generic acquisition proposal - restaurants

8/8/2019 Generic Acquisition Proposal - Restaurants

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Mexican Restaurant AcquisitionMexican Restaurant Acquisition

OutlineOutlinePresented by:

G H / J K

1-14-2009


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The Mexican Restaurant CultureThe Mexican Restaurant Culture

Philosophy of Organization

Mexican Restaurant approves operations oriented

organizations

They require absolute and total adherence to systems (thisis strictly enforced)

They want Franchisees that aspire to grow

Desire long term strategies versus short term gain

They utilize different language (Successor vs. Renewal)


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CompanyCompanyStructureStructureFranchise Company Structure

Operators are required to have equity positions (10%)

Prevents repeated turnover

Reinforces commitment to Operations

This does not apply to Area Coaches or Store Managers

All Partners must endorse Operational Approach 100%

Structure must mirror corporate design

Human Resource considered a foundation of long-term

success


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Individual RolesIndividual Roles

Director of Operations J K Duties: Training, Facilities, Systems, Sales Building, Prioritization, Attaining Company Goals, Supervise Area

Coaches, Manage Day to Day Results.

Executive Vice President G H Duties: Strategy, Marketing, Human Resource, Financial Results, Budgeting, Reporting, Build the

Management Team, the Business, and the Culture.

R P Duties: Oversee Company Functions, Liaison to Investors

Area Coach (District Manager) Duties: Daily field visits, direct coaching of management team, procedural follow-up,

NOTE 1: Job descriptions will change as the organization grows. This is particularly true if other brands are acquired. Spans of

control for above store supervision vary by brand and geography.

NOTE 2: The organization will be given recommendations by Mexican Restaurant as to it grows and additional support isneeded from their perspective. Example: At 15 to 20 locations, they may suggest a full time Human Resource Director.

This can also be dictated by location and local laws.


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The DealThe Deal

Geography

10 Stores in South Chicago Area and Indiana

All are in Chicago DMA (Designated Market Area)

Building Types vary(5-M60, 1 Mission, 2 Conversion, 1 T-38)

There are 4 Different Packages (2 @ packages of 3 stores, 1 package of 2, and 2individual sites)

One unit should not be considered and is not in our proposal.


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FinancialsFinancialsSee enclosed Pro-forma

Pro-forma is based on 2009 sales

Cost of Sales and Labor is based on Mexican RestaurantNational Average Definitions

Revenues Net sales after rebates, discounts, refunds, and sales tax

Cost of Sales Cost of all goods delivered food, beverages, paper, and promotional items i.e.toys

Labor & Related Total ofhourly, salaried management, taxes, insurance, vacation, sick pay,bonuses, workmans compensation, and stock options. (Does not include above store labor)

Controllable Operating Expenses Store management has direct impact and control

Semi-Controllable Expenses Store management does not control

Net Store Level Profit Before admin expenses Administrative Expenses Administrative costs that are not directly impacted at store level.

This category can be removed and charged to Company overhead as organization grows.

Net Income (EBITDA) Profit before interest, taxes, depreciation, and amortization. These arevariables that can not be accurately estimated until the actual P&Ls are revealed.

Does not take into account above store supervision See attachment for

scenarios ranging from X to Y


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Preliminary ProPreliminary Pro--formaformaMexican Restaurant 9 Store Acquisition - Full Year 2009


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Above Store Leadership PlanAbove Store Leadership Plan

Operating Partner


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Are We Interested?Are We Interested?

Step 1 Evaluation of each trade area

Area stability, Sales generators, Employment Etc.

Get asking price

Acquire updated P&Ls

Generate report reflecting trade area analysis with adjusted

pro forma

Determine viability of purchase and make recommendation

Timeline for Step 1 is 3 to 6 weeks based on seller cooperation


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Once Viability DeterminedOnce Viability Determined

Step 2 Detailed facility assessment

Facilities, Equipment, Seating Packages

Review personnel

Benefits Package, Salaries, Time in Position Who will stay and who will go

Finalize offer to seller

Submit personal applications

Timeline for Step 2 is 10 to 12 weeks based on MexicanRestaurant interview process


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ExpensesExpenses

Step 1

Salaries Normal $6,920 - $10,380

Room/Meals $ 850

Mileage $ 400

Supplies/Materials $ 200

Step 2

Facility Assessment $3,200

Application Costs $1,750

Salaries $34,600-$41,520 Travel Expenses for Interview Headquarters


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SummarySummary

Time is of the essence as we are the only entity to date that is aware ofthis sale and can keep this position if we move quickly.

The initial profitability will be small as we build an organization designedto acquire more locations and brands. i.e. A H. It is not so low that we

need to jump at the next available locations to justify our overhead.

Our recommendation: This is a very good opportunity to get our foot inthe door that will provide decent cash flow and profitability as wedemonstrate our ability to operate in the *** organization. The averagefranchise organization in Mexican Restaurant has 20 locations but there

are several that have grown well into the hundreds. Once we operate 9locations our potential and value will be realized by not only MexicanRestaurant but *** as well.


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generic acquisition proposal - restaurants

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