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Description of Venture

I would be willing to plan and operate for a fast food restaurant. In order to start off, I would require a restaurant, heating system, ventilator, boiling equipment, some initial fund capital, some customers among other things. For the restaurant we will need the following: a scullery sink, hand washing sink, refrigerator, convection oven, a preparation table. We will in addition to all these need an ice machine. I will be willing to take not less than five employees. I would require facilities for this restaurant such as private dining, and washrooms. Additionally I will require service counter and the kitchen. The kitchen I intend to have is an open one. The wash rooms will always be kept as tidy as possible and at full service of water facilities. The restaurant will also be with adequate lighting systems, decorations, furniture and so on. For customers who will need privacy of handling, there will be private dining halls for them. The customers will order for food through the counter upon paying cash. The bill will be processed and the customer will wait to be served with food.

1. Development Concept

Opening Kudler Restaurant would help exploit the available market opportunities and would offer employment opportunities for the area. It would offer to its clients a fun environment with affordable prices and services. Market analysis in the restaurant industry show that a well managed market has good opportunities for success in the intended geographical area.

Kudler Restaurant’s average target consists of a market comprising of people aged between 18 years and above but special sections for persons below this age will be provide to take care of even school going students. In order to have a successful venture we would alter our target somewhat due to the large and potential young school going population aged between 13 and 18 years. Of course we would have no age floors in targeting customers.

We will be at all times committed to offering high quality products with lots of variety that would please everyone. Apart from the products will be first-rate customer service which will ensure that the customers enjoy the good experience of dining in an atmosphere full of fun.

We will strive to promote Kudler Restaurant in quite a number of ways among them radio, national televisions and other social sites. We will make use of different holidays of the year such as Mothers Day, Veterans Day and Fathers Day inter alia. Our average price per meal is estimated at $10 which is considerably a reasonable price for college going students and the residents of the area.

Management Biographies

Carol W. Nanas Managing Director Ms. Nanas has served on several Companies’ boards of directors. She has been the Managing Director for Applebee’s since 1998. Ms. Nanas is currently a director of Texas Chamber of Commerce and Industry

Gideon T. Rayson Director

Gideon T. Rayson is currently a member of the board of directors at O’Melveny & Myers LLP. For close to a decade he practiced corporate law and has a vast experience with tax exempt transactions and a sound understanding of international finance. He is a recipient of Snowden Humanitarian Award.

Douglas M. Pascal Director Douglas M. Pascal, 37, is the current advisor to the CEO of NBCUniversal. Prior to this he was appointed to the BoD of DineEquity. He has served as marketing director of National Health Properties between 2008 and 2012. He also sat at the board of directors at Richfield Hospitality Services, Inc and served as the deputy CFO for Regal Hotels between 2007 and 2009.

Tom W. Ephraim

Chief Financial Officer

Mr. Ephraim recently served has served as the deputy president and chief operating officer for USHE which one of the most vibrant subsidiaries of NBCUniversal and a leading media and entertainment company. During his tenure as the chief operations officer he executed oversights of strategies, research, supply management, and logistics in general.

Gregory K. Harman

Human Resource Director

Mr. Gregory K. Harman has worked as the human resources manager for KPMG LLP Washington and currently a practicing freelance lecturer. He doubles as consultant on human resource issues for the States of Ohio and Chicago.

Competitive Product or Service Statement

· Kudler restaurant will not only offer food, but will also be a source of entertainment for most of its customers. Our employees will undergo rigorous training and after that they will be able to offer all customers a satisfying experience.

We will ensure that we put in place a solid management crew, with at least one manager on the floor at all times. They will be charged with the responsibility of walking the floor and ensuring that all customers are happy, satisfied and are enjoying their stay in the restaurant. They will also make sure that all foods coming from the kitchen are standard, presentable and well packed according the customer demand.

· Kudler Restaurant will offer its customers a fun and a casual place to dine. We feel this will constitute one of the principal benefits we have to offer to this market since that is considerably what a good number of customers would expect from a restaurant setting. Our food will be good with good prices and we will have a bar with television sets fixed in all sections of the restaurant.

Construction and Preopening Budget

The preopening budget is an outline that will help the business to predict the total cost of opening the venture. Some of these costs are one-time. Others include initial investments, and operating costs (Bort, 2010). Te budget will also act as a checklist for documenting all resources of Kudler. The resources include those allocated for the startup.

Kudler Preopening Budget

(First Year of Operation)

	Amount ($)			Amount
INVESTIGATORY			PROJECT AND SUPERVISION
Travel and Miscellaneous	25,000		Development Fee	1,000,000
Appraisal	23,000		Travel Out-of-Pocket	20,0000
Environmental	13,000		Payroll	125,000
Transportation Study	15,000			SUBTOTAL	__1,145,000
Legal	25,000
	________		PROFESSIONAL FEES & CONSTRUCTION
	SUBTOTAL	___101,000		Architect	14,000
			Reimbursable	8,000
LAND			Mechanical & Electrical	38,000
Land	588,000		Structural	45,000
Closing Costs	45,000		Civil	62,000
Brokerage Fees	28,000		Landscaping	____34,000
Legal For Acquisition	15,000			SUBTOTAL	__167,000
Survey	18,000
	________		CONSTRUCTION COSTS
	SUBTOTAL	__694,000		General Contract - Building	100,000
			Remodeling Fees	150,000
INITIAL COSTS			New Building Construction Fees	1,860,027
Travel & Miscellaneous	12,000		Bond	9,000
Soils	13,650		Builder's Risk	18,000
Engineering Fees	20,500		Building Permit & Plan Review	28,500
Architectural Fees	16,680		Utility Tap Fees	10,000
Use Permit	10,000			SUBTOTAL	2,075,527
Model / Renderings	14,250
	________		LAND IMPROVEMENTS
	SUBTOTAL	___87,080		Landscaping : Exterior		15,000
		Landscaping : Interior		17,260
INTANGIABLES			SUBTOTAL	_32,260
Accounting	35,000
Permit Expediter	8,000		PROFESSIONAL FEES: FF&E
Consulting Fee	16,280		Interior Design	78,000
Liquor License	12,250		Kitchen	52,000
Title Insurance	25,000		Out-of-Pocket	8,000
Legal	16,250			SUBTOTAL	130,000
	112,780		Furniture, Fixtures & Equipment	729,500
					Equipment: General Building Systems	25,000
FINANCING FEES: CONSTRUCTION		Equipment: Operating	35,000
Interest	573,388.4		Supplies	628,000
Taxes	272,670.3		Pre-Opening	145,000
Insurance	25,000		Working Capital	32,000
	________		Contingency (10%)	190,950
	871,058.7		Interest Reserve	__4,500
					PROJECT TOTAL	1,785,450

Operating Pro-Forma

KUDLER RESTAURANT

(First year of operation) $‘000’

	Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	Month 7	Month 8	Month 9	Month 10	Month 11	Month 12
Sales of Food and Beverage	6500	6923	7372	7852	8362	8906	9351	9818	10309	10852	11222	12588
Other Sales	300	300	300	300	300	300	300	300	300	300	300	300
Total Sales	6800	7223	7672	8152	8662	9206	9651	10118	10609	11125	11522	12888
Cost of sales	2442	2383	2532	2690	2858	3038	3185	3339	3607	3671	3700	3752
Gross profit	4556	4839	5141	5462	5804	6168	6466	6779	7108	7454	7822	9136
Operating Expenses
Sales & Marketing
Advertising	1000	1000	1000	1000	1000	1000	1000	1000	1000	1000	1000	1000
Commissions (5% of sales)	340	361	384	408	433	460	483	506	530	556	576	644
Entertainment	0	0	0	0	0	150	0	0	0	0	0	150
Literature	120	120	120	120	120	120	120	120	120	120	120	120
Sales Promotions	100	100	100	100	100	100	100	100	100	100	100	100
Trade Shows	0	0	0	0	0	250	0	0	0	0	0	0
Travel (6% of Sales	408	433	460	489	520	552	579	607	637	668	691	773
Salaries (sales personnel)	0	0	0	0	0	0	0	0	0	0	0	0
PR Taxes & Costs, sales	0	0	0	0	0	0	0	0	0	0	0	0
Total Selling Costs	1968	2014	2064	2117	2173	2632	2282	2333	2387	2444	2487	2787
Net Operating Profit	2588	2825	3077	3345	3631	3536	4148	4446	4721	5010	5335	6349

Samples of Financial Statements to be Used

KUDLER RESTAURANT

PROFORMA BALANCE SHEET

(First year of operation)

ASSET
Current Assets
cash & cash Equivalents		36946
Receivables from Sales		7008
Other Receivables		0
Inventory		8903
prepaid Expenses/Deposits		2000
Total Current Assets		54857
Fixed Assets
Equipment & Machinery		15000
Less Accumulated Depreciation		2429
Net Fixed Assets		12571
TOTAL ASSETS		67428
LIABILITIES
Current Liabilities
trade Payables		6424
Income Tax payable		8360
short-Term Notes		0
Total Current Liabilities		14784
Long-Term Liabilities
Notes Payable, Banks		12566
Notes Payable, Others		0
Other Liabilities		0
Total Long-Term Liabilities		12566
TOTAL LIABILITIES		27349
PROPRIETORS' ACCOUNT
Owners' Equity		15000
Less Withdrawals		25079
TOTAL NET WORTH		40079
TOTAL NET WORTH and LIABILITIES		67428
Current Ratio		3.7
Quick ratio		3.1
ROE		1.7

Summary of Proposed Investment Terms

No profits will be distributed as dividends until 60 % of the initial investment recovered. This is projected to occur in year three. However 40% of the profits will be distributed as dividends subject to the condition that at least 10% of the net profits are retained until the venture is bought or sold. No investment will be undertaken that requires more than 60% of the contributed capital.

Return on Investment Analysis

With an initial outlay of $708,181,500 and the required rate of return of 16% then the discounted cash flows are given as follows.

Year	Cash Flows $’000’	PVIF	PVIF*CF $’000’
1	113628	0.862	97947
2	142035	0.743	105532
3	184646	0.641	118358
4	230807	0.552	127406
5	276968	0.476	131837
6	304665	0.410	124913
7	319898	0.354	113244
NPV CF		819236

The discounted payback schedule would be as follows:

Year	Discounted Cash Flows	Cumulative D. Cash Flow
1	97947	97947
2	105532	203479
3	118358	321837
4	127406	449243
5	131837	581080
6	124913	705993
7	113244	819237

The initial out lay would be recovered between the 6th and the 7th year of operation. QUOTE *360days

=6years 1 month

The investors would have their initial capital returned in 6 years and 1 month.

2. Statement of the Viability of the Venture as an Investment

The Pro-forma financial statements are prepared with a 20% allowance for variations. The implication of this is that the capital invested can be recovered 20% length earlier than the projected 6 years. That would be as early as the 5th year. There will be quite sufficient profit balance after paying the owners of capital. This means that Kudler will be in touch with its leverages. The general trend in the restaurant industry points at an average profit margin of 35 and 43. We have estimated our profit margins at 16% and even though the margin may be down below the industry average, it is expected that the company margin will be hardly below the industry average. Then, the company will be able to harvest more from a margin twice as large.

References

Armstron, K. C. (2012). g. [http://www.qbox.wharton.upenn.edu/documents/mktg/research/INTFOR3581%20-%20Publication% 2015.pdf "Structured analogies for forecasting"] (PDF). qbox.wharton.upenn.edu.

Carlino, B. (2010). "BK co-founder McLamore dead at 70". Nation's Restaurant News. Retrieved 22 June 2014.

Ellis, K. (2008). . Production Planning and Inventory Control Virginia Tech. McGraw Hill. ISBN 978-0-390-87106-0.

Ellis, K. (2010). Production Planning and Inventory Control (in English). McGraw-Hill. ISBN 0-412-03471-9.

Terry, A., & Forrest, H. (2008). "Where's the Beef? Why Burger King Is Hungry Jack's in Australia and Other Complications in Building a Global Franchise Brand". Northwestern Journal of International Law and Business 28 (2): 171–214. ISSN 0196-3228.