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Table of Contents
NudlemanTM - Executive Summary ...................................................................................... 1 1.0 The Offer ................................................................................................................... 2 1.1 Investor Equity ........................................................................................................... 2 1.2 Owners Equity ........................................................................................................... 2 2.0 The Products ............................................................................................................. 2 2.1 NudlemanTM Meals..................................................................................................... 3 2.2 Noodle Vending Unit (NVU) ....................................................................................... 4 3.0 Organisation Overview............................................................................................... 5 3.1. Registered Name and Start Date ............................................................................... 5 3.2. History ....................................................................................................................... 5 3.3. Business Structure..................................................................................................... 5 3.4. Mission and Vision Statement.................................................................................... 6 3.5. Key Objectives to Support Mission............................................................................. 6 3.6. Organisational Values................................................................................................ 6 3.7. Management Team (Also refer Appendix A) .............................................................. 6 4.0 Strategic Analysis ...................................................................................................... 7 4.1 External Environment Analysis .................................................................................. 7 4.1.1 Macro Environmental Analysis ........................................................................... 7 4.1.2 Market Description ............................................................................................. 8 4.1.3 Competitive Environment Analysis ..................................................................... 9 4.1.4 Competitor Analysis ..........................................................................................10 4.1.5 Customer Profile ...............................................................................................11 4.2 Internal Environment Analysis...................................................................................12 5.0 Key Strategic Issues .................................................................................................12 5.1 Competitive Advantage.............................................................................................12 5.2 Basis For Growth ......................................................................................................12 6.0 Marketing Plan..........................................................................................................13 6.1 Marketing Objectives ................................................................................................13 6.2 Sales Forecasts ........................................................................................................13 6.3 Sales Assumptions ...................................................................................................14 6.4 Marketing Strategies .................................................................................................14 6.4.1 Product And Positioning ....................................................................................14 6.4.2 Price..................................................................................................................16 6.4.3 Placement .........................................................................................................16 6.4.4 Promotion .........................................................................................................16 7.0 Production and Logistics Plan...................................................................................17 7.1 NVU Production ........................................................................................................17 7.2 Meal Raw Product Production and Preparation.........................................................18 7.3 NVU Stocking and Resupply.....................................................................................18 8.0 Organisational Plan ..................................................................................................18 8.1 Structure and Staffing ...............................................................................................18 9.0 Financial Plan ...........................................................................................................19 9.1 Underlying Assumptions and Break Even .................................................................19 9.2 Financial Highlights...................................................................................................19 9.3 Financial Ratios ........................................................................................................19 9.4 Cash Flows...............................................................................................................20 9.5 Earnings ...................................................................................................................20 9.6 Critical Risks.............................................................................................................20 APPENDIX A MANAGEMENT TEAM RESUMES IN BRIEF .............................................21 APPENDIX B - SWOT ANALYSIS...........................................Error! Bookmark not defined. APPENDIX C CRITICAL RISKS AND PROBLEMS...........................................................23 APPENDIX D SUPPLEMENTARY FINANCIALS...............................................................24
NudlemanTM - Executive Summary The purpose of this business plan is to raise AUD 1,500,0001 from an investor, in the form of a convertible and redeemable note, providing a 32% compound annual return. NudlemanTM is committed to the rollout of its wok-fresh fast food business in 2006. The Products NudlemanTM provides high quality, fast-served Asian-styled meals, based on a central theme of noodles. The meals cater for variety and are delivered fresh faster than other noodle-based products. The meals are provided to the consumer initially through mobile Noodle Vending Units (NVUs), which provide widespread point of sale coverage. The NVUs are state-ofthe-art, complying with health regulations. The first trial NVU was tested in Sydney in July 2005, receiving great response2. The NVU will become a product in itself, as NudlemanTM expands rapidly through franchising. NudlemanTM is a globally transportable business. The Market Valued in 2003 at $7.9 billion, the Australian market for fast food is large and segmented, with Asian style foods representing 2 of the top 3 choices in Sydney at 40% of the market. NudlemanTM will initially target CBD lunchtime crowds, where high-income earning but time-poor individuals are most greatly concentrated. Shopping malls, university campuses, weekend markets, and local business areas will then be targeted. Event catering, and supermarket convenience foods will be markets that NudlemanTM then diversifies into. The Owners of NudlemanTM The owners have significant experience in: the hospitality industry, advertising, and business management. The founder previously owned two very successful Thai restaurants in Sydney but grew tired of paying exorbitant rent, hoping customers would turn up each night. His NudlemanTM concept takes the product to the street!
1 2
1,500,000 AUD is approximately 1,070,000 USD (10 April 06) . All figures in this business plan are in AUD. At first market day trial in Kings Cross, Sydney, NudlemanTM sold out its stock of 400 meals.
1.0
The Offer
$1,500,000 is sought from an investor. The funds will be used primarily for the completion of one central and five suburban meal production facilities. The funds will be expected in two tranches, $750,000 shortly after commencement of operations, and a further $750,000 seven months later (four months after revenues have commenced). 1.1 Investor Funds
The investors $1,500,000 will be structured as a redeemable note, convertible to 15% shareholding in NudlemanTM at the end of year-3. Alternatively, redemption can be done at this time providing a return of $3,450,000 (2.3 times investment), equating to a compound annual return of approximately 32%. The end of year-3 is good point for possible investor exit, as decisions on product expansion into supermarkets will be made at this time. 1.2 Owners Equity
NudlemanTM is currently equally owned by Mr Michael Costin and Mr Drew Blaxland. They have already spent over $75,000 in direct costs of product testing and development, and will commit a further $200,000 in 2006, prior to funds being required from the investor. Both owners will each hold two voting rights on the Board with the investor holding one. 2.0 The Products
The principal product of NudlemanTM3 (pronounced noodle-man) Pty. Ltd. is fast-served, quality, Asian-styled individual meals. The meals are based on a central theme of noodles, but have a flexible degree of customisation to suit the purchasers tastes. The second, but equally important supporting product, is the mobile cooking unit used to prepare the individual meals. This Noodle Vending Unit (NVU) has been specifically designed to produce the NudlemanTM meals in the shortest time possible. While NudlemanTM will own and operate some NVUs, the bulk of the fleet will be purchased and operated by franchisees.
NudlemanTM is a registered trademark of Nudleman Pty. Ltd. All copyright and trademark laws apply.
These two products symbiotically solidify the NudlemanTM brand name. NudlemanTM is a state-of-the-art stir-fry noodle street vending system. While Nudlemans footprint in the three major Australian cities will be underpinned by the NVU fleet and a smaller number of strategically placed NudlemanTM stores, the aim in year-3 is to diversify the revenue stream by selling the meal product alone in supermarkets for home preparation and consumption4. 2.1 NudlemanTM Meals
The NVU operator cooks the meals in front of the customer within sixty seconds, using fresh ingredients. As implied by the NudlemanTM tagline wok fresh, each serve of noodles is a taste sensation, freshly cooked-to-order and served piping hot in a convenient cardboard pail. Customers are invited to create their own noodle dish following three easy steps: Step 1: Select Noodle Type - Japanese Udon Noodle, Hokkien Egg Noodle, Pad-Thai Rice Noodle, Singapore Vermicelli; Step 2: Add Sauce Satay, Sesame and Teriyaki Soy, Black Pepper and Lemongrass, Spicy Black Bean and Sweet Chilli; Step 3: Choose Filling - Chicken, Beef, Combination Seafood, and Tofu. Compared to the meals in Table 2.1 NudlemanTM offers a fresh, tasty, nutritious alternative. NudlemanTM may be slower than some fast food from the point of order, but it is significantly fresher, more nutritious, and almost 50% more profitable.
NudlemanTM Fat Content % Fresh Speed Meal Cost Sale Price Gross Profit Low 75% + 60 Sec $2 $7.73 288% Kebabs Medium 50% 3-5 Minutes $2 $6.50 225% Hot Dogs x2 High 20% 60 Sec $2 $6 200% Savoury Pastry x 2 High 0 20% 20 Sec $2.50 $7.50 200% Pizza Slice x2 High 10% 30 Sec $2.50 $7.50 200%
Table 2.1 Comparison with other vendor and/or small store products5
One secret to the speed of NudlemanTM meals is that the meats and vegetables are preblanched and hygienically sealed in the same pail that the customer eventually receives. The operator simply removes from the fridge, and combines with noodles and sauce in the wok.
4 5
Discussed in more detail in the Marketing Plan section of this business plan Source, assessment of Jester Pies (Sydney), Manly Pizza by the Slice and standard hot dog vendors
2.2
Each NVU is completely self-contained, mounted on wheels and totally mobile. It is delivered on-site each day by a custom designed mini-van and simply wheeled into position. Stabilizing legs are deployed, the roof pops up and it is ready to go! At the end of the day it is simply wheeled back into the mini-van and returned to base for cleaning and waste removal. Ensuring the speed of the NVU operation is the Nudle-Rac. The Nudle-Rac is essentially a lightweight grid that is packed in the meal production facility with the various meal options. The Nudle-Rac is self-levelling and designed to fit perfectly in the NVUs fridge. (Refer 7.3)
Each NVU cart is immaculately presented in stainless steel and branded in strong colourful graphics. At night the noodle stand benefits from its own internal lighting. Construction is of the highest quality kitchen-grade stainless steel. It is designed to be versatile for use in just about any place where it is legal to sell food from a temporary stall. The Generation-2 NVU is currently under design, maintaining versatility yet improving with the introduction of inventions such as the Nudle-Rac. In comparison to standard caravan-type vendor units, the NVU has major advantages in; cheaper to produce, smaller size for better site access, selfsustaining power (no mains required short-term), easily moved by one person, unique look, hygienic and cheap to service.
3.0 3.1.
NudlemanTM is trademark registered. Nudleman Pty. Ltd. was incorporated in Australia in March 2006. The NudlemanTM website URLs are secured (www.nudleman.com and .au). 3.2. History
After running two successful Thai restaurants in Sydney for five years6, Michael Costin spent most of the past two years in Thailand looking at business opportunities. While living there he ate almost exclusively as the locals did, from street vendor food outlets. Not only was the food freshly cooked in front of him, but the visual entertainment combined to augment the vibrant street culture. His initial thoughts were, this is whats missing from our staid cities in Australia. Using this as his motivator he began to realise that there were also major commercial benefits to running a fast-food network where the majority of outlets were not restricted to one location. For a start, shop fronts in good locations are expensive. The key to making such a venture successful in Australia would be to ensure that the vendor outlets are very hygienic, comply with health standards, serviced by an efficient re-supply network producing consistent meals, with professionalism and quality paramount. He spent considerable time designing a purpose built Noodle Vending Unit. He also moved back to Sydney and renewed his ties in the culinary community to elicit the design of fresh and tasty meals to be served from the NVU. The NudlemanTM brand was born! Realising the opportunity to seize a market niche through rapid expansion, the inventor also joined forces with an experienced international business team to develop and implement that initiative. 3.3. Business Structure
NudlemanTM is 100% owned equally by Michael Costin and Drew Blaxland. A board of three directors, the two owners and the investor, will govern NudlemanTM.
Tuk-Tuk Thai operated profitably in both Balmain and Darlinghurst, Sydney, from 1996 to 2003
3.4.
To forge a new, vibrant, high quality brand in the fast-food sector; to challenge the established market by offering a fresh, tasty and professional alternative; and to build a robust business model founded on high-yield, low capital outlay products. It is our vision that NudlemanTM will expand predominantly through franchising in Australia and then to appropriate international markets. It will diversify through catering and product placement in supermarkets. The possibility of trade acquisition or merger also exists. 3.5. 1. Key Objectives to Support Mission Secure site permits and homologation certificate7 from government for street vending locations across Sydney. 2. Start NudlemanTM with 10 company-owned NVUs in high-profile Sydney locations for 6 months to promote brand awareness, attract franchise purchasers and fine-tune systems. 3. 3.6. Fit-out five suburban hubs in Sydney to act as meal supply points for franchisee network. Organisational Values
Professional, fastidiously clean, fun, committed to excellence and quality in service delivery. 3.7. Management Team (Refer Also Appendix A)
With over 80 years of sector diverse, international strategic and operational combined experience, professionally qualified and with energetic personalities critical to ensuring the NudlemanTM values, the owners and the Bond management provide the skills to deliver: Drew Blaxland has run start-up business operations, with broad management skills Mike Costin has owned and managed 2 successful restaurants and an advertising firm Daniel Noordzy is a financial wiz with broad entrepreneurial appreciation Laurie Martyn is not your typical CIO, with a creative flair and eye for efficiency Veronic Boulton brings the important HR skills combined with a marketing bent
Homologation certificate to be obtained for NVU affording blanket pre-certification for all local councils
4.0 4.1
Lets take a moment to consider the broad scope of this opportunity. Valued in 2003 at $7.9 billion8, the Australian market for fast food is substantial. When you also consider the global potential of NudlemanTM with future aspirations on the $105 billion9 US market, the opportunity to build and grow a new exciting product with a strong brand is real. The idea that desirable food could be prepared in a quick fashion appeals to a sizeable portion of the market; those in tourism, people engaged in a commercial capacity, busy homemakers and students. These few examples are indicative of a large and growing collection of time poor individuals placing increasing value on every spare moment of their day. NudlemanTM has the ability to match the ravenous need for convenience with the utility that modern, fast paced lifestyles drive. An Australian product with global vision, NudlemanTM negates boundaries of culture, age and preference, through a daily mission to satiate appetites. 4.1.1 Macro Environmental Analysis
The Social and Cultural Environment Today the contemporary food outlet must maintain its appeal within an increasingly healthconscious market. Worldwide the diet continues to gain momentum10 and this means that products with less appeal to the diet-conscious will suffer reduced success. Entrepreneurs continue to derive extraordinary profits from health-conscious ventures, for example Boost Juice (Boost Juice is an Australian fruit-based snack e.g. smoothies and drinks, which offers a fresh and healthy alternative to the major players product. Boost Juice expects $70 Million in revenue from its 150 stores in 2005.11) NudlemanTM is designed to make the most of the publics increasing nutritional conscience.
8 9
10 11
Source - IBISWORLD Industry Report Takeaway Food Retailing in Australia, 4 May 2005 www.usatoday.com/money/industries/food/2003-09-08-nutrition_x.html
http://www.newstarget.com/007960.html regards Atkins http://www.boostjuice.com.au/documents/MEDIA%20FACT%20SHEET.pdf
The Demographic Environment For a fast food venture to succeed it must appeal to a broad social segment. Crossing boundaries of ethnicity and culture requires a product with broad appeal that attracts the greatest potential customer base. NudlemanTM achieves this by satisfying three crucial elements health, speedy delivery and standout taste. The Economic Environment The economic environment for the successful outlet will take into account the factors and conditions that influence the ability of its target market to afford its product. Consumers today, particularly in Australian, American and UK capital cites, have a relatively high disposable income. NudlemanTM will be priced competitively with existing alternatives and will strive to attract market share through product differentiation. 4.1.2 Market Description12
In 2003-04, the Australian Takeaway Food retailing industry generated revenue of $7.9 billion, representing an increase of 6.1 percent compared to 2002-03. Asian style food represented approximately 40% of this revenue. Although the market is mature with heavy buyer/seller saturation, it is heavily segmented on quality, style, modality and price, presenting opportunity for niche market products such as NudlemanTM. The market also appears to be emerging from a 5-year static growth period.
The major market players, McDonalds, KFC and Burger King represent over 40% of this market. While they have experienced a downturn in revenue over the past 5 years, mainly due to the preference of the consumer towards healthier products, it is encouraging to see that niche markets such as that created by Boost Juice have expanded rapidly during the same period. McDonalds has seen recent improvement to revenue since adding lower fat,
12
Source - IBISWORLD Industry Report Takeaway Food Retailing in Australia, 4 May 2005
fresher meals to their menu, despite extra preparation detracting from their long-standing attraction of speed. These two examples do show that the customers perception of healthier is an important value proposition. NudlemanTM provides this, with the added bonus of serving the meal quickly. Eighty percent of the market resides in NSW, Victoria and Queensland, with the latter being roughly half the size of the other two states.
Dollars Avg weekly income
159.62 413.96 712.31 1115.75 1996.29 879.22
Income Quintile
Lowest Second quintile Third quintile Fourth quintile Highest quintile Average
Table 4.1 shows that although the percentage of weekly income spent on takeaway food reduces as income increases, almost 63% of the market revenue is received from income earners in the top two quintiles of the income range. Adjusting the Table 4.1figures for 2005, where real growth in wages has outpaced inflation over the 6-year period, more than $30 per week on takeaway food is spent by this consumer group. The fast moving, medium to high income, health conscious individual is the primary target consumer group for NudlemanTM. 4.1.3 Competitive Environment Analysis
NudlemanTM will create a niche market by bringing a fresh but fast food product direct to the consumer on the street, initially by way of the NVU and some small hardstand stores, and eventually through supermarkets for convenient cook-at-home meals. Consumers seek variety and flexibility in their meal choices, causing competitive substitutes to become complementary alternatives in the complete fast food market. You wouldnt want to eat the same thing every day, but each time you come back to NudlemanTM you will start to entertain the notion! Table 4.2 provides a risk analysis of the competitive environment.
Issue
Intensity of Competitor Rivalry Risk of Other Entrants Risk of Market Turndown Inability to Secure Point of Sale Locations
Comment
No current established competitor with same speed as NudlemanTM Price Competitive Targeting market segment that is not currently exploited NudlemanTM will rapidly increase point of sale locations Availability of NudlemanTM franchises will encourage potential sole operator entrants to purchase rather than compete NudlemanTM will secure critical point of sale locations prior to full market release Recent tax breaks have left medium to high income earners with more disposable cash People still have to eat, and NudlemanTM is a well priced and placed product If critical point of sale locations and NVU homologation are not secured in advance, NudlemanTM will not continue with this Business Plan in its current form Investor capital is not required until after NVU homologation and point of sale locations are secured NudlemanTMs strategy of growth through suburban locations, event catering and supermarket product placement, reduces reliance on NVU revenue in the CBD plus small stores can be substituted
Risk Level
Low Medium
LowMedium
Low
Low
Medium
4.1.4
Competitor Analysis
During the start-up phase of the business food sales revenue will come from NVU lunchtime custom in busy Sydney CBD locations. The range of competitors here spans the market dominants like McDonalds, to sandwich and sushi bars, to vendor foods like kebabs as shown in Table 2.1. However, when looking for closer similarity to Nudlemans offering, we arrive at the specialised noodle-based products provided by such companies as Noodlist. A storefront operation located close to cosmopolitan Martin Place in Sydney, the meal variety at Noodlist is slightly broader. However speed of preparation is significantly slower than NudlemanTM, necessitating the addition of standard pre-cooked, oily and somewhat bland Asian fare to satisfy the time-poor consumers. It is only this time constraint that is satisfied though, as taste and nutrition are compromised. The lack of speed in the fresh cooked Asian fast food market is emphasised by another competitor, Hot Wok, offering noodle-based meals in the Sydney domestic airport terminal, where a sign on the counter informs consumers that meals may take up to thirty minutes to prepare. A captive consumer group is not being exploited here. NudlemanTM will change that.
10
Wok in a Box is a South Australian competitor that intends to open stores interstate over 2006. The company currently operates 16 stores. According to BRW magazine (January 2005) company revenue for 03-04 reached $5 million, representing a growth rate of 78 percent13. This growth is encouraging to NudlemanTM, which through the use of its NVUs and its other competitive advantages (refer 5.1) will gain broader exposure. The existence of such competitors makes NudlemanTM an attractive acquisition or merger proposition.
Small area for slow Fresh Noodle product
Fig 4.1 Nudlemans pre-blanching gives it significant speed advantage over its competitor Noodlist
4.1.5
Customer Profile
With NudlemanTM, the term customer holds two meanings; firstly as a reference to consumers who may purchase a meal from a NudlemanTM point of presence, and secondly as entities with an interest in owning a NudlemanTM franchise. In section 4.1.2 we outlined that the primary target consumer group for the first phase of NudlemanTM fits the profile of a medium to high-income earner, with a healthy and fresh lifestyle orientation. The first phase of the business plan is about growing brand awareness quickly with customers of this profile. Shortly after growing the brand awareness, as part of the NudlemanTM rapid growth plans, franchisee customers looking for a self-employment opportunity providing good income relative to the hours worked will be targeted. Institutions such as University campuses will also be targeted as potential franchisees.
13
Source - IBISWORLD Industry Report Takeaway Food Retailing in Australia, 4 May 2005
11
The profile will then extend through catering to the customer who is looking for a relatively low cost, value-adding product to support private or corporate events. This customer will be served at both the supermarket (DIY) and event catering levels. 4.2 Internal Environment Analysis
In summary, the major strength of NudlemanTM is its industry leading sixty-second preparation time, and the profitability of its NVU network. While the business model is not immediately protected by patent, its rapid expansion plan provides first mover advantage. Strong branding, a total quality system (subject to copyright), patentable NVU gadgetry and an external environment increasing product demand will ensure the success of the business model. Appendix B provides a detailed SWOT analysis for NudlemanTM. 5.0 5.1 5.2 Key Strategic Issues Competitive Advantage Unique modality of fast-food availability, with unmatched preparation times Lower capital costs and overheads and high margin unit sales through broad exposure. Healthy, fresh, fast, quality, price competitive alternative New funky, identifiable brand, professional approach and solid management Aimed at segment of large market not currently exploited by the competition Basis For Growth Expansion from Sydney to Melbourne and Brisbane Expansion into suburban and regional areas through franchising (Risk Transfer) Expansion into other market segments, such as event catering (Risk Mitigation) Brand growth through supermarket placed convenience meal products Possible alliance with food distributor (e.g. Sysco) for supermarket distribution network Possible acquisition of noodle-based competitor in key locations (e.g. major airports)
12
6.0 6.1
The marketing objective of NudlemanTM is to position itself so that consumers of fast food are confident they are purchasing and consuming a healthy and fresh product, enhanced by the overall delivery experience. The marketing objectives are to: Rapidly establish a recognised brand through street vendor points of sale supported by a smaller number of strategically placed hardstand stores Position itself as a fresh, tasty and healthy alternative to traditional fast food Maintain high gross margins on meal products Capitalize on the brand through expansion using franchising and product diversification, which will include catering and supermarket placement NudlemanTMs initial strategy will be focused within Australia, commencing in Sydney then within 18 months expansion into Melbourne and Brisbane. Beginning with company owned NVUs and central production facilities, rapid expansion will then be achieved through franchising in all target areas. 6.2 Sales Forecasts
M e o r e ellb ou rn e M b u n B a Brriissb an ne b e
S Sy yd dn ne ey y
Based on market assessment and an analysis of the realistic number of NVU and store sites possible in each city, Table 6.1 provides the forecasted revenue:
Sales Type
Direct Sales Company Sales Catering Fees Supermarket Sales Food & Drink Supply Franchise Income Total Marketing Levy Initial Franchise Fees
June 30 2007
$2,740,388 $0 $0 $169,117 $0 $381,818 $3,291,323
June 30 2008
$10,892,851 $530,540 $0 $10,189,569 $681,433 $2,461,363 $24,755,756
June 30 2009
$21,638,899 $1,521,307 $198,000 $27,424,933 $1,834,032 $$4,206,478 $56,823,648
June 30 2010
$22,937,233 $3,042,614 $909,091 $29,070,429 $1,944,074 $0 $57,903,440
Table 6.1 Sales Revenue Forecasts (Refer Appendix D for example calculations)
13
6.3
Sales Assumptions
To June 30 2007
All in Sydney: 10 Company owned NVUs 10 Franchisee NVUs. 6 Production Facilities 5 Company owned stores 1 Franchisee store $220,000 spent on Quality Management System and Franchise Operations Manual Approximately $100,000 spent on promotional activities $1.5M spent on capital infrastructure and systems development
June 30 2008
Sydney, Melbourne & Brisbane: 25 Company owned NVUs 13 Company owned stores 16 Production Facilities 55 Franchisee NVUs 16 Franchisee Stores Catering represents about 10% of total meal sales $630,000 spent on promotional activities including both corporate and local franchise area marketing $2M spent on capital infrastructure
June 30 2009
Franchisee NVU to increase to over 125 in total Franchisee stores to increase to 37 in total Approximately $1.5M spent on promotional activities, corporate and local franchise area marketing Allow $750,000 for acquisition of competitors stores in key locations
June 30 2010
Catering revenue increase to 20% of total meal sales Figures allowed for supermarket revenue are based on royalty fees on outsourced production
6.4
Marketing Strategies
Given that Australia is positioned 9th in the top 10 global markets for weekly fast food consumption14, the marketing strategy is based on penetrating the market rapidly. This will be achieved by placing the NVUs in strategic locations where the likelihood of consuming a takeaway meal is extremely high. Expansion of numbers of NVUs and stores through franchising will ensure that first mover advantage is optimised. The network is supported by an integrated total quality management system ensuring consistency, which will be leveraged in the marketing strategy. Capital outlay for franchisees will be low with owners earning more dollars per hour worked than other franchise options. Expected net profit after tax for franchisees is 20%. (Refer Appendix D for full marketable benefits of franchise model) 6.4.1 Product And Positioning
NudlemanTMs key differentiators are freshness, quality, choice, speed and consistency. The NVU and store signage will advertise wok fresh, in addition to the menu options. Both will
14
14
be bright in colour, and visibly clean and hygienic to attract passing consumers. Australian research shows that cuisine is the highest driver of choice when it comes to the type of takeaway food chosen.15 Asian cuisine is a market dominant. NudlemanTM will aims to leverage off the brand awareness created by its retail and catering business, placing its meal product in supermarkets by June 2009. In Australia during 2003-2004 the Retail food sales
Retail Food Sales
estimated value was $88.7 billion. Approximately 10% of this being takeaway food outlets.16 Given the
$88.7 billion
changing pattern of eating as a result of changes in lifestyle and shopping habits of time-poor individuals, sales in this industry are expected to grow.
Source:
Liquor Retailing, 6%
Food
Our aim is to send a message to the public that you can enjoy inexpensive fast food, eat better and not compromise on quality, taste, calories or choice. When combined with the speed of meal production eating at NudlemanTM means no compromise. In Sydney, research shows that Chinese and Thai are two of the top three most likely take away foods to be consumed17, representing over 40% of the market that NudlemanTM will appeal to. Around the world consumers are developing more diverse palates beyond Chinese food, for more exotic Asian offerings18 and in the US Chinese food has topped the 10 mostordered list of foods for both men and women19 The US will be one target market for international expansion as it shares similarities in terms of trends and consumer choice for fast food and pre-packaged foods sold in supermarkets. The latter being a potential starting point there as refrigerated foods in the US was predicted to exceed over $12 billion in 200520.
15 16
ACNielsen Online Survey, October 2004 Australian Commodities, Australias Food Industry, vol. 12 no. 2, June quarter 2005 17 http:www.smh.com.au/articles/2003/10/07 18 US News & World Report, 02/26/2001, Vol. 130 Issue 8, p.48 19 Food Technology, What, When and Where America Eats, Jan 2006. 20 http://www.researchandmarkets.com/reportinfo.asp?report_id=10788,Retail Prepared Refrigerated Foods
15
6.4.2
Price
NudlemanTMs prices have been validated by the trials already undertaken in Sydney, and its pricing strategy has been derived using competitors and substitutes as a benchmark. (Wok in a Box Australia has minimum price of $7.95 and Wild Noodles in USA averages $7.70) NudlemanTM meals served at retail locations will cost the consumer on average $7.73. Research from the trials shows this price as being acceptable to our target market. Catering prices will be discounted, as wastage is less of an issue. This cost competitive pricing position will compliment the strong differentiation attributes of NudlemanTM, and be carried through to the supermarket line, giving it a distinct advantage in the competitive market place. 6.4.3 Placement
NudlemanTM will target the health conscious consumer of fast food. The NVUs and stores will be placed in key locations within each target areas. The catering division will be managed centrally through a call centre. Dedicated geographic franchise areas will be developed, and when focusing on supermarkets the target will initially be through independent supermarket chains offering gourmet, pre-prepared foods (Equivalent in USA is Whole Foods Market). 6.4.4 Promotion
There are several strategies in relation to promotion that support the expansion of NudlemanTM. While initially much of the business will be generated from word of mouth and from the NVUs proximity to consumers, a significant amount of funding is made available for advertising and promotion. This will contribute to creating awareness in the early stages underpinning subsequent franchise network growth, supermarket placement and sales. Several strategies will be implemented as summarised in Table 6.3. In addition to these, NudlemanTM will also use other methods to attract and retain customers. As the focus of NudlemanTM is on a healthy and fresh alternative we would seek to obtain industry recognition of our product. For example the Heart Foundations Tick of Approval is a recognised public health program
16
indicating that if consumers choose this product they are choosing a relatively healthy option. Nutritional information will be clearly displayed at the NVUs for each meal alternative, and meal containers and packaging will be environmentally friendly meaning biodegradable and recyclable.
Venues
CBD sites 2006 Sydney 2007 Melbourne and Brisbane Day and Evening Markets Private and Corporate Functions
Target Group
Medium to high income workers in CBD and suburban business areas Shoppers in large mall areas Tourists in CBD Hotels Families, couples, singles and Tourists Business Owners/Event Managers Wedding Planners Private Householders Schools and Universities All above target groups
Supermarket sales
Individual Franchisees
Those looking for opportunity Family business University Campuses All above target groups
self-employment
WWW
7.0 7.1
NVU production will be outsourced to a manufacturer in Sydney and has been costed at $12,500 per NVU. Each city will have company owned NVUs, shops, a central kitchen premises and support kitchens (hubs). Table 7.1 summarises this acquisition plan.
Date
Aug-06 Aug-06 to Oct-06 Mar-07 to Apr-07 Oct-07 Oct-07 to Nov-07 Mar-08 to Apr-08 Oct-08 to Mar-09
Purpose
Order 10 NVUs (Company Owned) for Sydney Establish and fit out Central Premises in Sydney, including IT Infrastructure Establish and fit out 5 hub sites and 5 shops in Sydney Order 15 NVUs (Company Owned) 10 for Melbourne, 5 for Brisbane Establish and fit out a central premises in both Melbourne and Brisbane + additional IT infrastructure and software Establish and fit out 8 hub sites and 8 shops, 5 in Melbourne, 3 in Brisbane Acquire 3 competitors stores in high volume Airport locations
Amount
125,000 500,000 900,000 195,000 660,000 1,496,000 750,000
17
7.2
Raw product has been sourced from selected Sydney suppliers. It is a competitive quality market, with room for a number of suppliers to diversify risk. The secret to NudlemanTMs fast delivery to the customer from moment of order is the blanching and preparation process of the raw product at the central kitchen premises and hub sites. This will be overseen by our master-chef teams, adhering to strict health regulations. All ordering, stocking and quality controls will be managed on an in-house computer based system enabling usage patterns to be monitored maintaining ordering efficiency and minimising wastage. 7.3 NVU Stocking and Resupply
A unique system for NVU and store restocking, the Nudle-Rac is currently under design. Essentially providing completely removable internal sectioning to the refrigerators to hold the different meals available, it is spring-loaded so that when one meal is removed, the next meal raises to the top for easy access. At the beginning of each day, a franchisee will arrive at their support kitchen where the Nudle-Rac, preloaded with the days meals, will be loaded directly into the NVUs fridge without having to remove the NVU from the van providing an efficient stocking system, and minimising the time meals spend out of refrigeration. For large catering events, support vans will provide additional pre-stocked Nudle-Racs to onsite NVUs. 8.0 8.1 Organisational Plan (Refer Also Appendix A) Staffing Levels
Jan 2007
4 1 20 12 4
Jan 2009
4 18 110 277 48
This will increase significantly with full expansion into supermarkets using outsourced supply
18
9.0 9.1
#
1
2 3 4 5 6 7 8 9
9.2
Financial Highlights
The financial assumptions above produce a fairly conservative estimate of revenues. Even so, the results are impressive: 9.3 Cash Positive at all times Large cash surplus at the end of year-3 for investor funds return or divestment Cash surplus can also be used for larger production facilities to supply supermarkets Financial Ratios
June 30 2007
41% 0.3% 4.3% 1.11
Ratios
Gross Margin NPAT ROE Quick Test
June 30 2008
40% 17.5% 95.4% 2.53
June 30 2009
42% 20.9% 72.3% 5.27
June 30 2010
38% 18.3% 37.3% 14.07
http://www.bom.gov.au/climate/averages/tables/cw_066062.shtml http://www.sydneymedia.com.au/html/2284-city-workforce.asp
19
9.4
Cash Flows
June 30 2007
0 547,287 -1,815,000 1,700,000 432,287 432,287
Cash Flow
Opening Cash Balance Total Cash from Operations Total Cash from Investments Cash from Financing Net Cash Flow Closing Cash Balance
June 30 2008
432,287 5,678,664 -2,351,000 3,327,664 3,759,951
June 30 2009
3,759,951 13,350,501 -750,000 12,600,501 16,360,452
June 30 2010
16,360,452 11,216,537
11,216,537 27,576,989
9.5
Earnings
June 30 2007
141,146 17,929 8,912 8,912
Earnings
EBITDA EBIT NPAT Retained Earnings
June 30 2008
6,551,929 6,184,806 4,325,726 4,334,638
June 30 2009
17,292,778 16,959,424 11,848,252 16,182,891
June 30 2010
15,373,951 15,174,795 10,622,357 26,805,247
9.6
Critical Risks
All risks for this venture are low. The NVU development risk for example is zero, as the owners of NudlemanTM have carried it out already. Table 9.5 provides risk highlights. Please refer to Appendix C for a summary of all risks.
Risk Dimension
Mitigation Strategy The NVU will receive homologation for blanket compliance with operating and health requirements. Trials of first NVU have lead to design improvements such as reduced weight and the Nudle-Rac Restaurant experience, network of supply contacts, senior business management, and understanding that instilling culture of professional quality in each NVU team is key to retaining customers. The business plan relies on capturing less than 0.5% of the market in the first year of sales and only moderated growth for the next two years. The valuation issue is removed by offering the investor a debt facility rather than equity. With the potential to expand after year-3 into the lucrative supermarket market, the investor has a great opportunity to obtain 15% of a company that may increase rapidly in value. Table 9.5 Risk Highlights & Mitigation Strategies
Manufacturing
Management
Low
Market
Low
Valuation
Low
20
Founders
Board
NUDLEMAN PTY LTD
Investor
BD & Human Capital * (Veronica Boulton) Veronica has 15 yrs HR experience, has owned a franchise, and been involved in business start-ups
CFO (Daniel Noordzy) Daniel has 11 years finance & accounting experience, currently CFO in tourism firm
Information Technology (Laurie Martyn) Laurie has over 10 years IT experience and is currently CIO for a major developer
Food Tech & Quality (Mike Costin) Refer Above Michael will also actively be involved in marketing & BD
* A franchise business development expert will be sourced to provide support in this area.
21
ADDRESSING WEAKNESSES
Defendability of concept as the meal products cannot be patented; this needs to be addressed by building strong brand awareness and establishing copyright on total quality system. Focus also on rapid growth and securing prime sites in target markets 2. NVU restocking logistics is being addressed through NVU design which ensures breakeven results for a days trade without restocking. Central production facilities also being established to support restocking 3. Site permits for street vending need to be established before implementation of NVUs, but also private sites will be secured to reduce exposure to local government issues 4. Product may be vulnerable to weaken over time which can be minimized through product innovation and diversification
2. 3.
4.
5.
6.
7.
8.
MAXIMISING OPPORTUNITIES
Niche-specific opportunities through monopolising niche market by building strong brand awareness and leading the street food vending culture in Australia through being vigilant with other vending business opportunities. 2. Low restriction to NVU operating hours means there can be diversity of venues and access to a very diverse target customer group 3. Capitalise on diversity of venues and consumer groups to promote and market expansion through event catering and franchise ownership 4. International expansion to the USA which has a strong culture for street food vending and preprepared meals. Target strategic partner for joint venture, master franchise or sale of NudlemanTM 1. 1.
MINIMISING THREATS
Local government regulations in relation to street vendors means permits secured have minimum life period, however change in this area is slow 2. Vulnerability to imitation products from competitors will be reduced through rapid development of NudlemanTM products and brand. 3. Short term site permits means the NudlemanTM brand needs to be diversified through catering, franchise and supermarket placement 4. Seasonal demand for NVUs meaning inconsistent returns. This can be minimized through diversifying brand through catering, franchising and a supermarket product line.
22
23
Typical Store Franchisee Profit and Loss Statement for year ended 30 June 2007
Direct Sales 949,583 949,583
Food & Drink Supply -161,496 NVU & Vehicle Lease -11,220 Daily Site Fees -16,435 Gas Refills -6,460 Maintenance & Misc. -2,000 Part-Time Support Staff x 1 -50,852 -11,765 -7,200 -267,428 124,737 -11,667 113,070 113,070 -33,921 79,149 20.2%
-382,486 -37,440 -12,920 -6,000 -138,620 -28,487 -14,400 -620,353 329,230 -30,000 275,896 275,896 -82,769 193,128 20.3%
Total Operating Expenses EBITDA Depreciation (Store Fit-Out, 3yr straight line) EBIT Net Profit Before Tax Income Tax Net Profit After Tax Net Profit After Tax %
Statistical data is all taken from the Franchising Australia Report 2004 compiled by Griffith University Queensland
24
432,287 45,507
3,759,951 150,632
16,360,452 236,341
27,576,989 241,264
Total Current Assets Non-Current Assets Plant & Equipment Less Accumulated Depreciation Software Less Accumulated Amortisation Key location stores Total Non-Current Assets Total Assets
477,794
3,910,583
16,596,793
27,818,253
Cuurent Liabilities Accounts Payable GST Payable Income Tax Payable Franchise Fee Deposits Total Current Liabilites Non-Current Liabilities Convertible Notes
1,500,000
1,500,000
1,500,000
Total Non-Current Liabilites Total Liabilites Net Assets Equity Issued and Paid-Up Capital Retained Profits Total Equity
0 2,180,224 28,505,247
25
Nudleman Pty Ltd Profit and Loss Statement for the years ended
30 June 2007 30 June 2008 30 June 2009 30 June 2010
Company Sales
Franchise Income
Direct Sales Catering Fees Supermarket Sales Food & Drink Supply Marketing Levy Initial Franchise Fee NVU Initial Franchise Fee Store Finance Package Fees
Other Sales Operating Income Operating Expenses Cost of Sales Administration Total Operating Expenses EBITDA Non-Operating Interest Income Expense Total Non-Operating Depreciation and Amortisation EBIT Financing Costs Net Profit Before Tax Income Tax Net Profit After Tax Net Profit After Tax % Dividends Paid To Retained Profits ROE ROA Gross Margin Net Margin Quick Ratio
-1,932,882 -14,831,590 -32,915,859 -35,788,776 -1,217,295 -3,372,237 -6,615,011 -6,740,713 -3,150,177 -18,203,827 -39,530,870 -42,529,489 141,146 6,551,929 17,292,778 15,373,951
12,127
77,815
382,146
553,844
17,929 -9,017 8,912 0.3% 0 8,912 4.27% 0.83% 41.27% 0.54% 1.11
6,184,806 -1,859,080 4,325,726 17.5% 0 4,325,726 95.39% 82.50% 40.09% 24.98% 2.53
16,959,424 -5,111,172 11,848,252 20.9% 0 11,848,252 72.32% 83.89% 42.07% 29.85% 5.27
15,174,795 -4,552,439 10,622,357 18.3% 0 10,622,357 37.26% 49.45% 38.19% 26.21% 14.07
26
Nudleman Pty Ltd Statement of Cash Flows for the years ended
30 June 2007 30 June 2008 30 June 2009 30 June 2009
Cash Flows from Operations Sales Balance of Accounts Receivable Payments to Suppliers and Employees Balance of Accounts Payable Income Tax Paid Interest Income Cash Flows From Operations
3,464,949 26,526,207 61,560,303 63,688,861 45,507 150,632 236,341 241,264 -3,256,910 -20,106,346 -44,741,238 -47,712,359 -154,944 -553,782 -880,373 -886,031 77,122 -1,479,012 -4,510,711 -4,669,042 12,127 77,815 382,146 553,844 547,287 5,678,664 13,350,501 11,216,537
Cash Flows from Investing Activities NVU's Central Premises Smaller Hub Sites IT Systems - Infrastructure IT Systems - Software Purchase existing stores in key locations Cash Flows From Investing Activities
-1,815,000
-2,351,000
-750,000
Cash Flows from Financing Activities Owner Contribution Investor Convertible Note Financing Dividends Paid
200,000 1,500,000
1,700,000
Net Decrease/Increase in Cash Flows Beginning Cash Balance Ending Cash Balance
432,287
432,287
27
An Example of monthly Profit and Loss Statement done for each year
Nudleman Pty Ltd Profit and Loss Statement for the year ended 30 June 2008
Total
Income Food & Drink Sales Company Owned NVU's + Hubs Catering Sales Company Owned NVU Supermarket sales (commission/royalty) Franchise Income Food & Drink Supply Marketing Levy Initial Franchise Fee NVU Initial Franchise Fee Store Finance Package Fees Other Income Total Income Cost of Sales Food and Drinks - Company Sales Food and Drinks - Franchisee Sales Gas bottle refills (Company Sales) Sales Staff - NVU (6 hours per day) * Sales Staff - Hard Stands (Coy Owned) * Kitchen Staff/Food Prep * Chef - Central Kitchen * Chef - Hubs * Cleaning Lease - Central Premises Lease - Hubs Lease - Stores Maintenance - Company NVU's Petrol Lease 1 van per 2 NVU's CBD Licenses Delivery - Supermarkets Total Sales and Marketing Expenses Gross Profit Gross Profit % Other Income Interest Received Total Other Income Administration Insurances (Business/Public Liability etc) Insurances (Fleet) Advertising/Marketing Training Management Salaries * Wages: Staff Bonuses & Incentives * Operations Manager * Site Manager (Hub/Shop)* Wages: Admin Staff - Central Premises * Bookkeeping & Annual Accounts Electricity IT Hardware/Software Maintenance Telecommunications (Internet, Phone, Mobile) Printing & Stationery Govt Fees and Charges Miscellaneous Legal Fees Board Director's Fees Depreciation - Plant and Equipment Amortisation - Software/IT Systems Total Administration Expenses Net Operating Profit Provision for Income Tax Net Income After Tax
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
10,892,851 530,540 N/A 10,189,569 681,433 1,431,818 954,545 75,000 24,755,756 2,591,552 5,155,046 52,747 772,583 877,928 3,350,636 162,240 524,160 108,160 174,720 287,040 382,720 8,736 13,806 81,900 287,617 14,831,590 9,924,166 40.09%
504,974 20,455
568,095 23,011
631,217 25,568
631,217 25,568
694,339 28,125
757,460 30,682
1,142,357 70,313
1,038,507 63,920
1,452,611 57,528
1,291,209 51,136
237,993 15,875 159,091 127,273 8,750 1,074,410 118,970 120,404 2,445 36,790 57,758 103,394 6,240 31,200 6,240 6,240 15,600 20,800 416 657 3,900 13,696 544,751 529,659 49.30%
385,676 25,755 159,091 127,273 8,750 1,297,651 133,842 195,119 2,751 36,790 57,758 142,250 6,240 31,200 6,240 6,240 15,600 20,800 416 657 3,900 13,696 673,499 624,152 48.10%
903,807 1,143,216 60,428 76,449 159,091 159,091 127,273 127,273 8,750 8,750 1,981,812 2,302,921 163,584 457,248 3,362 36,790 57,758 268,945 6,240 31,200 8,320 18,720 15,600 20,800 416 657 3,900 13,696 178,456 578,369 3,668 36,790 57,758 327,971 18,720 31,200 8,320 18,720 15,600 20,800 416 657 3,900 13,696
914,785 1,219,713 61,221 81,628 127,273 2,500 2,097,963 2,624,254 225,758 462,803 4,526 91,974 57,758 297,090 18,720 31,200 8,320 18,720 15,600 20,800 1,040 1,644 9,750 34,240 301,010 617,070 6,035 91,974 57,758 396,120 18,720 31,200 8,320 18,720 15,600 20,800 1,040 1,644 9,750 34,240
1,118,071 74,826
1,016,428 68,024
1,000,137 66,841 254,545 63,636 11,250 2,738,756 303,876 505,984 6,252 91,974 150,172 351,021 18,720 81,120 16,640 18,720 40,560 54,080 1,040 1,644 9,750 34,240 1,685,793 1,052,962 38.45%
1,548,855 1,688,665 148,713 283,093 3,057 36,790 57,758 186,869 6,240 31,200 6,240 6,240 15,600 20,800 416 657 3,900 13,696 821,269 727,586 46.98% 148,713 349,387 3,057 36,790 57,758 215,682 6,240 31,200 6,240 6,240 15,600 20,800 416 657 3,900 13,696 916,376 772,289 45.73%
2,405,566 275,926 565,648 5,532 91,974 57,758 363,110 18,720 31,200 8,320 18,720 40,560 54,080 1,040 1,644 9,750 34,240 1,578,221 827,345 34.39%
2,186,879 250,842 514,225 5,029 91,974 57,758 330,100 18,720 81,120 8,320 18,720 40,560 54,080 1,040 1,644 9,750 34,240 1,518,122 668,757 30.58%
2,808,023 341,861 505,697 7,034 91,974 150,172 368,084 18,720 81,120 16,640 18,720 40,560 54,080 1,040 1,644 9,750 34,240 1,741,336 1,066,687 37.99%
77,815 77,815
1,441 1,441
1,921 1,921
3,443 3,443
5,417 5,417
4,694 4,694
5,742 5,742
7,972 7,972
7,843 7,843
10,715 10,715
10,342 10,342
7,724 7,724
10,561 10,561
200,000 15,600 441,480 123,779 599,040 231,236 291,200 379,392 619,243 18,720 54,080 49,000 54,080 4,992 2,496 120,000 62,400 144,000 406,438 38,500 3,817,175 6,184,806 1,859,080 4,325,726
200,000 6,240 14,040 5,372 49,920 10,400 24,960 31,275 1,560 3,120 1,750 3,120 416 208 10,000 5,200 12,000 20,813 3,125 400,393 130,706 39,212 91,495
19,500 6,488 49,920 10,400 24,960 31,275 1,560 3,120 1,750 3,120 416 208 10,000 5,200 12,000 20,813 3,125 200,730 425,343 127,717 297,626
24,960 7,744 49,920 10,400 24,960 37,530 1,560 3,120 1,750 3,120 416 208 10,000 5,200 12,000 20,813 3,125 213,701 517,328 155,857 361,471
30,420 8,443 49,920 10,400 24,960 37,530 1,560 3,120 1,750 3,120 416 208 10,000 5,200 12,000 27,150 3,125 226,197 551,509 165,860 385,649
35,880 9,909 49,920 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 31,425 3,250 270,033 609,235 182,975 426,260
41,340 11,515 49,920 106,679 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 31,425 3,250 383,777 609,845 183,238 426,606
9,360 42,900 10,490 49,920 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 31,425 3,250 286,994 518,999 156,001 362,998
42,900 13,121 49,920 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 31,425 3,250 280,265 721,831 216,830 505,001
42,900 12,028 49,920 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 40,775 3,250 288,522 549,538 165,183 384,355
42,900 10,934 49,920 31,200 24,960 43,785 1,560 4,160 5,250 4,160 416 208 10,000 5,200 12,000 50,125 3,250 296,778 382,321 115,336 266,984
48,360 14,040 49,920 31,200 64,896 109,462 1,560 8,320 5,250 8,320 416 208 10,000 5,200 12,000 50,125 3,250 419,277 655,135 196,691 458,443
55,380 13,694 49,920 124,557 31,200 64,896 109,462 1,560 8,320 5,250 8,320 416 208 10,000 5,200 12,000 50,125 3,250 550,508 513,015 154,179 358,837
* Wages 20% loading for super, workers comp, payroll tax etc
28
Cash Flows from Operations Sales Balance of Accounts Receivable Payments to Suppliers and Employees Balance of Accounts Payable Franchise Deposits received Income Tax Paid Interest Income Cash Flows From Operations
1,345,138 1,619,924 1,779,842 2,093,870 2,445,552 2,299,032 2,857,734 2,658,151 2,417,594 2,984,662 2,926,441 71,371 85,187 92,877 109,000 126,661 115,388 144,334 132,306 120,278 154,441 150,632 -960,509 -1,101,139 -1,242,329 -1,456,034 -1,782,491 -1,813,430 -2,004,163 -2,102,610 -2,017,260 -2,241,538 -2,445,248 -216,351 -256,712 -282,183 -340,473 -421,044 -394,042 -474,744 -462,942 -447,604 -534,712 -553,782 70,000 70,000 70,000 20,000 0 0 0 70,000 90,000 100,000 100,000 -322,786 -532,073 -538,014 1,921 3,443 5,417 4,694 5,742 7,972 7,843 10,715 10,342 7,724 10,561 456,550 592,228 290,144 662,530 668,804 -38,499 861,414 636,256 -37,338 850,849 591,753
Cash Flows from Investing Activities NVU's: 10 in MEL, 5 in BNE Main Central Premises MEL+BNE @312 8 Smaller Hub sites MEL+BNE @187 IT Systems - Infrastructure IT Systems - Software
-195,000 -312,000
-2,351,000
-507,000
-348,000
-748,000
-748,000
Cash Flows from Financing Activities Owner Contribution Investor - Convertible Note Financing Dividends Paid
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Decrease/Increase in Cash Flows Beginning Cash Balance Ending Cash Balance
29
Control Sheet used in financial model to determine costs and outline assumptions
Nudleman Pty Ltd Control Sheet
2006/2007 2007/2008 2008/2009
Growth In Sydney 2008/2009* Inflation NVU Cost Meal Price (incl GST) Drink Price (incl GST) No of Drinks per meal Cost of Meal - ingredients (excl GST) Cost of Drink (excl GST) NVU Site Licence Fees per day Initial Franchise Fee NVU Initial Franchise Fee Store Franchise Deposit Franchise Food Supply Markup Franchise Food Supply Fee per unit (excl GST) Accounts Receivable at end of month Accounts Payable at end of month Depreciation Rate (Straight Line) Amortisation Rate (Software - Straight Line) Average Deposit Interest Rate
4% 12,500 8.50 2.50 0.25 1.60 1.00 100.00 35,000 70,000 10,000 12% 3.66 5% 25% 15% 25% 4.00% 18.67 2314 2506 2 6 4 150 3263
4% 13,000 8.80 2.60 0.25 1.67 1.04 104.00 35,000 70,000 12% 3.81 5% 25% 15% 25% 4.00% 19.40 2406.60 2606.20
25% 4% 13,520 9.20 2.70 0.25 1.73 1.08 108.16 35,000 70,000 12% 3.96 5% 25% 15% 25% 4.00% 20.20 2502.90 2710.40
Award Wages
Restaurants, &c., Employees (State) Award (577) (Grade 3 casual average) - NVU Restaurants, &c., Employees (State) Award (577) (Grade 3 Full Time) - Kitchen/Shop Clerical and Administrative Employees Consolidated (State) Award (135) (Grade 3)
No of General Staff
Sales Staff - NVU Casual - Hours per day Sales Staff - Hard Stand (4 wok) (Coy owned Hub) Full Time Kitchen Staff - Number of meals per day, per kitchen staff prepared, boxed, cubed - Number per month per staff @ 5 days per week
No Days
21.75 61% 13.17 240 3161
No Days
21.75 385 8374
No Days
26.08 540 14085
Catering Events
Operating 1.5 per month per NVU @ 250 meals per event in 0708' Operating same for franchise but double for company NVU in 0809' Catering meals sold should move from 10% of total NVU to 20% in 0910' Special Catering Price per Meal (and no drinks required) includes GST 375
7.50
Supermarkets
Total Value of Retail Food Supermarkets @ 62% Pre-prepared foods in supermarket Nudelman @ 1% in 0910 88.7 55.0 1.0 10.0
30