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Business Plan Tuesday, March 14, 2006

Slide 2

Contact

• Jack Smith 123 Mainstreet Columbus, IN 47203 (555) 555-5555 [email protected]

• Company Website: www.chipotle.com

Slide 3

The Idea

• The idea for Chipotle (pronounced chi- POAT-lay) is simple: Offer a simple menu of great food prepared fresh each day, using many of the same cooking techniques as gourmet restaurants.

• Then serve the food quickly, in a cool atmosphere.

Slide 4

The Sandbox: “Fast-Casual” • We compete in a category of dining called “fast-

casual”—the fastest growing segment of the restaurant industry.

• The fast-casual market pulls together the finer qualities of multiple restaurant sectors. It takes the fast from fast-food, the quality and ambience of casual dining, and adds a focus on health and freshness, all at an average ticket price below $10.

• Because of these appealing characteristics, sales for the market have grown at an average of 12.5% per year since 2001.

Slide 5

The Business Model • Using higher-quality ingredients. We use a variety of

ingredients that we purchase from carefully selected suppliers. We concentrate on where we obtain each ingredient. Some of the ingredients we use include naturally raised pork, beef and chicken, as well as organically grown produce, and we continue to investigate using even more naturally raised, organically grown ingredients, in light of pricing considerations.

• A few things, thousands of ways. We only serve a few things: burritos, burrito bols (a burrito without the tortilla), tacos and salads. We plan to keep a simple menu, but we'll always consider sensible additions.

Slide 6

The Menu: Choose an Entrée…

Slide 7

And Finish Up… • A focused menu.

You choose exactly what you want. We make it while you watch. That may mean a little more salsa, a little less sour cream, whatever you'd like. Build your version of the perfect burrito.

Price of Desire: About 5 Bucks.

The Customer: Market Analysis

Slide 9

The Customer • The primary customer for Chipotle’s is between the ages of 25

and 54. The customer is slightly older than the typical fast- food customer mainly due to their desire for a more healthy menu without sacrificing speed.

• These customers desire a… – Focus on freshness, with products made to order, and excluding the

use of frozen ingredients and microwaves – Focus on innovative flavors, including condiments that fuse elements

from distinct cuisines – Focus on consumer choice, sometimes provided through extensive

selection of condiments, but frequently extended to complete control of product content

– Focus on health, including whole-grain, and organic, as well as trans-fat and MSG free ingredients

Slide 10

Bartholomew County, Indiana

Slide 11

Community Profile • Population of Columbus is 40,000 • County (Bartholomew) population is 70,000 • Manufacturing is main industry. Two Fortune 500

companies – Cummins Engine Co. (diesel engines) and ArvinMeritor (auto parts)

• Also, a regional hub for retail, educational and medical services

• In 1994, Columbus, Indiana was one of ten cities in the United States awarded “All America City” status

Slide 12

Business Climate

• Columbus has the best business climate in Indiana: • Ranked #1 of any city under 50,000 population in

Indiana (Site Selection Magazine) • Columbus has the 30th best small community

business climate in the United States • Based on a February 2002 ranking by

BizDemographics of 496 small U.S. cities

Slide 13

A Growing Community

Slide 14

An Educated Customer Base

Slide 15

A Market of Wealth

Slide 16

Targeted Customers

• Within Columbus, Indiana, Chipotle’s will target three primary customer segments. These are as follows: – The Local Market: Defined as customers within a seven

mile radius of the store location. – Commuting Workers and Tourists: Customers

commuting into the city on a daily basis or for leisure travel.

– Commercial Events: Business customers within the county that require catering services.

Target Market Descriptions

Excellent growth in company numbers and employment trends

Good growth / new arts theatre nearby should improve traffic

Slow to moderate growth / spending less on meals away from home on average

Trends

$100,000$150,000$400,000Projected Sales

400 businesses9,000 daily commuters / 28,000 annual tourists

58,600 residents / 20,000 households / $58 million local market for restaurant sales

Size (numbers/dollars)

Infrequent but very large purchases (2 events per year spending $600.00 per event)

Infrequent but larger purchases (1 time but spends upward of $12.00 per patron)

Frequent but small purchases (5 times per year at about $9.00 per patron)

Buying Behavior

Businesses from 20 to 300 employees

Workers and Tourists ages 21 to 54

Consumers ages 25 to 54 / $54,000 average household income

Demographics

Commercial business in Bartholomew County that need catering event services

People migrating into Bartholomew County for work or tourism

People and households within 7 miles of the restaurant

Description

Commercial EventsCommuting Workers & Tourists

Local MarketName

Target Market #3Target Market #2Target Market #1Description

Target Market Strategy

15% off first event promotionHotel referral feesDiscount coupons, samples-Sales Promotions

Part-time banquet sales coordinator

-Personal Selling

Annual 5K charity run for diabetes assn.

-Public Relations

Direct mail, business section of newspaper

Hotel brochures, tourism directory, billboards, restaurant guide

Newspaper, yellow pages, specialty publications, website

-Advertising

Chamber of commerce, HR managers, event planners, public relations managers

Visitors center, community development, tourism bureau, hotel concierges

-Contact Sphere

Promotions:

On-site catering set-up and service

At retail locationAt retail locationDistribution

Banquet style serviceLunch time drive-thru speed is largest consideration

Product Customization

Per head range from $8 to $12

Entrees between $4 and $16Entrees between $4 and $6Pricing

Big Burritos For Big CrowdsGourmet Burritos…FastThe Gourmet Restaurant Where You Eat With Your Hands

Positioning Message

Target Market #3Target Market #2Target Market #1Strategy

Slide 19

Commuting Patterns • More than 16% of Bartholomew County’s workforce

commutes into Columbus on a daily basis. • This commuting inflow surges the daily workforce to over

39,000 employees.

Almost 9,000 worker’s

commute into Bartholomew

County every day.

Slide 20

Customer Ring Study • The proposed location for Chipotle is

500 Franklin Street in Columbus, IN • Within a 7 mile radius of this location the market

contains…

$54,000Average Household Income

20,000Households

58,600Population 7 MilesDescription

Source: Easidemographics.com

Slide 21

The Size of the Market

• According to the 2002 Economic Census for Bartholomew County: – Full Service Restaurants: 104 – Total Restaurant Sales ‘02: $78 million – Average Sales Per Rest: $750,000

Slide 22

Targeted Market Size in Dollars

• According to the Consumer Expenditure Survey in 2003, consumers spent an estimated $885 on “Food away from home”

• This would predict the 7 mile market radius to be worth approximately $52 million in restaurant and meal preparation services. ($885 times 58,600 consumers) and could support about 70 establishments.

Slide 23

The Food Service Market in Columbus, IN

Source: Google Earth

Future Site of ChipotleFuture Site of Chipotle

Slide 24

The Competition • Qdoba, is a “fresh-Mex” chain that offers more choices,

like poblano pesto burritos, but less discipline in its execution. Its wider menu offerings sometimes compromise food quality. Nonetheless, Qdoba is a series competitor in all respects as it plays in the same “sand box.” In 2003, Qdoba was acquired by Jack in the Box Inc., a publicly traded (NYSE: JBX) restaurant company headquartered in San Diego.

• Bajio Mexican Grill is also a fresh-Mex franchise chain that again offers more choices than Chipotle, but its franchising model puts a strain on store-to-store consistency.

Slide 25

The Message

Slide 26

The Sales Approach

• Chipotle will use a combination of the following media in creating its advertising and promotional campaign: – Yellow Pages – Newspaper – Direct Mail – Radio – Website

Slide 27

The Sales Approach

$19,770.00Total Annual Advertising and Media Costs

$3,720.00Media Costs (600 :30 second ads @ $6.20 per spot)

Radio (QMIX 103 / Adult Contemporary & WTIU/NPR)

$3,850.00Distribution (5,000 @ $.50 per piece @ $.27 postage)

Direct Mail (Brochures and Special Occasions)

$7800.00Media Costs (24 ads @ $328)

$800.00Ad Design Costs

Newspaper (The Republic: Circulation 28,000)

$3,600.00Category: Restaurants, Restaurant Guide

Annual Cost

Yellow Pages (South Central Edition)

Media

Slide 28

The Inner Workings: The Line

Slide 29

Two Things, Thousands of Ways

• We only serve a few things, so we can concentrate on doing them very well. And we use only the best ingredients. But they're simple. And that idea, taking something simple and elevating it to something special is what Chipotle is all about.

• It's all summed up in our name. A chipotle pepper is just a simple jalapeño pepper that's been smoked and dried elevating it from ordinary to something extraordinary. Tasting is believing.

Slide 30

The Inner Workings • Chipotle will be open six days a week from the

hours of 10:00am to 9:00pm. • To operate the location we require 8 full-time

employees and 7 part-time staffers all of which work on a rotating schedule which avoids overtime scheduling. Wages are about $8.00 to $9.00 per hour.

• It is imperative that we keep food costs below 28% of sales and labor costs just under 40%.

Slide 31

Location Design

• The design of Chipotle mirrors the idea behind our food: simple ingredients put together in creative, new ways, elevating them to a higher level.

• Each Chipotle uses the same basic materials— wood, concrete, raw steel and metals—but no two look the same.

Slide 32

Location Interiors

Slide 33

Location Exteriors

Slide 34

The Management Team • Jack Smith, Location Manager

Mr. Smith will oversee the day-to-day operations and management of the location. He has over 14 years of experience in retail fast food and is one of the founding members of Chipotle.

• Loretta Johnson, Assistant Manager Ms. Johnson is an experienced chef with over 12 years of commercial cooking knowledge. She will oversee the all ingredient purchasing and grill staffing according to the philosophies of Chipotle as presented within this business plan.

Slide 35

The Legal Structure • Chipotle will be legally formed as an “s” corporation. • This structure was selected for its pass through tax

advantages, limited liability protection, and freedom from having to pay corporate income taxes.

• Ownership of shares will be broken down as follows:

Owner Shares Percent Owned

Jack Smith 1,000 50% Loretta Johnson 500 25% Equity Investors 500 25%

Slide 36

Risk Management • Chipotle will require the following types of insurance

in its efforts to manage risk: – General Liability (up to $2 Million in coverage) – Worker’s Compensation Policy – Property Insurance (building & contents)

• In addition, it will also provide health care for its two member management team estimated at about $1,000 per month.

Slide 37

Required Start-Up Funds

$907,900Totals $15,000Working Capital

$5000Advertising

$12,000Furniture & Smallwares

$2500Legal & Accounting

$900Deposits

$4,500Initial Inventory

$68,000Equipment

$580,000Building

$220,000Real Estate

AmountItem

Slide 38

Capital Strategy

$23,900-Owners

$684,000-Commercial Bank Loan (Real Estate & 80% Building)

$200,000-4 Investors ($50,000 each will get 25% share of company)

$907,900Total Amount Required

$5,406.17Total Monthly Loan Payment

240-Term In Months

7.25%-Interest Rate

$684,000-Principal Amount Borrowed

Debt Service Payments

Slide 39

The Milestones • Present business plan to investors March 2006 • Finish legal work around investments March –April 2006 • Request and review construction bids April 2006 • Obtain building permits May 2006 • Begin construction May 2006 • Begin final fixturing of location July 2006 • Conduct health department inspections August 2006 • Begin hiring and grand opening marketing August 2006 • Cold opening August 22th, 2006 • Grand opening September 1st, 2006

Chipotle 5-Jul-06 Required Start-Up Funds

Required Start-Up Funds Amount Totals Depreciation Notes Fixed Assets

Real Estate 220,000$ Buildings 580,000 20.00 years Leasehold Improvements - 7.00 years Equipment 68,000 7.00 years Furniture and Fixtures 12,000 5.00 years Vehicles - 5.00 years Other Fixed Assets - 5.00 years

Total Fixed Assets 880,000

Operating Capital Pre-Opening Salaries and Wages - Prepaid Insurance Premiums - Beginning Inventory 4,500 Legal and Accounting Fees 2,500 Rent Deposits - Utility Deposits 900 Supplies - Advertising and Promotions 5,000 Licenses - Other Initial Start-Up Costs - Working Capital (Cash On Hand) 15,000

Total Operating Capital 27,900

Total Required Funds 907,900$

Sources of Funding Amount Totals Loan Rate Term in Months Monthly Payments Owner's Cash Injection 24.66% 223,900 Outside Investors 0.00% - Additional Loans or Debt

Commercial Loan 0.00% - 9.00% 84.00 $0.00 Commercial Mortgage 75.34% 684,000 8.00% 240.00 $5,721.25

Total Sources of Funding 100.00% 907,900$ $5,721.25

Chipotle 5-Jul-06 Salaries and Wages

Salaries and Related Expenses # Assumptions Wage Base Monthly Year One Year Two Year Three

Percent Change 3.00% 3.00%

Salaries and Wages Owner's Compensation 1 4,167$ 50,000 51,500 53,045 Salaries 1 3,333 40,000 41,200 42,436 Wages

Full-Time Employees 8 11,093 133,120 137,114 141,227 Estimated Hours Per Week 40.00 Estimated Rate Per Hour 8.00$

Part-Time Employees 7 4,550 54,600 56,238 57,925 Estimated Hours Per Week 20.00 Estimated Rate Per Hour 7.50$

Independent Contractors - - - - Total Salaries and Wages 17 23,143 277,720 286,052 294,633

Payroll Taxes and Benefits Social Security 6.20% 94,200$ 1,435 17,219 17,735 18,267 Medicare 1.45% 336 4,027 4,148 4,272 Federal Unemployment Tax (FUTA) 0.80% 7,000$ 79 952 952 952 State Unemployment Tax (SUTA) 2.70% 7,000$ 268 3,213 3,213 3,213 Employee Pension Programs 0.00% - - - - Worker's Compensation 750 9,000 9,270 9,548 Employee Health Insurance 1,200 14,400 14,832 15,277 Other Employee Benefit Programs - - - -

Total Payroll Taxes and Benefits 4,068 48,811 50,150 51,529

Total Salaries and Related Expenses 27,211 326,531 336,202 346,163

Chipotle 5-Jul-06 Fixed Operating Expenses

Fixed Operating Expenses Monthly Year One Year Two Year Three Notes

Percent Change 3.00% 3.00%

Expenses Advertising 1,667$ 20,000 20,600 21,218 Car and Truck Expenses - - - - Commissions and Fees - - - - Contract Labor - - - - Credit Card and Bank Charges 300 3,600 3,708 3,819 Customer Discounts and Refunds - - - - Dues and Subscriptions - - - - Entertainment - - - - Insurance (Liability and Property) 250 3,000 3,090 3,183 Internet 150 1,800 1,854 1,910 Legal and Professional Fees 200 2,400 2,472 2,546 Office Expenses 200 2,400 2,472 2,546 Postage and Delivery - - - - Rent (on business property) - - - - Rent of Vehicles and Equipment - - - - Repairs and Maintenance 500 6,000 6,180 6,365 Supplies 500 6,000 6,180 6,365 Telephone and Communications 200 2,400 2,472 2,546 Travel - - - - Utilities 600 7,200 7,416 7,638

Total Expenses 4,567 54,800 56,444 58,137

Other Expenses Depreciation 3,426 41,114 41,114 41,114 Interest

Commercial Loan - - - - Commercial Mortgage 4,516 54,198 52,998 51,698 Line of Credit - - - -

Total Other Expenses 7,943 95,312 94,112 92,812

Total Fixed Operating Expenses 12,509 150,112 150,556 150,950

Chipotle 5-Jul-06 Projected Sales Forecast

Products and Services Assumptions % January February March April May June July August September October November December Totals

Local Market Food Sales Price Per Unit 1.00$ 100.00% Variable Cost Per Unit 0.28$ 28.00% Gross Margin Per Unit 0.72$ 72.00% Projected Unit Sales

Seasonality Factor 8.00% 7.00% 8.50% 8.75% 8.75% 8.75% 8.75% 7.50% 8.50% 8.50% 8.50% 8.50% 100.00% Year One 32,000 28,000 34,000 35,000 35,000 35,000 35,000 30,000 34,000 34,000 34,000 34,000 400,000 Year Two Growth 3.00% 32,960 28,840 35,020 36,050 36,050 36,050 36,050 30,900 35,020 35,020 35,020 35,020 412,000 Year Three Growth 2.00% 33,619 29,417 35,720 36,771 36,771 36,771 36,771 31,518 35,720 35,720 35,720 35,720 420,240

Fixed Expense Allocation 60.00%

Projected Revenue 400,000$ Variable Costs 112,000 Gross Margin 288,000 Fixed Expenses 90,067 Profit 197,933 49.48%

Breakeven Sales Revenue 125,093.17$ Breakeven Sales Units 125,093

Commuter Food Sales Price Per Unit 1.00$ 100.00% Variable Cost Per Unit 0.28$ 28.00% Gross Margin Per Unit 0.72$ 72.00% Projected Unit Sales

Seasonality Factor 6.67% 6.67% 9.33% 9.33% 9.33% 8.00% 6.67% 8.00% 8.00% 9.33% 9.33% 9.33% 100.00% Year One 10,000 10,000 14,000 14,000 14,000 12,000 10,000 12,000 12,000 14,000 14,000 14,000 150,000 Year Two Growth 3.00% 10,300 10,300 14,420 14,420 14,420 12,360 10,300 12,360 12,360 14,420 14,420 14,420 154,500 Year Three Growth 3.00% 10,609 10,609 14,853 14,853 14,853 12,731 10,609 12,731 12,731 14,853 14,853 14,853 159,135

Fixed Expense Allocation 15.00%

Projected Revenue 150,000$ Variable Costs 42,000 Gross Margin 108,000 Fixed Expenses 22,517 Profit 85,483 56.99%

Breakeven Sales Revenue 31,273.29$ Breakeven Sales Units 31,273

Chipotle 5-Jul-06 Projected Sales Forecast - Page 2

Products and Services Assumptions % January February March April May June July August September October November December Totals

Catering Events Price Per Unit 1.00$ 100.00% Variable Cost Per Unit 0.32$ 32.00% Gross Margin Per Unit 0.68$ 68.00% Projected Unit Sales

Seasonality Factor 5.00% 5.00% 5.00% 7.50% 7.50% 7.50% 10.00% 10.00% 10.00% 10.00% 10.00% 12.50% 100.00% Year One 5,000 5,000 5,000 7,500 7,500 7,500 10,000 10,000 10,000 10,000 10,000 12,500 100,000 Year Two Growth 4.00% 5,200 5,200 5,200 7,800 7,800 7,800 10,400 10,400 10,400 10,400 10,400 13,000 104,000 Year Three Growth 4.00% 5,408 5,408 5,408 8,112 8,112 8,112 10,816 10,816 10,816 10,816 10,816 13,520 108,160

Fixed Expense Allocation 15.00%

Projected Revenue 100,000$ Variable Costs 32,000 Gross Margin 68,000 Fixed Expenses 22,517 Profit 45,483 45.48%

Breakeven Sales Revenue 33,112.90$ Breakeven Sales Units 33,113

Beverages Price Per Unit 1.00$ 100.00% Variable Cost Per Unit 0.18$ 18.00% Gross Margin Per Unit 0.82$ 82.00% Projected Unit Sales

Seasonality Factor 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 9.00% 9.00% 9.00% 9.00% 100.00% Year One 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,500 4,500 4,500 4,500 50,000 Year Two Growth 3.00% 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,635 4,635 4,635 4,635 51,500 Year Three Growth 2.00% 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,728 4,728 4,728 4,728 52,530

Fixed Expense Allocation 10.00%

Projected Revenue 50,000$ Variable Costs 9,000 Gross Margin 41,000 Fixed Expenses 15,011 Profit 25,989 51.98%

Breakeven Sales Revenue 18,306.32$ Breakeven Sales Units 18,306

Chipotle 5-Jul-06 Cash Receipts and Disbursements

Accounts Receivable Collections Percent of Collections

0 to 30 days 100.00% 31 to 60 days 0.00% More than 60 days 0.00%

Total Collections Percentage 100.00%

Accounts Payable Disbursements Number of Days to Pay Suppliers

0 to 30 days 100.00% 31 to 60 days 0.00% More than 60 days 0.00%

Total Disbursements Percentage 100.00%

Line of Credit Assumptions Desired Minimum Cash Balance -$ Line of Credit Interest Rate 9.00%

Income Tax Assumptions Effective Income Tax Rate 0.00%

Amortization of Start-Up Expenses Amortization Period in Years -

Chipotle Projected Income Statement - Year One

January February March April May June July August September October November December Totals

Income Local Market Food Sales 32,000 28,000 34,000 35,000 35,000 35,000 35,000 30,000 34,000 34,000 34,000 34,000 400,000 Commuter Food Sales 10,000 10,000 14,000 14,000 14,000 12,000 10,000 12,000 12,000 14,000 14,000 14,000 150,000 Catering Events 5,000 5,000 5,000 7,500 7,500 7,500 10,000 10,000 10,000 10,000 10,000 12,500 100,000 Beverages 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,500 4,500 4,500 4,500 50,000

Total Income 51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000

Cost of Sales Local Market Food Sales 8,960 7,840 9,520 9,800 9,800 9,800 9,800 8,400 9,520 9,520 9,520 9,520 112,000 Commuter Food Sales 2,800 2,800 3,920 3,920 3,920 3,360 2,800 3,360 3,360 3,920 3,920 3,920 42,000 Catering Events 1,600 1,600 1,600 2,400 2,400 2,400 3,200 3,200 3,200 3,200 3,200 4,000 32,000 Beverages 720 720 720 720 720 720 720 720 810 810 810 810 9,000

Total Cost of Sales 14,080 12,960 15,760 16,840 16,840 16,280 16,520 15,680 16,890 17,450 17,450 18,250 195,000

Gross Margin 36,920 34,040 41,240 43,660 43,660 42,220 42,480 40,320 43,610 45,050 45,050 46,750 505,000

Total Salary and Wages 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 326,531

Fixed Business Expenses Advertising 1,667 1,667 Car and Truck Expenses - Commissions and Fees - Contract Labor - - Credit Card and Bank Charges 300 Customer Discounts and Refunds - Dues and Subscriptions - Entertainment - - Insurance (Liability and Property) 250 Internet 150 150 Legal and Professional Fees 200 Office Expenses 200 Postage and Delivery - Rent (on business property) - Rent of Vehicles and Equipment - Repairs and Maintenance 500 Supplies 500 500 Telephone and Communications 200 Travel - - Utilities 600 600 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 300 300 300 300 300 300 300 300 300 300 300 3,600 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 250 250 250 250 250 250 250 250 250 250 250 3,000 150 150 150 150 150 150 150 150 150 150 1,800 200 200 200 200 200 200 200 200 200 200 200 2,400 200 200 200 200 200 200 200 200 200 200 200 2,400 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 500 500 500 500 500 500 500 500 500 500 500 6,000 500 500 500 500 500 500 500 500 500 500 6,000 200 200 200 200 200 200 200 200 200 200 200 2,400 - - - - - - - - - - - 600 600 600 600 600 600 600 600 600 600 7,200

Total Fixed Business Expenses 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 54,800

Total Other Expenses 7,986 7,978 7,971 7,963 7,955 7,947 7,939 7,931 7,923 7,915 7,906 7,898 95,312

Net Income (2,844) (5,716) 1,492 3,920 3,928 2,495 2,763 612 3,910 5,358 5,366 7,074 28,358

Chipotle Projected Cash Flow Statement - Year One

January February March April May June July August September October November December Totals

Beginning Cash Balance 15,000 14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763

Cash Inflows Income from Sales 51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000 Accounts Receivable - - - - - - - - - - - - -

Total Cash Inflows 51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000

Cash Outflows Investing Activities

New Capital Purchases - - - - - - - - - - - - - Cost of Sales 14,080 12,960 15,760 16,840 16,840 16,280 16,520 15,680 16,890 17,450 17,450 18,250 195,000

Operating Activities Salaries and Wages 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 326,531 Fixed Business Expenses 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 54,800 Taxes - - - - - - - - - - - - -

Financing Activities - Loan Payments 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 68,655 Line of Credit Interest - - - - - - - - - - - - - Line of Credit Repayments - - - - - - - - - - - - - Dividends Paid - - - - - - - - - - - - -

Total Cash Outflows 51,579 50,459 53,259 54,339 54,339 53,779 54,019 53,179 54,389 54,949 54,949 55,749 644,986

Cash Flow (579) (3,459) 3,741 6,161 6,161 4,721 4,981 2,821 6,111 7,551 7,551 9,251 55,014

Operating Cash Balance 14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763 70,014

Line of Credit Drawdowns - - - - - - - - - - - - -

Ending Cash Balance 14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763 70,014

Line of Credit Balance - - - - - - - - - - - -

Chipotle Balance Sheet - Year One

Base Period End of Year One

Assets Current Assets

Cash 15,000 70,014 Accounts Receivable - - Inventory 4,500 4,500 Prepaid Expenses 8,400 8,400 Other Current - -

Total Current Assets 27,900 82,914

Fixed Assets Real Estate 220,000 220,000 Buildings 580,000 580,000 Leasehold Improvements - - Equipment 68,000 68,000 Furniture and Fixtures 12,000 12,000 Vehicles - - Other Fixed Assets - -

Total Fixed Assets 880,000 880,000

Less: Accumulated Depreciation - 41,114

Total Assets 907,900 921,800

Liabilities and Owner's Equity Liabilities

Accounts Payable - - Notes Payable - - Mortgage Payable 684,000 669,543 Line of Credit Balance - -

Total Liabilities 684,000 669,543

Owner's Equity Common Stock 223,900 223,900 Retained Earnings - 28,358 Dividends Dispersed - -

Total Owner's Equity 223,900 252,258

Total Liabilities and Owner's Equity 907,900 921,800

Statement Balances Statement Balances

Chipotle Year End Summary

Year One % Year Two % Year Three %

Income Local Market Food Sales 400,000 412,000 420,240 Commuter Food Sales 150,000 154,500 159,135 Catering Events 100,000 104,000 108,160 Beverages 50,000 51,500 52,530

Total Income 700,000 100.00% 722,000 100.00% 740,065 100.00%

Cost of Sales Local Market Food Sales 112,000 115,360 117,667 Commuter Food Sales 42,000 43,260 44,558 Catering Events 32,000 33,280 34,611 Beverages 9,000 9,270 9,455

Total Cost of Sales 195,000 27.86% 201,170 27.86% 206,292 27.87%

Gross Margin 505,000 72.14% 520,830 72.14% 533,773 72.13%

Total Salary and Wages 326,531 46.65% 336,202 46.57% 346,163 46.77%

Fixed Business Expenses Advertising 20,000 20,600 21,218 Car and Truck Expenses - - - Commissions and Fees - - - Contract Labor - - - Credit Card and Bank Charges 3,600 3,708 3,819 Customer Discounts and Refunds - - - Dues and Subscriptions - - - Entertainment - - - Insurance (Liability and Property) 3,000 3,090 3,183 Internet 1,800 1,854 1,910 Legal and Professional Fees 2,400 2,472 2,546 Office Expenses 2,400 2,472 2,546 Postage and Delivery - - - Rent (on business property) - - - Rent of Vehicles and Equipment - - - Repairs and Maintenance 6,000 6,180 6,365 Supplies 6,000 6,180 6,365 Telephone and Communications 2,400 2,472 2,546 Travel - - - Utilities 7,200 7,416 7,638

Total Fixed Business Expenses 54,800 7.83% 56,444 7.82% 58,137 7.86%

Total Other Expenses 54,198 7.74% 52,998 7.34% 51,698 6.99%

Net Income 28,358 4.05% 34,073 4.72% 36,661 4.95%

Chipotle Projected Income Statement - Year Two

January February March April May June July August September October November December Totals

Income Local Market Food Sales 32,960 28,840 35,020 36,050 36,050 36,050 36,050 30,900 35,020 35,020 35,020 35,020 412,000 Commuter Food Sales 10,300 10,300 14,420 14,420 14,420 12,360 10,300 12,360 12,360 14,420 14,420 14,420 154,500 Catering Events 5,200 5,200 5,200 7,800 7,800 7,800 10,400 10,400 10,400 10,400 10,400 13,000 104,000 Beverages 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,635 4,635 4,635 4,635 51,500

Total Income 52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000

Cost of Sales Local Market Food Sales 9,229 8,075 9,806 10,094 10,094 10,094 10,094 8,652 9,806 9,806 9,806 9,806 115,360 Commuter Food Sales 2,884 2,884 4,038 4,038 4,038 3,461 2,884 3,461 3,461 4,038 4,038 4,038 43,260 Catering Events 1,664 1,664 1,664 2,496 2,496 2,496 3,328 3,328 3,328 3,328 3,328 4,160 33,280 Beverages 742 742 742 742 742 742 742 742 834 834 834 834 9,270

Total Cost of Sales 14,518 13,365 16,249 17,369 17,369 16,792 17,048 16,182 17,429 18,006 18,006 18,838 201,170

Gross Margin 38,062 35,095 42,511 45,021 45,021 43,538 43,822 41,598 44,986 46,470 46,470 48,238 520,830

Total Salary and Wages 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 336,202

Fixed Business Expenses Advertising 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 20,600 Car and Truck Expenses - - - - - - - - - - - - - Commissions and Fees - - - - - - - - - - - - - Contract Labor - - - - - - - - - - - - - Credit Card and Bank Charges 309 309 309 309 309 309 309 309 309 309 309 309 3,708 Customer Discounts and Refunds - - - - - - - - - - - - - Dues and Subscriptions - - - - - - - - - - - - - Entertainment - - - - - - - - - - - - - Insurance (Liability and Property) 258 258 258 258 258 258 258 258 258 258 258 258 3,090 Internet 155 155 155 155 155 155 155 155 155 155 155 155 1,854 Legal and Professional Fees 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Office Expenses 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Postage and Delivery - - - - - - - - - - - - - Rent (on business property) - - - - - - - - - - - - - Rent of Vehicles and Equipment - - - - - - - - - - - - - Repairs and Maintenance 515 515 515 515 515 515 515 515 515 515 515 515 6,180 Supplies 515 515 515 515 515 515 515 515 515 515 515 515 6,180 Telephone and Communications 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Travel - - - - - - - - - - - - - Utilities 618 618 618 618 618 618 618 618 618 618 618 618 7,416

Total Fixed Business Expenses 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 56,444

Total Other Expenses 7,890 7,881 7,873 7,864 7,856 7,847 7,839 7,830 7,821 7,812 7,803 7,794 94,112

Net Income (2,549) (5,507) 1,918 4,436 4,444 2,970 3,263 1,047 4,445 5,937 5,946 7,723 34,073

Chipotle Projected Cash Flow Statement - Year Two

January February March April May June July August September October November December Totals

Beginning Cash Balance 70,014 69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748

Cash Inflows Income from Sales 52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000 Accounts Receivable - - - - - - - - - - - - -

Total Cash Inflows 52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000

Cash Outflows Investing Activities

New Capital Purchases - - - - - - - - - - - - - Cost of Sales 14,518 13,365 16,249 17,369 17,369 16,792 17,048 16,182 17,429 18,006 18,006 18,838 201,170

Operating Activities Salaries and Wages 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 336,202 Fixed Business Expenses 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 56,444 Taxes - - - - - - - - - - - - -

Total Cash Outflows 52,960 51,807 54,691 55,811 55,811 55,234 55,489 54,624 55,870 56,447 56,447 57,279 662,471

Cash Flow (380) (3,347) 4,069 6,579 6,579 5,096 5,381 3,156 6,545 8,028 8,028 9,796 59,529

Operating Cash Balance 69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748 129,544

Line of Credit Drawdowns - - - - - - - - - - - - -

Ending Cash Balance 69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748 129,544

Line of Credit Balance - - - - - - - - - - - -

Chipotle Balance Sheet - Year Two

End of Year One End of Year Two

Assets Current Assets

Cash 70,014 129,544 Accounts Receivable - - Inventory 4,500 4,500 Prepaid Expenses 8,400 8,400 Other Current - -

Total Current Assets 82,914 142,444

Fixed Assets Real Estate 220,000 220,000 Buildings 580,000 580,000 Leasehold Improvements - - Equipment 68,000 68,000 Furniture and Fixtures 12,000 12,000 Vehicles - - Other Fixed Assets - -

Total Fixed Assets 880,000 880,000

Less: Accumulated Depreciation 41,114 82,229

Total Assets 921,800 940,215

Liabilities and Owner's Equity Liabilities

Accounts Payable - - Notes Payable - - Mortgage Payable 669,543 653,885 Line of Credit Balance - -

Total Liabilities 669,543 653,885

Owner's Equity Common Stock 223,900 223,900 Retained Earnings 28,358 62,430 Dividends Dispersed - -

Total Owner's Equity 252,258 286,330

Total Liabilities and Owner's Equity 921,800 940,215

Statement Balances Statement Balances

Chipotle Projected Income Statement - Year Three

January February March April May June July August September October November December Totals

Income Local Market Food Sales 33,619 29,417 35,720 36,771 36,771 36,771 36,771 31,518 35,720 35,720 35,720 35,720 420,240 Commuter Food Sales 10,609 10,609 14,853 14,853 14,853 12,731 10,609 12,731 12,731 14,853 14,853 14,853 159,135 Catering Events 5,408 5,408 5,408 8,112 8,112 8,112 10,816 10,816 10,816 10,816 10,816 13,520 108,160 Beverages 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,728 4,728 4,728 4,728 52,530

Total Income 53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065

Cost of Sales Local Market Food Sales 9,413 8,237 10,002 10,296 10,296 10,296 10,296 8,825 10,002 10,002 10,002 10,002 117,667 Commuter Food Sales 2,971 2,971 4,159 4,159 4,159 3,565 2,971 3,565 3,565 4,159 4,159 4,159 44,558 Catering Events 1,731 1,731 1,731 2,596 2,596 2,596 3,461 3,461 3,461 3,461 3,461 4,326 34,611 Beverages 756 756 756 756 756 756 756 756 851 851 851 851 9,455

Total Cost of Sales 14,871 13,694 16,647 17,807 17,807 17,213 17,484 16,607 17,878 18,473 18,473 19,338 206,292

Gross Margin 38,968 35,942 43,536 46,131 46,131 44,603 44,914 42,660 46,116 47,644 47,644 49,483 533,773

Total Salary and Wages 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 346,163

Fixed Business Expenses Advertising 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 21,218 Car and Truck Expenses - - - - - - - - - - - - - Commissions and Fees - - - - - - - - - - - - - Contract Labor - - - - - - - - - - - - - Credit Card and Bank Charges 318 318 318 318 318 318 318 318 318 318 318 318 3,819 Customer Discounts and Refunds - - - - - - - - - - - - - Dues and Subscriptions - - - - - - - - - - - - - Entertainment - - - - - - - - - - - - - Insurance (Liability and Property) 265 265 265 265 265 265 265 265 265 265 265 265 3,183 Internet 159 159 159 159 159 159 159 159 159 159 159 159 1,910 Legal and Professional Fees 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Office Expenses 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Postage and Delivery - - - - - - - - - - - - - Rent (on business property) - - - - - - - - - - - - - Rent of Vehicles and Equipment - - - - - - - - - - - - - Repairs and Maintenance 530 530 530 530 530 530 530 530 530 530 530 530 6,365 Supplies 530 530 530 530 530 530 530 530 530 530 530 530 6,365 Telephone and Communications 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Travel - - - - - - - - - - - - - Utilities 637 637 637 637 637 637 637 637 637 637 637 637 7,638

Total Fixed Business Expenses 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 58,137

Total Other Expenses 7,785 7,776 7,767 7,758 7,749 7,739 7,730 7,721 7,711 7,701 7,692 7,682 92,812

Net Income (2,509) (5,526) 2,077 4,681 4,691 3,172 3,493 1,248 4,714 6,251 6,261 8,109 36,661

Chipotle Projected Cash Flow Statement - Year Three

January February March April May June July August September October November December Totals

Beginning Cash Balance 129,544 129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292

Cash Inflows Income from Sales 53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065 Accounts Receivable - - - - - - - - - - - - -

Total Cash Inflows 53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065

Cash Outflows Investing Activities

New Capital Purchases - - - - - - - - - - - - - Cost of Sales 14,871 13,694 16,647 17,807 17,807 17,213 17,484 16,607 17,878 18,473 18,473 19,338 206,292

Operating Activities Salaries and Wages 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 346,163 Fixed Business Expenses 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 58,137 Taxes - - - - - - - - - - - - -

Total Cash Outflows 54,284 53,107 56,060 57,220 57,220 56,626 56,897 56,020 57,291 57,885 57,885 58,751 679,247

Cash Flow (445) (3,471) 4,123 6,718 6,718 5,191 5,502 3,247 6,704 8,231 8,231 10,070 60,818

Operating Cash Balance 129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292 190,362

Line of Credit Drawdowns - - - - - - - - - - - - -

Ending Cash Balance 129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292 190,362

Line of Credit Balance - - - - - - - - - - - -

Chipotle Balance Sheet - Year Three

End of Year Two End of Year Three

Assets Current Assets

Cash 129,544 190,362 Accounts Receivable - - Inventory 4,500 4,500 Prepaid Expenses 8,400 8,400 Other Current - -

Total Current Assets 142,444 203,262

Fixed Assets Real Estate 220,000 220,000 Buildings 580,000 580,000 Leasehold Improvements - - Equipment 68,000 68,000 Furniture and Fixtures 12,000 12,000 Vehicles - - Other Fixed Assets - -

Total Fixed Assets 880,000 880,000

Less: Accumulated Depreciation 82,229 123,343

Total Assets 940,215 959,919

Liabilities and Owner's Equity Liabilities

Accounts Payable - - Notes Payable - - Mortgage Payable 653,885 636,928 Line of Credit Balance - -

Total Liabilities 653,885 636,928

Owner's Equity Common Stock 223,900 223,900 Retained Earnings 62,430 99,091 Dividends Dispersed - -

Total Owner's Equity 286,330 322,991

Total Liabilities and Owner's Equity 940,215 959,919

Statement Balances Statement Balances

Chipotle 5-Jul-06 Financial Ratios

Ratio Year One Year Two Year Three Liquidity

Current Ratio 0.12 0.22 0.32 Quick Ratio 0.10 0.20 0.30

Safety Debt to Equity Ratio 2.65 2.28 1.97 Debt to Coverage Ratio 0.10 0.11 0.12

Profitability Sales Growth - 0.03 0.03 COGS to Sales 0.28 0.28 0.28 Gross Profit Margin 0.72 0.72 0.72 SG&A to Sales 0.54 0.54 0.55 Net Profit Margin 0.04 0.05 0.05 Return on Equity 0.11 0.12 0.11 Return on Assets 0.03 0.04 0.04 Owner's Compensation to Sales 0.07 0.07 0.07

Efficiency Days in Receivables - - - Accounts Receivable Turnover - - - Days in Inventory 8.31 8.05 7.85 Inventory Turnover 43.33 44.70 45.84 Sales to Total Assets 0.76 0.77 0.77

Chipotle 5-Jul-06 Breakeven Analysis

Breakeven Analysis Dollars Percent Annual Sales Revenue 700,000$ 100.00% Cost of Sales 195,000 27.86% Gross Margin 505,000 72.14%

Salaries and Wages 326,531 Fixed Operating Expenses 150,112 Total Fixed Business Expenses 476,642

Breakeven Sales Calculation 476,642 72.14%

Breakeven Sales in Dollars 660,692$

Chipotle Amortization Schedule

Loan Type Assumptions January February March April May June July August September October November December Totals

Commercial Loan Principal Amount -$ Interest Rate 9.00% Loan Term in Months 84.00 Monthly Payment Amoun $0.00

Year One Interest - - - - - - - - - - - - - Principal - - - - - - - - - - - - - Loan Balance - - - - - - - - - - - -

Year Two Interest - - - - - - - - - - - - - Principal - - - - - - - - - - - - - Loan Balance - - - - - - - - - - - -

Year Three Interest - - - - - - - - - - - - - Principal - - - - - - - - - - - - - Loan Balance - - - - - - - - - - - -

Commercial Mortgage Principal Amount 684,000.00$ Interest Rate 8.00% Loan Term in Months 240.00 Monthly Payment Amoun $5,721.25

Year One Interest 4,560 4,552 4,544 4,537 4,529 4,521 4,513 4,505 4,497 4,488 4,480 4,472 54,198 Principal 1,161 1,169 1,177 1,185 1,193 1,200 1,208 1,217 1,225 1,233 1,241 1,249 14,457 Loan Balance 682,839 681,670 680,493 679,308 678,116 676,915 675,707 674,490 673,266 672,033 670,792 669,543

Year Two Interest 4,464 4,455 4,447 4,438 4,430 4,421 4,412 4,404 4,395 4,386 4,377 4,368 52,998 Principal 1,258 1,266 1,274 1,283 1,292 1,300 1,309 1,318 1,326 1,335 1,344 1,353 15,657 Loan Balance 668,285 667,019 665,744 664,461 663,170 661,870 660,561 659,244 657,917 656,582 655,238 653,885

Year Three Interest 4,359 4,350 4,341 4,332 4,323 4,313 4,304 4,294 4,285 4,275 4,266 4,256 51,698 Principal 1,362 1,371 1,380 1,389 1,399 1,408 1,417 1,427 1,436 1,446 1,456 1,465 16,957 Loan Balance 652,523 651,152 649,772 648,382 646,984 645,576 644,158 642,731 641,295 639,849 638,393 636,928

Chipotle Financial Diagnostics

This sheet performs a few tests on your numbers to see if they seem within certain reasonable ranges. Remember, no computer can tell whether your projections are truly well-constructed, only a human can do that. But these tests can at least look for values that are critically out of range.

Financial Diagnostics Value Findings General Financing Assumptions

Owner's Cash Injection into the Business 24.66% Owner's injection is reasonable Cash Request as percent of Total Required Funds 1.65% Cash request seems reasonable with respect to total request

Loan Assumptions Commercial Loan Interest rate 9.00% Interest rate seems reasonable Commercial Loan Term in Months 84 Loan term seems within range for this type of loan

Commercial Mortgage Interest rate 8.00% Interest rate seems reasonable Commercial Mortgage Term in Months 240.00 Loan term seems within range for this type of loan

Loan Payments as a Percent of Projected Sales 0.82% Calculated loan payments as a percent of sales seem resonable

Income Statement Gross Margin as a Percent of Sales 72.14% Gross margin percentage seems reasonable Owner's Compensation Lower Limit Check 50,000$ An owner's compensation amount has been established Owner's Compensation Upper Limit Check 176.32% Owner's compensation may be too high relative to profitability of business Advertising Expense Levels as a Percent of Sales 2.86% Advertising as a percent of sales may be too low Profitability Levels 28,358$ The business is showing a profit Profitability as a Percent of Sales 4.05% The projection does not seem highly unreasonable

Cash Flow Statement Desired Operating cash Flow Levels -$ The financial projection provides the desired level of cash flow Line of Credit Drawdowns -$ The business doesn't seem to require a line of credit Accounts Receivable Ratio to Sales 0.00% Accounts receivable amount as a percent of sales seems reasonable

Balance Sheet Does the Base Period Balance Sheet Balance? - The balance sheet does balance Does the Final Balance Sheet Balance - The balance sheet does balance Debt to Equity Ratio 265.42% The debt to equity ratio seems reasonable

Breakeven Analysis Breakeven Levels 39,308$ The sales projection exceeds the projected break-even sales level