Edit This Plan

Make it your own. Use Business Plan Pro to edit this plan or any of 500+ other sample plans.

Pizzeria Franchise Business Plan

4 Moons Pizzeria

This business plan was created with Business Plan Pro software, the fastest way to prepare a complete business plan.

With Business Plan Pro, you can open this plan (or any of the 500 others included in the product) and quickly customise it to match your business. Or you can use the software's step-by-step wisard to easily create a custom business plan from scratch. Learn more »

Financial Plan

7.0 Financial Plan

Our main concerns will be aggressive time management to keep labour costs under control. Proper purchasing, food preparation and handling, and control of cheese consumption to keep food costs down. Growth will be sustained through increased sales.

7.1 Start-up Funding

Our start-up figures are approximate costs for start-up of a 4 Moons Pizzeria franchise as prescribed by the Franchisor.

4 Moons has £160,000 initial investment, £25,000 of which will cover the franchise fee.

Our estimated start up is £505,000. We are seeking an SBA Loan in the amount of £345,000 (see Long term liability line).

Start-up Funding

Start-up Funding
Start-up Expenses to Fund	£266,207
Start-up Assets to Fund	£238,793
Total Funding Required	£505,000
Assets
Non-cash Assets from Start-up	£151,507
Cash Requirements from Start-up	£87,286
Additional Cash Raised	£0
Cash Balance on Starting Date	£87,286
Total Assets	£238,793
Liabilities and Capital
Liabilities
Current Borrowing	£0
Fixed liabilities	£345,000
Accounts Payable (Outstanding Bills)	£0
Other Current Liabilities (interest-free)	£0
Total Liabilities	£345,000
Capital
Planned Investment
Solutrian, Steve and Diane	£85,000
Mittani, Rikard and Carol	£75,000
Additional Investment Requirement	£0
Total Planned Investment	£160,000
Loss at Start-up (Start-up Expenses)	(£266,207)
Total Capital	(£106,207)
Total Capital and Liabilities	£238,793
Total Funding	£505,000

7.2 Important Assumptions

We are projecting profit based on the performance of other franchises and our own judgement based on the following:

• We assume by using marketing strategies, sales strategies, good customer relationships, fresh food, and good management practices, we will succeed.
• In order to meet the sales goal in the first year, open for at least 360 days, we would have to sell 111 checks each day with a £17 per check average.
• Our sales each day should reach an minimum average of £1,881.43.
• Our forecast is based on an average. Some months will increase and others decrease. We do not predict any major decreases in sales, as Ohno area restaurants are busy all year round.

General Assumptions

General Assumptions
	FY 2006	FY 2007	FY 2008
Plan Month	1	2	3
Current Interest Rate	0.00%	0.00%	0.00%
Long-term Interest Rate	7.00%	7.00%	7.00%
Tax Rate	30.00%	30.00%	30.00%
Other	0	0	0

7.3 Break-even Analysis

Break-even based on fixed costs including rent, insurance, maintenance, investor note, and pre-opening amortisation. Additionally, controllables such as service labour, kitchen labour, management labour, excess rent, advertising, royalty, and legal/professional fees are included.

Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even	£36,365
Assumptions:
Average Percent Variable Cost	20%
Estimated Monthly Fixed Cost	£29,092

Break-even Analysis



7.4 Projected Profit and Loss

As the Profit and Loss table shows, the company expects to continue its steady growth in profitability over the next three years. We predicted a conservative 6% per year increase in sales.

The first month may have higher payroll due to employee training and restaurant set up.

Our operating expenses include rent at £4,242 estimate per month, royalty fees of 5% of gross sales, equipment rental and repair, utilities projected at 11% of gross sales, administrative charges including PC charges, cleaning supplies, payroll charges, and office supplies.

Marketing fees are 4% of gross sales per month.

Profit and Loss

Pro Forma Profit and Loss
	FY 2006	FY 2007	FY 2008
Sales	£677,297	£717,935	£761,011
Direct Cost of Sales	£135,461	£143,590	£152,206
Other Costs of Sales	£0	£0	£0
	------------	------------	------------
Total Cost of Sales	£135,461	£143,590	£152,206
Gross Margin	£541,836	£574,345	£608,805
Gross Margin %	80.00%	80.00%	80.00%
Expenses
Payroll	£126,738	£129,228	£136,982
Marketing/Promotion	£27,092	£28,717	£30,440
Depreciation	£30,000	£30,000	£30,000
Rent	£50,904	£50,904	£52,431
Royalty fees	£33,865	£35,897	£38,051
Equip rent/repair	£3,000	£5,400	£5,400
Utilities	£74,503	£78,973	£83,711
Admin charges	£3,000	£3,000	£3,000
	------------	------------	------------
Total Operating Expenses	£349,102	£362,119	£380,015
Profit Before Interest and Taxes	£192,734	£212,226	£228,790
EBITDA	£222,734	£242,226	£258,790
Interest Expense	£23,367	£21,648	£19,738
Taxes Incurred	£50,810	£57,173	£62,716
Net Profit	£118,557	£133,404	£146,336
Net Profit/Sales	17.50%	18.58%	19.23%

Profit Monthly



Profit Yearly



Gross Margin Monthly



Gross Margin Yearly



7.5 Projected Cash Flow

The cash flow depends on assumptions for good daily operational management, good traffic counts in the restaurant, stock turnover, payment days, and accounts receivable management. We do not predict any new financing until we open our second franchise.

Principal amounts are based on a loan of £345,000 with a 10 year SBA Loan at 7% interest.

Cash



Cash Flow

Pro Forma Cash Flow
	FY 2006	FY 2007	FY 2008
Cash Received
Cash from Operations
Cash Sales	£677,297	£717,935	£761,011
Subtotal Cash from Operations	£677,297	£717,935	£761,011
Additional Cash Received
VAT, VAT, HST/GST Received	£0	£0	£0
New Current Borrowing	£0	£0	£0
New Other Liabilities (interest-free)	£0	£0	£0
New Fixed liabilities	£0	£0	£0
Sales of Other Current Assets	£0	£0	£0
Sales of Fixed assets	£0	£0	£0
New Investment Received	£0	£0	£0
Subtotal Cash Received	£677,297	£717,935	£761,011
Expenditures	FY 2006	FY 2007	FY 2008
Expenditures from Operations
Cash Spending	£126,738	£129,228	£136,982
Bill Payments	£363,529	£425,196	£446,235
Subtotal Spent on Operations	£490,267	£554,424	£583,217
Additional Cash Spent
VAT, VAT, HST/GST Paid Out	£0	£0	£0
Principal Repayment of Current Borrowing	£0	£0	£0
Other Liabilities Principal Repayment	£0	£0	£0
Fixed liabilities Principal Repayment	£22,576	£26,332	£28,237
Purchase Other Current Assets	£0	£0	£0
Purchase Fixed assets	£0	£0	£0
Dividends	£0	£0	£0
Subtotal Cash Spent	£512,843	£580,756	£611,454
Net Cash Flow	£164,454	£137,179	£149,557
Cash Balance	£251,740	£388,918	£538,475

7.6 Projected Balance Sheet

The balance sheet is quite solid. We do not project any real trouble meeting our debt obligations--as long as we can achieve our specific sales objectives.

Balance Sheet

Pro Forma Balance Sheet
	FY 2006	FY 2007	FY 2008
Assets
Current Assets
Cash	£251,740	£388,918	£538,475
Stock	£6,044	£6,407	£6,791
Other Current Assets	£41,775	£41,775	£41,775
Total Current Assets	£299,559	£437,100	£587,041
Fixed assets
Fixed assets	£99,732	£99,732	£99,732
Accumulated Depreciation	£30,000	£60,000	£90,000
Total Fixed assets	£69,732	£39,732	£9,732
Total Assets	£369,291	£476,832	£596,773
Liabilities and Capital	FY 2006	FY 2007	FY 2008
Current Liabilities
Accounts Payable	£34,517	£34,986	£36,828
Current Borrowing	£0	£0	£0
Other Current Liabilities	£0	£0	£0
Subtotal Current Liabilities	£34,517	£34,986	£36,828
Fixed liabilities	£322,424	£296,092	£267,855
Total Liabilities	£356,941	£331,078	£304,683
Paid-in Capital	£160,000	£160,000	£160,000
Retained Earnings	(£266,207)	(£147,650)	(£14,246)
Earnings	£118,557	£133,404	£146,336
Total Capital	£12,350	£145,754	£292,090
Total Liabilities and Capital	£369,291	£476,832	£596,773
Net Worth	£12,350	£145,754	£292,090

7.7 Business Ratios

The company's projected business ratios are provided in the following table. The final column, Industry Profile, shows ratios for the "Pizza Restaurant Industry", as determined by the Standard Industry Classification 5812.0600 with annual sales of £500,000 to £999,000.

Ratios

Ratio Analysis
	FY 2006	FY 2007	FY 2008	Industry Profile
Sales Growth	0.00%	6.00%	6.00%	5.24%
Percent of Total Assets
Stock	1.64%	1.34%	1.14%	4.34%
Other Current Assets	11.31%	8.76%	7.00%	35.11%
Total Current Assets	81.12%	91.67%	98.37%	43.74%
Fixed assets	18.88%	8.33%	1.63%	56.26%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	9.35%	7.34%	6.17%	18.93%
Fixed liabilities	87.31%	62.10%	44.88%	25.48%
Total Liabilities	96.66%	69.43%	51.06%	44.41%
Net Worth	3.34%	30.57%	48.94%	55.59%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	80.00%	80.00%	80.00%	61.91%
Selling, General & Administrative Expenses	62.50%	61.42%	60.77%	39.08%
Advertising Expenses	4.00%	0.00%	0.00%	2.55%
Profit Before Interest and Taxes	28.46%	29.56%	30.06%	1.38%
Main Ratios
Current	8.68	12.49	15.94	1.14
Quick	8.50	12.31	15.76	0.79
Total Debt to Total Assets	96.66%	69.43%	51.06%	49.97%
Pre-tax Return on Net Worth	1371.43%	130.75%	71.57%	3.97%
Pre-tax Return on Assets	45.86%	39.97%	35.03%	7.93%
Additional Ratios	FY 2006	FY 2007	FY 2008
Net Profit Margin	17.50%	18.58%	19.23%	n.a
Return on Equity	960.00%	91.53%	50.10%	n.a
Activity Ratios
Stock Turnover	23.52	23.07	23.07	n.a
Accounts Payable Turnover	11.53	12.17	12.17	n.a
Payment Days	27	30	29	n.a
Total Asset Turnover	1.83	1.51	1.28	n.a
Debt Ratios
Debt to Net Worth	28.90	2.27	1.04	n.a
Current Liab. to Liab.	0.10	0.11	0.12	n.a
Liquidity Ratios
Net Working Capital	£265,042	£402,114	£550,213	n.a
Interest Coverage	8.25	9.80	11.59	n.a
Additional Ratios
Assets to Sales	0.55	0.66	0.78	n.a
Current Debt/Total Assets	9%	7%	6%	n.a
Acid Test	8.50	12.31	15.76	n.a
Sales/Net Worth	54.84	4.93	2.61	n.a
Dividend Payout	0.00	0.00	0.00	n.a