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									TownEats.com Business Plan




       Prepared for

      Angel Investors
       Frank Barone
      Raymond Frost
      Arthur Marinelli
       Larry Rogers




       Prepared by

         Team 4
      Erin Connelly
      Molly Heglund
     Valerie Kimball
     David Poluszejko




    November 18, 2000
                                     Letter of Transmittal

TownEats.com
78 Mill Street
Athens, OH 45701

November 18, 2000

Angel Investors
Copeland Hall
Ohio University
Athens, OH 45701


Dear Angel Investors:

At your request, we have produced a business plan for TownEats.com. Enclosed you will find a
detailed analysis of how TownEats.com plans to function and produce revenues. Some of the
subjects you will find in the business plan include the following:

      Desired initial investment and returns that can be expected for investors
      A description of the business functions of TownEats.com
      Marketing plan including analysis of target markets, competition, and advertising plans
      Information on our sales strategy
      Operations, management structure, and ownership structure
      Expansion, risks, and exit strategies

After extensive research, we have found that TownEats.com has great potential to expand
throughout the state of Ohio, which will ensure our projected profitability. TownEats.com
should be an excellent investment in which your group should participate.

We would like to thank Mr. Jim Murray for taking time to talk with us about his business in
Athens, as well as Dr. David Kirch and Dr. Neil Holden for assisting us with the financials of
TownEats.com. We would also like to thank our Project Managers for facilitating the
development of our business plan.

Thank you very much for agreeing to look over our business plan. Any details that are unclear
from this plan can be addressed in detail at our presentation on November 20, 2000. We
sincerely hope to work with you in the future. Thank you again and we look forward to meeting
with you.

Sincerely,


Valerie F. Kimball
President, TownEats.com


                                                i
                                                          Table of Contents

List of Illustrations ............................................................................................................. iii
Executive Summary ...............................................................................................................iv
Purpose of the Plan ................................................................................................................1
Description of TownEats.com ...............................................................................................1
The Service ............................................................................................................................2
Market Analysis and Strategies .............................................................................................2
        Target Markets ...........................................................................................................3
        Competition................................................................................................................3
        Marketing Strategies ..................................................................................................5
        Competitive Advantage .............................................................................................5
Marketing and Selling Strategies ...........................................................................................6
Operations ..............................................................................................................................6
Management ...........................................................................................................................7
        Valerie Kimball-President .........................................................................................7
        Molly Heglund-Director of Marketing ......................................................................7
        Erin Connelly-Director of Technology ......................................................................7
        David Poluszejko-Director of Finance/Accounting ...................................................8
        Board of Directors......................................................................................................8
Ownership Structure ..............................................................................................................8
Expansion of TownEats.com .................................................................................................8
Risks of TownEats.com .........................................................................................................9
Possible Exit Strategies for Investors ....................................................................................10
Conclusion .............................................................................................................................10
References ..............................................................................................................................11
Appendix A: Financials and Explanations .............................................................................13
Appendix B: Screenshot of TownEats.com ...........................................................................21
Appendix C: Background of Jim Murray‟s Business ............................................................22
Appendix D: Interview with Jim Murray...............................................................................23
Appendix E: Area Residents Survey......................................................................................25
Appendix F: Area Residents Survey Results .........................................................................26
Appendix G: Restaurant Survey ............................................................................................28
Appendix H: Restaurant Survey Results................................................................................30
Appendix I: Comparison of Competition ..............................................................................32
Appendix J: Marketing Strategies ..........................................................................................33
Appendix K: Restaurants in Athens (Target Markets) ..........................................................34
Appendix L: Possible Area Advertisers (for banner ads) ......................................................35
Appendix M: Web Hosting Through Verio.com ...................................................................36
Appendix N: TownEats.com Organizational Chart ...............................................................37
Appendix O: Resumes ...........................................................................................................38
Appendix P: Law Appendix...................................................................................................42
Appendix Q: Possible Expansion Areas in Ohio ...................................................................51
Appendix R: SWOT Analysis ................................................................................................52
Contract of Agreement ...........................................................................................................53
Confidentiality Agreement.....................................................................................................61



                                                                        ii
                                                     List of Illustrations

Figure 1- Sale of TownEats.com After 5 Years .....................................................................10
Figure 2- TownEats.com Net Income Growth .......................................................................14
Figure 3- Screenshot of TownEats.com .................................................................................21
Figure 4- How Often Respondents Eat Out or Order Food Weekly ......................................26
Figure 5- Interest in Centralized Website for Restaurants .....................................................26
Figure 6- Use of Site if Available ..........................................................................................26
Figure 7- Frequency of Use ...................................................................................................27
Figure 8- Site is More Convenient than Yellow Pages and Paper Advertisements ...............27
Figure 9- Use of Site Which Offers Coupons and Weekly Specials .....................................27
Figure 10- Potential Convenience of Site ..............................................................................27
Figure 11- Restaurant Affiliated with 45701.com or the Fax ................................................30
Figure 12- Feel 45701.com and the Fax have Increased Business Flow ...............................30
Figure 13- Interested in Featuring Restaurant Online............................................................30
Figure 14- Currently have Internet Access Within the Restaurant ........................................30
Figure 15- Current Forms of Advertising ..............................................................................30
Figure 16- Willing to Offer Coupons or Featured Specials Online .......................................31
Figure 17- TownEats.com Organizational Chart ...................................................................37

Table 1-TownEats.com Net Income ......................................................................................1
Table 2- TownEats.com Net Income .....................................................................................13
Table 3- TownEats.com Investor Rate of Return ..................................................................13
Table 4- TownEats.com Start-up Expenses ...........................................................................13
Table 5- Comparison of Competition ....................................................................................32




                                                                  iii
                                      Executive Summary

The purpose of the TownEats.com business plan is to inform investors of the financial benefits
that can be achieved by investing in TownEats.com. We are asking for a $60,000 investment in
exchange for 40 percent of our company. Our company will be an Internet metamediary linking
the restaurants and the residents of Athens in one convenient online location. TownEats.com
will create revenue through web hosting, web design, and business banner advertisements. In
this business plan, we discuss the following areas:

TownEats.com
 Description of TownEats.com and mission statement
 Service TownEats.com will provide restaurants and businesses

Marketing Analysis and Strategies
 Explanation of target markets and market research
 Extensive look into the competition
 Marketing strategies to encourage use of TownEats.com
 Competitive advantages of TownEats.com
 Selling strategies

Operations and Management Structure
 Outsourcing of web hosting
 How the members of our company will work together
 The organizational set-up of TownEats.com and a description of each founder
 TownEats.com as a Limited Liability Company

In this business plan, the founders have discussed their strategies for expansion throughout the
state of Ohio, and considered the possible risks of TownEats.com. In order to ensure that the
investor‟s needs are met, the company has also developed possible exit strategies after a five-
year period.

Information in the body of our business plan will be elaborated on in the appendices. Included in
these appendices will be pro forma financial statements, results of various surveys, comparison
of competition, an in-depth look at marketing strategies, and a look into al possible restaurants
and businesses. All information provided should demonstrate to investors the potential for
success that TownEats.com has to offer.




                                                iv
                                                                                     TownEats 1


                                        Purpose of the Plan

TownEats.com‟s business plan was formulated to give potential investors the opportunity to
assess the financial benefits our company has to offer. In this document, we will discuss the
company and the services we will provide, detailing the marketing analysis and strategy, selling
strategies, operations and management summary, and our ownership structure. Furthermore, we
will also consider possible risks of TownEats.com and exit strategies for investors.

TownEats.com is asking for a $60,000 investment in exchange for 40 percent of our company.
This will enable us to purchase the fax and cover other operating expenses. Our financial
statements project a 504 percent rate of return for investors after five years. This means that
each year the investors are receiving a rate of return over 100 percent. David Kirch, Professor of
Accountancy at Ohio University, verified this rate of return. The projected net income for
TownEats.com is as follows:

                                        TownEats.com
                                              Net Income
                            Year 1         Year 2         Year 3        Year 4         Year 5
Net Income                 $ 41,729       $ 104,499      $ 164,721     $ 220,305      $ 225,855

Net Income (Founders)           25037           62699         98832         132183         135513

Net Income (Investors)     $   16,692     $     41,800   $    65,889   $    88,122    $    90,342
                                               Table 1

For a detailed analysis of the projected financials for TownEats.com for the next five years,
please see Appendix A and the explanations for the income statements that follows.


                                 Description of TownEats.com

TownEats.com is a website designed for the facilitating of online advertising for Athens area
restaurants. The site will allow these restaurants to place their menu, phone number, prices,
hours of operation, location, featured specials, printable coupons, and delivery or catering
capabilities onto their own personally catered web page that we will design for them (to see a
screenshot of our website see Appendix B).

In order to make our site viable and comprehensive, all area restaurants‟ name, phone number,
and address will be included if they do not utilize our services. Those restaurants that do not
wish to feature their menu and other information on our site will have a caption next to their
name stating „Menu not provided by the restaurant.‟ TownEats.com hopes residents that visit the
site will tell restaurants, for instance „Why don‟t you have your menu online? I looked for it
ahead of time.‟ This will entice restaurants to put their menu online, therefore bringing in more
money for TownEats.com.
                                                                                     TownEats 2


TownEats.com is actively pursuing the ownership of the fax and menu book developed by
Athens resident Mr. Jim Murray in order to supplement the TownEats.com website. For
information regarding the background of Mr. Murray‟s business, please see Appendix C and D.
Mr. Murray is asking for $50,000 for the fax and menu book. It is our desire however, to desist
publishing the menu book once we acquire Mr. Murray‟s business, in order to draw customers to
our website when in search of area restaurants menus.

The founders of TownEats.com feel that purchasing this very stable and healthy business will be
a profitable investment, and that by coupling the fax with the online website we will be able to
ensure TownEats.com‟s success.


                                           The Service

Mission Statement: TownEats.com is devoted to providing its customers with a cost effective
means of advertising. Our site provides the Athens community, and similar college towns, with
all relevant and desirable dining information of the highest quality. This is a vital and integral
component of TownEats.com as it ensures not only our success, but also the success of our
customers.

TownEats.com is geared towards Athens area residents who have access to the Internet, whether
it is students in the dorms, residents at home, or employees at the workplace. We will be
providing these residents with a one-stop centralized site that will link them quickly to all area
restaurants. The viewers will be able to go to the TownEats.com website, click on their desired
restaurant or food category, and quickly obtain any information they desire, such as the
restaurant‟s menu and phone number.

While the fax does feature 15 area restaurants‟ daily specials and provides coupons, our online
site will encompass those restaurants that are not advertised on the fax, as space availability is
limited. Viewers will even be able to see daily specials and print out coupons to some of their
favorite restaurants. Customers may also benefit from free giveaways on our site, ensuring that
they will return.

In this way, TownEats.com will be able to provide a more effective form of advertising than
traditional forms for participating restaurants. We also will be able to ensure a higher level of
convenience for consumers. It is in this way that TownEats.com acts as a metamediary between
our customers, the restaurants, and the residents of Athens who support the site.


                                 Market Analysis and Strategies

In investigating the potential success of TownEats.com, an analysis of the market in which it will
compete is vital. Through this analysis, we are able to see a snapshot of where we stand in
relation to the competition and what strategies need to be implemented to guarantee success.
This analysis focuses on the target markets, our competition, a basic marketing strategy, and our
competitive advantage.
                                                                                     TownEats 3



Target Markets
TownEats.com has multiple target markets due to its industry position as a metamediary. The
site must attract customers, who are the Athens restaurants, and visitors, who are the hungry
residents in Athens.

Our primary target market is Athens area restaurants, whose customers consist of a large
proportion of college students, Ohio University faculty, and area residents. In order to ensure
that there is a strong customer interest in our site, we conducted a convenient survey of 108
students, 63 Ohio University employees, and 29 area residents. Please see Appendix E for a
copy of the survey, and Appendix F for complete results. Some of our results show:

      50 percent of consumers eat out 1-3 times a week, 31 percent eat out 4-5 times a week,
       11.5 percent eat out 6-7 times a week, and 4 percent eat out 8 or more times a week

      91 percent said they would like there to be an online site that features area restaurants
       menus, phone numbers, prices, hours of operation, location, featured specials, printable
       coupons and delivery or catering capabilities.

      89 percent said they would use this site if it were available to them

      88.5 percent said they would find this site more convenient than relying on the yellow
       pages, paper advertisements and menus

The founders of TownEats.com feel that these results will prove to our customers that this
service is desirable.

In addition, Ohio University students now have greater access to the web with the recent addition
of computers throughout the campus. In the past two years, 4,206 computers were added to the
residence halls. There are also 56 computer labs located across the campus (Ohio University
Homepage, 2000). With successful advertising of TownEats.com and the easy accessibility to the
web, the company will be able to bring many students to the site.

Various area restaurants were also surveyed to see what their potential interest would be in a site
such as TownEats.com. Please see Appendix G for a copy of the restaurant survey, and
Appendix H for complete survey results. Of the restaurants surveyed, we found that there is
great interest in the services we are offering. With the introduction of new restaurants such as
The Pita Pit, Damon’s, BW3s, and Dave’s Subs restaurants can be confident that they can
maintain their competitiveness through our site.

Competition
The competition dealing with restaurants and their means of advertising is increasing. A variety
of advertising methods exist including newspaper advertisements, yellow pages, and on-line
services available to restaurants to get their name and location available to potential customers.
For a comparison between the competitions, please see Appendix I. There are three competitors
to TownEats.com including the following:
                                                                                     TownEats 4



      Newspaper Advertisements: Many restaurants advertise daily or weekly in local
       newspapers, such as The Post, The Athens Messenger, and The Athens News. The
       newspaper provides a very effective way of reaching customers. However, newspapers
       rarely publish entire menus, the costs of advertisements are expensive, and errors in
       advertisements are common.

      Athens Menu Book: The Athens News publishes a yearly menu book for the entire
       Athens County. The menu book provides menus and advertisements for only 23
       restaurants in the surrounding area. The menu book is not commonly found, except in
       the office of The Athens News. The menu book cannot be updated when a restaurant
       changes their menu or phone number.

      Yellow pages: The yellow pages provide a complete listing of all area restaurants divided
       by the type of food, catering and delivery capabilities, and extra advertisements for those
       whom wish to pay a little more. The yellow pages are a convenient way to locate a
       restaurant or find a particular number when a computer is not accessible. However, the
       yellow pages do not offer menus for area restaurants, and it cannot be updated throughout
       the year, since it is only published once a year.

      Online Services: There are services available to consumers through the Internet that
       provide information regarding restaurants in particular areas. Mylocal.com and
       sidewalk.com provide a service where consumers can type in their zip code and a listing
       of restaurants in the area that pay to advertise on the site appears. The problem with
       these sites is they only offer three to six Athens area restaurants, and the menus for most
       of the restaurants are not available. Many residents of Athens do not know these services
       exist and they do not offer a wide range of restaurants.

      45701.com: A direct online competitor to TownEats.com is 45701.com run by Mr. Jim
       Murray. However, the site does not focus on Athens area restaurants, and is not well
       designed, as there is a lot of scrolling which is a result of the unnecessary pictures and
       useless information listed. A primary weakness of this site is that it is not a true one-stop
       alternative. There is a supplemental offline menu book that is not regularly updated, and
       a daily fax of coupons distributed to area businesses. The site is not marketed properly,
       as many people have not heard of the site.

TownEats.com‟s main competition deals with the off-line means of advertising for restaurants.
Many restaurants advertise in newspapers or in paper publications, because it has worked in the
past. With the growing number of households with computers, advertising through the Internet
will surely prove to be a more effective way of reaching our target audience.

TownEats.com is confident that purchasing the ownership rights to Mr. Murray‟s fax and menu
book will allow the company to gain a competitive advantage. Mr. Murray will be an ally to
TownEats.com, not a competitor, after the purchasing of the fax.
                                                                                     TownEats 5


Marketing Strategies
TownEats.com has both customers and visitors, and therefore must conduct two different
marketing strategies to attract these different groups. TownEats.com will be marketed as having
both value and price advantages to its customers. The price of web design, a one time set up fee,
individual restaurant site maintenance, and banner advertising for area businesses will be
comparatively low in order to attract customers. As the amount of traffic grows and value is
proven, these prices will be raised.

TownEats.com will continue to distribute the morning fax, maintaining the 15 faithful customers
located on the fax, therefore, creating a relationship with the restaurants will not be difficult.
TownEats.com can begin marketing these 15 restaurants to advertise on the TownEats.com
website. As there is limited advertising space available on the fax, other area restaurants will
also see the competitive advantage to utilizing our services. In this way, TownEats.com will be
able to offer customers the ability to reach a large group of potential diners without any
additional time or money spent targeting these potential customers.

In order to attract visitors to the website, TownEats.com will be marketed as a convenient and
user-friendly website. A major portion of its advertising will be conducted through viral
marketing which allows us to offer giveaways in return for the e-mail addresses of ten of the
visitors friends or family in the Athens area.

Additional forms of advertising will be through placing ads in local newspapers, such as The
Athens Messenger, The Athens News, and The Post. TownEats.com will also advertise by
placing neon fliers throughout the Athens community, which gives the URL of our site and a
little information about our services. For the complete marketing strategy please refer to
Appendix J.

Competitive Advantage
TownEats.com will clearly have a competitive advantage over other mediums of advertising
such as the Athens menu book, yellow pages, and other online services targeted towards
providing food-based information in the Athens area. We will have sole ownership of the
Athens Morning Fax and menu book, eliminating some competition ahead of time.

Other online providers such as Mylocal.com and Sidewalk.com offer similar services, but
utilizing their site has proven time consuming and inefficient when searching the Athens area.
They also do not provide the services TownEats.com plans on offering, making the site a leader
in the industry.

We will have no official partnerships with individual customers, which will enable us to offer
links to the individual specially catered web sites of all area restaurants, giving our visitors a
greater selection. As well, it will permit TownEats.com to gain more restaurants and businesses
to advertise on the site.
                                                                                    TownEats 6


                               Marketing and Selling Strategies

TownEats.com will produce revenue through the designing of each restaurants web page,
maintenance fees, and banner ads of area businesses. There are many area restaurants that
TownEats.com can target. Each restaurant will be charged a one time fee of $300 for
TownEats.com to design their website. The monthly hosting fee TownEats.com will charge is
$85 for each restaurant. TownEats.com plans on targeting 10 restaurants for website design, and
a total of 15 restaurants to host, taking into consideration the already existing websites. Please
see Appendix K for a complete listing of Athens restaurants.

TownEats.com plans on targeting an average of six area businesses to advertise on the site
through banner ads. A banner ad on the site will cost $100 a month. For a listing of possible
business advertisers, please see Appendix L. Towneats.com will accept cash, checks, and money
orders from restaurants and businesses for advertising on the site.

In order to get area restaurants interested in joining the site, TownEats.com will develop a
sample website that will show area restaurants and businesses an outline of the site. The sample
will allow TownEats.com to examine area interest and allow for feedback to make the site better.
At this time, the market research and surveys will be shown to establish there is community
interest in a site such as TownEats.com will be presented to the restaurants.


                                           Operations

TownEats.com will do all web page design, maintenance, advertising, and selling internally.
TownEats.com will outsource its web hosting through Verio.com at a cost of $49.95/mo with an
initial set up fee of $50. Our company seeks the following services from a web host:

      Web site access statistics (to determine how much to bill our advertisers and to gain
       necessary site feedback)
      60 MB disk space, about 800 web pages
      24 hour technical support

For more information on web hosting and the components of the plan, please see Appendix M.

The work force of TownEats.com is small, consisting of the four creators. We will be
responsible for gathering information to update the web site regularly, along with various other
roles in the company. TownEats.com will be located in the basement of co-creator Erin
Connelly‟s house at 78 Mill Street. The office area will be 20 feet by 30 feet, and will include
four desks with a computer, faxing system, and all company files. There will also be furniture,
donated by Erin, for customers to relax in during the hours of operation, 9am-12pm.
                                                                                    TownEats 7


                                          Management

“I invest in people, not ideas. If you can find good people, if they’re wrong about the product,
they’ll make a switch.” – Arthur Rock, venture capital legend

TownEats.com‟s management team will consist of the four founders in a fairly simple
management structure. Valerie Kimball will perform the duties of the President, Molly Heglund
will serve as the Director of Marketing, Erin Connelly will serve as the Director of Technology,
and Dave Poluszejko will head up the Finance/Accounting department. The four founders of
TownEats.com are intelligent, driven, dedicated, and creative people.

The company‟s management will be decentralized and the four founders will “wear many hats.”
While each founder will be responsible for one particular business function, his or her
responsibilities will not be limited to that function. Please see Appendix N for an organizational
chart of the company, depicting the percentage of time each founder will spend on a given
business function.

The management team will work sweat equity, receiving no set salary. Each of the founders has
another primary job. At the end of each year, all profits will be divided among the founders and
the investors. A brief description of each founder is as follows; please turn to Appendix O for
each founder‟s resume:

Valerie Kimball –President
Valerie Kimball will devote 50 percent of her time as the President of TownEats.com, overseeing
all operations of the company. Along with this position, Valerie will devote 50 percent of her
time handling the day-to-day Marketing and Sales activities of the company. The duties include
advertising for the site, promotions, and continuing to research other college towns in Ohio for
future expansion. She is an International Business/Marketing major with sales experience in
both product and service based industries.

Molly Heglund – Director of Marketing
Molly Heglund will devote 100 percent of her time as the Director of Marketing. The duties will
include the organization and development of marketing and sales strategies, advertising, and
promotional materials. She will continue to conduct surveys and research within the Athens
area, as well as the state of Ohio, for the future expansion of TownEats.com into similar college
towns. With the expansion of TownEats.com, Molly will be responsible for the training of our
student representatives. She is a Marketing and Finance major with prior sales experience.

Erin Connelly – Director of Technology
Erin Connelly will allot 80 percent of her time as the Director of Technology, concentrating on
the web design and other technological aspects needed for TownEats.com. She is currently an
MIS major and is continuing to gain technological skills through her experiences in the
numerous courses that she will take for her major. Erin will also be devoting 20 percent of her
time helping with the finances of the company.
                                                                                  TownEats 8


David Poluszejko – Director of Finance/Accounting
David Poluszejko will coordinate the financial and accounting aspects of the company. This
includes, but is not limited to, preparing balance sheets and income statements, managing
accounts receivable/payable, and preparing budgeting for the company‟s expenses. David also
has technological skills (web design and computer programming) that will be an asset to the
technology aspect of the company. David is a Finance major and is familiar with accounting
principles.

Board of Directors
The company will have a Board of Directors that includes: the four founders, Mr. Jim Murray,
and one representative for the angel investors. The board will meet quarterly the first year of
operations, and semi-annually from then on. Mr. Murray will be the consultant and advisor for
TownEats.com, since he is the original owner of the fax, and he will help aid us in the
development of the company. He is responsible for coming to all the board meetings the first
year, and one a year from then on. Mr. Murray will receive $100 for each board meeting he
attends.


                                     Ownership Structure

Due to the nature of our business and our need for tax advantages, TownEats.com feels forming
a Limited Liability Company (LLC) will be most beneficial to our company. LLC's bring
together the advantages of both a partnership and a corporation. For a complete analysis of the
various types of business entities, please see Appendix P.

By forming an LLC, the owners will be protected from personal liability for the debts and
obligations of the company. The owners have limited liability, and are only liable for their
contributions to the company. By forming an LLC, TownEats.com does not have to pay taxes as
an entity, eliminating the double taxation corporations encounter. The profits, losses,
deductions, and credits from the company are taxed on each owner's individual tax return at the
end of the year. This is one of the main reasons we chose a LLC, because we will be able to
retain the majority of our profits or reinvest them in the operations of the company
(LawInfo.com, 2000).

An LLC can pass along tax benefits (depreciation deductions) to those members who are best
able to take advantage of them and also gain considerable other tax-planning flexibility by
making special allocations of such attributes. All members can manage and control the business
without causing the LLC to be taxed as a corporation. The investors, as well, have the limited
liability of a corporate stockholder (LawInfo.com, 2000).


                                 Expansion of TownEats.com

TownEats.com will initially be targeted to Athens area restaurants/residents. The site will be
expanded when the Athens site is successful. The expansion will target similar medium-sized
college towns. Expansion into another market can be done quickly because the marginal cost, in
                                                                                     TownEats 9


terms of both time and money, will be reduced once the initial site is launched. For a listing of
possible college town expansion areas, please see Appendix Q.

The target market for the site is expected to include 10 restaurants for website design, and a total
of 15 restaurants for the hosting on the site, in each college town TownEats.com expands into.
After the first year that TownEats.com is in business, the site will expand to the college towns of
Akron and Kent State. During the third year of expansion, TownEats.com will expand to the
University of Toledo. The fourth year of expansion will include Bowling Green State University
and Miami University.

TownEats.com would also like to expand the Morning Fax into each of these areas, in order to
ensure that our expansion is advantageous and profitable through the utilization of all our
available services.

The employing of student representatives in each expansion area will facilitate TownEats.com‟s
expansion. Students will be hired by our advertising on job boards at the schools and through
advertising this employment opportunity on our website. Each representative will receive a $300
stipend for training, which they will receive at our office in Athens. These representatives will
be given a monthly wage of $200, along with $25 for each website design referral, $100 for each
restaurant they sign on for TownEats.com‟s hosting plan, and $25 for each fax referral.


                                     Risks of TownEats.com

We see two primary risks to the success of TownEats.com. If the restaurants or local businesses
do not advertise on our site, it will not be successful. The restaurants may fear that they will be
losing their individuality if put on a combined site with their competitors. Potential customers
can browse the site for the restaurant with the best prices or specials ahead of time, which will
automatically exclude certain restaurants before customers try them. There is the risk of losing
customers to other restaurants featured on the site. However, 82 percent of restaurants surveyed
said they would like to have their menu featured on such a site.

The second risk for TownEats.com is that residents of Athens may not utilize the site. Possible
reasons why residents may not use the site include the following:

      Lack of computer
      Already know restaurants available to them
      Only go to favorite restaurants
      Fear of technology
      Inconvenient

These are the possible risks TownEats.com must consider in the development of the site.
Through the market research, results showed many residents feel the site will be helpful and
convenient. We feel the amount of residents that will not use the site is minor compared to the
market that is available.
                                                                                     TownEats 10



                              Possible Exit Strategies for Investors

The exit strategy for the angel investors is very important. There are three foreseeable exit plans
for investors in TownEats.com. The exit strategies include the following:

      Selling the Company. After 5 years our company financial statements would value our
       company at approximately $1,386,150. This figure is found by multiplying year 5
       revenues by 1.75. Dr. Neil Holden, Professor of Accountancy at Ohio University,
       recommended this factor. The investors will receive $554,460 from the sale of the
       business. This number is found by multiplying the value of the company by the investors
       40 percent stake in the company.


                              Sale of TownEats.com After 5 Years


                                                            Share to Founders (.6)

                            Sale of C om pany                     $ 831,690

                              $1,386 ,150




                                                       Share to Inves tors (.4)

                                                              $554 ,460


                                                 Figure 1

      No Exit. We see the possibility that the investors would not want to exit the business. At
       the end of year five, the company will earn the investors a net income of $90,342 for the
       year. The business will be profitable for investors, therefore, they might not want to exit.

      Initial Public Offering (IPO). With the expansion of TownEats.com, the company may
       be able to bring in a large enough profit to IPO. This will need to be discussed with the
       founders of the company and the investors.

                                                Conclusion

In conclusion, we feel that TownEats.com will be a great success and an exciting venture for our
investors. With our thorough research in examining all aspects of the business, it is predicted
that TownEats.com will be a profitable and desirable site for everyone involved. This is why the
founders of TownEats.com feel that an investment of $60,000 in exchange for 40 percent of our
company will be beneficial for investors. Our company is an innovative idea backed by
hardworking, intelligent, and creative individuals. Please view our appendices, including a
SWOT analysis of the company (Appendix R) for a more in depth look at various areas of our
paper.
                                                                             TownEats 11


                                         References

Athens Yellow Pages. January 2000.

Berlin, R. Choosing the Best Structure of Your Business. (2000). [File posted on the World
        Wide Web] Retrieved on November 14, 2000 from the World Wide Web:
        http://www.alllaw.com/artiles/business_and_corporate...

Dell Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November 7,
       2000 from the World Wide Web: http://www.Dell.com

45701 Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November 10,
      2000 from the World Wide Web: http://www.45701.com

Frognet Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November 14,
       2000 from the World Wide Web: http://www.frognet.net

Goldcoin Group Homepage. (2000). [File posted on the World Wide Web.] Retrieved on
      November 13, 2000 from the World Wide Web: http://ww.goldcoingroup.com

Holden, N. (2000, November 14). Personal Communication.

Kirch, D. (2000, November 16). Personal Communication.

Law Info Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November 9,
      2000 from the World Wide Web: http://www.lawinfo.com

Limited Partnerships. (2000). [File posted on the World Wide Web.] Retrieved on November
       14, 2000 from the World Wide Web: http://www.tannedfeet.com/html/partnerships.htm.

Murray, J. (2000, November 9). Personal Communication.

My Local Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November
      10 from the World Wide Web: http://www.mylocal.com

Ohio University Homepage. (2000). [File posted on the World Wide Web.] Retrieved on
      November 10 from the World Wide Web: http://www.ohiou.com

Partnerships. (2000). [File posted on the World Wide Web.] Retrieved on November 14, 2000
       from the World Wide Web: http://www.tannedfeet.com/html/partnerships.htm

Publicizing Your Events and Activities (2000) [File posted on the World Wide Web.] Retrieved
       on November 13 from the World Wide Web: http://www.ohiou.edu/stuactivites/...

Register Homepage (2000). [File posted on the World Wide Web.] Retrieved on November 6
       from the World Wide Web: http://www.register.com
                                                                           TownEats 12



Sample Form. (2000). [File posted on World Wide Web.] Retrieved on November 15, 2000 from
      the World Wide Web: http://www.alberty.com/sample_form.html

Sidewalk Homepage (2000). [File posted on the World Wide Web.] Retrieved on November 10
      from the World Wide Web: http://www.sidewalk.com

Sole Proprietorships. (2000). [File posted on the World Wide Web.] Retrieved on November
       14, 2000 from the World Wide Web: http://www.tanned feet.com/html/partnership.htm

Types of Business Entities (2000) [File posted on the World Wide Web.] Retrieved on
       November 14, 2000 from the World Wide Web: http://www.szun.com/types.htm

Verio Homepage. (2000). [File posted on the World Wide Web.] Retrieved on November 6
       from the World Wide Web: http://www.verio.com
                                                                                   TownEats 13


                                               Appendix A
                                                Financials


                                          TownEats.com
                                               Net Income
                              Year 1        Year 2            Year 3       Year 4       Year 5
Net Income                   $ 41,729      $ 104,499         $ 164,721    $ 220,305    $ 225,855

Net Income (Founders)             25037           62699          98832        132183       135513

Net Income (Investors)       $   16,692    $     41,800      $   65,889   $   88,122   $   90,342
                                                 Table 2




                          TownEats.com Investor Rate of Return
                                          5 Year Period

Total Investor Net Income (5 years)   $302,845
Initial Investment                      60,000

Investor Rate of Return                   504%
                                                 Table 3




                                      TownEats.com
                                      Start-up Expenses

Computer/Scanner/Digital Camera       $ 2,348
Telephone                                  40
Office Supplies                            30
Trade Name Registration                    20
LLC New Business Filing                    85
DSL Installation                           50
Legal Expenses                            500
Total                                 $ 3,073
                                                 Table 4
                                                                      TownEats 14


                              TownEats.com Net Income Growth



Net Income Dollars
                     250000
                     200000
                     150000
                                                               Net Income
                     100000
                      50000
                          0
                                Year Year Year Year Year
                                 1    2    3    4    5
                                          Year

                                         Figure 2
                                                                                                                  TownEats 15


TownEats.com Income Statement Year 1
                           Jan         Feb      Mar      Apr       May      June      July     Aug       Sept      Oct       Nov      Dec
        Revenues
Web Site Design Fee      $ 300.00             $ 600.00           $ 300.00           $ 600.00           $ 600.00            $ 300.00
Monthly Listing Fee          255        425       510      680       765      850       935    1,190     1,190     1,190     1,275    1,275
Banner Ads                   600        600       600      600       600      600       600      600       600       600       600      600
Sales                      2,730      2,730     2,730    2,730     2,730    2,730     2,730    2,730     2,730     2,730     2,730    2,730
        Expenses
Selling Expenses            167         167      167      167        167     167       167      167       167       167       167      167
Equipment Depreciation       67          67       67       67         67      67        67       67        67        67        67       67
Web Hosting Fee              99          49       49       49         49      49        49       49        49        49        49       49
Fax Software                108
Domain Name                  35
Telephone                    40          40        40      40         40      40         40      40         40       40         40      40
Office Supplies              30          30        30      30         30      30         30      30         30       30         30      30
Utilities                    40          40        40      40         40      40         40      40         40       40         40      40
Advertising
     flyers                 125         125       50       50
     newspaper              400         400      400      400        400     400       400      400       400       400       400      400
     viral campaign         300
Legal Fees                  500
Internet                     51          51        51      51         51      51         51      51         51       51         51      51

Total Revenues             3,885      3,755     4,440    4,010     4,395    4,180     4,865    4,520     5,120     4,520     4,905    4,605
Total Expenses             1,962        969      894      894        844     844       844      844       844       844       844      844
Net Income (Monthly)       1,923     $ 2,786 $ 3,546 $ 3,116 $ 3,551 $ 3,336 $ 4,021 $ 3,676 $ 4,276 $ 3,676 $ 4,061 $ 3,761


Net Income               $ 41,729
NI for Founders            25,037
NI for Investors          $ 16,692
                                                                                       TownEats 16



TownEats.com Income Statement Year 2
                           First Quarter Second Quarter Third Quarter Fourth Quarter
          Revenues
Web Site Design Fee        $     1,800    $         600   $     2,400   $        600
Monthly Listing Fee              6,205            8,415        10,455         11,305
Banner Ads                       5,400            5,400         5,400          5,400
Sales                           13,140           17,820        22,140         23,940

          Expenses
Selling Expenses                 4,953            3,753         3,903          3,053
Equipment Depreciation             201              201          201             201
Web Hosting Fee                    147              147          147             147
Domain Name                         35
Telephone                          360             360           360             360
Office Supplies                    150             150           150             150
Utilities                          120             120           120             120
Advertising
     flyers                        600              100
     newspaper                   3,600            3,600         3,600          3,600
     viral campaign                600
Internet                           153             153           153             153

Total Revenues                  26,545           32,235        40,395         41,245
Total Expenses                  10,919            8,584         8,634          7,784
Net Income                 $     15,626   $      23,651   $    31,761         33,461

Net Income                                                                  104,499
Net Income for Founders                                                      62,699
Net Income for Investors                                                    $ 41,800
                                                                                           TownEats 17



TownEats.com Income Statement Year 3
                               First Quarter              Second Quarter   Third Quarter     Fourth Quarter
                  Revenues
Web Site Design Fee            $          900             $          300   $       1,200     $         300
Monthly Listing Fee                    12,655                     13,770          14,790            15,385
Banner Ads                              7,200                      7,200           7,200             7,200
Sales                                  26,820                     29,160          31,320            32,220

                  Expenses
Selling Expenses                        5,129                      4,329           4,404             4,029
Equipment Depreciation                    201                        201            201                201
Web Hosting Fee                           147                        147            147                147
Domain Name                                35
Telephone                                 480                       480             480                  480
Office Supplies                           180                       180             180                  180
Utilities                                 120                       120             120                  120
Advertising
     flyers                               300                        50
     newspaper                          4,800                      4,800           4,800             4,800
     viral campaign                       300
Internet                                  153                       153             153                  153

Total Revenues                         47,585                     50,430          54,510            55,105
Total Expenses                         11,845                     10,469          10,485            10,110
Net Income                     $       35,740             $       39,961   $      44,025     $      44,995

Net Income (End of Year 3)                      164,721
Net Income for Founders                          98,832
Net Income for Investors                $        65,889
                                                                              TownEats 18



                      TownEats.com Income Statement Year 4 and 5

                                                    Year 4           Year 5
                      Revenues
Web Site Design Fee                          $     5,400
Monthly Listing Fee                               56,610     $    56,610
Banner Ads                                        43,200          43,200
Sales                                            177,420         177,420

                      Expenses
Selling Expenses                                  26,870           17,220
Web Hosting Fee                                    1,188            1,188
Domain Name                                           35               35
Telephone                                          2,880            2,880
Office Supplies                                      960              960
Utilities                                            480              480
Advertising
     flyers                                          700
     newspaper                                    28,000           28,000
     viral campaign                                  600
Internet                                             612             612

Total Revenues                                   282,630         277,230
Total Expenses                                    62,325           51,375

Net Income                                       220,305         225,855
Net Income for Founders                          132,183         135,513
Net Income for Investors                     $    88,122     $     90,342
                                                                                 TownEats 19


                              Explanation of Income Statements

Revenues
Web Site Design Fee- This is the revenue that the company collects from designing websites for
restaurants. The revenue is collected only once. We anticipate that in each market our company
expands into, we can acquire 10 web site design customers by year-end. This number is our
realistic goal, before expanding into any market a detailed market analysis would need to be
completed.

The company expects to be able to charge a one-time fee of $300 for each site it designs. This
number is based upon the estimated time the design of the sited should take to complete. We
estimated that the average time to complete a web site for a restaurant would take approximately
15 hours. With this estimation, the company will make approximately $20/hour for website
design.

Monthly Listing Fee- This is revenue collected by the company for listing a restaurant on our
page. The fee per month is $85 per restaurant. This is the average that restaurants said they
would pay to be on our site in the Athens area. The Athens area average is projected to the other
expansion markets. Before expanding into any market a detailed survey would be distributed
and analyzed, to get and average for each market.

Banner Ads- This is revenue collected from local companies that wish to advertise on our site.
We aim to capture 6 advertisers per market. We anticipate charging each advertiser $100 a
month to advertise on our site, this number is based on the current market price for banner ads.
A detailed analysis of both the number of advertisers and the advertising cost per month would
need to be done before expanding into any market.

Sales- This is revenue collected from the office fax page. Currently, the fax has 15 restaurants
advertising on it in the Athens area. The goal in every market will be to have 15 restaurants on
the fax by year-end. Customers will be charged approximately $182 per month to advertise on
the fax.

Expenses
Selling Expenses-Selling expenses are the expenses the company incurs in order to gain
customers. Selling expenses are the cost to get restaurants signed up for each of our offerings
(web site design, monthly listing fee, the fax). The student representatives in each expansion are
will be the primary source of selling costs. The student representatives will be paid as follows:

Training- $300
Fax Customer Referral- $25/each
Monthly Listing Fee Referral- $100/each
Web Ste Design Referral- $25/each
Monthly Wage- $200

Equipment Deprecation – Equipment depreciation refers to the way in which the computer,
scanner, and digital camera bought in year 1, month 1, by the company will be depreciated. The
                                                                                    TownEats 20


equipment was bought from Dell for a price of $2438. The equipment is deprecated over 36
months; the cost per month is $67.

Web Hosting Fee – The web site hosting fee is the money our company pays to “rent” space on
a server. Our company has chosen Verio to be our web host. The fee for the first two years is
$49 per month with a set-up fee of $50. At the beginning of year three, due to company growth,
the company will be forced to pay $99 per month.

Domain Name – The TownEats.com name costs $35 a year to reserve from Register.com.

Telephone – As the company grows, so will the telephone expenses. The predicted phone
expenses are increased by $40 per month for each additional expansion into a new market.

Office Supplies – The company will have office supplies expenses. The predicted office
expenses are $30 per month for the first market, and a $10 per month increase for each additional
expansion market.

Utilities – The predicted utility expense is $40 per month. This is based upon the current
expense rate at 78 Mill Street Athens, OH 45701. As the company expands, there are no
additional utility expenses.

Advertising – Advertising expenses are allocated into three categories: flyers, newspapers, and
the viral marketing campaign.
     Flyers – The expenses for the flyers are $125 per market, per month for the first two
        months of entry, $50 per market, per month for the third and fourth months of entry into a
        new market.
     Newspapers – Advertising expenses are projected to be $400 per month, per market.
        This is based upon current newspaper advertising rates and our newspaper advertising
        strategy.
     Viral Campaign – The viral campaign will cease at the end of the first month in each new
        market. At this time, the company will expense $300 for the TV/Books For the Quarter
        sweepstakes winner.

Legal Fees – In order to become a Limited Liability Company (LLC), the company will need to
hire legal expertise. The company will also need legal expertise to write customer contracts.
The projected legal expense for the first month of the business is $500. This number is based on
current legal rates, and the projected time it will take to fulfill our legal requirements (approx. 10
hours).

Internet – In order to operate the company will need one Internet connection. The company will
use Verizon to provide a DSL connection. The DSL connections will provide a faster Internet
connection and will help to improve worker productivity. The projected cost of the Internet
connection is $51 per month.

Special Thanks: TownEats.com would like to thank Dr. Neil Holden and Dr. David Kirch,
Professors of Accountancy at Ohio University, for reviewing our financial statements.
                             TownEats 21



        Appendix B
Screenshot of TownEats.com




         Figure 3
                                                                                   TownEats 22


                                        Appendix C
                             Background of Jim Murray’s Business

In January 1996, the Athens Morning Fax was founded by Athens resident, Mr. James Murray.
He began marketing his idea of faxing restaurants‟ daily specials and coupons to 187 area
offices. Once he knew that there was an interest in the fax, he took his results to area restaurants
offering them his service at a price of $5.80/day for a 2 inch x 21/4 inch ad, a price much more
affordable than the $10 cost for a 1 inch x 1 inch ad in local newspapers.

Currently, the fax features 15 area restaurants, and is received by 358 offices, 190 of which are
Ohio University affiliated. Mr. Murray operates his business out of his home using only two
telephone lines, which cost him $88 a month, and he pays a fee of $20 a month for Internet
hookup through Frognet. He works 6 hours a week, and has office hours from 9-12 am Monday
through Friday.

Mr. Murray does not have any supply costs because the fax is printed on the individual offices
paper. He charges each restaurant $377 for a 13 week period. Mr. Murray states that he grosses
$22,000 a year, and has a net income of $20,000 a year, which is a 90 percent profit due to the
fact he has no inventory. Before purchasing the business, these numbers would need to be
verified using income tax returns for the business.

Mr. Murray also founded the Athens Menu Book in 1996. The book was established as a
supplemental service to restaurants already affiliated with the fax and is published once a year.
Mr. Murray charges these restaurants $197 a year for two full pages plus coupon space. His
gross profit for this service is $8,000 a year, and he nets $6,000 a year after printing costs. These
two services serve as a cross promotion of one another.

A third service that Mr. Murray offers is the website 45701.com. Currently, this is a free service
that allows a few restaurants to promote their restaurants. However, most consumers do not
know of the site and the restaurants show no great interest in the site.

TownEats.com is actively pursuing the ownership of the fax and menu book developed by
Athens resident Mr. Murray, in order to supplement the TownEats.com website. Because his
business falls in the category of the service industry, Mr. Murray can charge one-and-a-half to
two times his net profit of $25,000. According to the Athens Small Business Development
Center, his business is appraised to be worth $44,000 to $63,000, but Mr. Murray is asking for a
buying price of $50,000. Before purchasing, the debts of the business would need to be verified.

The founders of TownEats.com feel that purchasing this very stable and healthy business will be
a profitable investment. If we purchased the business for $50,000, we would be assured to make
our money back in two years time by continuing to charge the restaurants $5.80/day. However,
if we increased our rates, this return would be even greater. Coupling these services with our
online website will result in an even greater profit for TownEats.com.
                                                                                TownEats 23


                                         Appendix D
                                 Interview with Jim Murray

November 11, 2000

Dear Mr. Murray:

This is in regards to the questions that we said we would fax to you. Once again, we are students
in the College of Business here at Ohio University, and we are researching online advertising
that focuses on restaurants. We saw your site and just wanted to ask you some questions to aid
us in our research.

Our agreed upon meeting time is Monday, November 13, 2000 at 8 am at the 1804 Lounge in
Baker Center. We look forward to meeting with you and we appreciate your time. Attached are
the questions that we would like to discuss with you. Thank you.

Sincerely,


Erin Connelly
Molly Heglund
Valerie Kimball
Dave Poluszejko


Enclosure
                                                                                TownEats 24


How did you come up with the idea for your online website, fax, and menu book?



What means did you use to advertise your site and get area restaurants involved?



What is your primary target market (students, Athens area businesses, residents)?


How long have you been operating your website, fax, and menu?


What are your major costs that you incur to operate your site, the fax, and the menu book?


How much did it initially cost you to set up your website?



Who designs and maintains your website?


How much do you charge restaurants to advertise on your site, on “The Fax”, and
in the Athens Menu Book monthly?



Do these three services come as a package, are they separate, or does it depend on what the
restaurant wants?


How often do you update the website and menus?


Do you have a way of counting how many people visit your site, if so how?



Do you work alone or do you have a staff?
                                                                              TownEats 25


                                         Appendix E
                                    Area Residents Survey

We are proposing the development of a website that would feature all Athens area restaurants.
This site would allow customers to view each restaurants menu, location, hours of operation,
phone number, prices, coupons and featured specials. The site would also provide information
on delivery capabilities and catering.

Please answer the following questions to help us with our work, Thank You.

1. How often do you eat out or order food weekly?
      0             1-3            4-5          6-7               8 or more

2. Would you like there to be a website that features area restaurant’s menus, phone
numbers, etc…
      YES            NO

3. Would you use this site if it were available to you?
      YES            NO

4. If you answered YES to question #3, how often would you use this site?
        Often       Sometimes            Rarely        Never

5. Would you use a site that features weekly specials and provides printable coupons?
      YES            NO

6. Would you find this site more convenient than having to rely on the yellow pages, paper
advertisements and menus?
       YES           NO

7. On a scale from 1-10 (10 being the best), how convenient would you find this site?
Not Convenient                                                        Convenient
       1       2     3       4      5       6     7      8     9      10
                                                                                               TownEats 26


                                                Appendix F
                                        Area Residents Survey Results


                                     How Often Respondents Eat Out or
                                            Order Food Weekly

       Number of Respondents   120
                               100
                                80
                                60
                                40
                                20
                                 0
                                         0     1 to 3    4 to 5    6 to 7         8 or
                                                                                  more
                                               Num ber of Tim es per Week


                                                  Figure 4


Interest in Centralized                                            Use of Site if Available
Website for Restaurants
                                                                            11%
      9%




                                 91%                                                     89%
            Yes                  No                                               Yes   No

      Figure 5                                                               Figure 6
                                                                                      TownEats 27


  Frequency of Use                                             Site is More Convenient than
           8%                                                     Yellow Pages and Paper
                           26%                                        Advertisem ents




                                                                                      12%
                                                                    88%

   66%


Often        Sometimes     Rarely                                          Yes   No

           Figure 7                                                       Figure 8

                                 Use of Site Which Offers Coupons
                                        and Weekly Specials




                                                          9%

                                    91%




                                               Yes   No

                                              Figure 9



                           Potential Convenience of Site

                      60
                      50
        Respondents
         Number of




                      40
                      30
                      20
                      10
                       0
                           1      2       3     4    5    6     7     8      9   10
                                       Scale 1-10 (10 being best)

                                              Figure 10
                                                                                TownEats 28


                                         Appendix G
                                      Restaurant Survey

November 9, 2000

Dear Sir or Madam:

We are students in the College of Business at Ohio University, and we are working on an
assignment that requires us to develop an e-commerce business. We are proposing the
development of an online website that would allow Athens area restaurants to showcase
themselves online.

We recently surveyed a random sample of 200 area residents and students explaining that our
site would feature area restaurant‟s menus, phone numbers, prices, hours of operation, location,
featured specials, printable coupons, and delivery or catering capabilities. We found that:

 91% of the people surveyed said they would like there to be a site like this one available to
  them
 89% said they would use our proposed site, if available
 88.5% said using this site would be more convenient that relying on the yellow pages, paper
  advertisements, and menus

We feel that this demonstrates the strong potential market in the area for such a site. We would
appreciate your assistance in answering the attached questionnaire. Your participation in our
research will aid us tremendously in the development of our business plan, and will allow us to
better understand and meet the needs of area restaurants in terms of advertising. Thank you for
your time.

Sincerely,


Valerie Kimball and Team
                                                                                    TownEats 29


We are aware that there is currently a site in Athens called www.45701.com, and a daily
newsletter called “The Fax” that features area restaurants.

1. Is your restaurant currently affiliated with either of these services?


2. If yes, what is your overall perception of the site and/or Fax?


3. Do you feel that it has increased your business flow?


4. If you are not currently affiliated with either of these services, would you like to be able to
feature your restaurant online?


5. Do you currently have Internet access within your restaurant?


Our site would benefit you because your potential customers would be ensured a convenient way
to find your restaurant online, along with any information you feel is important to them. Your
site would be personally catered to you, therefore meeting not only your needs but the needs of
your customers.

1. What is your current form(s) of advertising, and how much do you spend on this
   mean(s)?


2. Approximately how much would you be willing to pay for a professionally designed
   website? (This would be a one-time initial set up fee)


3. How much would you be willing to spend to advertise online monthly?


4. Would you like to have your menu featured on such a site?


5. Would you be willing to offer coupons or feature your specials online?


6. Do you currently deliver or cater?


7. Do you have any suggestions on how we could make this site more appealing to you or your
customers?
                                                                                                                        TownEats 30


                                                               Appendix H
                                                         Restaurant Survey Results

Restaurant Affiliated with                                                                    Feel 45701.com and The Fax
 45701.com of The Fax                                                                          Have Increased Business
                                                                                                         Flow

  27%
                                                                                                    33%




                                                 73%                                                                    67%


                           No         Yes                                                                    Yes   No


         Figure 11                                                                                         Figure 12

Interested in Featuring                                                                         Currently Have Internet
   Restaurant Online                                                                         Access Within the Restaurant

    18%
                                                                                                     36%


                                                                                                                        64%
                                            82%

                  Yes                  No                                                                    Yes   No

        Figure 13                                                                                          Figure 14


                                                       Current Forms of Advertising
         Number of Restauran ts




                                     10
                                       8
                                       6
                                       4
                                       2
                                       0
                                                                                                                   l
                                                         st




                                                                           io



                                                                                       d
                                                                  er




                                                                                                               ai
                                                                                                              on
                                                                                               rs
                                             s




                                                                                    ar
                                                       Po




                                                                         ad




                                                                                                             M
                                            ew




                                                                ng




                                                                                             ye



                                                                                                            si
                                                                                  bo




                                                                                                          vi
                                                                        R




                                                                                                          ct
                                                                                           Fl
                                                              se
                                       N


                                                    e




                                                                                   ll




                                                                                                        le
                                                  Th




                                                                                                      ire
                                                                                Bi
                                       ns




                                                           es




                                                                                                    Te


                                                                                                    D
                                                          M
                                    he




                                                         e
                                  At




                                                       Th




                                                                       Type of Advertisem ent


                                                                       Figure 15
                                                                                   TownEats 31




                                     Willing to Offer Coupons or
                                      Feature Specials Online




                                       45%
                                                           55%




                                              Yes     No

                                             Figure 16


*The average fee restaurants are willing to pay for a professionally designed website is $300
(this is a one-time initial set-up fee).

*The average price restaurants are willing to pay to advertise online monthly is $88.

*All restaurants surveyed would like to have their menu featured on such a site.

*Five restaurants surveyed cater and three deliver.
                                                                                 TownEats 32


                                        Appendix I
                                  Comparison of Competition

The main competition for TownEats.com is the yellow pages, area newspapers, and
Sidewalk.com. The competition, including TownEats.com, was ranked on a scale of 1 to 3, with
3 meaning extremely good, 2 meaning average, and 1 meaning not available or of poor quality.
The following table explains the results and displays why TownEats.com beats all competitors.

Category/type      TownEats.com       Yellow Pages       Newspapers        Sidewalk.com
Ability to
update                    3                 1                  2                  3
regularly
One-stop                  2                 2                  1                  1
convenience
Offers a variety          3                 3                  2                  1
of restaurants
Provides extra
services, such            3                 2                  2                  1
as coupons or
specials
Offers a
complete menu             3                 1                  1                  1
list
Average Score            2.8               1.8                1.6                1.4
                                            Table 5

TownEats.com offers customers the ability to display their menu, phone number, location,
specials, and coupons on the Internet. Restaurants with changing menus or specials can update
the menu on a regular basis. All Athens area restaurants are arranged on the site according to the
type of food or service. TownEats.com is expected to be a one-stop solution for area residents
dining needs if all restaurants advertise, ranking an average 2.8 on the scale.

The yellow pages displays all Athens area restaurants according to the type of food and service
provided. Coupons are offered occasionally in the back of the yellow pages. Restaurants menus
are not available in the yellow pages, and updating any changes can only be made once a year,
therefore the yellow pages received an average ranking of 1.8.

Area newspapers offer a variety of restaurant advertisements and occasionally coupons.
Restaurants can update their advertisement at any time, but sometimes the newspapers forget to
use the updated version. Menus are not published in the local newspapers, and a one-stop
solution to dining needs is not satisfied. The local newspapers ranked on average a score of 1.6.

Sidewalk.com offers restaurants the ability to update their advertisements regularly. The site
only offers information about six Athens area restaurants, and the menu is only provided for half
of those. There also are no coupons or specials offered. Sidewalk.com is not a one-stop solution
and received an average score of 1.4.
                                                                                   TownEats 33


                                         Appendix J
                                      Marketing Strategies

Viral Marketing
A major portion of TownEats.com‟s advertising will be conducted through viral marketing.
Companies such as Hotmail.com have shown that this type of “and then they told ten friends”
advertising is a viable alternative for young, cash-strapped web companies. Viral marketing is
relatively inexpensive at a price of $300, and if conducted properly can be a significant
promotional vehicle.

The site will have a TV/Books for the quarter sweepstakes to coincide with the site‟s launch.
Contestants will be entered in the sweepstakes after they have submitted the valid e-mail
addresses of ten people (which is restricted to e-mails of people in Athens only, since this is the
target market). These ten referred people will then be sent an e-mail by TownEats.com stating
who referred them and to please visit our site. This form of advertising will cease after the end
of the first month in each new market.

Newspaper Advertising
Another form of advertising that will be employed by TownEats.com is placing ads that promote
our website and fax, in various local newspapers. TownEats.com will spend $150/month to
advertise in the Athens Messenger, $53/month to advertise in the Athens News, and $50/per ad to
advertise in The Post. We have allotted $400/month for this means of advertising.

Flyers
The third form of advertising that TownEats.com will utilize in our marketing strategy is the
distribution of 2,500 flyers ($125 per market per month for the first two months, $50 per market
per month for the third and fourth months) around the Athens Community. The management
team of TownEats.com will design our own flyers, which will give our URL and some
information about our site. These flyers will be duplicated at The Printing Resources Center
located in the basement of Scott Quad at a fee of $.05 a neon copy.

The Fax
Because TownEats.com will have ownership of the fax, we will be able to advertise our website
conveniently on it. This is a very beneficial form of advertising because it won‟t cost us
anything, and 358 offices throughout the city already receive the fax.

TownEats.com feels these advertisement mediums are appropriate and useful forms of
advertising, because each will reach every level of our target market including students, OU
employees, and local residents.
                                                                              TownEats 34


                                        Appendix K
                           Restaurants in Athens (Target Market)

The following are restaurants that TownEats.com can target as potential customers. The
restaurants are all located in the surrounding Athens area.

Albert‟s Café & Confections                        Lui Lui Restaurant
Avalanche Pizza                                    Mama Einstein‟s Bar & Grill
Bagel Street Deli                                  Maplewood Inn
Bob Evans Farms Restaurant                         McDonald‟s
Brenen‟s Coffee Café                               McHappy‟s Bake Shop
BW3s                                               My Favorite Muffin
Buffalo Wings & Rings                              Night Court
Burger King                                        The Oasis
Burrito Buggy                                      Oak Room
Casa Nueva                                         Papa John‟s Pizza
China Fortune Restaurant                           Pigskin Sports Bar & Grill
China Garden                                       Pizza Express
The Court Street Bakery                            Pizza Hut
Courtside Pizza                                    Ponderosa Steak House
Cutler‟s Restaurant                                The Pub
D.P. Dough                                         Purple Chop Stix
Dairy Queen                                        Rax Restaurant
Dalt‟s Court Street Diner                          Redbud Café Ltd
Damon‟s                                            Seven Sauces
The Deli                                           Skipper‟s Pub
Domino‟s Pizza                                     Souvlaki‟s
Firehouse Pizza                                    Subway Sandwiches & Salads
Gold Star Chili                                    Sylvia‟s Inc.
GoodFella‟s Pizza                                  Taco Bell
Great Streak & Potato Company                      Taco John‟s
Hardee‟s                                           Tomatillo‟s Mexican Restaurant
Hole in the Wall Sub Shop                          The Union Bar & Grill
KFC                                                Union Street Café
Lam‟s Garden                                       W.G. Grinders
Larry‟s Dawg House                                 Wendy‟s
Late Night Pizza                                   World‟s Best Bagels
Long John Silver‟s                                 Zachary‟s Delicatessen
Lucky‟s Sports Tavern
                                                                          TownEats 35


                                        Appendix L
                         Possible Area Advertisers (for banner ads)

The Other Place                                  Mountain Leather General Store
College Bookstore                                Cross Court
Follett‟s University Bookstore                   Duplication Station
Specialty Books                                  Jack Neal Florist
Athens Flower Shop                               Court Street Collection
Attractions                                      University Mall
Bank One                                         Athens Mall
People‟s Bank                                    Classic Brands
The Inlet at Five                                O‟Bleness Memorial Hospital
Figleaf                                          CNS
Artifacts                                        Ohio University
Low Key Clothing Store                           Beads and Things
Frognet                                          Payless Shoe Source
Haffa‟s Records                                  Sprint
Bungalows                                        Odd Lots
The Import House                                 Ames
Kinko‟s                                          Big Bear
Athens Chamber of Commerce                       Kroger‟s
                                                                                TownEats 36


                                       Appendix M
                              Web Hosting Through Verio.com

In order to have a website on the Internet, a web server is necessary. Web servers are expensive
and require much technical experience, two business aspects that most companies cannot afford.
Web hosting companies provide the equipment and resources that are needed by Internet
businesses at a much more affordable price. TownEats.com choose Verio.com to host the site.
The following include the qualities of the web hosting plan TownEats.com chose for the site
(Verio.com, 2000):

      Silver Plan at a cost of $49.95 per month plus a $50 set-up fee
      4 GB of monthly data transfer (or 80,000 page views)
      60 MB disk space (or 800 web pages)
      20 configurable e-mail accounts
      Total control of the account through account Control Panel
      Website access statistics
      MS FrontPage 2000 extensions
      Use own software to build and publish the site
      Upgrade at anytime
      24/7 technical support
      Guaranteed uptime
      SSL secure server

The qualities of the Silver Plan provide the necessary components TownEats.com desires for the
Internet site. By using Verio.com, the company can save a substantial amount of money that
otherwise would have been lost form purchasing a server.
                                                                      TownEats 37



                                       Appendix N
                            TownEats.com Organizational Chart


                                                                Board of Directors
                                            Presid ent
                                                                   4 Founders
                                      Valerie Kim ball (50%)*
                                                                  An gel Investor
                                                                  Jam es Murray




    M arketin g/Sales                     Operatio ns/M IS          Fin ance/Acco unting
  Molly Heglund (100 %)*               Erin C onn elly (80%)*      David Poluszejko (40%)*
  Valerie Kimball (50 %)*            D avid Poluszejko (60%)*       Erin Connelly (20%)*



*Sweat Equity



                                         Figure 17
                                                                                      TownEats 38


                                             Appendix O
                                              Resumes

                                       ERIN E. CONNELLY

CAMPUS ADDRESS                                                  PERMANENT ADDRESS
78 Mill Street                                                  9807 New California Drive
Athens, Ohio 45701                                              Plain City, Ohio 43064
Telephone: (740) 589-7336                                       (614) 873-9744
Email: ec283598@oak.cats.ohiou.edu

OBJECTIVE
       To obtain an internship in the field of Management Information Systems.

EDUCATION
       Bachelor of Business Administration
       OHIO UNIVERSITY, Athens, Ohio
       Anticipated Graduation Date: June 2002
       Major: Management Information Systems
       ACCUMULATIVE GPA: 2.98/4.0
       Dean‟s List: Fall 1998

WORK EXPERIENCE
       OHIO UNIVERSITY, Baker Center Catering Service, Athens, OH
       Caterer, March 2000 – present
         Responsible for setting up tables and serving dinners, banquets, and other functions.

       ADECCO, Temp Agency, Marysville, OH
       Honda Summer College Program, June 1999-August 1999 and June 2000-August 2000
        Worked as a part of an assembly line. Utilized communicating skills. Learned the importance
        of working as a team to achieve goals. Received bonuses for perfect attendance.

       BATH AND BODY WORKS, Dublin, OH
       Sales Associate, November 1999-December 1999
       Opened and closed the store. Helped change the layout of the store. Provided friendly and
       helpful customer assistance during the busy holiday season. Learned to work a register.

COMPUTER SKILLS
       Microsoft Office 2000
       Microsoft Visual Basic 6.0

ACTIVITIES
       Society for Advancement of Management (SAM) member, Fall 2000
                       Intramural Soccer, Team Captain, Seasonal 1998-2000
                                                                                  TownEats 39


                                     Molly E. Heglund
CAMPUS ADDRESS:                                                    PERMANENT ADDRESS:
127 South Green Drive Room 124                                     5324 Bliss Place
Athens, Ohio 45701                                                 Kettering, Ohio 45440
(740) 597-6065                                                     (937) 433-9520
E-mail: mh266799@ohio.edu
OBJECTIVE
       To obtain a summer internship in the field of Finance or Marketing.

EDUCATION
    Bachelor of Business Administration
    OHIO UNIVERSITY, Athens, Ohio
    Anticipated Graduation Date: June 2003
    Majors: Finance and Marketing
    GPA: 3.91/4.0

WORK EXPERIENCE
    Buildings and Grounds Manager, June 2000 – August 2000
    KETTERING CITY SCHOOL DISTRICT, Kettering, Ohio
      Maintained the outside appearance of 15 district school buildings each week.
      Completed all tasks on a self-paced schedule with 2 other employees.
      Trained 3 new employees and received a promotion.
      Responsible for thousands of dollars of equipment.

       Dietary Aid, January 1998 – December 1999
       OAK CREEK TERRACE NURSING HOME, Kettering, Ohio
          Served 55 residents in the dining room.
          Prepared trays for 40 residents in their rooms according to their required diets.
          Cleaned the kitchen and prepared the dining room for the next meal.
          Trained 6 new employees in all 4 areas of the kitchen.
          Delegated tasks to other employees.
          Received a raise every 4 months and superior ratings on evaluations.

ASSOCIATIONS & ACTIVITIES
     The Growing Tree Preschool, Volunteer, 2000
     Association of Collegiate Entrepreneurs, Member, 1999-2000
     Habitat for Humanity, Member, 1999-2000

AWARDS & HONORS
    Alpha Lambda Delta Honor Fraternity: May 2000-Present
    Dean‟s List: 3/3 Quarters
    Dean‟s Scholarship: 2000
    Dwight N. Compton Memorial Scholarship: 1999, 2000
    Ohio University Valedictorian Scholarship: 1999
                                                                                    TownEats 40


                                     Valerie F. Kimball
Campus Address:                         E-mail:                         Permanent Address:
19 S. Lancaster                  valkim19@yahoo.com                     321 Anniston Dr.
Athens, OH. 45701                      Home Page:                       Dayton, OH. 45415
(740) 598-4340         http://oak.cats.ohiou.edu/~vk368598/ESP          (937) 274-1442

Objective:          An internship in the field of international marketing

Education:          Bachelor of Business Administration, June 2002
                    OHIO UNIVERSITY, Athens, Ohio
                    Majors: International Business/Marketing
                    Minor: Spanish (fluent), Latin American Studies Certificate
                    GPA: 3.4/4.0

Related
Course Work:        Business Cluster 202I, Fall 2000
                            Developed team-working skills to solve real-world
                               business problems

                    Study Abroad in Cuenca, Ecuador, Spring 1999
                            Achieved fluency in the Spanish language
                            Studied the culture, history, and geography of the country
Work
Experience:         Receptionist, 1999
                    Schneider, Meixner and Company Inc., Dayton, Ohio
                            Received and directed all incoming calls, faxes, and mail
                            Data base entry
                            Prepared contracts and spreadsheets
                            Maintained inventory orders
                            Responsible for opening and closing of office

                    Child Care Supervisor, Activities Director, 1996-1998
                    St. Rita’s “Special Afternoons”, Dayton, Ohio
                              Supervised large groups of children organizing activities
                              Assisted children with homework

                    Sales Associate, 1998
                    Elder Beerman, Dayton, Ohio
                             Balanced cash register receipts
                             Tabulated flow of cash, checks, and credit card payments each day
                             Interacted with public through sales

Professional
Associations:       American Marketing Association, 2000
                    Marketing Research and Sales Committee Member

                    Delta Sigma Pi 1999-present
                    Regional Relations Committee Head
                    Student Senate, 1998
                    Public Relations Intern
                                                                             TownEats 41


                              David M. Poluszejko
                              david_poluszejko@hotmail.com
                                    101 Kenney Drive
                                   Sewickley, Pa 15143

EDUCATION

          Ohio University                         Expected Graduation May 2002

WORK EXPERIENCE

PNC Bank – Intern, MIS Dept.                           Summer 2000
 Became Familiar with UNIX operating system
 Developed basic UNIX shell scripts for routine functions
 QA tested Account Link by Web Release 2
 Researched other banks wireless delivery strategies and presented them to supervisor
 Developed Perl/CGI financial calculator, to view please got to: www.notthereyet.com
 Developed Java application and applets as needed

Ping Recreation Center – Supervisor         September 1999 – Present
Account for and supervise staff
 Document cash in register at the end of each shift
 Enforce all building and staff policies and procedures
 Give tours
 Respond to all crisis situations

North Side Community Bank – Teller                Winter 1999
 Responsible for balancing drawer and vault
 Direct contact with customers
 Routine teller functions

PNC Bank – Intern, MIS Dept.                                    Summer 1999
 Converted existing Learning Link web site into Vignette StoryServer
 Assisted with development of Web Hosting web site
 Researched and presented findings on emerging technologies (wireless communications,
  interactive television, broadband, XML)

PNC Bank – Intern, MIS Dept.                                    Summer 1998
 Documented Account Link by Web application
 QA tested Account Link by Web Release 1
 Tested various PNC Bank applications for Y2K compatibility
 Researched and presented findings on the electronic banking industry
                                                                                     TownEats 42


                                            Appendix P
                                           Law Appendix

When choosing the best business structure for TownEats.com, the founders investigated and
analyzed each of the four basic types of business entities: limited liability companies,
partnerships, sole proprietorships, and corporations. Each has its own advantages and
disadvantages, however we found that a limited liability company best meet our needs in terms
of tax issues, liability issues, director and ownership concerns, and federal and state obligations.

By forming an LLC, the owners will be protected from personal liability for the debts and
obligations of the company. The owners have limited liability, and are only liable for their
contributions to the company. By forming an LLC, TownEats.com does not have to pay taxes as
an entity, eliminating the double taxation corporations encounter. The profits, losses,
deductions, and credits from the company are taxed on each owner's individual tax return at the
end of the year (LawInfo.com, 2000). This is one of the main reasons we chose a LLC, because
we will be able to retain the majority of our profits or reinvest them in the operations of the
company.

An LLC can pass along tax benefits (depreciation, deductions) to those members who are best
able to take advantage of them and also gain considerable other tax-planning flexibility by
making special allocations of such attributes. All members can manage and control the business
without causing the LLC to be taxed as a corporation. The investors, as well, have the limited
liability of a corporate stockholder (LawInfo.com, 2000).

In order to set up the LLC, one must submit the articles of organization, along with $85 filing fee
to the Secretary of State. The Articles of Organization must include the following: name,
duration of entity, address to which requests of copies of the operating agreement may be made,
other provisions, and purpose for which formed (LawInfo.com, 2000). Please see Page 53 for
the contract of agreement.

Each business entity, LLC, Partnership, Sole Proprietorship, and Corporation, were evaluated
based on the advantages and disadvantages of forming such an entity.

                                    Limited Liability Company

A limited liability company (LLC) is a form of business entity that combines the best features of
the corporation and partnership business entities. Properly structured LLC‟s possess the
corporate characteristic of limited liability since is protects its owners from personal liability for
the debts or obligations of the organization (LawInfo.com, 2000).

An LLC is treated as a partnership for federal income-tax purposes. In a partnership, income tax
is taxed only once; all income is passed through the partnership entity to the partners themselves,
who are taxed as individuals. The combination of limited liability and partnership “flow-
through” tax treatment can be highly advantageous to the LLC‟s members (LawInfo.com, 2000).
                                                                                TownEats 43


LLC‟s are for smaller enterprises, such as a family business or a closely held business. New
businesses and existing partnerships should consider organizing into an LLC. The following lists
the advantages and disadvantages of an LLC (LawInfo.com, 2000):

Advantages:
   May be formed by one or more persons or entities
   Benefits of both a corporation and a partnership
   Owners not liable for the debts and obligations of the LLC beyond their contributions to
     the LLC
   Investors have the limited liability of a corporate stockholder
   Profits taxed on its owners‟ individual tax returns; profits paid personally by the members
     of the company so the LLC does not have to pay taxes as an entity; eliminates the double
     taxation corporations encounter
   All members can manage and control the business without causing the LLC to be taxed
     as a corporation
   Legal entity separate from individuals

Disadvantages:
    Members taxed on share of company income whether or not distributed
    Subject to close government regulation
    All states have not adopted LLC statutes
    Statutes differ from state to state, meaning business dealings in multiple states may face
      difficulties
    Lack of established case law since it is relatively new
    If drafter is not careful, the entity could be classified and taxed as a corporation
    Since taxed like a partnership, the LLC does not have as good of retirement plans as a
      corporation
    Limits the amount of members to 500
    Legal expenses and efforts are expensive; constant filing of documents to the state
    Members can still be liable for such items as the nonpayment of payroll taxes that have
      been withheld from employees‟ wages and not turned over to the IRS or the state taxing
      authorities

Classification as a partnership for federal-income tax purposes depends on whether or not the
LLC exhibits more than two of the following corporate characteristics. The LLC can generally
possess no more than two of the characteristics in order to qualify for partnership tax status
(LawInfo.com, 2000).

      Continuity of Life
      Centralization of Management
      Free Transferability of Interest
      Limited Liability

The LLC provides the advantages of both the partnership and the corporation, and proves to be
the best business entity for TownEats.com.
                                                                                  TownEats 44



                                           Partnerships

There are three different types of partnerships: general partnerships, limited partnerships, and
limited liability partnerships. While each of these business entities are forms of partnerships,
they each have different tax issues, liability issues, director and ownership concerns, and federal
and state obligations. These differences will be discussed as advantages and disadvantages for
each partnership.

                                      General Partnership

A general partnership occurs automatically when more than one individual, excluding a husband
and wife, which is not a corporation or limited liability company, owns a business. These
individuals agree to share not only ownership, but also management, profits, and liabilities of the
business. Partnerships may be formed with a written, formal partnership agreement, or based
solely on oral agreements. However, it is suggested that a written agreement be made that spells
out the commitments of all parties involved in order to avoid potential conflicts between partners
(Partnerships, 2000).

The contract should include how much each partner will contribute to the business, how they will
draw profits and share losses, and who will have authority and responsibility for making other
various decisions pertaining to the business. If the partners of the business do not make a written
partnership agreement, the partnership law in the state which the business is located determines
their obligations (Partnerships, 2000).

There are several advantages and disadvantages of a general partnership including the following
(Partnerships, 2000):

Advantages
   Simple and inexpensive to form and maintain
   Require no formal written requirements
   Easy to operate, as partners can make decisions without formal meetings
   Great Flexibility in structuring management
   Fiduciary relationship binds partners which restricts anyone becoming a member of the
     partnership without the consent of all the partners
   Partnerships are not subject to federal income tax on the income they earn, but must file
     an informational return (Form 1065) to let the government know how much the business
     earned or lost that year.
   Partners pay taxes individually on the income they receive from the partnership (or
     deducts his share of losses) on his personal federal tax returns, allowing them to avoid
     double taxation on their share of profit
   If the partnership loses money, the partners get a deduction equal to the losses equal to
     their ownership percentages
   Partners do not owe any taxes on the distributions they receive until their capital account
     (consisting of their capital contribution of money or property) reaches zero
                                                                                   TownEats 45


Disadvantages
    Unlimited Liability- each partner is personally responsible for the debts, taxes and claims
      against the other general partners, which means their personal assets can be seized to pay
      off partnership debts
    Each partner is an agent of the corporation and is allowed to enter into binding
      agreements without the signatures of the other partners
    Partners are bound together by fiduciary relationship which means they can not open a
      competing business, deprive the partnership of their time and skills, misappropriate
      partnership property, or take money out of the partnership without following proper
      procedures
    No continuity of life so when a partner dies, goes bankrupt, or withdraws from the
      partnership, the partnership agreement is terminated
    Income earned by partnership is divided up among the partners according to their
      ownership percentages after all expenses and bills are paid. However, partners are taxed
      on this income whether or not it is distributed
    If a partnership retains money at the end of the year instead of paying it out, the partners
      must still pay income tax on their respective shares of the partnership income
    A partner who receives partnership interest without making a capital contribution of
      money or property has to pay income taxes on the value of the ownership interest they
      receive
    Selling an interest in a general partnership is hard to do because all partners must agree

                                       Limited Partnership

A Limited Partnership is a partnership where only general partners can run the business. All
limited partnerships must have at least one general partner, who remains personally liable for all
debts and liabilities of the partnership and for the limited partners. Limited partners are
forbidden to perform any management functions, but can contribute capital and share in the
profits of the business. The formation and operation of a limited partnership requires that a
certificate of limited partnership be filed with the Secretary of State, and that an oral or written
agreement be established (Limited Partnerships, 2000).

There are several advantages and disadvantages of a limited partnership including the following
(Limited Partnerships, 2000):

Advantages
   Limited partners do not take on personal liability for the obligations of the partnerships,
     and are only liable for the amount of their investment in the company
   Income earned by the partnership is attributed to the partners according to their
     ownership interest
   Profits can be divided among the partners as the parties desire
   Attractive to entrepreneurs because they can retain control of the business by acting as
     the general partner, while still being able to offer limited partner investors the tax benefits
     of a tax flow-through entity
   Limited partners do not owe fiduciary duties to one another, but the general partner does
     owe the partnership this loyalty
                                                                                  TownEats 46


      Death, retirement, withdrawal, or bankruptcy of a limited partner does not end the
       existence of the limited partnership, and only requires an amendment to the certificate

Disadvantages
    Formation is highly regulated as there are strict and inflexible statutory rules which must
      be followed
    Formation and maintenance cost are high
    The general partner is personally liable for all partnership debts, obligations, and
      liabilities
    Limited partners may expose their personal assets to the debts and liabilities of the
      partnership if they become active in the general management of the company
    The limited partnership dissolves with the death withdrawal, incompetency, or
      termination of the general partner, unless otherwise specified in the agreement
    The limited partnership interest may be transferred to another person without the consent
      of the other limited or general partners

                                 Limited Liability Partnership

A limited liability partnership (LLP) has basically the same structure as a general partnership,
except that the partners are only liable to the extent of their original investments in the
partnership. The goal of the LLP is to shield a partner from personal liability and/or certain acts
or omissions of another partner. It is for this reason that attorneys and accountants in most
states use this form of business entity (Partnerships, 2000).

There is one major advantage and two disadvantages to a Limited Liability Partnership
including the following (Partnerships, 2000):

Advantages
   LLP filing does not create a new type of entity, just a prospective liability shield for
     partner-investors
   Partners are not personally liable for debts and obligations of the partnership, and remain
     liable only for their original investments in the partnership
   If partners are not supervising, directing, or involved in the action which results in errors
     or negligence of their partners or employees, they can not be held responsible (no
     vicarious liability)
   Partners are protected from debts against the partnership arising from professional
     malpractice lawsuits against another partner
   Limited liability partnerships are based as general partnerships for federal income tax
     purposes
   A LLP partner is treated as a general partner for self-employment tax purposes and,
     therefore, generally will have self-employment earnings, or his or her distributive share
     of LLP income

Disadvantages
    May only consist of two or more persons who are engaged in the practice of accountancy,
      law, or other related activities
                                                                                    TownEats 47


      As protection for creditors, some states require the LLP to obtain additional insurance or
       to establish a designated trust fund in exchange for the liability shield afforded LLP
       partners
      Lack the corporate characteristics of continuity of life, free transferability of interests and
       centralized management
      Limit on liability does not protect the partner from liability arising in whole or in part
       from his or her own negligent acts
      The LLP would not protect a partner from liabilities or obligations arising before
       achieving LLP status or after that status is not maintained
      An LLP that conducts multi-state business may not give protection to its partners in all
       states
      If a partnership retains money at the end of the year instead of paying it out, the partners
       must still pay income tax on their respective shares of the partnership income

                                       Sole Proprietorship

A sole proprietorship is an individual who owns a business, which is not otherwise incorporated
or organized as a separate legal entity. It is the simplest form of conducting on business. An
individual conducts business and holds title to property in his or her name and is personally
liable for the obligations of the business (Sole Proprietorships, 2000). A separate tax form is not
required to be filed by the business but reported on “Schedule C” of his/her individual income
tax form. The owner also claims expenses of the business as deductions against income on the
owners‟ year-end tax return. The sole proprietorship will continue to exist until the owner
dissolves the business or dies (Types of Business Entities, 2000).

There are many advantages and disadvantages to a Sole Proprietorship including the following
(Sole Proprietorships, 2000):

Advantages
   Easiest form of business to start
   Low initial costs
   Has full control of business operations and any of the profits that are earned
   There is no separate taxation because the owner is personally taxed on all income
   The owner may deduct business expenses on his/her personal tax return

Disadvantages
    There is unlimited personal liability, which means the sole proprietor is personally
      responsible for all debts and liabilities incurred by the business
    Cannot qualify for deductions for life insurance, medical insurance, or disability
      insurance, as you would if the business was incorporated
    Cannot use this type of business if there is more than one owner or partner
    Owner taxed on profits whether or not they are distributed
    Legal life of the company ends with the owner‟s life
    Limited financing - there is no ability to raise capital through sale of corporate
      share/ownership interest in company
                                                                                  TownEats 48


      Owner‟s salary cannot be treated as an expense, and is, therefore, not tax deductible
      State and federal taxes are imposed on the business income and often at a higher rate than
       corporate income

                                          Corporations

A corporation is a legal entity created through the laws of its state of incorporation. The law
treats a corporation as a legal “person” that has standing to sue and be sued, distinct from its
stockholders. The legal independence of a corporation prevents shareholders from being
personally liable from corporate debts. A corporation is a legal entity that is separate from the
people who run it. A corporation can enter into contracts; pay taxes, and is liable for debts and
claims. Corporations also allow stockholders to sue the corporation through a derivative suit and
makes ownership in the company (shares) easily transferable. The legal “person” status of a
corporation gives the business perpetual life; deaths of officials or stockholders do not alter the
corporation‟s structure (Types of Business Entities, 2000).

There are two types of corporations. They include the following:

      Subchapter S. An “S” corporation is designed for the small proprietor who wants
       incorporation for the sake of increased liability protection, and the option to have
       multiple owners. For taxation, all profit is split on a prorated basis among all
       shareholders based on their percentage of ownership.

      Subchapter C. A “C” corporation is a true standalone entity. All publicly traded
       companies are “C” corporations. There can be an unlimited number of shareholders in a
       “C” corporation.

                                        “S” Corporation

S corporations qualify for all of the advantages of a regular corporation; however, they are taxed
as a partnership. The profits and losses of the corporations are “passed-through” directly to the
shareholders‟ personal tax returns in an amount equal to their proportionate share of stock
holdings with the corporation.

The advantages and disadvantages to forming an “S” Corporation include the following (Types
of Business Entities, 2000):

Advantages
   Net operating losses are deductible by shareholders
   Shareholders benefit from limited liability

Disadvantages
    Shareholders taxed on taxable income of company whether or not distributed
    Must satisfy annual information reporting requirements and prepare individualized
      shareholder schedules
                                                                                   TownEats 49


Qualifications for an “S” Corporation
   Incorporated in the United States
   No shareholder can be a nonresident alien individual
   No shareholder can be a corporation or partnership
   The corporation can only have one class of common stock and one class of preferred
       stock
   No more than 35 shareholders (husband and wife counted as 1)
   The corporation cannot own stock in a subsidiary that is considered an affiliate
   No more than 25% of the corporation‟s gross receipts can be from interest income,
       dividends, rent, royalties, or proceeds from the sale of securities (this does not apply to a
       brand new corporation)


                                        “C” Corporations

C Corporations file and pay corporate income taxes directly. C Corporations are considered a
separate entity from their shareholders, and must pay taxes on net. It is in your best interest to
become a C Corporation if you plan to keep profits and other cash in the bank to finance your
growth, repay debt, or make other capital expenditures. This is because C Corporations can take
advantage of lower initial corporate income tax rates. All corporations are “C” corporations and
will be taxed as such unless another form of incorporation is specifically requested (Types of
Business Entities, 2000).

There are many advantages and disadvantages to forming a “C” Corporation, including the
following (Types of Business Entities, 2000):

Advantages
   Tax rate for the corporation is less than that of a sole proprietorship for the first $75,000
   Fringe benefits for employees may be deducted from a corporation‟s gross income, and
     the employees are not taxed on the value of the benefit either
   Shareholders have limited personal liability to the extent of their investment in the
     corporation
   Limited liability for officers and directors of a corporation for the debts and claims
     against a corporation
   Perpetual duration – even if an officer, director, or shareholder dies, the corporation
     continues to exist
   Capital generation – the corporation may borrow money, issue bonds, sell common and
     preferred stock, and enter into investment contracts to raise capital
   Ease of ownership transfer – the corporations assets may be sold, transferred, pledged, or
     mortgaged simply by using stock

Disadvantages
    Will be taxed personally on any salary withdrawn from the business
    Expensive start-up costs
    Double taxation if dividends are paid
                                                                              TownEats 50


      Corporation taxed on income even if salaries/dividends are not paid
      Securities regulations apply depending upon the number of shareholders and the amount
       of capital raised
      Required meetings and reporting of directors and shareholders

The Advantages of Incorporating in Delaware
Delaware is home to nearly 60% of all the companies listed on the New York Stock Exchange
and over half of Fortune 500 companies. Delaware has the reputation for being the “American
Corporate State” (GoldcoinGroup.com, 2000). There are several main advantages for a
corporation to incorporate in Delaware. They include the following:

      You can be all the officers of a Delaware corporation yourself. The same person can be
       president, vice-president, secretary and treasurer
      There is no minimum amount of money required to be in the company bank account.
       Many states require $1,000, but Delaware has no requirement
      You can incorporate anonymously in Delaware if you desire
       There is no state inheritance tax on stock held by non-residents of Delaware
      There is no state income tax for Delaware corporations who do not operate within the
       state
      There is an established body of laws that protect the corporations in Delaware. This
       special business court exists only in Delaware
      Directors may fix any price on shares of stock that they wish to sell
      Incorporating in Delaware can take as little as twenty four hours
                                                                                  TownEats 51


                                         Appendix Q
                               Possible Expansion Areas in Ohio

The following colleges and universities are possible expansion areas for TownEats.com. The
areas are college towns similar to Ohio University, in that they offer a variety of restaurants.

University of Akron                                  Kent State University
Akron, OH                                            Kent, OH
25,000 students                                      22,000 students

Bowling Green State University                       Miami University
Bowling Green, OH                                    Oxford, OH
19,300 students                                      21,000 students

Case Western Reserve                                 University of Toledo
Cleveland, OH                                        Toledo, OH
9,601 students                                       21,000 students

College of Wooster                                   Wittenberg University
Wooster, OH                                          Springfield, OH
1,700 students                                       2,100 students

University of Dayton                                 Wright State University
Dayton, OH                                           Fairborn, OH
10,172 students                                      16,000 students

Denison University                                   Youngstown State University
Granville, OH                                        Youngstown, OH
2,000 students                                       12,500 students
                                                                                  TownEats 52


                                        SWOT Analysis

Strengths
TownEats.com has several strengths and advantages. They are as follows:

      Decentralized Management. TownEats.com is a small and decentralized operation.
       Decisions will be made quickly, because there is little hierarchy in the company‟s
       management structure.
      Low Cost Operation. The expenses to run TownEats.com will not be excessive. The
       company is estimated to be profitable within the first month.
      Company Vision and Clearly Defined Target Market. TownEats.com will have a
       clearly defined target market. The company has two target markets: Athens area
       restaurants aiming to promote and advertise their restaurant and Athens area residents
       looking for a one stop shop for area dining information.

Weaknesses
TownEats.com has several weakness or disadvantages. They are as follows:
    Two Target Markets. TownEats.com is a metamediary. The site brings together
     Athens area restaurants and residents. The relationship between the two is reciprocal. In
     order for residents to come to the site, there must be a critical mass of restaurants. This is
     also true with restaurants. In order for restaurants to come there must be a critical mass
     of residents.
    Difficult to Expand into Different Market. After TownEats.com successfully
     establishes the Athens area portion of the site, the company will expand into different
     geographical markets. It is unclear on how the company will do so and how difficult
     such an expansion will be.

Opportunities
TownEats.com has several opportunities. They are as follows:
    Increasingly Competitive Restaurant Market. TownEats.com will benefit by serving
     restaurants in the Athens area that are facing an increase in competitive pressure. There
     are many new restaurants opening in Athens. The restaurants are looking for more
     effective ways to promote and advertise themselves to Athens area residents.
     TownEats.com is a way to do so.
    Increasing Internet Adoption. TownEats.com does a major portion of its business on
     the Internet. All Ohio University dormitories are equipped with an Internet connection in
     each room. As Internet adoption becomes more ubiquitous, TownEats.com will gain
     more visitors to the site. The increase in visitors could help to retain and attract
     restaurants to advertise on our site.

Threats
TownEats.com has several potential threats. They are as follows:
    Financing Problems. In order to acquire The Fax, TownEats.com will need
      approximately $60,000 dollars from angel investors. If this financing is not secure, the
      company will have to compete with the already respectable and established The Fax.
                                                                                         TownEats 53


                                    Contract of Agreement


    OPERATING AGREEMENT FOR TOWNEATS.COM LIMITED LIABILITY COMPANY

DATE: November 20,2000

RECITAL:
The parties to this agreement (the "Members") are entering into this agreement for the purpose of
forming a limited liability company under the Limited Liability Company Act of the state of Ohio.

AGREEMENTS:

1. FORMATION

1.1 Name. The name of this limited liability company shall be TownEats.com

1.2 Articles of Organization. Articles of organization for the Company shall be filed promptly with the
Secretary of State for the state of Ohio by the members of the limited liability company, and tender and pay
all fees, charges and do all other things requisite for the due formation of the limited liability company
pursuant to the State of Ohio.

1.3 Duration. The Company will exist until dissolved as provided in this agreement.

1.4 Principal Office. The Company‟s principal office will initially be at 78 Mill Street, Athens, OH, but may
be relocated by the Members at any time.

1.5 Registered Office and Registered Agent. The Company's initial registered office will be at 78 Mill Street,
Athens, OH, and the name of its initial registered agent at that address will be Valerie Kimball.

1.6 Purposes and Powers. The Company is formed for the purpose of engaging in the business of
providing online advertising to Athens area restaurants and businesses, with future expansion in similar
college towns throughout Ohio . The Company has the power to do all things necessary, incident, or in
furtherance of that
business.

1.7 Title to Assets. Title to all assets of the Company will be held in the name of the Company. No
Member has any right to the assets of the Company or any ownership interest in those assets except
indirectly as a result of the Member‟s ownership of an interest in the Company. No Member has any
right to partition any assets of the Company or any right to receive any specific assets upon
liquidation of the Company or upon any other distribution from the Company.

2. MEMBERS, CONTRIBUTIONS AND INTERESTS

2.1 Initial Members. The names and addresses of the Members of the Company, the amounts of
their initial capital contributions, and their initial Ownership Interests are:

 Name and address:           Contribution:              Ownership:
 Valerie Kimball            50% President              15%
 19 S. Lancaster            50% Marketing
 Athens, OH 45701

 Molly Heglund              100% Marketing             15%
 127 S Green Dr Rm 124
 Athens, OH 45701
                                                                                           TownEats 54




 Name and address:           Contribution:              Ownership:
 Erin Connelly               80% Operations/MIS         15%
 78 Mill Street              20% Finance
 Athens, OH 45701

 David Poluszjeko            60% Operations/MIS         15%
 138 W Washington St         40% Finance
 Athens, OH 45701

The initial capital contribution of each Member will be paid to the Company, in cash, promptly
following the full execution of this agreement. Each Member's Ownership Interest at any time will be
determined by the ratio of that Member‟s aggregate capital contributions to the aggregate capital
contributions of all Members.

2.2 Additional Members. Except as otherwise provided in the section of this agreement relating to
substitution, additional Members of the Company may be admitted only with the consent of all
Members.

2.3 Additional Contributions. Except as otherwise provided in the Act, no Member will be required
to contribute additional capital to the Company. Additional capital contributions to the Company may be
made by the Members only with the Members‟ unanimous approval. If the Members approved additional
capital contributions, the Members must set a maximum amount for such contributions that will be accepted
from the Members. Each Member will then have the right, but not the obligation, to contribute a pro rata
share of the maximum based upon the Member‟s Ownership Interest.

2.4 No Interest on Capital Contributions. No interest will be paid on capital contributions.

2.5 Capital Accounts. An individual capital account will be maintained for each Member. A
Member's capital account will be credited with all capital contributions made by the Member and
with all income and gain (including any income exempt from federal income tax) allocated to the
Member. A Member‟s capital account will be charged with the amount of all distributions made to
the Member and with all losses and deductions (including deductions attributable to tax-exempt
 income) allocated to the Member.

3. ALLOCATION OF PROFITS AND LOSSES

3.1 Determination. The net profit or net loss of the Company for each fiscal year will be
determined according to the accounting principles employed in the preparation of the Company‟s
federal income tax information return for that fiscal year. In computing net profit or net loss for
purposes of allocation among the Members, no special provision will be made for tax-exempt or
partially tax-exempt income of the Company, and all items of the Company‟s income, gain, loss, or
deduction required to be separately stated under IRC §703(a)(1) will be included in the net profit or
net loss of the Company.

3.2 Allocation of Net Profits and Net Losses. The net profit or net loss of the Company for a
fiscal year will be allocated among the Members in proportion to their Ownership Interests.

3.3 Allocations Solely for Tax Purposes. In accordance with IRC §704(c) and the corresponding
regulations, income, gain, loss, and deduction with respect to any property contributed to the capital
of the Company will be allocated among the Members, solely for income tax purposes, so as to take
into account any variation between the adjusted basis of such property for federal income tax
purposes in the hands of the Company and the agreed value of such property as set forth in this
agreement, or in any document entered into at the time an additional contribution is made to the
                                                                                             TownEats 55

Company. Any elections or other decisions relating to the allocations to be made under this section
will be made by action of the Members. The allocations to be made under this section are solely for
purposes of federal, state, and local income taxes and will not affect, or in any way be taken into
account in computing, any Member's capital account, interest in or allocable share of the net profits
and net losses of the Company, interest in or allocable share of other items, or right to distributions.

4. DISTRIBUTIONS

4.1 Distributions to Pay Taxes. To enable the Members to pay taxes on income of the Company
that is taxable to the Members, the Company will make cash distributions to the Members. During
each fiscal year the Company must distribute an amount equal to the product of (a) the highest
aggregate rate of federal, state, and local income and self-employment tax imposed on the
 Company‟s income for that fiscal year (taking into account the deductibility of state and local income taxes
for federal income tax purposes) allocated to any Member who was a Member for the full fiscal year times
(b) the amount of the taxable income of the Company allocated to all Members for that fiscal year.
Distributions must be paid at least quarterly during each fiscal year at times that
coincide with the Members‟ payment of estimated taxes, and the amount of each distribution will be
based upon the anticipated taxable income of the Company for the fiscal year of the distribution and
the anticipated tax rates of Members, as determined at the time the distribution is made. The
Company's obligation to make distributions under this section is subject to the restrictions governing
distributions under the Act.


4.2 Additional Distributions. Subject to the restrictions governing distributions under the Act,
additional distributions of cash or property may be made from time to time by the Company to the
Members, at such times and in such amounts as the Members determine.

4.3 Allocation of Distributions. All distributions to pay taxes and additional distributions will be
made to Members in proportion to their Ownership Interests.

5. ADMINISTRATION OF COMPANY BUSINESS

5.1 Management. All Members have the right to participate in the management and conduct of the
Company‟s business. Subject to the limitations imposed by this agreement or by action of the
Members, each Member is an agent of the Company and has authority to bind the Company in the
ordinary course of the Company‟s business.

5.2 Actions by Members. Except as otherwise provided in this agreement, all decisions requiring
action of the Members or relating to the business or affairs of the Company will be decided by the
affirmative vote or consent of Members holding a majority of the Ownership Interests. Members
may act with or without a meeting, and any Member may participate in any meeting by written proxy or by
any means of communication reasonable under the circumstances.

5.3 Approval of Other Members Required. In addition to the other actions requiring unanimous
Member approval under the terms of this agreement, no Member has authority to do any of the
following without the prior written consent of all other Members:

      5.3.1 To sell, lease, exchange, mortgage, pledge, or otherwise transfer or dispose of all
      or substantially all of the property or assets of the Company;

      5.3.2 To merge the Company with any other entity;

      5.3.3 To amend the articles of organization of the Company or this agreement;

      5.3.4 To incur indebtedness by the Company other than in the ordinary course of
      business;
                                                                                               TownEats 56


      5.3.5 To authorize a transaction involving an actual or potential conflict of interest
      between a Member and the Company;

      5.3.6 To change the nature of the business of the Company; or

      5.3.7 To commence a voluntary bankruptcy case for the Company.

5.4 Devotion of Time; Outside Activities. Each of the Members will devote so much time and
attention to the business of the Company as the Members agree is appropriate. Members may engage in
business and investment activities outside the Company, and neither the Company nor the other Members
have any rights to the property, profits, or benefits of such activities. But no Member may, without the
consent of all other Members, enter into any business or investment activity that is competitive with the
business of the Company, or use any property or assets of the Company other than for the operation of the
Company‟s business. For this purpose, the property and assets of the Company include, without limitation,
information developed for the Company, opportunities offered to the Company, and other information or
opportunities entrusted to a Member as a result of being a Member of the Company.

5.5 Compensation and Reimbursement. Members who render services to the Company are
entitled to such compensation as may be agreed upon by the Members from time to time. Any
compensation paid to a Member for services rendered will be treated as an expense of the Company
and a guaranteed payment within the meaning of IRC §707(c), and the amount of the compensation
will not be charged against the share of profits of the Company that would otherwise be allocated to
the Member. Members are also entitled to reimbursement from the Company for reasonable expenses
incurred on behalf of the Company, including expenses incurred in the formation, dissolution, and
liquidation of the Company.

6. ACCOUNTING AND RECORDS

6.1 Books of Account. The Members must keep such books and records relating to the operation of
the Company as are appropriate and adequate for the Company's business and for the carrying out
of this agreement. At a minimum, the following must be maintained at the principal office of the
Company: (a) financial statements for the three most recent fiscal years; (b) federal, state, and local
income tax returns for the three most recent fiscal years; (c) a register showing the current names
and addresses of the Members; (d) a copy of the Company's articles of organization and any
amendments thereto; (e) this agreement and any amendments thereto; (f) minutes of any meetings
of Members; and (g) consents to action by Members. Each Member will have access to all such
books and records at all times.

6.2 Fiscal Year. The fiscal year of the Company will be the calendar year.

6.3 Accounting Reports. Within 90 days after the close of each fiscal year, Company must deliver
an unaudited report of the activities of the Company for the preceding fiscal year, including a copy
of a balance sheet of the Company as of the end of the year and a profit and loss statement for the,
year, to each Member.

6.4 Tax Returns. The Company must prepare and file on a timely basis all required federal, state,
and local income tax and other tax returns. Within 90 days after the end of each fiscal year, the
Company must deliver to each Member a Schedule K-1, showing the amounts of any distributions,
contributions, income, gain, loss, deductions, or credits allocated to the Member during such fiscal
year.

6.5 Tax Matters Partner. Anytime the Company has more than 10 Members, any Member is an
entity other than an estate or a C corporation, or any Member is a nonresident alien individual, the
Members must designate one of the Members as the tax matters partner of the Company in
accordance with IRC §6231(a)(7) and keep such designation in effect at all times.
                                                                                           TownEats 57


7. DISSOCIATION AND DISSOLUTION

7.1 Withdrawal. A Member may withdraw from the Company only after giving notice of such
withdrawal to the other Members at least 90 days prior to the effective date of the withdrawal.

7.2 Expulsion. A Member may be expelled from the Company by an affirmative vote of the
Members holding a majority of the Ownership Interests held by Members other than the expelled
Member if the expelled Member has been guilty of wrongful conduct that adversely and materially
affects the business or affairs of the Company, or the expelled Member has willfully or persistently
committed a material breach of the articles of organization of the Company or this agreement or has
otherwise breached a duty owed to the Company or to the other Members to the extent that it is not
reasonably practicable to carry on the business or affairs of the Company with that Member.

7.3 Events of Dissolution. Except as otherwise provided in this agreement, the Company will
dissolve upon the earliest of: (a) the death, incompetence, withdrawal, expulsion, bankruptcy, or
dissolution of any Member; (b) approval of a dissolution of the Company by unanimous consent of
the Members; or (c) at such time as the Company has no members.

7.4 Effect of Member‟s Dissociation. Within 120 days following the death, incompetence,
withdrawal, expulsion, bankruptcy, or dissolution of a Member, the other Members may elect to
continue the Company by themselves or with others, and to cause the Company to purchase the
interest of the dissociating

7.5 Purchase Price. If the other Members elect to cause the Company to purchase the interest of a
dissociating Member under the section of this agreement relating to effect of member‟s dissociation,
the purchase price of the dissociating Member's interest in the Company will be determined by
agreement between the other Members (acting by vote) and the dissociating Member or the
dissociating Member's successor in interest. If an agreement on such purchase price is not reached
within 30 days following the election to purchase the interest of the dissociating Member, the
interest will be valued by a third party appraiser selected by the other Members who is reasonably
acceptable to the dissociating Member or the dissociating Member's successor in interest, and the
purchase price will be the value determined in that appraisal.

7.6 Payment for Member's Interest. The purchase price for the interest of a Member purchased
under the section of this agreement relating to effect of member‟s dissociation will be paid as
follows:

      7.6.1 The purchase price will bear interest from the date of the election of the other
      Members to purchase the dissociating Member‟s interest at the prime rate of interest in
      effect on the date of the election as quoted in The Wall Street Journal or, if that
      publication is not available, another reputable national publication selected by the other
      Members that is reasonably acceptable to the dissociating Member or the dissociating
      Member‟s successor in interest.

8. WINDING UP AND LIQUIDATION

8.1 Liquidation Upon Dissolution. Upon the dissolution of the Company, the Members must wind
up the affairs of the Company unless the dissolution results from the dissociation of a Member and
the other Members elect to continue the Company under the provisions of this agreement relating to
effect of member‟s dissociation. If the affairs of the Company are wound up, a full account must be
taken of the assets and liabilities of the Company, and the assets of the Company must be promptly
liquidated. Following liquidation of the assets of the Company, the proceeds must be applied and
distributed in the following order of priority:

      8.1.1 To creditors of the Company in satisfaction of liabilities and obligations of the
                                                                                            TownEats 58

      Company, including, to the extent permitted by law, liabilities and obligations owed to
      Members as creditors (except liabilities for unpaid distributions);

      8.1.2 To any reserves set up for contingent or unliquidated liabilities or obligations of
      the Company deemed reasonably necessary by the Members, which reserves may be
      paid over to an escrow agent by the Members to be held by such escrow agent for
      disbursement in satisfaction of the liabilities and obligations of the Company, with any
      excess being distributed to the Members as provided below; and

      8.1.3 To Members in proportion to the positive balances of their capital accounts, after
      taking into account all adjustments made to capital accounts for the fiscal year during
      which the distributions to Members are made.


9. TRANSFER OF MEMBERS' INTERESTS

9.1 General Restrictions. No Member may transfer all or any part of such Member's interest as a
member of the Company except as permitted in this agreement. Any purported transfer of an
intersest or a portion of an interest in violation of the terms of this agreement will be null and void
and no void effect. For purposes of this section a "transfer" includes a sale, exchange, pledge, or other
disposition, voluntarily or by operation of law.

9.2 Permitted Transfers. A Member may transfer all or a portion of the Member's interest in the
Company with the prior written consent of all other Members. If the other Members do not consent
to a particular transfer, the Member may transfer all or a portion of the Member's interest if such
interest has been tendered for sale to the Company in accordance with the section of this agreement
relating to tender of interest, the tender has not been accepted within the time limit set forth in that
section, the transfer is made to the transferee named in the notice of tender within 180 days after the
notice of tender is effective, and the transfer is at a price and upon terms no more favorable to the
transferee than those set forth in the notice of tender.

9.3 Tender of Interest. If a Member wishes to transfer all or part of the Member's interest in the
Company and the other Members do not consent, the portion of the interest to be transferred must
be tendered to the Company by giving written notice of such tender to the Company. Such notice
must contain the name and address of the proposed transferee, the price to be paid by the proposed
transferee for the interest, if any, and the terms of the proposed transfer.

9.4 Effect of Tender. The Member tendering the interest will cease to be a Member with respect to
the tendered interest upon an acceptance of the tender by the Company. Thereafter, the Member
tendering the interest will have no rights as a Member in the Company, except the right to have the
tendered interest purchased in accordance with the terms of this agreement.

10. INDEMNIFICATION AND LIABILITY LIMITATION

10.1 Indemnification. Except as otherwise provided in this section, the Company will indemnify
each of the Members to the fullest extent permissible under the law of the state in which the articles
of organization of the Company have been filed, as the same exists or may hereafter be amended,
against all liability, loss, and costs (including, without limitation, attorney fees) incurred or suffered
by the Member by reason of or arising from the fact that the Member is or was a member of the
Company, or is or was serving at the request of the Company as a manager, member, director,
officer, partner, trustee, employee, or agent of another foreign or domestic limited liabilitycompany,
corporation, partnership, joint venture, trust, benefit plan, or other enterprise. The Company may,by
action of the Members, provide indemnification to employees and agents of the Company who are
not Members. The indemnification provided in this section will not be exclusive of any other rights
to which any person may be entitled under any statute, agreement, resolution of Members, contract, But
despite any other provision of this agreement, the Company has no obligation to
                                                                                           TownEats 59

indemnify a Member for:

10.2 Limitation of Liability. No Member of the Company is liable to the Company or to the other
 Members for monetary damages resulting from the Member‟s conduct as a Member except to the
 extent that the Act, as it now exists or may be amended in the future, prohibits the elimination or
 limitation of liability of members of limited liability companies. No repeal or amendment of this
 section or of the Act will adversely affect any right or protection of a Member for actions or
 omissions prior to the repeal or amendment.

11. MISCELLANEOUS PROVISIONS

11.1 Amendment. The Members may amend or repeal all or part of this agreement by unanimous
written agreement. This agreement may not be amended or repealed by oral agreement of the
Members.

11.2 Binding Effect. The provisions of this agreement will be binding upon and will inure to the
benefit of the heirs, personal representatives, successors, and assigns of the Members. But this
section may not be construed as a modification of any restriction on transfer set forth in this
agreement.

11.3 Notice. Except as otherwise provided in other sections of this agreement, any notice or other
communication required or permitted to be given under this agreement must be in writing and must
be mailed by certified mail, return receipt requested, with postage prepaid. Notices addressed to a
Member must be addressed to the Member‟s address listed in the section of this agreement relating
to initial members, or if there is no such address listed for a Member, the address of the Member
shown on the records of the Company. Notices addressed to the Company must be addressed to its
principal office. The address of a Member or the Company to which notices or other
communications are to be mailed may be changed from time to time by the Member‟s or the
Company‟s giving written notice to the other Members and the Company. All notices and other
communications will be deemed to be given at the expiration of three days after the date of mailing.

11.4 Litigation Expense. If any legal proceeding is commenced for the purpose of interpreting or
enforcing any provision of this agreement, including any proceeding in the United StatesBankruptcy
Court, the prevailing party in such proceeding will be entitled to recover a reasonable attorney's fee
such proceeding, or any appeal thereof, to be set by the court without the necessity of hearing
testimony or receiving evidence, in addition to the costs and disbursements allowed by law.

11.5 Additional Documents. Each Member will execute such additional documents and take such
actions as are reasonably requested by the other Members in order to complete or confirm the
transactions contemplated by this agreement.

11.6 Counterparts. This agreement may be executed in two or more counterparts, which together
will constitute one agreement.

11.7 Governing Law. This agreement will be governed by the law of the state in which the articles
of organization of the Company have been filed.

11.8 Severability. The invalidity or unenforceability of any provision of this agreement will not
affect the validity or enforceability of the remaining provisions.

11.9 Third-Party Beneficiaries. The provisions of this agreement are intended solely for the benefit
of the Members and create no rights or obligations enforceable by any third party, including creditors of the
Company, except as otherwise provided by applicable law.
                                                                                 TownEats 60


12. ACKNOWLEDGEMENT AND ACCEPTANCE
The Members acknowledge and accept the terms of the foregoing Operating Agreement for
TownEats.com Limited Liability Company.


_____________________________
 Valerie F. Kimball

_____________________________
 Molly E. Heglund

_____________________________
 Erin E. Connelly

_____________________________
 David M. Poluszejko
                                                                                 TownEats 61


                                   Confidentiality Agreement

I ____________________ understand all information I receive about TownEats.com, while
working for this company is confidential. All information in the TownEats.com business plan
including, but not limited to, partnership information, marketing plan/strategy, organization
hierarchy, operations, pro forma financials information, and all other information is confidential.
I also understand that if I divulge any of this information before or after employment
determination, I will be in violation of this agreement. Any employee of this agreement is
subject to immediate termination and a complete loss of ownership rights. Any former employee
found to be in violation of this agreement is also subject to lawsuit.


Signature___________________


Witness Signature____________________


Date___________________
                                                                                 TownEats 62


                                   Confidentiality Agreement

I ____________________ understand all information I receive about TownEats.com, while
working for this company is confidential. All information in the TownEats.com business plan
including, but not limited to, partnership information, marketing plan/strategy, organization
hierarchy, operations, pro forma financials information, and all other information is confidential.
I also understand that if I divulge any of this information before or after employment
determination, I will be in violation of this agreement. Any employee of this agreement is
subject to immediate termination and a complete loss of ownership rights. Any former employee
found to be in violation of this agreement is also subject to lawsuit.


Signature___________________


Witness Signature____________________


Date___________________
                                                                                 TownEats 63


                                   Confidentiality Agreement

I ____________________ understand all information I receive about TownEats.com, while
working for this company is confidential. All information in the TownEats.com business plan
including, but not limited to, partnership information, marketing plan/strategy, organization
hierarchy, operations, pro forma financials information, and all other information is confidential.
I also understand that if I divulge any of this information before or after employment
determination, I will be in violation of this agreement. Any employee of this agreement is
subject to immediate termination and a complete loss of ownership rights. Any former employee
found to be in violation of this agreement is also subject to lawsuit.


Signature___________________


Witness Signature____________________


Date___________________
                                                                                 TownEats 64


                                   Confidentiality Agreement

I ____________________ understand all information I receive about TownEats.com, while
working for this company is confidential. All information in the TownEats.com business plan
including, but not limited to, partnership information, marketing plan/strategy, organization
hierarchy, operations, pro forma financials information, and all other information is confidential.
I also understand that if I divulge any of this information before or after employment
determination, I will be in violation of this agreement. Any employee of this agreement is
subject to immediate termination and a complete loss of ownership rights. Any former employee
found to be in violation of this agreement is also subject to lawsuit.


Signature___________________


Witness Signature____________________


Date___________________
ther information is confidential.
I also understand that if I divulge any of this information before or after employment
determination, I will be in violation of this agreement. Any employee of this agreement is
subject to immediate termination and a complete loss of ownership rights. Any former employee
found to be in violation of this agreement is also subject to lawsuit.


Signature___________________


Witness Signature____________________


Date___________________

								
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