lunch club final

7/29/2019 Lunch Club Final

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AnOpportunityBrief

By

CharlesTruong11139575

Presentedto

GibDEMEDEIROS

NewVentureCrea3on

53-473-11

June8th,2012


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Lunch-Clubisa fusionbetween fast-fooddeliveryservice ande-commerce.Think

aboutmixingAmazon.comandLeCommencal.OurmissionisToprovideahealthy,

affordable, delicious and convenient alterna3ve to fast-food lunches to office

workers in the Montreal downtown area with an easy to use, easy to get e-

commerceplaormtofacilitatepurchaseanddelivery.

TheMontrealFast-FoodMarketises3matedtobecloseto1.3B$,thoughthescene

is crowded and fragmented, there is an opportunity to capture an underserved

marketwhoputsforththeirhealthandareleadingbusylifestyle,theyoungurban

professional.

TheExecuLveSummary

Leveragenewtechnologyforouropera3onsandmarke3ng,Lunch-Clubisbringingto the conven3onal fast-food market a whole new approach to the customer

experience which will differen3ate our company and generate tremendous

amount of aenLon which we plan to capture and leverage in our marke3ng

strategy. The mastery of social media, Web 2.0 and e-commerce plaormswill

provideLunch-ClubaclearcompeLLveadvantageoveritstradi3onalcompe33on.

Scalabilityanditsopera3onscapacitytostay leanandpredictablemakesLunch-

Clubasolidprojectwithimpressivefinancialoutlook fromtheget-go.Ledbyan

ambi3ous young entrepreneur with experience in the food service industry,

technology and management, Lunch-Club has the right founda3on to go from

dreamtoreality.


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TheCONCEPT

+E-Commerce unch


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Toprovideahealthy, affordable,

d e l i c i o u s a n d c o n v e n i e n talterna3vetofast-foodlunchesto

office workers in the Montreal

downtown area with an easy to

use, easy to get e-commerce

plaorm to facilitate purchaseanddelivery.

OurMISSION

In the long-term, we want our

brand and concept to develop

into a franchise that can roll-out

in dense urban areas across

Canada,andthenNorthAmerica

OurGOA


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HealthissuesrelatedtounhealthyeaLnghabitshas

beenplaguingCanadaandQuebec.Obesityrateshave

almosttripledinthepast25yearsamongstCanadian

childrenaged2to17*.Itisafactthatconsumersare

nowbeWerinformedandawareoftheissue,sothe

CanadianconsumerisgeXngmorehealth-conscious

sta3nghealthandnutri3onasatopofmindconcern(1%)whenpurchasingfoodvs.24%in2years

earlier**

*ChildhoodObesityFounda3on,hWp://www.childhoodobesityfounda3on.ca/,Fall2011.**CanadianConsumerSpendingonFoodandBeverage,AgicultureandAgri-FoodCanada,2006

HEATH

MajorTrends&Needs

2


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MajorTrends&Needs

Young Professionals are busier than ever, so

convenience has become a big driver in their

ea3ng habits. A Canadian Consumer behaviour

reportstatesthat consumersarelookingforways

todomore,moreeasily,quicklyandenjoyably,and

their approach to food and beverage choices

generally reflects this aHtude*. Convenience isconsidered to be the main reason consumers

chosetheirdiningop3on**

*TheCanadianConsumer:Behaviour,AHtudesandPercepNonsTowardFoodProducts,Interna3onalMarketBureau,May2010

**FastFoodaNon2008:AConsumerPerspecNveontheFastFoodIndustry,Research

Interna3onalUSA,2008

CONVENIENCE

2


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TheMarket:

DowntownMontrealFast-FoodMarketinMontreal:1.3B$*

More than 150,000 Office Workers** downtown

thatsover50%ofallMontrealsofficeworkers

Informa3onandCulture:23295 Finance:43815 EngineeringandScien3fic:51895 Government:25520

*P.M.Parker,The2009ReportonFastFood:WorldMarketSegmentaNonbyCity,ICONGroup,2009**LeCentre-villecest,VilledeMontral,hWp://ville.montreal.qc.ca/pls/portal/docs/page/mtl_stats_fr/media/

documents/CENTRE-VILLE_SURVOL.PDF


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TheTarget:

YoungUrbanProfessionnals*

58%men/42%women Aged25-4 +65%aremarriedorlivingwithsomeone Havechildrenunder3 Bachelorsorpost-graduatedegree HHIover$90,000 Busy lifestyle & at the crunch-3me of

theircareer

Restaurant & Fitness are their 2 firstlifestylechoices

*YoungUrbanProfessionnals,ZoomBusinessCanada,hWp://canada.zoommedia.com/en-ca/Targets/

YoungUrbanProfessionals.aspx


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TheCompe33on:FragmentedandConvenLonal*

TheFast-FoodSectorinMontrealishighlyfragmentedandlikemost

ci3es, leadbyjunk-foodna3onalbrands.Someemergingtrendsare

found in ethnic food, but the health trend is mainly served by

extendedmenusatusualjunk-foodloca3ons.HealthylunchopLons

areunderservedintermsofbrands,franchises&mealop3ons.

*C.Truong,FastFoodSectorinMontreal,HECMontreal,April2012

ocaLonisthenameofthegame. All compe3tors are

figh3ng over loca3on for

convenience, the sector is

seeing low innovaLon in

terms of convenience and

userexperience.


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erealifestylebrandthatiscombiningwhatleveragestheneeds

andpurchasebehavior ofanewgeneraLonofprofessionals.Our

offeringistheneededalternaLve tothesameoldandunhealthy

fast-food brands. Plus our model is scalable and give us cost

advantageoverlocaLondependentandspaceconstraint limited

servicerestaurants.

OurCompeLLveAdvantage

EaNngHealthyevenifImBusyatWork


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TheMECHANICS


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HowdoIjointhe

Lunch-Club?

4 EasyStepsJust


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Website

1 Visitunch-Club.ca

Astronge-commerceandaergonomicandwell-designedwebsiteiscrucialto

thesuccessoftheLunch-Club.Ourtargetmarket isusedtowell-designedand

securesites,sobasedonrecommendaNonsofanadvisor,aleadingonlineretail

entrepreneur, well use open-source Magentos e-commerce pla;orm and

investinawebdevelopertoimplement,maintainandimprovethepla^orm.


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2 Sign-uptotheunch-Clubusing:

Beingpartofaclubisanexclusiveexperience,andfor10$permonthincluding

a free lunch (10$ in credit), the barrier to entry is minimal. Credit cardinformaNon is not only for membership, but also to facilitate the payment

processwhenorderinglunchfromanydevice.EaseofpaymentlimitshesitaNon

whenitcomestopayandhasshowntremendoussuccesswithe-commerce.In

order to join the club, the office address needs to be on an exclusive list,

candidatescanrallypeoplefromtheirofficetoaddtheirofficetothelist.

E-Mail

PhoneNumber

OfficeAddress

CreditCardInformaLon


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3 Sharewithfriendsandcolleagues

SocialMedia(OnlineandOffline)isthecornerstoneofourmarkeNngstrategy.

WordofMouth,andonlinebuzzarekeysuccessfactorsforustolimitthecost

ofcustomeracquisiNons.Onsiteguerillamarkengstrategiesareinvestmentsfor locaon-basedcustomeracquisions,butbyfosteringourcommunityand

incenvizingourclubmemberstopromoteourclubandaddmembers,wecan

acquireaclient-baseforafracNonoftheusualcost.Socialmediawillalsobe

our nurturing pla^orm to enforce loyalty, user engagement and repeat

business.

Facebook

Twier

inkedIn

Blogs&OtherChannels


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4Order,share&par3cipateand

givefeedbacktoearnpoints!

Gamificaonisatechniqueonlinebrandcanusetofosteruserengagementby

incenNvizinguserparNcipaNon.Wewilldevelopapointsystemto earnpoints

for ordering (based on nutriNonal values), sharing and parNcipaNng on ourFacebookpageandsite,andforprovidingfeedbackonourmenuwhichwillnot

only encourage repeat business, but also ensure customer-oriented product

development.

+pts


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ThePROCESS


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HowdoIusetheLunch-Club?

6 EasyStepsJust


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7:36PM 11:47PM 9:52AM

1 hendoyouthinkaboutlunch?

PeoplethinkabouttheirlunchopNonsatdifferentmeofthedayorweek,

someare lastminutes,someprepareinadvance.Thegoalistocaptureour

memberslunchorderinghabitandofferaneasylunchorderingexperience


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MobileApp Website

2Orderingiseasyandaccessibleat

all3me

GeneraNon YandMillennialsare connectedat allNmeandareused toeasy

andconvenientpurchasingexperiencethroughe-commerce.Throughamobile

appandourwebsite,conveniencemakesiteasyforourmemberstodecideon

lunchandcarry-onwiththeirlives.


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Date Time

3Choosewhat&whenyouwant

yourlunch

Choosingoneof3meals(ofourrollingmenu),adateandNmemakes lunch

planningeasyforourbusymembers,plustheplanningprocessallowsusto

havepredictablequantyandplanourquanNNesandcapaciNesaccordingly,

thereforewebenefitinlimitedwasteandeconomiesofscale.

Meal

3


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4Speedydrop-offdeliverytoyour

officeonLunchDay

OpLmal

Scheduled

Delivery

Targeted

OfficeTowers

FastDrop-Off

atRecepLonByLunchDay,lunchareorderedandpaidfor,sowecaneasily opmizethe

deliveryscheduleandinerary.LimiNngtotargetedofficetowersbasedon

sizeanddensityoftheworkforce,weensure speedydrop-offattherecepNon

areas. Extra capacity on delivery route can also be filled with targeted

promoNonsandadverNsement.


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5 Enjoyyourlunch!

In the end, its also about the lunch itself,

which is why in the first phases and beta

tesNng, well work with a chef and focus

groups in order to come up with a rolling

menu of healthy and delicious meal. The

quality and taste of our meals are a key

successfactorofthisconcept,sowellinvest

upfront to come up with a great offering,

and involve our club members in order toconstantlyimproveit.


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6 Providefeedbackandsugges3ons

Sasfyingourcustomers isakeysuccessfactortoensurerepeatbusiness.Theadvantage with our e-commerceonline strategy is that our target customers

areusedtogetengagedwithonlinebrands.Ournurturingandengagement

strategyistoinvolveourmembersintheproductofferingwiththeirfeedbacks

andsuggesNonsthroughourchannelofcommunicaNons:website,Facebook&

twier.


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TheMARKETINGPAN


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KeystonesofourMarke3ngStrategy3

TheBrand&Inden3tyAggressiveCustomerAcquisi3on

oyalty:Nurturing&Engagement


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Insteadofhavingthetypicalethnicproductdifferen3a3on,Lunch-

Club targets lifestyle to the niche segment of 25-4 busy

professionalsworkinginMontrealsDowntown.eoffer healthy

meals op3ons that fits our target segments busy lifestyle and

questforconvenienceandhealthwhenitcomeslunchop3ons.

DistribuLon,

Convenience&Speed

Distribu3on is key for us, since were an office delivery

service, well set ourselves apart from the delivery

compe33onwithafastandLmelydeliveryservice.PartofwhatdefinestheLunch-Clubisaneasyandfastwaytolunch

attheoffice,justone-clickaway.

ProductNiche

TheBrand&Inden3ty

Leveragingthebenefitsofe-commerceandapplyingtothefood

serviceindustryisoneofthesecretsauceforLunch-Club.By

facilita3ngthepaymentthroughone-clickonthewebsiteormobileapp,wereshorteningthepaymentprocessandfacilitaLng

repeatbusinessbykeepingclubmemberspaymentinforma3on

andofferingperkslikecreditsuponrecurringusageoftheservice.InnovaLve

Ordering


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Social media is key in our customer acquisiLon

strategy.EspeciallysinceweretargeLngmillennials

that are heavy users of social media technologies

such as Facebook and TwiWer. Mechanism like

referralsandgroupinginordertosignupasaclub

memberaregreattac3cstoensureasmuchsocialmedia exposures as possible. IncenLves for

members to share their feedback on the services

are also in the plans in order not only to improve

product quality and alignment with our members

taste profiles, but for customer acquisi3on also

sincetheyllwitnessthelevelofengagementofourmembers.

AggressiveCustomerAcquisi3on

WordofMouth


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The fusion of E-Commerce and the food service industry is an

innova3on that deserves the launching PR well be able to

leverageforourstar3ngphases.GeXngaWen3onfromthemediawith our innova3on is key for our customeracquisi3on strategy,

eveniftheyarenotyetservedinourserviceterritory.Thegoalis

getasmuchfreeexposureaspossible fromtheget-goforpeople

tojoinandrequesttheservicetobeavailablefortheiroffice.

Beforenewofficetowersareaddedtoourserviceterritory,ad-

hocboothswillbesetupduringlunchhoursinmallclosetothe

newtowersto testdemand.Thesepointofsales,willallowus

tomake some extra revenues, but mainly the goal will be to

maketheunch-Clubknowntothesenewpoten3alloca3ons.

UsingsocialmediatoaractpotenLalmembers totheboothsarea,wellusesimilartac3csusedbyfoodtrucksintheUSto

hypeourad-hocboothslocaLon.

AggressiveCustomerAcquisi3on

PublicRelaLons

BoothtotestlocaLons


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Sa3sfyingourcustomersisakeysuccessfactortoensurerepeat

business. The advantage with our e-commerce online strategy is

that our target customers are used to get engaged with onlinebrands.Ournurturingandengagementstrategyistoinvolveour

members in the product offering with their feedbacks and

sugges3ons through our channel of communica3ons: website,

Facebook & twiWer. SaLsfied customer = repeat business and

awesomewordofmouthforreferrals.

TheconceptofclubisimportantinLunch-Club,sinceitcreates

a sense of belonging and community for our members.This

differenLate our service versus usual fast-food joints and

restaurants since theyll feel part of something. The

healthinessofourproductandtheu3liza3onoflocalfoodwill

strengthenaachmentfromourmemberstotheLunch-Club,

because theyll be involved in a good cause, for their own

healthandtheircommuni3ty.

oyalty:Nurturing&Engagement

SaLsfied

Customer

Community


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TheSTARTUPBUDGET


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MajorCostComponents4

HeadquartersKitchen

DistribuLon E-Commerce


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The Lunch-Club HQ is conveniently located at 1892 rue

PayeeinGriffintown,Montreal.

Theadvantageofthatloca3onisdefinitelylowerrentcost(3410$/months@18$/sq.)*thantheOldMontrealand

Downtownarea.

Anotheradvantageisthe proximitytosuppliersoffresh

andlocalfoodattheAtwatermarket.Healthyingredient

will be close at hand, and well be developing good

rela3onshipswithlocalfarmersthroughdirectcontactatthemarket.Locallygrowningredientsisdefinitelyatrend

that we want to build on, and even market it in our

offering, since its the top consumer trend in the

foodserviceindustry**.

*MontrealRealEstatePage,hWp://www.firstcorp.ca/offices/1890_2payeWe.html

**ChefSurvey:Whatshotin2012,Na3onalRestaurantAssocia3on,2012

Headquarters

6MonthsofHeadquartersOpera3ons(Rent+Insurance

+Salaries+Expenses+Marke3ngPlan)=

160000$


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ThekitcheniskeytotheLunch-Clubandalsoabigpieceofthe

investment. The plan is to purchase new equipment and

renova3ngthekitchenareatobescalableforfutureexpansion.

Considering the cost associated in seXng up a new kitchen*,ourkitchenopera3onssetupbudgetissetat50000$.

*HowToRunARestaurant:Start-UpCosts,Forbes.com,February2007

KitchenEquipment+Renova3on+Distribu3on=

70000$

Kitchen

DistribuLon

The distribu3on opera3ons has two major costs investment

involved, the delivery van,whichwecanrenttosmooththe

costs (expenses), and the delivery racks to load the lunches

andtounloadanddeliverwhenwereonloca3on.Theupfront

investment would be star3ng with a good off-the-shelf base,

andworkwithan industrialdesignerinordertoop3mizerack

storageintothevansoitremainsfitandstable.(~20000$)


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Aerinterviewingasuccessfulentrepreneurthathadhis

own e-commerce business in clothing retail, he advisedme to use an open-source plaorm called Magento. In

order to reduce investment cost, I wouldnt own the

hardwareitrunson,anduseahosLngservicetopayper

use,whichwillreducetheupfrontcost.(expenses)

Butinordertorunthepla{ormIllneedtohaveawebdeveloper internally and an experienced consultant

(professional services) for the first setup months. (~20

000$)

3MonthsofE-CommerceProfessionalServices=

20000$

E-Commerce


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STARTUPBUDGETITEM IN OUT

HeadquartersOpera3ons -160,000$Kitchen -50,000$

Distribu3on -20,000$

E-Commerce -20,000$

Personal 25,000$BursaryandContest 50,000$

TOTA -175,000$*

*BankandGovernmentProgramoans


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TheFINANCIAS


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TheCash-FlowStatement

Year1(0-6M) Opening Jan Feb Mar Apr May JunCashSales $10,000$25,000$25,000 $40,000 $40,000 $40,000

PersonalContribu3on(75kSalary) $25,000 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250

Contest&Bursaries $50,000

BankLoan $175,000

CASHIN $250,000 $16,250$1,250$1,250$46,250$46,250$46,250

Inventory(COGS50%) $5,000$12,500$12,500 $20,000 $20,000 $20,000

Expenses $25,000$25,000$25,000$25,000$25,000$25,000

Assets $60,000

InterestPayment(7.5%) $1,094 $1,094 $1,094 $1,094 $1,094 $1,094

IncomeTax(0%)

CASHOUT $60,000 $1,094$8,594$8,594$46,094$46,094$46,094

NETCASHFOW $190,000

$(14,844)$(7,344)$(7,344) $156 $156 $156


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TheCash-FlowStatement

Year1(7-12M) Jul Aug Sep Oct Nov Dec TOTACashSales $60,000 $60,000 $60,000 $80,000 $80,000 $80,000$600,000

PersonalContribu3on(75kSalary) $6,250 $6,250 $6,250 $6,250 $6,250 $6,250$100,000

Contest&Bursaries

BankLoan $175,000

CASHIN $66,250$66,250$66,250$86,250$86,250 $86,250$925,000

Inventory(COGS50%) $30,000 $0,000 $0,000 $40,000 $40,000 $40,000$00,000

Expenses $0,000 $0,000 $0,000 $0,000 $0,000 $0,000$0,000

Assets $60,000

InterestPayment(7.5%) $1,094 $1,094 $1,094 $1,094 $1,094 $1,094 $1,125

IncomeTax(0%) $- $-

CASHOUT $61,094$61,094$71,094$71,094$71,094 $61,094$70,125

NETCASHFOW $5,156 $5,156$15,156$15,156$15,156 $5,156$221,875


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TheCash-FlowStatements

Year2-3 2014 2015

CashSales $1,200,000 $2,000,000

PersonalContribu3on(75kSalary) $-

Contest&Bursaries $-

BankLoan $-

CASHIN $1,200,000 $2,000,000

Inventory(COGS50%) $600,000 $1,000,000

Expenses $62,697 $425,597

Assets $- InterestPayment(7.5%) $13,125 $1,125

IncomeTax(40%) $71,191$172,20.90

CASHOUT $1,047,01 $1,611,04

NETCASHFOW $152,987 $388,957


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TheIncomeStatements

Year1-3INCOMESTATEMENT 2013 2014 2015YEARLY SALES: $600,000 $1,200,000 $2,000,000COGS (50%) $00,000 $600,000 $1,000,000

GROSS PROFIT: $00,000 $600,000 $1,000,000

ANNUAL EXPENSES:RENT $50,000 $50,000 $50,000

PERMITS $412 $297 $297HYDRO $7,500 $10,000 $12,000GAS $7,500 $10,000 $12,000

INSURANCE $4,000 $5,000 $6,000TRUCK RENTAL $7,800 $11,700 $2,400

GASOLINE $2,400 $,600 $4,800TLPHONE $600 $600 $600

INTERNET $1,200 $1,200 $1,200SALARIES $150,000 $155,000 $200,000

PROFESSIONAL FEES $50,000 $75,000 $75,000MARKETING $20,000 $0,000 $0,000BANK FEES $1,500 $2,000 $2,000

MAINTENANCE $1,200 $1,500 $1,500SERVER HOSTING $2,400 $4,800 $4,800

DIVERS / MISCELLANEOUS $2,000 $2,000 $2,000TOTAL EXPENSES: $308,512 $362,697 $425,597

EBIT: $(8,512) $237,303 $574,403INTEREST (7.5%) $1,125 $1,125 $1,125

TAXES (30%) $- $71,191 $172,21NET INCOME: $ 21,637 $152,987 $388,957


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TheBalanceSheets

Year1-32013 2014 2015ASSETS

Cash $221,000 $79,987 $621,957

PP&E $60,000 $60,000 $60,000

Deprecia3on $(6,000) $(12,000) $(18,000)

Inventory $,000 $,000 $,000TOTAASSETS $278,000 $40,987 $666,957

IABIITIES

AccountPayables $,000 $,000 $,000

BankLoan $175,000 $175,000 $175,000

TOTAIABIITIES $178,000 $178,000 $178,000

EQUITY

Shareholder'sEquity $100,000 $100,000 $100,000

RetainedEarnings $- $152,987 $88,957

TOTAEQUITY $100,000 $252,987 $488,957

IABIITIES+EQUITY $278,000 $40,987 $666,957


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TheRISKS


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Novelty is notalways agood thing, andcoming up withsuch an

innovaLve purchasing experience is risky if we come in too

naively. In order to mi3gate the risk of a slow adop3on period,

well introduce the services through mulLple phases with animportantbetatesLngperiodswithlotsoffocusgroups.

Technology

Dependency

Thoughtthee-commercetechnologyisproven,s3llgoingwith

thatop3ononlymightstoptheviabilityofourbusinessincase

thecentralpaymentsystemgoesdownforanyperiodof3me.

Inordertomi3gatetherisk,itllbeimportanttohavemulLple

electronicpaymentsuppliers tospreadtherisks.

TooInnovaLve

TheRisks

The Fast-Food sector is highly compeLLve and there are major

incumbentsthatcanalso startasimilarservice.Inordertomi3gate

thatrisk,itllbeimportanttosLcktothemarkeLngplanandensureourbrandnotonlysurvivesretalia3onbutgainsnotorietyfromthe

compe33onsreac3on.RelaLonshipwithourclubmemberswillset

usapartandgiveusacompeLLveadvantageasthefirstmover .CompeLLon

RetaliaLon


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TheENTREPRENEUR


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5yearsinSales&MarkeLng

SowareEngineer+MBA

10Years+experienceinFoodService

Passionate about Food, Business &

TechnologyLunch-ClubisTEideaIwaslookingfor,itsthetrifecta

ofwhat Iampassionate about.TheMBAisformea

Nme of reflecNon and trial, and the result of it is the

Lunch-Club. Since the idea came up to me, Ive been

challenging it, researching it and sharing it withwhomeverandtheoverallresultsisastrong,profitable

andexcingproject.Butthemostimportantargument

is thatmygut feeling concurs, so now is theme to

makeitreal.

lunch club final

Documents