pack 5 Documents Included