Saskatoon Taco Bell
YUM! Brands
Taco Bell Saskatoon YUM! Brands Inc.
Prepared for: Development Department
Yum! Restaurants International (Canada)
Prepared by: Chantel Laventure
Dave Johnson
Aaron Forer
Michael Milo
Contents
1.0 Executive Summary 6
2.0 Introduction 7
2.1 Mission Statement 7
2.2 Our Market 8
2.3 Core Values (P.E.A.R.L.S.) 8
2.4 Goals and Objectives 8
2.4.1 Short Term: (6 months) 8
2.4.2 Medium: (18 months) 9
2.4.3 Long-Term: (5 years+) 9
2.5 Philosophy 9
3.0 Industry Overview 11
4.0 Operations Plan 11
4.1 Organizational Structure 11
4.2 Site Plan and Five Year Development Plan 12
4.3 Building and Floor Plans 13
4.4 Work Plan 13
4.5 Quality Control 13
4.6 Average Business Day, Week, Month, Year 13
4.7 Supply Analysis 14
4.8 Service Providers 14
4.9 Capacity Limits 14
4.10 Capital Budget 14
4.11 Environmental Considerations 15
4.12 Cost of Sales 15
4.13 Operating Expenses 15
4.13.1 Ongoing Expenses 15
4.13.2 Franchise Expenses 16
4.14 Working Capital Management 16
4.14.1 Cash Management 16
4.14.2 Inventories 17
4.14.3 Account Receivable 17
4.14.4 Accounts Payable 17
4.14.5 Cash Conversion Cycle 17
4.15 Summary 17
5.0 Human Resource Plan 17
5.1 Hours of Operations 18
5.2 Scheduling 18
5.3 Training 18
5.3.1 University 18
5.4 Job descriptions 19
5.5 Recruitment and Selection 19
5.6 Discipline and Termination 19
6.0 Marketing Plan 20
6.1 Products and Services 20
6.2 Pricing 20
6.3 Promotion 20
6.4 Place 20
6.5 Segmentation, Targeting, Positioning 21
6.6 Competitive Analysis 22
6.6.1 Competition 22
6.6.2 Responding to Competitors 23
6.6.3 Sustainable Competitive Advantage 23
6.7 Projections of Revenues and Marketing Expenses 23
6.8 Marketing Strategy 23
6.8.1 Yum! Value Network 24
6.9 Marketing Budget 25
6.10 Summary of Marketing Plan 26
7.0 Financial Plan 26
7.1 Projected Financial Statements 26
7.2 Cash Flow Analysis 26
7.3 Risk Analysis 27
7.3.1 Food safety and food-borne illness 27
7.3.2 Cost Changes 27
7.3.3 Shortages and Availability 28
7.3.4 Financing 28
7.3.5 Economic Conditions 29
7.3.6 Changes in governmental regulations 29
7.3.7 Competitive Industry 29
7.3.8 Franchisee/Franchisor Disputes 30
7.4 Financing Plans 30
7.5 Feasibility of the Plan 30
8.0 Summary of the Business Plan 31
9.0 References 32
10.0 Appendices 33
Appendix A: Organizational Chart 33
Appendix B: Job Descriptions 34
Appendix C: S.W.O.T. Analysis 36
Appendix D: Marketing Revenue Projections 37
Appendix E: 5 Year Projected Financial Statements 38
Appendix F: Best and Worst Case Scenario Analysis 39
Appendix G: Sensitivity Analysis 40
Appendix H: Net-Worth Statements 41
Appendix I: Distribution of Expenses 44
Appendix J: Break Even Analysis 45
1.0 Executive Summary
Taco Bell is one of five restaurant franchises under Yum! Brands, which is the largest restaurant company in the world. Taco Bell is the most profitable Quick Service Restaurant QSR brand in Yum! Inc., beating out the other three big players: KFC, Pizza Hut, and Long John Silvers.
Our investing team finds Saskatoon to best suit the opening of a new Taco Bell. Saskatoon has a high rate of growth in GDP and population along with the lowest unemployment rates in Canada. The Saskatoon Taco Bell will be located in the Stonebridge Market Center, on Stonebridge Boulevard – a fast growing newly developing neighbourhood of Saskatoon.
The Yum! Brand Inc. has many training and university courses which are mandatory before opening or managing a franchise. This training will prepare our managerial staff in marketing, HR, operations
and other important aspects of the QSR industry.
Taco Bell’s operational activities fall under the regulations and supply chain management of Yum! Brand International, where ready to prepare foods are delivered on a request basis. Inputs will be procured directly through Yum! Restaurant International’s Unified Purchasing Group of Canada (UPGC), prepared fresh on site, and served to customers in either cafeteria style seating or via drive thru.
Taco Bell’s marketing plan is directly linked to YRI Brand Inc, where 4.5% of gross sales are reintegrated into local and national marketing campaigns. Out of the 4.5%, 1.5% is used for local advertising and
promotion. Our marketing campaign is centralized around the opportunity to be the first Taco Bell in Saskatchewan. We will create awareness by a promotional campaign which focuses on Taco Bell’s exclusive offering to Saskatoon and surrounding residents. Taco Bell Saskatoon thinks outside the bun!
Our Taco Bell will be privately owned by three investors: Michael Milo, Dave Johnson and Aaron Forer; each contributing to a total investment of $1.35 Million. Another additional $1050 000 is required for initial start-up and building costs, details to be discussed with Bank of Montreal on repayment over 10 years.
2.0 Introduction
Our team of investors, Michael Milo, Chantel Laventure, Dave Johnson, and Aaron Forer are looking to start up the first Taco Bell in Saskatchewan in Saskatoon. Saskatoon is one of the fastest growing cities in Canada with a steady growth in gross domestic product even through the 2008/2009 recession. With a population estimated at 257,300, Saskatoon is a great location to start a new Taco Bell franchise. The growth potential of Saskatoon is a great opportunity and launching point for our team. We expect to the grand opening of our Taco Bell franchise to be May 2011. This takes into account building time of three months and the proper training and employment of staff to be finished December 1, 2010. The location will be on Stonebridge Boulevard in the Stonebridge Market Center.
Not only is Taco Bell the most successful franchise in the Yum! Brand restaurant chain, but also is the number one franchise in the QSR industry in the United States. We plan to continue this trend with in Canada. Out of the 5,142 locations world-wide only 1% fails or closes due to bankruptcy. Yum! Brands have recently gone global into Chinese markets and internationally only show a 2% closure rate.[1] We believe this is a great track record and gives our investors an exceptional reason to invest.
Leading our team is Chantel Laventure, who has a MBA from the University of Saskatchewan. She will manage the Taco Bell location in Saskatoon and provide all training to employees. Michael Milo and Dave Johnson are the primary shareholders who will control 75% of the shares. Both of these investors have substantial wealth from the oil industry in Alberta. Michael brings a strong background in marketing and Dave specializes in Operational Management. The other limited partner is Aaron Forer who has contributed
the other 25% of financing. Total equity collected will be 56% of our financing, equalling 1.35 Million. The remaining $1050 000 will be financed through a commercial loan from the Bank of Montreal to cover initial start-up costs.
2.1 Mission Statement
We take pride in making the best Mexican style fast food providing fast, friendly and accurate service.
We are the employer of choice offering team members opportunities for growth, advancement, and rewarding careers in a fun, safe working environment. We are accountable for profitability in everything we do, providing our shareholders with value growth.
2.2 Our Market
After performing market research, we have concluded that there are a number of reasons to go ahead with this project in Saskatoon, including:
§ Taco Bell Brand: The Taco Bell Brand is distinct and attracts many consumers throughout the U.S. and Canada.
§ First Mover: As the Saskatoon Taco Bell will be the only Taco Bell in Saskatchewan, we will be a first mover by opening a restaurant under the largest restaurant chain in the world – Yum! Brands Inc.
§ Market Size and Characteristics: Saskatoon is a booming city with above average rates of employment and growth.
2.3 Core Values (P.E.A.R.L.S.)
The Taco Bell brands all follow the same core values in their daily operations. The Saskatoon Taco Bell franchise will also follow these values to stay true to the Taco Bell brand, and to ensure utmost employee and customer satisfaction:
Have a PASSION for excellence in everything we do.
EXECUTE with positive energy and urgency.
Be individually and collectively ACCOUNTABLE for growth in people, customer satisfaction and profitability.
Find reasons to RECOGNIZE the achievement of others and have fun doing it.
LISTEN and more importantly, respond to the voice of the customer.
Think SAFETY first.
2.4 Goals and Objectives
· To elevate the Saskatoon Taco Bell to ‘Best in Class’ among Mexican Quick Serve Restaurants in Saskatoon.
· To Pave the Way for future Taco Bell locations in Saskatoon and Saskatchewan.
· To become a magnet location that customers seek out when choosing a QSR destination.
2.4.1 Short Term: (6 months)
We will:
1. Use radio, word of mouth, and print advertising (radio and print costs to be covered by Yum! Brands Inc.) to make Saskatoon aware that our business is up and running, and encourage consumers to visit.
2. Maintain a steady cash flow by being consistently aware of purchasing and sales decisions, preparing cash flow projections for the short and long terms, and preparing for shortfalls with back up methods such as lines of credit and credit cards.[2]
3. Fully recover costs associated with start-up, with break even by the end of the first year of operations.
4. Ensure smooth daily operations in the critical opening months, while impressions of our business are being formed, using extensive pre-opening staff training and constant floor management.
2.4.2 Medium: (18 months)
We will:
1. Develop and maintain a favourable reputation within our target market and the Saskatoon community by supporting local teams and sports groups through sponsorship initiatives (in line with YRI community development initiatives).
2. Continue to penetrate our target market through promotional campaigns (flyers and coupon /dollar off offers) in order to expand our clientele.
4. Develop working relationships with local businesses through networking and developing contacts. (i.e.: Saskatoon Chamber of Commerce, Canadian Franchise Association)
2.4.3 Long-Term: (5 years+)
We will:
1. Research and determine the feasibility of another Taco Bell location in Saskatoon, possibly in a mall vendor location or another stand alone store.
2. Consider franchise opportunities in other markets (other cities in Saskatchewan) using market research and investor interest.
2.5 Philosophy
The Saskatoon Taco Bell will follow the Yum! Brand Inc. corporate philosophy:
‘Our corporate values – what we call our How We Win Together Principles – are built around a "People Capability First" philosophy and lay the groundwork for the way we team together every day’.[3]
Saskatoon Taco Bell and its employees will strive towards excellence in implementing the corporate philosophy when dealing with customers, suppliers, employees, the Saskatoon community, and our investors. We hope to establish our firm as a responsible and respected member of the community as a whole.
Customers:
We are committed to:
1. Providing a fun and exciting atmosphere for the customer to enjoy quick, convenient, and delicious food.
2. Providing excellent customer service, resetting the bar for other quick service restaurant establishments by making customers our first priority.
Suppliers:
We are committed to:
1. Developing positive, mutually beneficial relationships with all of our supplying companies to allow us both to succeed.
2. Partnering and marketing with local and related businesses in order to provide the maximum exposure in the market for both businesses.
Staff:
We are committed to:
1. Providing flexible employment for young people while accommodating education through detailed scheduling and being responsive to staff requests.
2. Allowing growth within the organization through practical experience and education when applicable from Yum! University. Suggestions from staff will be considered in company decision making, as they have the most contact with the customer.
Community:
We are committed to:
1. Supporting the community through sponsorships, support for local groups and teams.
Shareholders and Other Financers:
We are committed to:
1. Becoming responsible borrowers, using discretion and responsible decision making to maximize shareholder returns.
2. Devoting ourselves to providing a return on shareholders investment within six years.
3. Keeping lenders involved and informed about the status of the business through quarterly shareholders meetings and planning sessions.
3.0 Industry Overview
Taco Bell is one of five restaurant franchises under Yum! Brands, which is the largest restaurant company in the world. The other four franchises are big names such as KFC, Pizza Hut, Long John Silver’s and A&W. Taco Bell is the second most profitable Quick Service Restaurant QSR brand in the U.S., with a 54% share of the Mexican QSR category.
Taco Bell Corporation is based out of Irvine, California, and is the leading Mexican-style QSR chain serving tacos, burritos, signature quesadillas, Border Bowls, nachos and other specialty items. Taco Bell serves more than 35 million consumers each week in approximately 5,600 restaurants in the U.S. Since its founding by Glen Bell in 1962, the company's countless innovations have changed the very nature of the QSR industry. "Think Outside the Bun®" is more than a company tagline; it's a way of life at Taco Bell.
4.0 Operations Plan
Saskatoon Taco Bell will operate under Yum! Restaurants International (YRI) Taco Bell franchise to provide Saskatoon with a low cost quick service Mexican dining experience. Restaurants will be strategically situated in high traffic and high population areas in order to maximize customer exposure and convenience.
Inputs will be procured directly through YRIs’ Unified Purchasing Group of Canada (UPGC), prepared fresh on site, and served to customers in either cafeteria style seating or via drive thru.
Through unparalleled standards of excellence and an ongoing commitment to customer satisfaction Saskatoon Taco Bell will become a leader in the cities quick-serve food industry.
4.1 Organizational Structure
Saskatoon Taco Bell will be a privately held corporation with the three shareholders serving on the board of directors. The board will serve as guidance to the business to direct it in achieving its mission and vision.
Chantel Laventure, a manager with quick serve restaurant management experience will run the daily operations of the business and manage the first restaurant. An assistant manager will be hired to oversee operations when she is not present. The other staff will be part time cooks, and part time till workers. A night cleaner will also be hired to do an overall clean once the store is closed. See Appendix A for an Organizational Structure.