F&L RECAP AUGUST 2022

August was a challenging month due to the summer season, which caused a low tenant population. Amongst other challenges, most events consisted of up to 50 guests since most companies had limitations on expenses for F&B minimums and room rentals. This created a lower revenue threshold for the restaurant since the most companies are now utilizing in-house operations.

Although August brought some challenges, Foundry & Lux made efforts to keep tenants engaged by expanding the farmer's market, hosting a tenant cooking & cocktail class, and continuously refreshing menu items. The slow season has allowed Foundry & Lux to prepare for the upcoming holiday season.

Passiflora

ONSITE CATERING & EVENTS

OFFSITE CATERING

FARMER’S MARKET

This month's farmer's market was a huge success! In addition to Capay Organics and Sonoma Feed, Teautulia Organic Teas participated to showcase the delicious teas that we have inhouse.

TENANT COOKING CLASS

The tenant cooking and cocktail class had a great turnout! We utilized Sonoma FEED food bins to create recipes showcasing the ingredients' versatility in each bin. Chef kicked off the class by making Pomodoro estivo, and our bar manager concluded the class by demonstrating how the elements could also be used in a classic bloody mary. Our tenants were able to enjoy a sample of each! The class had maximum participation at a total of 30 tenants!

Last Month’s Assumptions: Roblox will continue to get catering from F&L 3x a week. Events will begin to pick up in August.

Sales: Sales for the four week period totaled ~$251k with a weekly average of ~$62.8k. Additionally, F&L has been producing catering two to three days every week to ROBLOX, totaling an estimated $10k to weekly revenue. ROBLOX has reduced services due to an encouraged hybrid work model. Tenant population at the Cove reduced to occupancy around Labor Day, F&L abbreviated services on Friday before the holiday and closed on Monday (Labor Day). Additionally, budget reflected an increase to events and catering that got postponed due to lower population of the Cove. Week four produced half of the revenue ~$125k for the period, thanks to ROBLOX week.

COGS: Cost of goods is at 25.6% against 24.3% from the last period. Cost of goods continues to be a moving target due to distribution and vendor challenges. The team has been actively targeting to reduce cost of goods to make up for the rising cost of labor.

Labor: Management monitored labor closely and made as many reductions as possible without impacting service levels. August labor is at 66% against revenue, 7.4% less than budgeted. There have been several resignations and employees out on leave, which has increased the need for temporary labor. Temp labor from an agency has become the industry ‘norm’ for food services and typically have a higher hourly rate to account for fees and the absence of taxes and benefits.

Other Expenses: Total other expenses were at ~27.1%. Expenses included services for the culinary garden, smallware replacements, computer expenses, catering vehicle expenses, insurance, bank and armored car services, computer and POS costs, safety equipment, and a $20k food truck event at ROBLOX. Other expenses were higher than forecasted due to the $25k food truck event at ROBLOX.

Total Losses: Total losses were ~$46k against budgeted losses of ~$46k. YTD total losses are ~$241.7k against budgeted losses of ~$215.7k, Q4 is forecasted to beat budgeted losses and forecasting to finish the year at ~

ASSUMPTIONS FOR FOUNDRY & LUX:

SEPTEMBER

Five-week period and business is expected to ramp up. Tenant population at the Cove will reduce occupancy around Labor Day, F&L will abbreviate services on Friday before the holiday and will be closed on Monday (Labor Day) to minimize operating costs.

OCTOBER

Four-week period and beginning of Q4. Business is expected to be busy with a large planned tenant event in W4.

NOVEMBER- Four-week period, F&L will be closed 1 day to execute a client event. Business is expected to be busy but are forecasting to be extremely slow W3 & W4 due to holiday season, the operation is planning to run abbreviated services from 11/21 to 11/28 to mitigate losses.

Chandlery continues to expand its offerings with extended hours for Thursday happy hours, new made-to-order hot lunch items, and increasingly robust grab-and-go offerings. Additionally, the retail snacks and impulse purchase items in the café have significantly expanded. Staffing has increased to accommodate the tenant's needs and build infrastructure for the expanding services. The hot food menu and happy hour have increased revenue this month while the population at the Shore continues to grow. Bon Appetit is working closely with CBRE to begin hosting tenant events to strengthen tenant engagement.

CHANDLERY

Sales: Sales for the four-week period totaled ~$30.1k with a weekly average of ~$7.5k.

COGS: Cost of goods is at 39.1% against budgeted 25.5%. Cost of goods continues to be a moving target due to distribution challenges. Additionally, the walk-in that houses all food product broke down twice, resulting in heavy losses. ~$3k in product had to be discarded in August.

Labor: Labor is high due to the OT required to recover the product that was lost due to the walk in. Currently, Chandlery has 1 and a half salaried managers dedicated to the unit to minimize cost. Because this unit is lacking salaried labor, management has added hourly labor to help move the program forward.

Other Expenses: Total other expenses were at 43.9% against revenue. Other expenses include POS equipment, software, licenses, insurance, culinary garden maintenance, and smallwares.

Total Losses: Total losses were ~$26.7k against budgeted losses of ~$22.5k. Management will continue to control losses while providing a substantial amenity to the tenants. Total losses YTD is at ~$162.8k against budgeted losses of ~$164.8k.

ASSUMPTIONS FOR CHANDLERY:

SEPTEMBER Five-week period and business is expected to ramp up. Tenant population at the Shore will reduce occupancy around Labor Day, Chandlery will be closed on Labor Day, resulting is a 4 day work week, to minimize operating costs.

OCTOBER Four-week period and beginning of Q4. Business is expected to be busy with several catering events.

NOVEMBER- Four-week period. Business is expected to be busy but are forecasting to be slower W3 & W4 due to holiday season, the operation is planning to run abbreviated services from 11/21 to 11/28 to mitigate losses.