1. A sweet SaskatOON Experience…

6. A sweet SaskatOON Experience…

7. Presented by: Alym Amlani Jennifer Chung Ayaz Jessa Celia Li
Chris Pawluk
David Rusnacik

8. Agenda Executive Summary Introduction Marketing Plan
Human Resources Plan
Operations Plan
Financial Plan
Conclusion

9. How it begins…

10. A tasty treat…

11. Executive Summary
Goal: to establish the first super premium ice cream franchise in Saskatoon
We have secured $100,000 in debt financing
We will be providing $50,000 in equity and are seeking an additional $150,000 in equity financing today
Anticipated IRR of 33%
Anticipated ERR of 9.3%
Preliminary discussions in place for location in downtown Saskatoon

12. Why franchise? Proven business model Predictable growth
Strong brand recognition in Alberta
Supplier contracts already in place
Recipes and branding have already been developed
Training provided
Franchisee social network and national assistance
Online advertising provided

13. Vision
Marble Slab Creamery is the ultimate gustatory experience. We cater to each customer’s unique tastes providing the perfect ice cream, just how they want it. Our ice creams are fresh, delicious, and of the highest quality. We don’t just make desserts, we create experiences.

14. Mission
Our mission is to be the pre-eminent distributor of quality ice creams in Saskatchewan. We will provide prompt service, a great experience, and the finest ice cream appealing to ice cream lovers of all ages.

15. Present Locations
557 stores in total located in 35 states, Puerto Rico, Canada, and in Dubai and Kuwait
35 locations in Canada – No franchises currently located in Saskatchewan

16. Demand for Ice Cream
According to University of Guelph, annual consumption of ice cream is as follows:
Country liters per capita
New Zealand: 26.3 liters
United States: 18.7 liters
Australia: 17.8 liters
Canada: 9.5 liters
Italy: 9.2 liters
United Kingdom: 7.7 liters
Finland: 3.9 liters
China: 1.9 liters
Japan: 0.01 liters

17. Marble Slab’s Competitive Advantage
50 flavors of ice cream in a freshly baked waffle cone made on site using proprietary recipes – “Bread and Butter” for Marble Slab
Select Mixins® such as berries, nuts, chocolate chips, Smarties, Gummy Bears etc.
Marble Slab sells an experience
Whole process involved. You get more than just a ball of ice cream. All the ice cream is mixed, flavored and frozen at each outlet.

18. Marketing Plan – Marketing Mix
Product:
Ice cream with Mixins®
Specialty dipped cones
Frozen yogurt
Sundae
Ice cream cakes and pies
Price:
From $4.95 for a regular ice cream cone
$30.95 for an ice cream cake

19. Marketing Plan – Marketing Mix
Promotion:
Printed ads
Local radio stations
Facebook®
In-store discount
Coupons
Place:
1,500 sq ft. store located on 20th Street E and 2nd Avenue S.

20. Marketing Plan – Store Location

21. Why we need 120k for leasehold improvements

22. Marketing Plan Segmentation Target group Positioning Age Gender
Household characteristics
Income level
Target group
Families with children
High income individuals and families
Positioning
High-end segment

23. Marketing Plan – Competitive Analysis
Major high-end ice cream chains
Cold Stone Creamery, Marble Slab Creamery and MaggieMoo’s International
Good news
None of these chains are operating in Saskatoon
Bad news
Intense competition from Dairy Queen, Jerry’s and Homestead

24. Marketing Plan – Competitive Analysis

25. Marketing Plan Strengths Weaknesses Opportunities Threats
Premium products
Customized ice cream
Universal recipe and training
Weaknesses
Low brand awareness
Lost control on choosing suppliers
Opportunities
First-mover advantage
Booming economy and increased disposable income
Unsaturated market
Threats
Entrance of rivals
Regulations on frozen dessert

26. Human Resource Plan Manager Background
Bachelor of Commerce
2 Years Management Experience DQ
Training – Management & Employees
In-House
Corporate
Roles – Generic
Duties

27. Human Resource Plan Motivational Incentives Compensation
Work-Life Balance
Employee of the Month
Discounts
Flexible Hours
Work Environment
Compensation
1 Full Time Manager = ~ $55,000 + Std Benefits
Equivalent of 4 Part Time Associates = ~$20,000/annum + Std Benefits

28. Operations Plan – Hours of operation
Daily hours of operation
Winter hours (January – May, September- December)
Daily 11:00am – 7:00pm
Summer hours (June – August)
Sunday – Thursday 11:00am – 10:00pm
Friday – Saturday 11:00am – 11:00pm

29. Operations Plan – Typical Day
Manufacture ice cream and cones
Serve customers
Restock goods
Clean machines, floors and tables
Make ice cream cakes
Observe inventory levels
Review sales reports and other financial data

30. Operations Plan – Supply Analysis
Designated, reputable suppliers
Base mix
Flavourings
Other Ingredients
Menu board
Equipment
Fixtures
Pricing negotiated by franchise

31. Operations Plan – Service Providers
Legal and Accounting
Local Law firm and Accounting firm
Bookkeeping
Accounting
Legal services
Computer Hardware and Software Support
Restaurant Computer Solutions, Inc. (RCI)
POS Computer System

32. Operations Plan – Capital Budget
Computer Hardware and Software
POS System
Granite Slab
Ice cream making machine
Ice cream cone baking oven
Display case
Ice cream freezer

33. Operations Plan – Technical processes
Training program provided by the franchise
Training program – Houston, Texas
10 days
In-depth review of Marble Slab’s Operations Manual
On the job training in procedures
Store operations
Ice cream manufacturing

34. Operations Plan – Floor Plan Front of store

35. Operations Plan – Floor Plan Back of store

36. Financial Plan – Initial Cost
Item
Amount %
Franchise Fee
25,000 8%
Equipment
95,000
32%
Working Capital
10,000 3%
Furniture
4,000 1%
Uniforms
Leasehold Improvements
120,000
40%
Small Equipment & Supplies
6,000 2%
Signage
Inventory - Food
Licenses
3,000
Legal & Accounting Costs
7,000
Grand Opening Marketing
Total
300,000

37. Financial Plan – Capital Structure
$300,000 in funds required to commence operations
Financed via Combination of Debt & Equity
Corporate franchisor does not offer direct or indirect financing
$100,000 in debt over 10 year period
Translates to annual payments of $14,238
$200,000 in equity financing required
Raised $50,000 personally and are seeking $150,000
Required return on equity = 20%

38. Financial Plan – Sales & Growth
First year sales revenue expected
Ice Cream & Cake Sales
Year 1 ~ $430,000 growing to ~ $545,000 in year 5
Growth
Ice Cream – ~10% in year 1, ~5% thereafter
Cakes – ~6% per year

39. Financial Plan – Statement of Income and Retained Earnings
Gross Profit Margin = Average 50%
Net Profit Margin = Average 13.7%
Operating costs/Gross Sales = Average 34%
Composition of Cost of Goods Sold
Direct Materials = 41% Average
Direct Labor Used = 41% Average
Variable Manufacturing Overhead = 18% Average

40. Financial Plan – Cash Flow
Initial Working Capital - $10,000
Net Cash Flow from Operations
~$57,000 in year 1 rising to $116,000 in year 5
Net Cash Flow from Financing
~$293,000 (net of year 1 interest) in year from initial equity offering and proceeds from long term debt
Net Cash Flow from Investing
~($264,000) in year 1 and ($30,000) resulting from capital expenditures

41. Financial Plan – Investment Analysis
Net Present Value of Investment = ~60,895
Using required rate of return on equity of 20%
IRR on equity = 33%
Total Net Cash Flow to Equity
~86K in Y1, 86K in Y2, 91K in Y3, 70K in Y4, 107K in Y5
External Rate of Return on Equity Investment
9.3%
Estimated dividend payment schedule
40K in Y2, 65K in Y3, 80K in Y4, 95K in Y5
Undiscounted Pay Back Period
5.1 Years (Dividends Received)

42. Assumptions for Sensitivity:
Scenario Estimates
Variable
Worst Case
Base Case
Best Case
Quantity of Sales
80%
100%
110%
Labour Costs
130%
$10.15/hr
Min wage
Labour Hours
150%
75%
Materials Costs
125%
90%

43. Financial Plan: Break Even + Sensitivity

44. Conclusion Saskatoon loves ice cream Established market exists
Knowledge and expertise exists
Established business model, brand, and training
Asking for $150,000 in equity, IRR of 33%

45. Conclusion
Marble Slab has quickly expanded beyond its original Southeastern presence and become a fast-growing franchise.
It is ranked in Entrepreneur Magazine's Franchise 500 (#93), Fastest-Growing Franchises (#72) and America's Top Global Franchises (#75)
Don’t miss out on this excellent investment opportunity

46. Questions?

47. Market Drivers
Health issues – both negative (obesity, diabetes) and positive (natural, organic) have continued to generate new products
Consumers crave indulging in richness and luxury
Carry super-premium image to healthier segments

48. Market Drivers Market Challenges
Trade-offs exist where popularity of new product detracts from sales of older one
Ice cream and frozen novelty market has nearly completely penetrated among kids
Ice cream and frozen novelty market has near penetration amongst kids
Mature ice cream segment
Continuously develop products that consumers seek and react to call for healthier choice.

49. Financial Plan - Assumptions
In preparing estimates, we obtained actual sales figures for similar establishments located in Canada and the United States.
In a sample of 68 stores, the range of actual sales was between a low of $258,711 to a high of $867,770.
Corporate profit and loss statements obtained from similar establishments to assess whether our estimates were reasonable

50. Risk Factors Why go Independent? Marble slab is easily imitable
Marble slab does not yet have traction in Saskatoon; brand goodwill is trivial
Flexibility to run the business how you choose
Ability to change store layout
Can offer products not offered by Marble Slab
Works in other cities
Why go Independent?
Business model of franchise is easily imitable
Marble slab does not yet have traction in Saskatoon so the value of goodwill associated with the name is not known
Flexibility to run the business how you choose
Ability to change store layout to improve customer flow
Can set prices
Can offer products not offered by Marble Slab but competitive with local market (eg Sundays, Floats, etc)
Successful model as seen in Vancouver – namely Dolce Amore and Casa de Gelato, two local stores that are incredibly successful. Ditto for Mondo gelato.
May be worth looking into how much startup and design costs would actually be as these could be commensurate with initial franchise fee
Potential for franchising the brand if it becomes popular! (Taco del Mar)
Could just buy dairyland ice cream and sell 

51. Financial Plan - Assumptions
The royalty fee as franchisee is equal to 6% of gross sales – Payable weekly
An advertising fee is also assessed that is equal to 2% of gross sales
Initial price for the standard seven ounce serving of ice cream will be $4.95
Initial price for ice cream cake will be $30.95
Expected real growth
Ice Cream Sales – 5% in yr 1 and 3% subsequently
Ice Cream Cake Sales – 5% in yr 1 and subsequently
Expected rate of inflation = 3%