kfc feasibility

FOODS & MOODS A fast Food Restaurant 2014

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Pre-Feasibility Report

To open

FAST FOOD RESTAURANT

Presented to Presented By:

Sir Imran Rasool Ghulam MujtabaMuhammad FiazAamir RohailAbid AliMirza Mazhar Ali Baig

Table of Contents

Feasibil ity Report Prepared by Ghulam Mujtaba , M.Fiaz & Aamir Rohail, Abid & Mazhar

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Topic Page No:

Disclaimer 3

Introduction 4

Brief description of proposed project 7

Project profile 8

Operation strategy 15

Market survey 18

Results of market research 20

Technical analysis of location 21

Technical analysis of building 23

Proposed product (menu) 27

Machinery& equipment 29

Dining furniture & general fixtures 30

Human resource requirement 32

Financial analysis 33

Advertisement Expense 37

Revenues 39

Break-even Point 40

Assumptions 41

Statistical data 42

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DISCLAIMER

The purpose and scope of this information memorandum is to introduce the

subject matter and provide a general idea and information on the said area. All

the material included in this document is based on data/information gathered

from various sources and is based on certain assumptions. Although, due care

and diligence has been taken to compile this document, the contained

information may vary due to any change in any of the concerned factors, and the

actual results may differ substantially from the presented information. We do not

assume any liability for any financial or other loss resulting from this

memorandum in consequence of undertaking this activity. Therefore, the content

of this memorandum should not be relied upon for making any decision,

investment or otherwise. The prospective user of this memorandum is

encouraged to carry out once own due diligence and gather any information

he/she considers necessary for making an informed decision.


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INTRODUCTION

“The pleasures of the table belong to all times and all ages, to

every country and every day, they go hand in hand with all other

pleasures, outset them and remain to console us for their loss.”

Restaurant business is one of the oldest known to man and to a

large extent is still an art and will remain so in future. System and practices make

the job of managing a hotel or restaurant much similar, but the human element is

difficult to systemize. The field of restaurant business is interdisciplinary. It draws

up economics, psychology, management, food technology, architecture and

marketing clustered together. It is a business of hospitality.

Lahore is one of the oldest cities of Pakistan and is expanding every day. The

trend of the people of Lahore is drifting extensively towards modern means of

socializing and relaxation. Therefore, while starting our business, we want to

introduce a revolution in the business of restaurant. We plan to introduce a

restaurant of international standard, “Foods & Moods”, as the name explains

itself require no explanation. Here, you can find all types of foods which your

moods demand. Therefore, while starting our business we have decided to open

a restaurant in the posh locality of Lahore, and then extended to other parts.

About Foods & Moods

Moods & Foods is an entity of Ali Group of Companies, An old

established and dynamic business group of Pakistan. Ali Group is

primarily engaged in providing homemade food in offices, canteens,

schools & colleges. This includes processing, cooking and delivery.


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Now, in 2014, the group expanded and diversified its business

activities to include the fast food sector by launching its own

restaurant in the fast food scene with its brand Moods & Foods

The company lived up to its name and quickly carved out a niche for

itself in the burgeoning fast food market in Pakistan.

It will rapidly acquired a huge customer base of institutional customers

includes some prestigious franchise restaurants and other ventures,

apart from institutional base Moods & Foods caught the eye, and will

win the hearts, minds and taste birds of a large number of upwardly

mobile Pakistani families. They will appreciate its superb quality,

extensive range and appealing pricing. In no times Moods &

Foods will become a brand to keep an eye on and not necessarily in

the fast food field alone.

Our Mission

To deliver consistent taste and quality to our valued customers by

using the purest ingredients and technology.

Be dedicated to a continuous improvement through alliance with

international companies.

To promote professionalism at all levels through education, training &

development of human resources.

Our Vision

Times are changing and the modern man continuously struggles to find

more time for himself. People crave for convenience in life and the only

way to make more time is by cutting down on time consuming jobs like

cooking, house cleaning etc. A company that believes in quick food Feasibil ity Report Prepared by Ghulam Mujtaba ,

M.Fiaz & Aamir Rohail, Abid & Mazhar

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preparations gives its customers more quality time to enjoy life and

great tasting food.

To serve locally and expand globally.

To make our brands an essential part of life.

To maintain the highest standards in fast food products and take

advantage of pioneer ship in the fast food market as well as

research and development.


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Brief Description of Proposed Project

(In this project we are introducing a Fast Food Restaurant)

Project: Fast Food Restaurant

Name: Foods & Moods

Project Site: Gulberg Locality, Garden town, Lahore

Total Area: 1 Canal

Operating Time: 12:00AM – 12:00PM (Weekdays)

12:00AM – 1: 00PM (Sundays)

30 days a month,

12 months a year

Project Capacity: 150 People at a time

Main Utilities: Fried Chicken, Chinese, Zinger Burger,

Fillet Burger, Soft drinks & many more

End Project: Opening a number of more restaurants after

success of project.


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PROJECT PROFILE

Purpose of the Documents

This document is developed to provide the entrepreneur with potential

investment opportunity in setting up and operating a medium sized fast food

restaurant offering a variety of food items to the general public. This pre-

feasibility gives an insight into various aspects of planning, setting up and

operating a fast food restaurant for the general populace. The document is

designed to provide relevant details (including technical) to facilitate the

entrepreneur in making the decision by providing various technological as well as

business alternatives. The document also allows flexibility to change various

project parameters to suit the needs of the entrepreneur.

Project Brief

Fast food is food which is prepared and served quickly at outlets called fast-food

Restaurants. It is a multi-billion dollar industry which continues to grow rapidly in

many countries. A fast-food restaurant is a restaurant characterized both by food

which is supplied quickly after ordering, and by minimal service. The food in

these restaurants is often cooked in bulk in advance and kept warm, or reheated

to order. Many fast-food restaurants are part of restaurant chains or franchise

operations, and standardized food stuffs are shipped to each restaurant from

central locations. There are also simpler fast-food outlets, such as stands or

kiosks, which may or may not provide shelter or chairs for customers. Because

the capital requirements to start a fast-food restaurant are relatively small,

particularly in areas with non-existent or medium income population, small

individually-owned fast-food restaurants have become common throughout

Pakistan. Generally restaurants, where the customers sit down and have their

food orders brought to them, are also considered fast food.


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Opportunity Rationale

The Fast Food Restaurant Market is a growing industry in Pakistan relying

heavily on the changing lifestyle patterns, population growth of the target age

group and the related increase in employment of women. With today's hectic

lifestyles, time-saving products are increasingly in demand the most obvious

being the fast food. The rate of growth in consumer expenditures on fast food

has led most other segments of the food-away-from home market for much of the

last one decade. Demand for convenience has driven expenditures where people

want quick and convenient meals; they do not want to spend a lot of time

preparing meals, traveling to pick up meals or waiting for meals in restaurants.

As a result, consumers rely on fast food. Knowing this, fast food providers are

coming up with new ways to market their products that save time for consumers.

Consumers want to combine meal-time with time engaged in other activities,

such as shopping, work, or travel, therefore allocating less time for food, hence

the growing need for fast food.

The Fast Food Industry of Pakistan

The fast-food industry is popular in Pakistan, the source of most of its innovation,

and

Many major international chains are based there. The presence of multinational

fast food chains like McDonalds, KFC, Pizza Express, Pizza Hut, Subway etc.

have somewhat catered to the high income segment therefore developing a

niche as upscale fast food restaurants. Multinational corporations such as these

typically modify their menus to cater to local Pakistan tastes and most overseas

outlets are owned by native franchisees to ensure that cultural, ethnic, and

community values are taken care of additionally, multinational fast-food chains

are not the only or even the primary source of fast food in most cities of Pakistan.

Many regional and local chains have developed around the main cities of

Pakistan (for example Khan Broast in Karachi) to compete with


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International chains and provides menu items that appeal to the unique regional

tastes and habits at comparatively low costs. In Pakistan, multinational chains

are considerably more expensive; they usually are frequented because they are

considered chic and somewhat glamorous and because they usually are much

cleaner than local eateries. However much of the middle-income segment (which

forms a major chunk of fast-food goers) prefers visiting local outlets that offer low

cost fast food, hence more frequent visits.

Increasing Number of Fast Food Outlets

The rapid rate at which the fast food industry continues to add outlets is as much

a reflection of consumer demand for convenience as it is a reflection of demand

for fast food itself. Expanding the number of outlets increases accessibility, thus

making it more convenient for consumers to purchase fast food. Especially in

recent years, much of the expansion has been in the form of "satellite" outlets.

These tend to be smaller in size, with little or no seating capacity, and are often

in nontraditional locations, such as office buildings, department stores, airports,

and gasoline stations; locations chosen specifically to maximize convenience and

consumer accessibility.

Consumer Appeal

Fast-food outlets have become popular with consumers for several reasons. One

is that through economies of scale in purchasing and producing food, these

companies can deliver food to consumers at a very low cost. In addition,

although some people dislike fast food for its predictability, it can be reassuring to

a hungry person in a hurry or far from home Multinational Fast food chains like

McDonald's rapidly gained a reputation for their cleanliness, fast service and a

child-friendly atmosphere where families on the road could grab a quick meal, or

seek a break from the routine of home cooking. Prior to the rise of the fast food

chain restaurant, people generally had a choice between greasy-spoon diners

(kiosk) where the quality of the food was often questionable and service lacking,


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or high end restaurants that were expensive and impractical for families with

young children. Modern, stream-lined convenience of the fast food restaurant

provides a new alternative and appealed to consumers' instinct for ideas and

products associated with progress, technology and innovation. Fast food

restaurants have rapidly become the eatery "everyone can agree on", with many

featuring child-size menu combos, play areas and whimsical branding

campaigns, designed to appeal to younger customers. Parents can have a few

minutes of peace while children played or amused themselves with the toys

included in the premises. Many consumers see multinational fast food

restaurants as symbols of the wealth, progress and well-ordered openness of

Western society and therefore become trendy attractions in many cities around

Pakistan, particularly among younger people with more varied tastes.

Focusing on Consumer Convenience

Fast Food outlets tend to focus on the “work while you eat” philosophy similar to

the McDonald Outlet at Quaid e Azam International Airport (Karachi) wherein

seating space is also available for passengers in transition or the KFC outlets in

large shopping malls like the Millennium Shopping Mall in Karachi promoting the

concept of “Shop While You Eat.”

Increasing Market for Fast Food – The Population Boom

Pakistan, currently ranked as 6th in terms of total population, is characterized by

a high population growth rate of 1.9% (Pakistan Economic Survey 2005) and is

set to take the top three positions in terms of total population with already 153.4

Million people registered in 2005.1 With this, the per capita income has increased

to US$ 736 while the productive age group (15 to 64) years is said to take the

major chunk of population (67% of total population) by 2020. 2 The growth rate in

food consumption is also augmented by the rapid increase in the employment

rate for males / female population aging between 20 to 29 years (fast food goers)


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hence the greater income contribution to the overall income generated is

expected to be higher.

The Future of the Industry

The Pakistani economy is becoming increasingly service-oriented, and over the

past several decades, the foodservice industries that offer the highest levels of

convenience have been rewarded with strong sales growth. In the face of rising

population, incomes and increasingly hectic work schedules, a nearly insatiable

demand for convenience will continue to drive fast food sales. Fast Food Outlets

will strive to find ways to make their products even more accessible. Even if

incomes stagnate or attitudes change, consumers are unlikely to return to meal

preparation at home on a large scale. This suggests that even if consumers

choose to spend more time at home, for family or other reasons, much of the

meal preparation will still occur elsewhere. Many more table service restaurants,

which traditionally focus on full-service in house dining, will likely try to capture

part of this market by offering take-out, and possibly experimenting with home

delivery. The value of consumer time, as well as the demand for consistent, high-

quality food products, will continue to shape the fast food industry. Fast food,

once considered a novelty, has become an increasingly significant part of the

young generation’s diet. The role of convenience in this dietary shift cannot be

over-emphasized, and the future growth of the rest of the foodservice industry

will be driven in large part by its ability to find new ways to save consumers’ time.

Key Success Factors / Practical Tips for Success

Whether we are opening a one-of-a-kind restaurant or trying to grow our existing

Restaurant into a multi-unit chain, there are winning principles that can help

shape our restaurant and improve its chances of succeeding.

i) Conceive the “Winning” Concept

A well-defined concept stands a much better chance of long term success than


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Some vague notion. To start, it is wise to first set specific goals and decide on

the

Ways you will measure your restaurants success.

ii) Longetivity

This can be described as the art of being able to maintain success over time

while adjusting to meet the changing demands and buying habits of the

customer. To open a restaurant successfully and become profitable is one thing,

but to maintain that success over a long period of time is “winning.”

iii) Consistency

To not simply open a restaurant, but to truly develop a winning concept requires

Implementing systems and procedures to ensure consistency of your operation.

iv) Market Appeal

All restaurants want to be busy but winning concepts seem to have a broad

appeal and well developed “points of difference” that enable them to dominate

their market niche. To be the first place the customer thinks of going when

choosing to dine out is the goal of the winning concept.

v) Expandability

Consistency of quality and service, and operating systems and management

Procedures established in the first unit can result in more expandable

opportunities where all systems are already developed and waiting to be

implemented.

vi) Menu Pricing

One of the most important factors in the strategic planning of a restaurant is in

the development of the menu. It involves designing an appealing selection of

menu items that are competitively priced in the marketplace. Menu pricing is a

very tricky task because you need to price items so that you can operate


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profitably and, just as important, offer your targeted guests a good price/value

relationship.

vii) Selecting Prime Location

The specific location within your target area also is critical. If you are situated in

an infrequently traveled area nowhere near complimentary businesses or at the

back of a mall, you limit your earning potential. Even if you are the only outlet in

town you must gauge the likelihood of outsiders visiting your restaurant. If the

restaurant is right off of a major freeway heavily traveled by truckers and road

trippers you may be highly successful despite a remote location.

viii) Market Research

This is probably the most critical factor for running a successful fast food

restaurant. You need to visit fast food outlets, franchises and other chains to see

how your ‘concept’ would fit into the neighborhood you are planning to target.

Talk to customers to know their preferences, some detailed meetings with

restaurant managers / owners over dinner would do the trick in obtaining best

practices and critical information that otherwise could have been overlooked.

Keep in mind that because a concept works in one area does not mean it will be

well-received by customers in your location. Tastes are subject to location

preference and more often target market. In high scale urban areas (like PECHS,

KDA etc.) you are more likely to be successful with a niche concept than in a

dense middle income areas (like Gulistan e Jauhar). Another thing to consider is

competition. If your market is saturated with similar restaurants and the

population may not be large enough to support more restaurants, you may want

to rethink your concept.

Proposed Business Legal Status

Although the legal status of business tends to play an important role in any setup,

the proposed fast food business is assumed to operate on a partnership basis


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which may extend to multi branches in case of addition of new products that

might add significant business to the existing setup.


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Operation Strategy

The operation strategy of our restaurant will be designed around the

concepts of five senses. From our description research of the industry we found

out that restaurant business is one of those rare services which touch all the five

senses of human being. The food will cater to the sense of taste, music to the

sense of sound, aroma of dishes to sense of smell, decor to the sense of sight

and clean crockery, cutlery and environment in general to the sense of touch.

Taking care of all five senses our customers would be the core of our strategy.

Structure of Management:

Our business is a partnership which includes 3 partners investing capital.

Once it is decided that we are getting into business the question arises

that what is uncountable list of occupations the point is what kind of

business to be done. The answer to this question may be found while

considering following factors:

Government Policy:

The factor of government policy plays a major role in the

success of any business. Before deciding to get into the business. One

must also keep in mind the advantages and disadvantages of any business

for the country. Earning money by keeping the interest of the country at

stake should not be even thought of. The business must be chosen

considering its benefit to the country, in the shape of taxes, revenues and

overcoming unemployment.


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Number of Consumers:

This factor is also of vital importance. This business only

flourishes when the demand of that product or number of consumers is

more. Thus, while choosing any business we must see the field which

provides maximum number of consumers, so that the invested capital is

not blocked or wasted.

Demand of the Product:

Demand of the product by the user is also a key feature before

choosing any business. If the chosen business in competition with others

then one should not forget that profit is divided. However, by producing

quality product, this factor could be dealt with properly and in our favor.

One could fetch more business if demand of the product increases.

General Trend of the Area:

One cannot do any business if it is started at a place where the

trend of the people is not favorable. Therefore, before choosing the trend

of people must be created for it. Hasty decisions should be avoided. See

to the fact, that business place is located where one could fetch the

consumers. So the trend of consumer is also important before selecting

the business.

Budget of Partners:

Before getting into business, the spirit should be high, but

always keeping in mind that it should be planed within the available

budget. It is an art to get maximum benefits by spending minimum

resources. However, the element of risk and luck always becomes the


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major cause of success of business. Therefore, we planned business by

keeping budget in mind.

Budget of Consumers:

The purchasing power and the real income of the consumer

should be kept in mind before choosing business.

By giving thorough study and elaborate discussions on above-

mentioned factors, we now have to choose business out of unlimited jobs

one could get into. After loads of thinking and vast study, we all partners

concluded that the business of opening a fast food restaurant could be the

best for us. So we all decided to open a restaurant where the full range of

eatables of international standard are provided on competitive rates. Since

the occupants of the area, which is selected for this restaurant, have a lot

of trend for hotelling, therefore, we sincerely hope and pray that this

business would meet the required success.

The Scope of the Project

The fast food restaurants all over the world and in Pakistan in cities

like Lahore and Karachi are meeting with unlimited success day-by-day, resulting

in expansion all over the world. Since people have to eat, therefore, the business

in eatables will not fail if properly looked after by a team of dedicated lot.

In Lahore, there are number of hotels and restaurants, cheap and expensive, but

all these places are always filled with people of different class. We have felt that

if conducted properly, this project could bring us luck.

We have also carried out surveys and have found that almost 60%

of the occupants have a trend of eating out with families and friends. Moreover,


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this business also benefits the government policies of unemployment – also does

not hinder the government polices. A lot of revenue is paid to the government in

shape of excise duty and sales tax.

As we have selected one of the best spots in Lahore, therefore, we

are sure that we will be able to compete with other restaurants in surrounding

areas. We are young, energetic and honest. We want to stand on our feet; we

want to bright in our future with respect and dignity. With our honest efforts, we

are positive that this project will be able to meet the success.

We strongly believe that if success has to be met, then we will have

to put in our best and honest efforts to provide our food to the entire satisfaction

of consumers. We believe that we can make a difference; we will demonstrate

personal pride and commitment in everything we do. We have a passion for

making things better and we have a positive outlook. We know working as team

always gets the best results. We will by the grace of God work with all our zeal

and enthusiasm.

By considering all above-mentioned factors of our project, it is quite

evident that we will compete in the market. The scope of our project is good and

the results will be prolific. The location of business spot is already been

mentioned which appears to be the best in Lahore. We intend covering our

clients from all part of the city mainly from cantonment area. The rest from

Gulberg, Iqbal Town, Johar Town, Model town, Garden town. In future we plan to

introduce more outlets of Restaurants in different areas of Lahore.

Market Survey

The market survey was carried out with express intention of its being

factual and maximum possible care has been exerted to use the best sources of


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information. There are many ways through which market survey can be

conducted and the most popular method available entails about 80% of the facts

considered and 20% of necromancy and judgment. It would be true to say that

the luck of statistical data would make the study useless. There are different

ways through which market survey can be conducted. It is only right; therefore to

describe the various ways of the market research, there are eight different types

of market research. These are:

Consumer Research

Product Research

Market Research

Dealer Research

Price and Policy Research

Selling and Advertising Research

Ware Housing

Inventory Research,

Cost and Efficiency Studies

In order to conduct our market survey we aimed at:

Factual survey

The awareness information system

The opinion survey

The attitude survey

The future inventory survey

The reason “why” survey.

To conduct a proper and a good survey, we divided the city in to classes

i.e. Upper Class and Middle Class.


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Upper Class:

It includes the elite class of the city. It includes people living in cantonment

area, DHA, Model town, Garden Town & Johar Town, Officers Colony, and few

sprinkled here and there. The people living in these are mostly rich and can

afford to have a good and expensive food.

Middle Class:

It includes mostly the people living in areas such as Icchra, Saman

Abad Sabzazar, New Mozzang etc. Most people living in these areas belong to

middle class. The survey report results are as follows:

Results of Market Research

Q.No.1: How frequently in a month do you usually go out to a restaurant?

By this question we wanted to know that at which time we should be expecting

more customers and the result was that 76% people come out dinner, 19% at

lunch and 5% at other.

Q.No.2: Do you usually go out with your?

Friends 36%, Family 41%, Business Guests 23%

By this question we wanted to know what kind of entertainment and atmosphere

we should provide.


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Q.No.3: How do you become aware of new restaurants?

We wanted to know in which field we should advertise more. The results were

that 30% come to now from reviews of Mag. 29% TV, 21% Recommendation,

15% by banners and 5% by Personal discovery.

Q.No.4: Rate the following attributes according to their importance for a

restaurant?

We asked this question to know to focus more.

Quality of food = 40%

Quality of services = 10%

Location = 15%

Crowd = 05%

Price = 30%

Q.No.5: Would you like the new restaurant in:

Gulberg Locality = 46%

Cantt Locality = 35%

Johar Town = 19%

Survey Results

So we decided that we should start our restaurant in Gulberg because this is the

middle area and easily accessible from all areas of Lahore. There are a large

numbers of colleges and universities also. So by doing business here, we can

boost up our business by offering discounts and deals to students as well.

Technical Analysis of Location

Accessibility to potential customers. Feasibil ity Report Prepared by Ghulam Mujtaba ,

M.Fiaz & Aamir Rohail, Abid & Mazhar

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We consider how easy it will be for customers to get into our outlet. If we are

relying on strong pedestrian traffic, consider whether or not nearby businesses

will generate foot traffic for us.

The rent-paying capacity of your business.

If we done a sales-and-profit projection for your first year of operation, we will

know approximately how much revenue we can expect to generate, and we can

use that information to decide how much rent we can afford to pay.

Traffic density.

With careful examination of food traffic, we can determine the approximate sales

potential of each pedestrian passing a given location. Two factors are especially

important in this analysis: total pedestrian traffic during business hours and the

percentage of it that is likely to patronize your food service business.

Visibility

It is a location’s ability to be seen and recognized. Good visibility can create

opportunities for the impulse eating decision that is critical for fast food operators,

and it allows the exposure full-service restaurants require.

Customer parking facilities.

In case we allow for parking the site should provide convenient, adequate

parking as well as easy access for customers.

Proximity to other businesses.

Neighboring businesses may influence our sales volume, and their presence can

work for us or against us.

History of the site.

We will find out the recent history of each site under consideration before you

make a final selection. Who were the previous tenants, and why are they no

longer there?

Terms of the lease.


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We understand all the details of the lease, because it's possible that an excellent

site may have unacceptable leasing terms.

Future development.

We will check with the local planning board to see if anything is planned for the

future that could affect our business, such as additional buildings nearby or road

construction.

Technical Analysis of Building

Deciding on the Layout

Layout and design are major factors in restaurant's success. We'll need to take

into account the size and layout of the dining room, kitchen space, storage space

and counter. Typically, restaurants allot 40 to 60 percent of their space to the

dining area, approximately 30 percent to the kitchen and prep area, and the

remainder to storage and office space.

Dining area.

This is where we'll be making the bulk of our money, so we will not cut corners

when designing your dining room. We will Visit restaurants in our area and

analyze the décor. Watch the diners; do they react positively to the décor? Is it

comfortable or are people shifting in their seats throughout their meals? We will

Note what works well and what doesn't. Much of our dining room design will

depend on our concept. It will help us to know that 40 to 50 percent of all sit-

down customers arrive in pairs; 30 percent come alone or in parties of three; and

20 percent come in groups of four or more. To accommodate the different groups

of customers, we will use tables for four that can be pushed together in areas


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where there is ample floor space. This will give us flexibility in accommodating

both small and large parties. We will Place booths for four to six people along the

walls.

Production area.

Too often, the production area in a restaurant is inefficiently designed--the result

is a poorly organized kitchen and less than top-notch service. We will keep our

menu in mind as we determine each element in the production area. We’ll need

to include space for receiving, storage, food preparation, cooking, baking,

dishwashing, production aisles, trash storage, employee facilities and an area for

a small office where we can perform daily management duties. We will arrange

our food production area so that everything is just a few steps away from the

cook. Our design should also allow for two or more cooks to be able to work side

by side during our busiest hours.

Designing & Decor

Since customers ultimately drive restaurant design trends, many of our

restaurant design ideas will come from our clientele. Successful restaurant

design ideas are bred with an understanding of the types of experiences your

customers are looking for and the promise our brand has made to them. we may

know what types of menu items they crave, but do we know what kinds of

restaurant design ideas create an atmosphere that will welcome them time and

time again?

Step One:

The restaurant designer’s process begins with a thorough understanding of the

eatery’s menu, location, customers, architectural preferences and lighting

concerns. More than just a design powwow, the restaurant designer’s process


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includes budget considerations, timelines and coordination with city officials to

secure necessary building permits.

Step Two:

The most effective restaurant design considers the flow of waiter staff from the

kitchen to the dining area or from the dining area to the restrooms. The

restaurant designer’s process contemplates the overall circulation within the

restaurant for maximum efficiency

Step Three:

With the floor plan in hand and a concept in mind, the next stage in the

restaurant designer’s process is interior design. Sketches may depict color

schemes, furniture Placement, window treatments, artistic lighting and other

aspects of the ambiance. This is also the part of the restaurant designer’s

process where we consider paints, wallpapers, foliage and artwork.

Creating a Menu

Though menu variety has increased over the years, menus themselves are

growing shorter. Busy consumers don't want to read a lengthy menu before

dinner; dining out is a recreational activity, so they're in the restaurant to relax.

We should our number of items in check and menu descriptions simple and

straightforward, providing customers with a variety of choices in a concise format.

Our menu should also indicate what dishes can be prepared to meet special

dietary requirements. Items low in fat, sodium and cholesterol should also be

marked as such.

Restaurant Size

That depends to some extent on how we answered the fundamental question

mentioned above. For the sake of discussion, a restaurant can be understood in

two parts; the front house component and the back-house component, which we

will call the engine. The backhouse areas include, the cook-line, the food

preparation areas, refrigerated any dry storage areas, office and the dishwashing


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area. The front-house functions are typically dining areas (interior and exterior),

waiting area, to-go area, restroom, and private dining areas. The speed of

product delivery; the size of the engine, a casual or formal atmosphere, and

numbers of patrons we want to accommodate will all factor in to the amount of

space we need for our restaurant. The goal is trying to maximize the number of

patrons one can serve, out of the smallest most efficient back-house possible.

Hiring the Right Employees

Choosing employees who will do a good job is not only important to the success

of our business, but will also contribute to the image of our establishment,

provided they are properly trained. There are several categories of personnel in

the restaurant business: manager, cooks, servers, busboys, dishwashers and

cleaners. When our restaurant is still new, some employees' duties may cross

over from one category to another. For example, our servers may double as the

cleaners. We will hire people who are willing to be flexible in their duties.

Manager

The most important employee in most restaurants is the manager. The best

candidate is a person who has already managed a restaurant or restaurants in

the area and will be familiar with local buying sources, suppliers and methods.

The manager should have leadership skills and the ability to supervise personnel

while reflecting the style and character of the restaurant.

Chefs and cooks.

When we start out, we’ll probably need three cooks - two full time and one part

time. But one lead cook may need to arrive early in the morning begin preparing

soups, bread and other items to be served that day. One full-time cook should

work days, and the other evenings. The part-time cook will help during peak

hours, such as weekend rushes, and can work as a line cook during slower


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periods, doing simple preparation. Cooking schools can provide us with leads to

the best in the business, but we look around and place newspaper ads before we

hire. Customers will become regulars only if they can expect the best every time

they dine at your restaurant. To provide that, we'll need top-notch cooks and

chefs.

Servers.

The servers will have the most interaction with customers, so they need to make

a favorable impression and work well under pressure, meeting the demands of

customers at several tables while maintaining a pleasant demeanor. There are

two times of day for wait staff: very slow and very busy. We will schedule our

employees accordingly. The lunch rush, for example, starts around 11:30 a.m.

and continues until 1:30 or 2 p.m. Restaurants are often slow again until the

dinner crowd arrives around 6:30 to 7 p.m.

Proposed Product Mix

The proposed project will assumed to provide customers with a variety of fast

food items as outlined in the following menu:

Broast Price Chinese Price

Chicken Broast (Qtr.) 125 Hot & Sour Soup (2 Servings) 250

Chicken Broast (Half) 250 Hot & Sour Soup (4 Servings) 440

Chicken Broast (Full) 450 Chicken Corn Soup (2 Servings) 225

Chicken Corn Soup (4 Servings) 425

Plain Rice 70

Burgers Price Chicken Fried Rice 180

Chicken Burger 250 Vegetable Fried Rice 140

Chicken Cheese Burger 265 Egg Fried Rice 120

Beef Burger 200 Beef Fried Rice 130


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Beef Cheese Burger 255 Beef Chili (w/o rice) 105

Zinger Burger 180 Chicken Chili (w/o rice) 85

Sandwiches Price

Chicken Sandwich 155 French Fries (per plate) 75

Egg Sandwich 140 Cole Slaw 55

Beef Sandwich 145 Soft Drinks (Large) 75

Club Sandwich 140 Soft Drinks (Regular) 30

Based on the above the fast food we can offer low cost combo meals to our

Customers for increased value. Following are the proposed combo deals that can

be further modified to meet increasing demand:

Combos Items Price

Combo Deal 1 Zinger Burger / French Fries / Reg. Drink 255

Combo Deal 2 Chicken Broast (Qtr.) / French Fries / Reg. Drink 180

Combo Deal 3 Chk Burger, Broast (Qtr.), Fries, Reg Drink 450

Combo Deal 4 Club Sandwich / French Fries / Reg. Drink 215

Family Deal 1 Full Broast / Zinger Burger / Club Sandwich /

French Fries (4) / Large Drink

999

Family Deal 2 Zinger Burger (2) / Club Sandwich (2) /

Broast (Half) / Large Drink / Fries (2)

1099

Jumbo Deal 10% discount on purchase above Rs. 1,000/-

It desirable to have a vast variety of food items to capture a larger target

audience but initially the we need to be careful in choosing the right product mix


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that has the greatest acceptability such that the sales volume generated are able

to cover the initial setup costs and desired profit margins. Once the fast food

restaurant achieves a steady sales pattern further food items like Barbeque can

be added and similarly for desserts ice cream would be the best potential. In

case circumstances demand items other than the proposed menu the

entrepreneur should make immediate changes to the menu before we start losing

our customers. One important factor to consider here is that we must have the

requisite skills to decide on whether to introduce a new product line (like

Barbeque, Pizza) or add a new item to the existing product line both of which

might require the purchase of additional kitchen equipment. Hence the

experience of the entrepreneur will play an important role in determining the

course of action.

MACHINERY& EQUIPMENT

Understanding the customer’s individual needs and the capability to satisfy these

Completely is a vital part of the restaurant’s success. This is in turn dependent on

the machinery and equipment used to produce good quality fast food. Fast Food

Machines are easily available in the market wherein the owner has to choose

between expensive brands and cheaper ones depending on how much we can

afford to give quality to our customers. Secondhand equipment of world leading

brands such as SPINZER, FRYMASTER, HENNY PENNY, LINCOLN,

AYRKING, KEATING, MIRROR, CARPIGIANI, LINCAT, MORRETTI, ILSA,

ROUND-UP, SANYO, ELETTROBAR are available while cheaper Chinese

brands have gained popularity over the years. The machines can be ordered

through international vendors with a minimum delivery period of 3 months while

refurbished / reconditioned machines are also available. Some outlets closing

their business also tend to sell their machinery at low prices but the durability and


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reliability factor must be taken into consideration while buying such machines.

We would require the following machine /equipment for its operations:

Item Details Quantity Unit Price Total PriceFreezer (16 CFT) 4 65,000 260,000Broast Machine 1 750,000 750,000Deep well frier (15 pound capacity) 2 65,000 130,000Hot Plate for Burgers, Kebab, Sandwiches (30” x 22”)

1 40,000 40,000

Bin Marry Soup Container (2 Valve With Steel Cabinet)

1 50,000 50,000

Potato Cutter (8mm) 1 3,000 3,000Pillar (4.5 Kg Potato Peeling Capacity) 1 6,000 6,000Microwave 2 25,000 50,000Working Tables 2 20,00 20,000Keg Racks & Shelves 2 10,000 20,000

Total 1,329,000

* Available from Spinzer USA, Delivery Time Three Months, Reconditioned Available at

Rs. 200,000 with the same specs and Delivery Time

Machinery Maintenance

All machines require routine cleaning and maintenance after every three months

and an annual service which costs around 1% to 5% of the total cost depending

upon the use of the machine and operator's skill. We have assumed an average

of 2.5% of the depreciated cost as the annual maintenance cost.

Dining Furniture & General Fixtures

The restaurant is expected to entertain a minimum of 300 customers in a day,

which requires a good seating layout to avoid any confusion and problems during

rush hours. The following table gives the details of the dining tables and chairs

that would serve approximately 150 customers (maximum capacity) at a time:

Item Details Quantity Unit Price Total Price

Dining Table – Square(2X2)

70 6,000 420,000

Chairs (Standard 14”) 200 1,500 300,000


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Kitchen Cutlery Set 3 3,000 9,000

Dining Cutlery* (Plate,Fork, Knife, Spoon, Glass)

150 200 30,000

Air Conditioner Split Units(6 Ton)

2 80,000 160,000

Hot Water Geyser Large 1 25,000 25,000

Halogen Lights 25 350 8,750

Wall Lights (Large) 4 2,500 10,000

Portable Emergency Light 4 3,500 14,000

Generator (5 KVA) 1 200,000 200,000

Counter Chairs 2 2,500 5,000

Office Table & Chair Set 1 2,500 2,500

Waiting Chairs for TakeAway Customers

5 2,000 10,000

Misc. items, computers, office stationary etc 1 100,000 100,000

Total 1,294,250

Land Requirement

The land requirement is around 4,500 sq.ft. In densely populated area where all utilities

And facilities are properly available. It is recommended that the fast food outlet be

opened on the ground floor of flats or shopping mall wherein the consumer traffic will be

a maximum.

4.3 Recommended Mode

The proposed premises will be acquired on a rental basis with 6 month deposit

and 6 months advance rent after which rent will be payable on a monthly basis.

The monthly rent is approximately Rs. 50/ Sq Feet for the ground floor which

would amount to Rs. 225,000 per month for the proposed fast food outlet (4,500

Sq Ft.)


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4.4 Reception & Owner Office

To allow for maximum space for dining and security concerns (Cash control) it is

Recommended that we should manage the reception counter as well as all cash

Handling emanating from the tables. Therefore a total of Rs. 50,000 would be

required to erect the reception and cash counter along with the take-away order

taking booth. The Office Furniture & Equipment will be depreciated at the rate of

10% per annum according to the diminishing balance method for the projected

period.

HUMAN RESOURCE REQUIREMENT

The human resource requirement for the general and management staff are as

follows:

Designation Type No’s Monthly

Salary

Total

Salary

Partners 3

Kitchen Supervisor 2 15,000 30,000

Shift Supervisor 2 15,000 30,000

Cook 3 10,000 30,000

Server 6 8,000 48,000

Take Away Cashier 1 12,000 12,000

Dishwasher 2 6,000 12,000

Cleaner 2 5,500 11,000

Guard 2 9,000 18,000

Total 191,000


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Considering the size of the proposed establishment it is assumed that the partner

would be managing the overall affairs of the fast food setup. He will be required

to process and check bills, invoices, receivables management, maintain

accounts, etc. for record. He will also ensure safe custody of store keys. The

cashier will only be responsible for receiving payment and handing over change

while the partner would be managing the cash drawer for control purposes. It is

important to note that many food outlets tend to lose out due to inadequate cash

control by the owners especially during rush hours where the counter staff can

easily slip out one or two payments.


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Financial Analysis

FINANCIALANALYSIS & KEYASSUMPTIONS

The project cost estimates for the proposed fast food outlet have been

formulated on the basis of discussions with relevant stakeholders and experts.

The cost projections cover the cost of land, building, inventory, equipment

including office furniture etc. The specific assumptions relating to individual cost

components are given as under:

6.1 Revenue & Cost Projections

The Sales are expected to increase by 25% every year while the cost of raw

materials is assumed to increase by 20%. The 25% annual increase in revenue

is expected to result from a part increase in population increase and part

increase in product price. The prices used to calculate the gross revenue earned

are based on the billing rate at which the entrepreneur will charge the customer.

The prices are also inclusive of the General Sales Tax. Furthermore it is

assumed that the following sales breakup will form the revenue streams for the

fast food outlet

Revenue Stream % of Total Sales

Dine In 60%

Take Away 15%

Home Delivery 25%

Total Revenue 100%

The minimum delivery order size is assumed to be Rs. 350/- per order with 3

delivery riders being employed at the charge out rate of Rs. 25 per delivery order

wherein no transportation fuel is provided by the fast food outlet. For Take Away

and Home Delivery another 1% of sales added cost due to packing is assumed.


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Rent Cost

The rent for the assumed premises will be Rs. 225,000/- per month. It is

assumed that Rs. 2,700,000 will be given in advance before possession of

premises. This will include 6 months deposit and 6 month advance rent. The rent

would be payable on a monthly basis and is expected to increase at the rate of

10% per annum for the projected period.

Utilities Requirement

The following table presents the assumed breakup of utilities on a monthly basis:

Utility Monthly Charges (Rs.)

Electricity 65,000

Water 4,000

Gas 21,000

Telephone 10,000

Total 100,000

As depicted above the most of the fast food machines require considerable gas

during the preparation process. The preheating procedure of the equipment

before commencement of preparation also consumes considerable gas. It is

assumed that utilities expenses will be increased by 10% every year.

6.4 Depreciation on Building & Equipment

Depreciation on Equipment, Machinery and Fixtures is assumed to be at the rate

of 10% per annum based on the diminishing balance method for the projected

period.

6.5 Working Capital & Pre Operating Costs

It is estimated that an additional amount of approximately Rs. 2,664,000 will be

required as cash in hand to meet the working capital requirements / contingency

cash for the initial stages. The requirement is based on the rent, utilities and


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salaries expenses for at least four months and 3 days raw material inventory.

The following table gives the break up.

Item 4 Months Cost (Rs.)

Utilities 400,000

Salaries 764,000

Raw Material Inventory 600,000

Rent 900,000

Total 2,664,000

The provision for pre operating costs is assumed to be Rs. 25,000 which will be

amortized equally over a 5 year period.

6.6 Account Receivables

All sales will be made strictly on cash basis. It is not advisable to operate a fast

food restaurant on credit basis.

6.7 Miscellaneous Outlet Expenses

A monthly figure of Rs. 15,000 (500 per day) is assumed to be incurred for

miscellaneous expenses which are expected to increase at the rate of 10% per

annum for the projected period.

6.9 Taxation

The tax rate applicable to sole proprietorship is the same as that of the salaried

individual. Therefore, we are assuming that the tax rate would be the same for

the proposed fast food setup.

Owner’s Withdrawal

It is assumed that the owner with withdraw from the business once the desired

profitability is reached from the start of operations. The amount would depend on

business sustainability and availability of funds for future growth.

Key Assumptions

Item Assumption(s)


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Sales Increase 25 % per year

Increase in Cost of Raw Materials 15 % per year

Increase in Staff Salaries 10 % per year

Increase in Utilities (Electricity / Water /Gas) 10 % per year

Increase in Rent 10 % per year

Increase in Office Expenses 10 % per year

Depreciation

Shop Building & Fixtures 10 % per annum

Kitchenware & Machinery 10 % per annum

Furniture 10 % per annum

Equipment Annual Maintenance Cost 2.5%

Raw Food Inventory - Meat 3 Days

Raw Food Inventory – Spices & Sauce 7 Days

Lease Period 5 Years

Lease Installments Monthly

Financial Charges (Lease Rate) 15 % per

annum

In these section total expenses for our restaurant from this survey of market we

have estimated the least price with good quality.

Ownership of Business:

Our business is on partnership basis and we have three partners, each one

investing his own capital, which is near about Rs. 2,000,000 as franchise will cost

us Rs. 6,000,000.

Advertisement Expense:


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We are entering in the market with the large advertisements. So, for this reason,

we would have a large advertisement expense.

Advertisement through Newspapers:

Many daily and weekly newspapers are published in Lahore. The people

of Lahore frequently read newspapers that are why we advertise our restaurant

by these newspapers.

The main daily newspapers published in Lahore are:

Nawa-I-Waqt

Din

Khabrain

Among English newspapers, important one is “This News” our ads. Will be

given in Urdu newspapers, 10 days before the opening ceremony of Restaurant

and then 30 days after it.

News paper Quantity Unit Price Total Price

Nawa I Waqt

add on 2nd page

Size = 3 col x 10 cm

40 3700 148,000

Khabrain Newspaper

Add size = 3 col x 10 cm on

2nd page

40 2200 88,000

The News English 40 1,800 72,000


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Ad Dimension = 3 col x 10 cm on

2nd page

Total 308,000

Advertisement through Television:

In Pakistan, we have three TV channels that are ‘PTV’, Channel-3 ‘PTV World’.

But we have chosen PTV for the advertisement of our KFC Restaurant, because

it is the most popular TV channel in Lahore.

TV Channel/ Time Quantity Unit Price Total Price

Drama Hour

3 ads. will be displayed during

“Drama Hour” During 7-9 P.M

3 5,000 15,000

Khabranama Hour

2 ads.will be displayed after

“Khabarnama”

2 3000 6,000

Advertisement Exp for one day 21,000

Advertisement Exp for one month = 21,000 x 30 630,000

Advertisement through Printed Material:

We will also advertise through printed material like banners, handbills,

signboards, and stickers. This is important way of advertising because these

printed materials almost cover the whole city. Those people who miss ads. On

TV or those who cannot read newspaper, will certainly see this material.


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Medium of Add Quantity Unit Price Total Price

Hangers & Banners 30 1,000 30,000

Signboards 4 18,000 72,000

Hand Bills 50,000 1.5 75,000

Advertisement Exp for one day 177,000

Total Advertising Expense:

Medium of Add Quantity

News papers 308,000

Television 630,000

Hand Bills 177,000

Total Expenses 1,115,000

Revenues:

We have found out our revenues on average basis per month. The name of

items available in our restaurant, their prices and quantity sold will be given as

follows:

Item DescriptionUnit Price Quantity

sold

Revenue

Amount

Chicken Broast (Qtr.) 125 500 62,500

Chicken Broast (Half) 250 500 125,000

Chicken Broast (Full) 450 500 225,000

Chicken Burger 250 300 75,000

Chicken Cheese Burger 265 500 132,500

Beef Burger 200 500 100,000


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Beef Cheese Burger 255 500 127,500

Zinger Burger 180 500 90,000

Hot & Sour Soup (2 Servings) 250 100 25000

Hot & Sour Soup (4 Servings) 440 100 44,000

Chicken Corn Soup (2 Servings) 325 100 32,500

Chicken Corn Soup (4 Servings) 425 100 42,500

Plain Rice 70 100 7,000

Chicken Fried Rice 180 500 90,000

Vegetable Fried Rice 140 500 70,000

Egg Fried Rice 120 500 60,000

Beef Fried Rice 130 500 65,000

Chicken Sandwich 105 500 52,500

Egg Sandwich 85 1000 85,000

French Fries 75 500 37,500

Soft Drinks (Large) 75 500 37,500

Soft Drinks (Reg) 30 1000 30,000

Total Monthly Revenue 1,616,000

Break-even Point:

The break-even point is the point where the total revenue is equal to the total cost. This

point shows that after how much time we can get our profit.

Break-even point: C(x) = R(x)

Cost calculation Cost = Fixed Cost + Variable Cost

Fix cost = 1,329,000 Variable Cost = 291,000 =

Revenue = 1,616,000 (X) (As indicated above)


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1,620,000(X) + 291,000 = 1,616,000 (X)

1,620,000(X) = 1,616,000 (X) - 291,000

1,620,000 = 1,325,000(x)

x = 1.222 Months (14 Months)

So we can achieve our break-even point in 14 months.

Assumptions

While considering our project, we have taken the following assumptions:

1. We have assumed that as our business moves towards success, we will

offer different discount packages for our customers and will give special

discount to the students. Eventually this will increase our sales.

2. We have assumed that we will try to compete all the existing restaurants

in this field.

3. Our restaurant will remain opened for the full week and also during

special holidays like Eid, 14 thAugust, etc.

4. There may be a variation in the price of the ingredients, which we will be

using with respect to taxes.

5. We are assuming that no other international chain restaurant will be

opening in Lahore for two years.


kfc feasibility

Documents

business of restaurant

feasibility report

field of restaurant

information memorandum

abid mazhar introduction

abid mazhar disclaimer

open fast food restaurant

presented information