Executive Summary......................................................................................................1 Mission Statement........................................................................................................5 Goals and Objectives....................................................................................................5 Industry Overview.........................................................................................................6 Location....................................................................................................................8 Floor Plan..................................................................................................................9 Business Activity.....................................................................................................10 Suppliers.................................................................................................................

11 Capital Expenditures...................................................................................................12 Strategy..................................................................................................................13 Management and Staffing........................................................................................13 Experience and Training..........................................................................................16 Salaries and wages..................................................................................................16 Products and Services.............................................................................................18 Promotion................................................................................................................19 Pricing.....................................................................................................................19 Place.......................................................................................................................21 Marketing Plan Budget................................................................................................27 Strengths, Weaknesses, Opportunities, Threats Analysis.............................................28 Financial Plan.............................................................................................................30 Appendix A ................................................................................................................26

Executive Summary
The following is a comprehensive business plan for The Halal, a fast food establishment designed to provide fresh and healthy donairs and similar ethnic cuisine of the Middle East and South-East India regions. The restaurant will be located in Lethbridge, Alberta in an area of the city where there is currently a lack of unique healthy alternative meal choices but an abundance of university students willing to try something new.

Financing Requirements The estimated total start up costs for The Halal is $200,000. The four primary equity investors, Erin Brown, Ahmed, Iqbal, Christy Sonen and Karla Whitford will contribute $120,000; another $80,000 is required to cover the remainder of the start up costs.

Operations Plan The Halal will purchase its products from three major suppliers all located in Lethbridge Brew Master (local meat supplier), Costco (for produce and general supplies) and the local Coca-Cola dealer (for fountain and bottled Coke beverages); thus just-in-time ordering can be utilized and customers will appreciate the fresh products. Investment in initial capital costs is approximately 1

$44,000 and initial inventories would be minimal (due to short turnover) of approximately $3,000.The Halal will lease the property in the strip mall located in West Lethbridge near the University of Lethbridge campus.

Design of the restaurant will be such that it provides for fast service as customers enter through one door, order, continue to move down the queue while the line-cook prepares the meal to the customer specifications, pays for their meal, and exits through the exit door on that side of the restaurant. There will also be limited seating available along the front window for those customers wishing to stay and enjoy their meals in the restaurant.

Marketing Plan The Halal will offer ethnic fast food items particularly donairs, kabab wraps, falafels, chicken tikkas, and samosas. These items will be marketed as healthier fast food choices that other fast food restaurants. Due to the lack of ethnic restaurants in Lethbridge and the abundance of university students in the area, there is a strong presence of young individuals with appetites for different and unique foods. Thus our target market is those individuals interested in healthy, ethnic meal choices.

The location of our restaurant will be in a strip mall located in west Lethbridge, in close proximity to the University, a large residential complex and schools. There is also a local pub located in the same strip mall which we believe will vastly benefit our business during the late hours when patrons are leaving the bar at the end of the night. There is little direct competition of the same products as Sams Donair is the only other donair restaurant in Lethbridge. However Sams Donair is located further 2

away from our target market (university students) and also does not also provide other East Indian products to complement their donairs. Other direct competitors that are located closer to our future location but are not competing with the same products is Pita Pit, Subway and Little Caesars. However, these restaurants do not provide the customer with both the unique and healthy alternative that The Halal will.

The pricing strategy is one of differentiation due to the uniqueness of our product compared to others in the Lethbridge area and the fact that we are tapping into a niche market. Promotion of The Halal will include advertising spots on trash bins and bus benches around campus, and also advertisements and coupons in the University newspaper. Total advertising costs are expected to be approximately $7,900 in the first year and approximately $5,000 there after once our name is established and we can rely more on word-of-mouth advertising.

Human Resources Plan Overall, it is important to hire energetic individuals who strive to provide friendly customer service and have fun working in smaller team environments. Equity investor, Ahmed Iqbal, has been designated as the General Manager of The Halal. He will work an average of 40 to 45 hours per week but be available on-call during all store hours. Mr. Iqbal will be in charge of hiring two fulltime supervisor positions one for the day shift and one on the evening shift; both paid annual salaries. Also two full-time employees and four part-time employees 3

will be required. The General Manager will earn a salary of $65,000 in the first year, the supervisors $40,000 each, the full-time employees $30,000 and the part-time employees a competitive hourly wage equal to minimum wage plus 10% (currently works out to $9.68.hour). The restaurant will be open from 10:30 am to 11:00 pm Sunday thru Thursday and 10:30 am to 2:30 am Thursday thru Saturday. Employees will be required to come in early (at 9:00am) to begin preparation work for the day and stay later after store hours to complete the closing checklist (ie. Clean the restaurant, store away vegetables and meat, etc).

Financing Plan The financial analysis for The Halal was calculated over the next 5 years with a required rate of return of 25% for the investors. Net income is projected to be negative in the first year at ($39,000), but then reach a positive $22,000 by year 2 and continues to increase significantly year over year. The net present value was determined to be approximately $64,500 with a return of 40% on investment. Dividends would be paid out equally in the amount of an additional net income over $40,000 in accordance with the Dividend Shareholder policy. Therefore dividends are projected to be paid out by year 3.

Mission Statement Goals and Objectives To provide a healthy and unique fast food alternative that tastes like no other!

To achieve a return on investment of not less than 25% per annum To provide a unique fast food option that not only tastes great but is healthy too

To gain market share of the customers eating out in Lethbridge, especially university students

Maintain constantly growing sales over the next 5 years

Industry Overview
The fast food industry is rapidly growing with increased competition from establishments thriving to provide healthier alternative food choices. The city of Lethbridge, the future site for our new business, has a booming economy due to the growing population and the significant infrastructure development planned to facilitate this growth. Lethbridge is a large university city and as such is home to many students. Lethbridge prides itself in having a young, welleducated and ethnically diverse demographic, as 36% of the citys population is under the age of 25.

Overall, Lethbridge has enjoyed a balanced growth rate of approximately 2% annually over the last ten years. However growth is expected to explode over the next 10 to 15 years especially in the West Lethbridge area of the city. Due to this growth, and the lack of healthy food choices especially in West Lethbridge and around the University of Lethbridges campus, there is a need for more restaurants which provide fast and healthy meal options.

Our new business, The Halal, has a great opportunity to benefit and succeed in this market.

Location
The location we will lease for the donair shop is currently a Shoppers Drug Mart that will soon be moving to a larger location. The building is located in a strip mall on the West side of Lethbridge. The only other donair shop in Lethbridge is located across the river on the other side of the city. Competition within the strip mall includes a Dairy Queen, Little Caesars, and a pub called The Duke, so there are very few competitors nearby.

The other major advantage of this location is that it is 0.5 kilometres away from the University campus, and therefore very convenient for students to visit. As well, most of the housing behind the strip mall is apartments which are often rented by these university students. With the location of the pub nearby, it is a source of competition, but also an opportunity to feed its patrons in the late hours of the night when its kitchen has already closed. See below for the future location of The Halal.

Floor Plan
The restaurant will have limited seating at a counter along the window for customers to eat at, but most orders will be take out. Customers will order at one end of the counter, their order prepared in front of them at the counter, and make their payment at the other end of the counter. The preparation and storage area will be separated by a wall. There will be freezers and refrigerators for storing meat and perishables, as well as storage area for other supplies such as napkins. There will also be a washroom in the back for employee use only.

Business Activity
On a daily basis, staff will arrive early to prepare for the lunch customers. This will mostly include slicing vegetables for the donairs. Staff will consist of part-time and full-time workers as needed; please see the Humane Resources Plan for further details. Three staff will be working during the busier times of lunch and dinner. Slower periods in between meals will be used for further preparation time to cut more vegetables and restock supplies as needed. All shifts will be responsible for regular clean-up, but a more thorough clean (floors, windows, fridges, coolers, etc.) will be done by the evening staff. An inventory count and a reconciliation of sales for the day will also be completed by the evening staff. For an example of a closing checklist that will communicate responsibilities to employees, please see below:

Closing Checklist Date Completed:

Task Complete cash reconciliation Cash secured in safe Count Inventory Items (complete count checklist) Wash counters and prep area Store meat and clean rotisseries Wash floors Restock supplies (napkins, cutlery, etc.) Wash dishes & run dishwasher Take out garbage Lock front and back entrances Lights out Initials

10

Suppliers
Three major suppliers will be necessary for operating the business:

Brew Master The Lethbridge location will be our supplier for the meat products.

Coke Coca-Cola will be used to supply fountain and bottled beverages.

Costco All other necessary supplies will be purchased from Costco including items such as: disposable plates, disposable cutlery, napkins, produce, condiments, etc.

11

Capital Expenditures
Since the current location is not set up as a restaurant, the space will require significant renovations. We requested bids and plans from several local construction companies and have settled on Ace Construction. They have agreed to complete renovations at a contracted cost of $25,000.

Other capital expenditures include several large appliances, kitchen tools, and seating for customers. The total cost for all capital expenditures is $43,650 including taxes and shipping; summarized below:

Total Capital Expenditures Leasehold Improvements # required 2 2 1 3 1 1 several 1 1 1 10 Estimated Cost/item $1,000 $1,100 $500 $2,000 $3,500 $1,200 $250 $700 $300 $100 $25,000 Total Cost $2,000 $2,200 $500 $6,000 $3,500 $1,200 $1,000 $250 $700 $300 $1,000 $18,650

Freezers Refrigerators Toaster Rotisseries Commercial Oven Cooling Unit Kitchen Utensils Microwave Oven Dishwasher Cash Register Stools

Total Capital Expenditures

$43,650

12

Strategy
To hire energetic staff who will like to have fun in a team atmosphere but also get the job done to high level of quality by preparing well made sandwiches and providing helpful and courteous service to the customers To ensure that the adequate amount of employees are on duty during the anticipated lunch, dinner and after-bar rushes (as The Halal will be located near a local pub as mentioned earlier); and also to ensure that sufficient preparation for the peak times is completed

Management and Staffing

The four owners and equity investors, Ahmed Iqbal, Karla Whitford, Christy Sonen and Erin Brown will administer the productivity and overall performance of The Halal however the day-to-day operations will be left Ahmed Iqbal, who will also be the general manager. to

Store Hours will be as follows: Sunday to Wednesday 10:30AM to 11:00PM Thursday to Saturday 10:30AM to 2:30AM

13

Staff requirements, other than the General Manager, will include the following: Day shift Supervisor will supervise and assist line-cooks and cash from

9AM to 5PM; will also be responsible for the HR functions of the employees, such as accepting resumes, conducting interviews, hiring part time employees and hiring additional full-time employees after discussions with the General Manager Evening shift Supervisor will supervise and assist line-cooks and cash from 5PM to 1AM; will also be responsible for the inventory by ensuring that accurate inventory counts have been performed daily and placing orders based on these counts and anticipated demand Full-time line cooks (2) there will be 2 line cooks with full-time hours, one to work the day shift from 9AM to 4:30PM and one the evening shift from 4:30PM to 12AM Part-time line cooks (4) there will be a total of 4 part-time employees

working an average of 15 to 25 hours per week; their schedules will be as follows: o one part-time line cook will work during the lunch rush from 11AM to

2PM daily o Sunday to Wednesday schedules: two part-time line cooks for the

dinner rush from 5PM to 8PM

14

Thursday to Saturday schedules: two part-time line cook for the

dinner rush from 5PM to 8PM and two part-time line cooks for the late night shift of 11PM to 3AM o Note that full-time staff will fill in as required

Please refer to Appendix A for an approximate weekly staff schedule.

15

Experience and Training

The supervisors will be hired based on their previous experience in the food industry and/or supervision skills acquired within the food industry. All other positions will be entry level positions. Training will be provided to all hired individuals therefore experience is not necessary however it is definitely an advantage. Training of newly hired line-cooks will consist of an initial 5 hour shift which will include a one hour session with the Day Supervisor who will go over the day-to-day operations of The Halal and provide the new hire with a menu to become familiar with. The new hire will then make them self a meal from the menu. The rest of the first 4 hour shift of the new hire will include prep work in the back and assisting the other line-cooks during a lunch rush. Other duties such as opening and closing checklists will be trained through experience as the new hire works more hours.

Salaries and wages

Ahmed, General Manager, will be on salary for $65,000 per year while the Supervisors will be on salaries of $40,000 each per year and fulltime employees will be paid salaries of $30,000 each. Part-time employees will be paid competitive wages at minimum wage plus 10%. As of July 1, 2009, minimum wage in Alberta was $8.80; therefore current wages for part-time employees is $9.68. Overall maintain energetic and experienced employees is a important to

16

the success of The Halal and thus paying competitive wages is intended to recruit and maintain these types of employees.

17

Products and Services

Lethbridge Alberta is the site of our location. The city has a current population of 85,000 with surrounding municipalities that commute into the city on regular bases which posts the population to 125,000. The population is on the verge of exploding in the next decade and the city is planning on the infrastructure development to handle a population of 300,000 in the next 10 to 15 years.

West Lethbridge boasts the 3rd largest university in the province with annual enrollment of 10,000 students. The university has expanded in recent years and has anticipated increasing their enrollment in future years. The city has recently completed the construction of a junior high school and has begun the construction of a high school to accommodate the increasing number of students.

The product that we are selling is ethnic fast food items from the regions of the Middle East and South East India. Some of the key items on our menu will include donair and kabab wraps, falafel meals, chicken tikka, and samosas. The items on the menu will be marketed as unique and healthier choices compared other fast food restaurants.

18

Ethnic food choices in the city is not particularly rich, and the recent success of other new ethnic restaurants hint that the city is craving a taste of something different from the immense choices of Italian and Chinese restaurants. The customer wants ethnic diversity in their choice of food, and thats what we plan on providing them.

Promotion
The appearance of the shop will take on a traditional MiddleEastern East-Indian restaurant, with dcor placed around the restaurant imported from the Middle-East, Pakistan and India. We will use fresh ingredients in order to promote our healthy menu and promote our ethnically diverse meal choices to differentiate ourselves from the competition.

Pricing

Our product pricing strategy will be one of differentiation. Our product is vastly different from other alternatives available in the local market (further discussed in competitive analysis); thus we are able to charge a premium for our product. The consequence of our 19

differential pricing model will result in higher gross profits for us and thus a high return. This may trigger our competition to enter our niche market; however we believe that it would be difficult to reciprocate our products due to the expertise in ethnic cooking required. In other words, an Indian restaurant selling Indian food will have an advantage over a generic restaurant like Moxies trying to replicate the same recipes. The pricing for our menus is detailed below.
Donair Wraps Large Medium Small Falafel Meal Large Medium Small Chicken Tikka Pieces Party size ( 77 pieces) Family size ( 77 pieces) Couples size ( 7 pieces) By the piece Kabab Wraps Large Medium Small Chicken Tikka Wraps Large Medium Small Samosas Party size ( 77 pieces) Family size ( 77 pieces) Couples size ( 7 pieces) By the piece

77 . 7 77 . 7 77 . 7

77 . 7 77 . 7 77 . 7

77 . 7 77 . 7 77 . 7

77 . 7 77 . 7 77 . 7

7. 7 77 7. 7 77 77 . 7 77 . 7

7. 7 77 7. 7 77 77 . 7 77 . 7

20

Place
The place of the business will be West Lethbridge, in a strip mall that is located 0.50 km away from the university campus and 200 meters from a large residential complex and elementary school. A few units down from the business are a popular pub; which many university student visit during the academic year (see the Operations Plan for the map of location). We will sell our product right to the end user of the product.

Our business will be targeting individuals interested in experiencing ethnic healthy choices with fresh ingredients. We determine that segment includes Generation X, Y, and Z because those generations are synonymous with trying something different and maintaining healthier lifestyles. The image that we want our customers to have is that of healthy ethnic alternatives related to the mainstream. Our product should be seen as a good choice for lunch, dinner or a late night meal. An additional target market is the Muslim population, for which they can only eat Halal (kosher) meat products as our name suggests; halal meat is sold here. As it currently stands this will be the only Halal restaurant in southern Alberta.

Most of the promotion will occur in and around the University of Lethbridge. We will purchase advertising spots on trash cans and bus benches around campus which will cost $100 per spot for each month. We will include advertising in the university newspaper, which will cost $100 per week. We dont believe that there is a need for a significant advertising campaign, because the strip mall that we plan on locating to is 21

very busy with significant traffic from the university crowd. We believe that word of mouth will bring customers to our restaurant, especially after the first year of operations.

22

Competitive Analysis

Direct competition of the same products: There is currently one direct competitor selling the same product in which we intend to sell in a 200km radius; Sams Donair, which is located on Mayor Magrath Drive (approx 8km away). Though the distance does not seem that long, the location is on the opposite side of town and would take 15 minutes to drive there. Sams Donair has similar pricing; however they do not have the East Indian products that we are also going to compliment our main donair product with. The main reason why our customer will choose us to that of Sams Donair, is because of the distance to travel. Direct competition of similar products: Similar products would include sub sandwiches and pitas. There is a Subway located in the university and one located 3km away from our location, which markets a fresh and healthy meal alternative to its customers. They target a similar market as we intend to and their prices are slightly more competitive than our own (average meal will be $1 less than ours). The reason why our customers will choose us over Subway will be because of our ethnic variety, which is not something that Subway currently competes on. The Subway located in the university will benefit from being at that location during the academic year (September April), because of the student traffic, however we can compete, because we are located only 1km away. We do not expect to experience the seasonality of customers as they would as our location off campus allows us to market to nonuniversity students and mall-goers during the summer times. The Subway located

23

3km away is also far for some to travel, especially those residents in our area that want to walk or travel to a place nearby for a meal.

There is a Pita Pit and Extreme Pita located downtown (approx 5km away). Just as with Subway, these competitors market a fresh and healthy meal alternative to its customers. They target a similar market as we intend to and their prices are slightly more competitive than our own (average meal will be $1 less than ours). Once again our customers will choose us because of the ethnic variety that we offer to our customers and the distance in which they would have to travel to our location versus downtown for Pita Pit or Extreme Pita.

There is a Little Caesars located a few business units down from us, which sells pizza. They market a similar reputation of some-what healthy choice and fresh ingredients. The prices are not comparable in terms of what an individual can receive as a meal. Customers will choose us again because of our ethnic choices and speed that it takes us to prepare a donair wrap compared to a fresh pizza. In addition, pizza is not as much viewed as a healthy lunch item as a donair would. Indirect competition: Hirobas is a Japanese restaurant that is located on the university campus. The menu consists of only Japanese ethnic food, which has both healthy choices and fresh ingredients. Their location on campus will benefit from being at that location during the academic year (September April), due to the student traffic, however again we can compete since we are located only 1km away and would not experience the effects of seasonality like they would during the summer months. Though Hirobas promotes an ethnic

24

alternative, our ethnic alternative is different (Middle Eastern, East Indian), which provides for a different taste. Our price is comparable for a meal.

The only McDonalds located on the West-side of Lethbridge is 3km away from our location. McDonalds has a notorious reputation of selling items that are unhealthy to the consumer and the freshness of their ingredients is questionable, though their prices are significantly lower than ours. McDonalds has attempted in recent years to provide some health menu items, however their reputation of being an unhealthy restaurant precedes them. Our customers will choose us over McDonalds, because of our healthy menu, fresh ingredients, ethnic variety, and proximity to the university.

Dairy Queen is located a few business units away from our location. As with McDonalds, Dairy Queen is also infamous for their reputation of selling items that are unhealthy to the customer and the freshness is also lacking. Our customers will choose us over Dairy Queen for the same reasons that they would choose us over McDonalds (healthy menu, fresh ingredients, and ethnic variety).

Home-made meals are also an alternative to the customer. The freshness of the ingredients is never in question because they can be purchased immediately prior to making the meal and the choice of what to make is endless. However we believe that our 25

customers will choose us when they crave something different because of the level of difficulty of preparing ethnic foods as well as the level of specialization that is required to prepare a good ethnic meal. There is also significant time needed in order to prepare for the meal, which many people do not have in these days.

26

Marketing Plan Budget

Our main advertising is planned to be word of mouth, but during the first year we will rely more heavily on advertising on the university campus in order to establish our name and reputation. Our strategy is developed in this way, because our location is in an extremely high traffic area. We plan on using bus bench signs as well as garbage bin posters to advertise on campus, as well as advertisements in the university newspaper, which is released weekly. Further to that we will purchase a large and eye catching sign at our location, so that we are able to attract the customers that drive or walk by the strip mall. Our estimated market costs are detailed below:
Form of Advertising Store front sign Yellow pages Bus bench signs Garbage bin poster Cost of Advertising $3,000 $100 annually $100/mnt/ad $100/mnt/ad Estimated Annual Costs $3,000 one time $100 $2,400 $2,400 $7,900 $4,900 in first year subsequent years

27

Strengths, Weaknesses, Opportunities, Threats Analysis

Detailed below is our analysis of our Strengths, Weaknesses, Opportunities and Threats: Strengths: Differentiation of products from the competition (ethnic food made from fresh ingredients) Proximity of the university campus, university residents, schools, popular pub We are less likely to be affected by seasonality of the university student traffic, as would our competition located on campus Fast and friendly service High quality and consistent meals clean environment Expertise in preparing ethnic food, which would be difficult to replicate (Ethnic food prepared by someone of the same ethnicity as a advantage against someone of a different ethnicity) Weaknesses: Competition from places like Subway, Pita Pit, Extreme Pit, Little Caesars, Hirobas McDonalds, Dairy Queen Some of our competition is located right on campus so there is a significant advantage to our competition, who is selling items to student between classes and the

28

New entrant into the business, which may require time before or target market, catches on

Opportunities: Market to a growing population that is concerned with healthy food choices that taste great The city of Lethbridge is expected to increase significantly in the next few years The university is continuing to add more students annually to its enrollment, which is one of our main targeted markets Threats: New product, so there is a risk of customer acceptance We are placing reliance on a supplier for the donair meat, which would threaten our ability of operate if the supplier goes out of business Government regulations on the food service industry could increase costs

29

Financial Plan
Key financial highlights. Refer to Appendix B for detailed information on our base case scenario, Appendix C for our best case scenario and Appendix D for our worst case scenario.

Yea r Income State ment - Ba se Case

Revenues COGS Gross Profit Total Expenses Net Incom e b efore tax Incom e taxes Net Incom e

492,710 197,084 295,626 335,048 (39,422) (39,422)

606,034 242,414 363,620 342,013 21,607 21,607

714,362 285,745 428,617 349,018 79,600 8,650 70,950

805,444 322,177 483,266 356,788 126,478 17,707 108,771

866,859 346,743 520,115 364,860 155,255 21,736 133,520

Net Cash Flow

133,118

24,683

41,734

40,828

39,884

Se nsitivity Analysis
W orst Case Custom ers Per day Wages IRR NPV Base Case Best Case Average 175 299,308 73% 210,915 254,699 42% 77,320

100 140 198,338 266,450 14% 40% (43,477) 64,523

Net Present V alue of Equity Investment Internal Rate of Return on Equity Investment

64,523 40%

30

Appendix A
Total Planned Hours of Work at The Halal

7 Manager ) (S alary) Monday Tuesday Wednesday Thursday Friday Saturday Sunday

7 Day ) 7 Evening ) S upervisor S upervisor 7 Full Time - 7 Full Time ) ) Annual PT (S alary)7) (S alary) Day Evening 7 Part Time Daily Total ) hours 7 77 . 77 . 7 2 2 7 77 . 7 77 . 7 2 2 7 77 . 7 77 . 7 7 7 7 77 . 7 77 . 7 7 7 7 7 77 . 7 77 . 77 . 7 7 2. 22 7 7 77 . 77 . 7 7 7 7 7 77 . 77 . 7 7 7 7 7 7. 77 2 2 7. 77 7. 77 7 7 7 77 7. 77 77

2 Managers schedule: Mon to Fri 2 to 2Sat 2 to 2 ) am ; am pm 7 Day Supervisor schedule: Mon to Fri 7 to 77 pm, Sunday 7 to 7 ) am : 7 am pm 7 Evening Supervisor schedule: Tues to Sat 77 pm to 7 : 7 ) : 7 77 am 7 Full time day employee schedule: Tues to Thurs 7 to 77 pm, Sat & Sun 7 to 77 ) am : 7 am : 7 7 Full time evening employee schedule: Thurs to Mon 7 to 77 am ) pm : 7 7 Part time employees schedule: Varies depending on day but 7 ) hours Sunday thru Wednesday to cover lunch and supper rush &77 77 to hours Thurs thru Saturday to cover lunch, supper and after bar rushes

26