1. “Pepper in Some Fun” Prepared by Hammer Smash Consulting Nicky Cox Gary Houseman Tyrone Okrainetz

2. Outline Introduction Operations plan Human Resources Plan Marketing Plan Financial Plan Questions

3. Introduction Chili’s is a high quality franchise family restaurant Serves a variety of food Similar restaurants would be Applebee’s, Montana’s and East Side Mario’s No franchise in Saskatoon yet

4. Mission Statement “To be the leading Canadian Chili’s franchise in Saskatchewan, with a commitment to providing great food and service to the people of Saskatoon, while achieving growth through core competencies of our people.”

5. Operations Plan Need $1.5 million to start up business Serve American style Tex-Mex cuisine. Serve alcoholic and non alcoholic beverages. Lunch and Supper menu with appetizers. One general manager and 2 assistant managers. Highly visible, accessible, high traffic location.

6. Location C

7. Floor plan

8. Average Business Day Open from 11AM till 11PM, 7days a week. Serve lunch menu and appetizers from 11AM till 4PM. Serve supper menu and appetizers from 4PM till 11PM. Kitchen manager starts at 9 AM to prepare kitchen for the day. General Manager starts at 10AM Assistant Manager starts at 6PM Supervisors fill in as needed for managers.

9. Daily Shifts: Managers

10. Capital Budget

11. Operating Expenses

12. Human Resources General Manager Dining Room Assistant Manager SupervisorsHostessesFood RunnersServers Kitchen Assistant Manager SupervisorsCooksExpos Organizational Structure

13. Marketing Plan Target – mid to high income families – Young Adults Competitive Price Excellent location – Located on Preston Avenue and in close proximity to Circle Drive and College Drive – University – Sutherland/Erindale/Silverspring/Willowgrove areas Quality food and service

14. Marketing Plan Franchise marketing – Website Email club Pepper in Some Hope – Advertising Local – Radio – Billboards

15. Financial Plan Need $1.5 million for startup $1.0 million bank loan $500,000 invested by us Royalty fees up front of $40,000 5% of gross margin per year for royalties 4% of gross margin per year for advertising Capital expenditure of $95,800 to renovate Salaries and wages of about $690,000 a year Cost of Goods Sold is 60% of revenues Other marketing of $15,000 a year

16. Financial Plan Highly profitable IRR of 69.9% NPV of $2.1 million Positive net income after first year Dividends paid out as well to investors Long term debt paid off in 6 years at annual payments of $209,796 All ratios look good for an investor in this business

17. Financial results Sales is the most critical variable Assumed average meal is $22 Supper $25 – 70% Lunch $15 – 30% Open 360 days a year Maximum capacity of 3000 people First year excitement 1000 people a day ($7.92 mil) Second year decline to 800 people per day ($6.34 mil) Level off for next 4 years at 900 people per day ($7.13 mil)

18. Risk Analysis Sensitivity analysis showed the company to be successful Break even analysis is at 585 customers per day for a 20% return on investment Feasible due to it being a franchise and our personal advertising along with the quality of the food

19. Conclusion Quality restaurant for families Profitable in the suggested location IRR of 69.9% Positive net incomes for 6 years with dividend payouts SASKATOON IS READY TO PEPPER IN SOME FUN WITH A CHILI’S

20. Questions?