Business Plan for Delight Restaurant
Executive summary
In line with South Africa's drive for gender equality and economical growth, two female entrepreneurs (one black and one white female) joint forces in pursuit of a Delight franchise from ABC Franchises. The franchise from ABC Franchises is well structured, managed and is set up to protect the branding of ABC Franchises, therefore ensuring the Delight success.
The entrepreneur are faced with the common challenge of having the required drive, energy, enthusiasm and will power to make the franchise work but lack the capital in acquiring the Delight franchise. This business case will show the feasibility to the funders in support of this business case and the two female entrepreneurs.
Business Overview
Delight introduced South Africans to healthy eating in the 70's, in line with the trend towards convenient, yet wholesome food. The brand holds the high ground in this niche of the Quick Service Restaurant market.
Delight is co-managed by Unilever and ABC Franchises, a subsidiary of Unilever PLC, a world leader in fast moving consumer goods, and a global leader in foods with a presence in 95 countries as well as 6 000 food retail outlets world-wide, Unilever offers advanced marketing, innovation and supply chain systems.
ABC Franchises manages the operational side of Delight. A team of entrepreneurs with a proven track record in South Africa and surrounding countries, the ABC Franchises management team gives franchisees access to the most professional operations and support systems and ensures the long term success of the brand.
ABC Franchises are taking the Delight brand into a new era adding a fresh new look, fresh ideas and fresh tastes to make Delight more successful than ever before. ABC Franchises plan to build Delight into a retail food experience for consumers on the go, who want fresh, wholesome food with a whole lot of taste.
The Product and Service
Delight offers a wide range of freshly prepared products to suit every need - from breakfasts, sandwiches, rolls, foldovers and salads, to juices, smoothies, bakes and speciality coffees.
Delight hero products are imported coffee, sandwiches, juices and smoothies, all of which are showing phenomenal growth world-wide. Currently, the growth of sandwiches outstrips that of burgers globally, with an annual growth rate of 9% versus 5%. There is also a growing trend towards health and wellness, with consumers taking an active interest in eating fresh, healthy foods that don't compromise on taste.
Location
At present Delight stores are located nationally, across the country. The franchise considered is the Sunshine Mall Delight in Durban, that is already in constructed and closed awaiting an owner.
Opening the site
The Franchiser provides a complete turnkey operation, from design and development to the fixtures and fittings of the site. The site is already constructed and fitted with furniture, ready to be opened. The site is currently closed awaiting a franchisee owner. The Sunshine Delight in Durban is available for opening from 1 August 2008.
Franchise Management
Franchise Structure
The current structure has been put in place in such a way as to allow the Delight brand to enter a significant sized shopping centre with a Franchisee who has an investment in the shop.
Currently the Franchisee contributes a franchisee fee (Royalty) of 7% on gross turnover (excluding VAT) and a 5% fee for marketing of the brand. Gross turnover comprises all sales taken through the point of sale system.
Operating Management Structure
A private company will be established and used to act as a vehicle for the business operations. Me Catherine Green and Me Alison Ntondo will be partners in a 50% / 50% shareholding structure. The daily operations management of the outlet will be the full time responsibility of Me Catherine Green.
Training
The Franchisor provides quality products through well trained people who are at all times responsive to customers needs, making it the first choice health food provider. The franchisor will oversee the training of the staff until the output quality is of satisfactory levels to sustain and increase the Delight brand name. ABC Franchises there after will provide continuous assistance and support on all related training.
Management reporting and systems
ABC Franchises monitors the progress and success of each unit monthly and provides reports and an overview of the progress of the Franchise Channel as a whole. The Franchisee will be required to utilize the software packages provided by ABC Franchises as well as provide other related figures as requested. The Franchisee is accordingly required to submit monthly Management reports and annual audited financials.
Market analysis
The market analysis is conducted by ABC Franchises specialist. ABC Franchises is responsible for brand building and brand maintenance. The Location is selected to maximise the shop profitability ensuring franchisee success.
Sales and Marketing Strategy
Advertising
ABC Franchises contributes a significant portion of the finance to national media campaigns be it via print, audio or visual media. The Franchisee will be encouraged to enhance the image of the Delight by employing additional advertising and/or promotions, subject to approval from ABC Franchises. This additional advertising cost will be carried by the franchisee.
The franchisee will deploy an initial campaign to create awareness of the shops location and existence to the public. Promotions will be negotiated with ABC Franchises to introduce the outlet and create shop/outlet awareness to the public in the direct geographical area.
Financial Overview
Required Capital Funding
The franchise purchase amount is R1,200,000.
Cash flow Analysis
An income cash flow of R170 000 per month is used in calculating the viability of the Sunshine Mall outlet. This figure of R170 000 is the actual average monthly outlet figures as provided by ABC Franchises for 4 outlets over the past 2 years. Refer to calculation averages below.
The analyses shows that the Delight will be viable and the entrepreneurs will be able to service the debt repayment schedule as required.
The Financial Plan
Please refer to our Financial Plan page for more information on what the Financial Plan entails.
Break-even Analysis
Fixed monthly costs for Clean Machine are estimated to be approximately R7,500, and break even monthly units are 203 units per month.
Please refer to our Financial Plan page for a formula to calculate the Break-even point.
Projected Cash Flow
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Projected Income Statement (Profit and Loss)
Click here to download an Income Statement template.
Projected Balance Sheet
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