Restaurant Business Plan

BARBECUE LLC BUSINESS PLAN

EXECUTIVE SUMMARY

An overview of the business to be established and the milestones to be achieved.

EXECUTIVE SUMMARY

COMPANY PROFILE

XXXX is going to purchase an already running restaurant in Prescott, AZ named XXXX BBQ. The restaurant has been operating as a full-service BBQ since its launch in 2019, offering food options including smoked meats, homemade sides, and desserts. The acquirer’s goal is to make it a quick-service and take the restaurant to the next level by offering both quality and quantity while satisfying people’s demand for amazing delicacies sold at affordable rates. The overall aim of the acquirer is to keep opening new units at new locations and expand the business' reach. The company will thrive on service and quality.

BUSINESS MODEL

At present. the restaurant offers dine-in, delivery, takeout, and catering services to customers in Prescott, AZ. After the acquisition, the acquirer will add additional food options to the catering menu and launch a food truck allowing people to enjoy their meals on wheels. The products offered by the company will include three broad categories; food, snacks, and beverages. The company will source inputs from top-quality ingredients suppliers in Prescott to prepare fresh and tasty foods. The company aims to grow the relationships with these suppliers for the long term, ensuring continuous delivery of ingredients without any disruption. The ingredients will be sourced locally to provide fresh food to its customers. Cash/gift cards, debit cards, and major credit cards, including Visa and MasterCard, will be accepted as payment options at the restaurant, its website, and the food truck. Considering the buying trends among food lovers, the acquirer has decided to adopt a two-way business model in which consumers will be able to order and enjoy their food at the restaurant and, place their orders online through its website or third-party online food ordering platforms. The food ordered using the platform will be delivered to any location of their choice. This way, the company will target both indoor and outdoor diners.

TARGET CUSTOMERS

In terms of geography, XXXX BBQ will target customers in and around Prescott, AZ. As the restaurant is perfectly located between Highway 89 & 69 and is close to the colleges & other crowded market areas, it will be in a better position to serve customers from surrounding areas and people on their journey through the Highway. In terms of demographics, the company will target customers consisting of families and individuals. The primary target customers of the company will include people going on dine-out with their families, friends, or relatives, people making online food orders, people searching for mobile food options, local businesses, college students, and travelers.

$1.2 Million NET PRESENT VALUE

(Based on projected cash flow for 8 years)

18% INTERNAL RATE OF RETURN. (Based on projected cash flow for 8 years)

36% REVENUE CAGR

11% AVERAGE NET PROFIT

INVESTMENT REQUIRED

The acquirer will invest equity funds in the business and will satisfy additional funding requirements from the funds generated through a bank loan. This document outlines the strategies that XXXX BBQ will use to maximize its profits and lower its operating expenses. These strategies will ultimately increase ROI and benefit the stakeholders associated with the company. The acquirer is looking to raise an amount of $1.5 million from the bank to purchase the restaurant and make major improvements. An amount of $400K will be paid to the restaurant owner as the purchase price of the business. In addition to the purchase price of the restaurant, the acquirer will also purchase the real estate for $875K, and a mobile smoker vehicle for $100K. Balance funds to the tune of $125K will be kept as buffer cash for operating expenses.

The acquirer himself will invest an amount of $175K in the business, out of which $150K will be used to make a down payment for the loan, and the balance funds to the tune of $25K will be utilized to purchase furniture, fixtures, and other equipment for the restaurant.

BUSINESS MODEL

Purchase an already running BBQ restaurant that allows people enjoy their meal at the restaurant, or place online orders from their convenient surroundings while earning additional revenue through catering services and the food truck.

BUSINESS MODEL – THE ENTITY

Americans have been in love with barbecue, or BBQ as it is more commonly known now, since the 19th century. It is not surprising, given how deeply rooted BBQ is in American history, that the traditional southern cuisine is overwhelmingly admired by a wide majority of the population. The United States is home to region-specific barbecue flavors. The regional barbecue styles across the U.S. draw consumers back to their hometown roots. QSR magazine reports that Barbecue has a wide appeal with over 95% of Americans saying that they like barbecue, and nearly one-third saying that they eat barbecue or barbecue-sauced foods in any given week. Meat or steaks is the most popular food to barbecue amongst U.S. consumers with 88% of them consuming either one of these or both during barbecues.

According to Innova Market Insights, global barbecue-flavored food and beverage launches grew 19% from 2015 to 2019. Considering the growing demand among Americans and the lifting of COVID restrictions, it is the right time to enter the BBQ restaurant market and penetrate a great market share.

HISTORY

XXXX BBQ LLC was originally incorporated by the founder Lucy Dee’s on 29th July 2019, and the operations were launched in August 2019. Since then, it has been operating as a full-service restaurant in Prescott, AZ. The restaurant was closed for 5 weeks from March to April 2020 due to COVID-19 restrictions, after which it resumed operations. The business was then sold by the founder to the second owner on 29th July 2021. Now the third acquirer, XXXX is going to purchase the restaurant from its second owner. XXXX will use his state-ofthe-art sales & marketing skills and utilize the experience gained through operating two restaurant units in Prescott, AZ to position XXXX Barbecue among the top restaurants in the target area.

HISTORICAL SALES

2019 (September to December)

2020 (January to December)

$275,962

$750,507

2021 (January to April and August to December) $657,554

2022 (January to February) $139,323

RESTAURANT OVERVIEW

XXXX Barbecue is a BBQ restaurant serving customers around Prescott and Prescott Valley areas. The restaurant offers quick-serve smoked meats (BBQ Angus beef, pork, and hormone & antibiotic-free chicken), homemade sides, and desserts. Homemade sides and desserts are made daily to serve fresh food to the customers. The restaurant serves its clients during the hours of 11 AM to 7 PM from Monday to Saturday and remains closed on Sundays. The restaurant has the capacity for 84 seats, including a banquet-style room for larger parties. The building is fully remodeled from the ground up to provide it with a modern and elegant look.

After being acquired by the acquirer, XXXX will purchase the additional furniture or equipment required to replace the outdated ones & give the space a modern look, and the restaurant will function as a quick-service restaurant with additions to the portfolio of offerings. In addition to serving clients in the restaurant, the company will also provide catering services at parties or functions and will also purchase a food truck to provide mobile food services to people.

BUSINESS MODEL – THE ENTITY

RESTAURANT OWNERSHIP

XXXX BBQ LLC will be owned and managed by the acquirer, XXXX who holds a100% share in the company. He will be managing the restaurant in his capacity as the chief executive officer. He will be responsible for the overall working and management of the restaurant. He has over 14 years of experience in sales & marketing, business management, and the finance industry, and he will use his expertise and knowledge base to grow the restaurant. Moreover, having already managed two restaurants in Prescott, AZ has he’s already equipped him with the necessary skills required to gain visibility in the food industry. XXXX is a passionate entrepreneur looking to develop quick-service restaurant units in the United States. He aims to capture a significant share in the quick-service restaurants industry by providing exceptional customer service and value-for-money food options. He will be responsible for managing the suppliers’ relationships, planning the business expansion, and managing the overall working of the restaurant. He will hire a team of experienced managers, cooks, support staff, and cashiers, who will assist him in managing the day-to-day operations and bringing new business to the restaurant. Continual training initiatives will also be introduced to keep the staff updated with the new standards of customer service and the latest recipes to be added to the menu offerings to enable them to serve the customers better.

OPERATIONAL STRATEGIES

The company will be perfectly positioned to capture a significant share of the multi-billion-dollar barbecue restaurant industry through the acquirer’s extensive network and experienced team. The company is committed to expanding with highly experienced restaurant staff, online marketing initiatives, new technology, and continual research and development initiatives to keep on innovating new cuisines and recipes. In addition to these efforts, the company will focus on the following initiatives to drive sales and capture a significant share in the barbecue restaurant market:

▪ XXXX BBQ will provide high-quality and hygienic food items to its customers to achieve higher customer satisfaction.

▪ The décor and theme of the restaurant will be centered on a modern and open kitchen that will appeal to the eyes of dine-in customers.

▪ Serving quality and fresh food in a friendly environment with some additional healthy twists will attract customers and help the restaurant achieve a significant share in the food industry in the U.S.

▪ The company will attractively design its food truck so that people get encouraged to try the food.

BUSINESS MODEL – THE ENTITY

COMPANY NAME: XXXX Barbecue LLC

WEBSITE:

COMPANY INCORPORATION DATE:

ACQUIRER: XXXX

INDUSTRY: Barbecue Restaurant Industry

PRODUCTS OFFERED: Smoked meats, homemade sides, and desserts

FOCUS: To understand the changing needs and preferences of the customers and constantly improve their experience through innovation in products and services.

BUSINESS LOCATION:

BUSINESS LOCATION USP: Being located on the highway will allow the restaurant to cater to travelers, commuters, college students, and people visiting nearby markets.

GEOGRAPHICAL FOCUS: The company will target barbecue food lovers in Prescott with an initial focus on people commuting through Highway 89 and 69. After establishing a brand presence in its home market, the company plans to open an additional chain of barbecue restaurants in the remaining parts of Arizona.

BANK LOAN: $1.5 Million

ACQUIRER’S INVESTMENT: $175K

TARGET CUSTOMERS: People going on dine-out with their families, friends, or relatives, people making online food orders, people searching for mobile food options, local businesses, college students, and travelers.

COMPETITORS: Colt Grill, Uncle Bud’s Place, The Squealing Hog, and Lucky’s BBQ

CORE STRENGTH: Experienced acquirer, highest-quality and hormone & antibiotic-free meats, implementation of proven operational strategies, and focus on excellent customer service.

OVERALL OBJECTIVE: To serve happiness to the customers through delicious food and an extraordinary restaurant experience, while working for the welfare and good of employees, the community, and other stakeholders associated with the business.

BUSINESS MODEL – RESTAURANT OFFERINGS

BY THE POUND

SANDWICHES

FOOD PRODUCTS

OFFERED BY THE RESTAURANT

SIDES

Sliced Beef Brisket, Pulled Pork, Chicken Breast, Sausage, and ST. Louis Pork Ribs

Sandwich with Side, Sandwich Only, Sliced Chicken Breast, Pulled Pork, sausage, and Sliced or Chopped Brisket

Mac N Cheese, Coleslaw, Ranch Beans, Potato Salad, BBQ Beans, Tots, Cornbread Mini Muffins with or without Honey Butter, and Kettle Chips

PICNIC MEAL

PLATES

Choice of Two Meats (1 LB Each), 3 Medium Sides, 18 Slider Buns, or 1 Doz Regular Buns, and 1 Gallon Iced Tea

One Meat Choice, Two Meat Choice, Brisket, and Substitute Half Rack Ribs (Plates are served with cornbread muffin and choice of two sides)

BEVERAGES

KIDS MEAL

Coffee, Fountain Sodas, Iced Teas, Domestic Beer, Craft Beer, Craft Soda, and Flavored Waters

Choice of One Meat Slider, Small Fountain Beverage, and Chocolate Chip Cookie.

OPERATE RESTAURANT

XXXX BBQ will serve high-quality and tasty food at its restaurant for dine-in customers.

TAKE OUT OPTION

The company will create its own website to allow its customers place online orders. It will also deliver the food through a variety of third-party platforms.

FOOD TRUCK

The company will purchase a food truck to serve food on wheels to customers in busy market areas.

CATERING

The company will also provide catering services to people organizing parties or functions or businesses organizing business events.

BUSINESS MODEL – BUSINESS STRATEGIES

LOCAL COMMUNITY INVOLVEMENT

CUSTOMER FEEDBACK

PRODUCTIVITY

IMPROVEMENT

The management team at the company will reach out to the local community and businesses to promote the restaurant and its online food ordering platform. The team will also dedicate more time to promoting customer relations with in-store marketing.

The restaurant will provide comfortable and convenient platforms for its customers to voice their feedback. Such platforms or avenues will include social media platforms like website, Facebook, Twitter, Yelp, Grub Hub, and other related avenues. The restaurant will use the customer feedback received through these channels to improve its product offerings and provide a better customer experience by training its staff members.

The management team will simplify all the daily tasks, including morning preparations, clean-up, and opening and closing tasks so that the staff can perform their duties in a timely and efficient manner, which will make them more productive. Making optimum utilization of resources will be another strategy of the acquirer, which will ultimately help increase productivity, decrease cost, and make delivery prompt.

TEAM MEETINGS

STAFF RETENTION

Team meetings will be organized at regular intervals to promote unity among staff members, brainstorm ideas, introduce changes to product offerings and procedures, discuss customer feedback, and resolve customer and other business-related issues.

Staff retention is very critical for the barbecue restaurant industry. To maintain a high staff retention rate, the acquirer is committed to offering attractive wages, and incentives to its staff members (above the industry average), so that they feel connected to and cared for at their jobs. In addition to the standard wage and incentive system, productive employees will be recognized and rewarded with bonuses and awards to keep them motivated to perform to the best of their abilities.

BUSINESS MODEL – MISSION AND VISION

MISSION

To delight and nourish the customers with healthy, quality, fresh, and delicious food and excellent service by sourcing quality ingredients locally, and continually incorporating innovative food items into the menu.

VISION

To be known as the top quick-service barbecue restaurant in the United States by serving happiness to the customers through delicious, quality meals, extraordinary restaurant experience, teamwork, honesty, community involvement, and dedication to improving customer’s food experience.

BUSINESS MODEL – GOALS

SHORT-TERM

▪ To make additions to the portfolio of products and services by increasing catering options and purchasing a smoker trailer.

▪ To purchase a food truck to serve food on wheels.

▪ To offer a unique experience to customers visiting the restaurants and ordering food through the website.

▪ To sell high-quality food at a great value, with exceptional customer service, and in beautiful environments.

▪ Establish loyalty programs that will allow the customers to build up points with regular visits and use those points for free meals and drinks.

▪ To consider and resolve each customer’s complaints and concerns.

▪ To focus on low food waste, find affordable ingredients vendors, and maximize resources.

▪ To adopt consistent quality food preparation standards.

▪ To reduce the operational cost by making optimum utilization of resources.

MEDIUM-TERM

▪ To continue innovating with new dishes or recipes to provide a unique, creative, and entertaining menu that distinguishes the restaurant from its competition.

▪ To review and measure the company’s growth and performance periodically, aligning business strategies with existing market trends.

▪ To explore new locations in the United States to expand the business reach.

▪ To maintain continuous revenue flow during all hours of operation.

▪ To study changing customer tastes and behaviors and modify the dishes/recipes accordingly.

▪ To build organizational capacity and expertise to support the expansion and ensure the highest-quality delivery in all areas of work.

▪ To update the website features to facilitate the customer to place online orders conveniently.

▪ To achieve a high degree of profitability during the period under projections.

▪ To maintain an open, accountable, and transparent culture across all levels in the company.

LONG-TERM

▪ To place XXXX BBQ among the most successful quickservice restaurants in the United States.

▪ To continuously seek new opportunities and frame multiple strategies to capitalize on the same.

▪ To position itself as the premier quick-service barbeque restaurant throughout the United States.

▪ To achieve a higher return on equity than peers operating in the restaurant industry and reach sustainable and profitable growth.

▪ To maintain high level of exceptional customer service by training the restaurant staff.

▪ To promote the company’s culture, good values, and business philosophy.

▪ To continually explore new ideas to make XXXX BBQ a preferred choice of people in the United States.

▪ To identify innovative ways of raising revenue by leveraging its existing assets.

▪ To regularly spend on research and development activities to bring technological innovations in the restaurant to tackle tech-savvy customers.

BUSINESS MODEL – CRITICAL SUCCESS FACTORS

EXPERIENCED ACQUIRER

The acquirer possesses unique experience in growing businesses from the ground up, which is evident from the success of current restaurants under his ownership that are performing really well in terms of revenue and visibility. The acquirer is also the past Chairman of the Board for the Prescott Chamber of Commerce and has developed several key strategic relationships in the community. The experience gained throughout his journey will help him manage the restaurant operations effectively while providing training to the team members. He will leverage his expertise, strong knowledge, and personal networks to create a successful barbecue restaurant business and establish long-term customer and vendor relationships. Effective management of the business will further present opportunities for business expansion.

FOCUS ON PROVIDING COMPLETE SERVICE

While other restaurants are compromising on either quality or quantity of food, XXXX BBQ will be the only company focusing on providing sufficient quantity and topquality food items at value-for-money pricing. Customers will receive full value for their money and will be able to enjoy their food in a comfortable restaurant environment. This will allow the company to create a loyal customer base in the targeted region and grow the referral business.

ALREADY ESTABLISHED BUSINESS

XXXX BBQ is not a new player in the restaurant market. It has already established a brand presence among people in Prescott, AZ by offering high-quality food and exceptional customer service, which will help generate referral business. This will allow the acquirer to generate revenue during the initial phase of restaurant acquisition with a minimum marketing cost.

STRONG SUPPLIER RELATIONSHIPS

The company will enter into long-term agreements with the ingredients’ suppliers and third-party distribution partners to ensure that customers receive high-quality food items at a reasonable price. The company’s effective distribution channels will ensure faster delivery with zero wastage, building a brand name in the market. The acquirer will review the agreements with suppliers and third-party distribution partners at regular intervals to check the viability of continuing with them in the future.

BUSINESS MODEL – CRITICAL SUCCESS FACTORS

EXTENSIVE MARKETING STRATEGIES

XXXX BBQ will leverage social media and other digital marketing strategies as marketing tools to target its potential customer base. It will also invest in becoming a thought leader in its segment, allowing it to be discovered by prospective customers (individual and business). The company will run various contests through its social media and other digital channels and distribute coupons to the winners to encourage them to visit the restaurant. The acquirer has also gained unique marketing skill sets that will enable the restaurant to attract new customers at a lower cost. The primary marketing initiatives of the restaurant will include social media, community engagement, gift cards, and great food.

CUSTOMER SERVICE

Overall customer satisfaction is crucial to the business’s continued expansion. A team of dedicated restaurant staff will assist the company in building a loyal customer base that will make the business successful. The company will establish a feedback system through various online and offline channels to take corrective actions as soon as possible by improving the overall product quality and customer service. Customer feedback will also be considered while innovating new dishes to the menu or offerings.

PROFESSIONAL STAFF

The company will employ a well-rounded and professional team with great character and experience in the restaurant industry. The staff will show care, compassion, and understanding to the restaurant customers, which will help them to remain competitive with other players in the market. The professionals will consistently provide exceptional customer service, always be available and responsive to their requirements, and maintain the company’s integrity by staying true to the morals and values of XXXX BBQ.

LOCATION

XXXX Barbecue is centrally located between Highway 89 and Highway 69 and is near the college and downtown Prescott, allowing it to serve customers better. The restaurant has a great frontage on a very busy road. Having the restaurant in a central location with high travelers footfall will allow the company to attract many customers to the facilities.

BUSINESS MODEL – XXXX BBQ LLC

KEY PARTNERS

▪ Financial institutions

▪ Food ingredients suppliers (U.S. Foods and Sysco)

▪ Beverages Suppliers (Coca-Cola)

▪ Kitchen equipment suppliers

▪ Community support

▪ Third-party food delivery partners

▪ Food bloggers and influencers

▪ Security and insurance companies

▪ Media

KEY ACTIVITIES

▪ Manage daily restaurant operations

▪ Advertising and promotion

▪ Logistic network

▪ Operations management

▪ Cooking and customer service

▪ Quality control

▪ Branding

▪ Procurement

▪ Pricing

▪ Negotiations with ingredients suppliers

▪ Manage inventory and orders

▪ Online orders management

▪ Manage contract labor for catering services

KEY RESOURCES

▪ Cuisine dishes

▪ Experienced acquirer and network

▪ User-friendly website

▪ Delivery partners

▪ Secret recipes

▪ Experienced team of chefs and other staff members

▪ Menu variations

COST STRUCTURE

▪ Cost of ingredients

▪ Cooking staff salary

▪ Marketing expenditure

▪ Other operating expenses

VALUE PROPOSITION

▪ Focus on quality and quantity

▪ Authentic and quality barbecue food options

▪ Multiple payment options

▪ Provide the warm and friendly service environment normally expected from a quick-service restaurant

▪ Ingredient innovation

▪ Distribution innovation

▪ Multiple dishes under one roof

▪ Customer-centric approach

▪ Fair pricing strategy

▪ Convenient location

▪ Comfortable seating and engaging environment

▪ Speed of service

▪ Doorstep delivery in any weather

▪ Optimum utilization of available resources

▪ Be proactive and quickly learn from mistakes

▪ Highly collaborative approach coupled with compassion and an open-minded attitude

CUSTOMER RELATIONSHIPS

▪ Automation

▪ Community involvement

▪ Referral discounts

▪ Word-of-mouth

▪ Customer feedback and rating

▪ Reputation

▪ Personal engagement

▪ Quality assurance

▪ Telephone support

▪ Excellent customer service

CHANNELS

Sales Channels:

▪ Restaurant location

▪ Company website

▪ Curbside Pick up

▪ Food Truck

▪ Delivery by Grub-Hub or local

Delivery driver

Ad Channels:

▪ Billboards and signage

▪ Social media

▪ Promotions

▪ Word of mouth

▪ Food events and trade shows

POTENTIAL REVENUE STREAMS

▪ Revenue from Dine-in and Online Orders

▪ Revenue from Catering

▪ Revenue from Food Truck

CUSTOMER SEGMENTS

Target Geography

▪ Prescott, AZ

Target Demographics

▪ Dine-in Customers (families, teenagers, and men & women of all ages)

▪ People ordering food online

▪ People looking for mobile food options (food truck)

▪ Local businesses

▪ Prescott and Yavapai College students

▪ Vacationers or travelers

BUSINESS MODEL – RISK AND MITIGATION

RISK MITIGATION STRATEGY

FIRE HAZARDS

▪ Clean grease from hoods daily and ensure that they are professionally serviced to the manufacturers’ specifications.

▪ Ensure all kitchen rags are kept in a fireproof metal container daily.

▪ Check fire extinguishers regularly and make sure they are fully charged.

▪ Install an automatic fire suppression system in the restaurant’s kitchen.

▪ Follow the manufacturer’s instructions that come with the kitchen equipment to avoid fire incidents.

▪ Regularly check the fuel sources in the kitchen.

▪ Hire professionals to clean the hood(s) and duct(s) at least twice a year.

▪ Keep a detailed log of when systems have been cleaned and by whom.

RESTAURANT FACILITIES AND EQUIPMENT

STAFF

▪ Purchase superior quality kitchen equipment and subject them to regular maintenance to avoid any accidents.

▪ Keep cut-resistant gloves near knife storage and prep areas.

▪ Continuously practice good housekeeping.

▪ Have a fully-stocked restaurant-specific first-aid kit handy.

▪ Take out appropriate insurance policies to cover the entire restaurant business with staff.

▪ Install security cameras around the restaurant to protect the restaurant property and customers.

▪ Implement effective programs to position new employees for success by orienting them on the restaurant’s day-to-day operations, policies, and culture.

▪ Conduct regular training sessions on proper lifting and carrying techniques for heavy items.

▪ Introduce the staff to the company’s food safety protocols.

▪ Implement an effective hiring process to evaluate the experience, skills, and personalities of the candidates appearing for the interview.

▪ Make sure that the restaurant staff maintains good hygiene and follows proper food preparation protocols.

FOOD QUALITY

▪ Ensure all food is cooked to the proper temperature.

▪ Display food safety warnings on menus where relevant (allergies, etc.).

▪ Implement policies that focus on good health and hygiene practices.

▪ Establish safety standards and processes, document them, and ensure employees and suppliers comply with them.

▪ Keep abreast of changing regulations and understand which consumer trends and medical research could impact future regulations.

COMPETITION

▪ Track the performance and strategies of competitors to provide better products to the customers.

▪ Find and resolve the client’s problems or issues as quickly as possible.

▪ Devise a competition-based pricing strategy attracting each segment of the population.

▪ Frame new marketing channels or strategies to stand out from the competition.

▪ Research and development

strategies.

Cooks Kitchen Support Staff Cashier Servers

Note: Salary for the first year has been taken for 6 months only as the restaurant will resume operations from July 2022 after acquisition.

MARKET RESEARCH

Analysis of barbecue restaurants industry in the United States, including growth drivers, consumer demographics, and location analysis for target customers at Prescott, AZ

MARKET RESEARCH – RESTAURANT INDUSTRY OVERVIEW

RESTAURANT

INDUSTRY IN THE UNITED STATES: The U.S. restaurant industry has seen healthy growth over the past few decades, becoming an essential part of the everyday personal and professional lives of millions of Americans. The revenue in the restaurant industry reached $899 billion in 2020, up by 4% over 2019, and is further projected to grow to $1.2 trillion by 2030.

The projected growth is supported by the fact that consumers are more confident in their spending power, driven by a healthy labor market, and are demanding more from the foodservice sector. 45% of adults stated that they ate out more often, and American adults average 5.3 restaurant occasions weekly.

REGIONAL

ANALYSIS: The biggest restaurant city is San Francisco, with 39.3 restaurants per 10,000 households. Other restaurant-dense cities include New York City and its surrounding areas; Boston, Seattle, and San Jose, California.

$899 Billion

U.S. restaurant industry sales revenue in 2020

SPENDING ON FOOD: In 2019, food spending by U.S. consumers, businesses, and government entities totaled $1.77 trillion. Food away-fromhome accounted for 53% of the total food expenditures, up from 50.1% in 2009.

In 2019, Americans spent an average of 9.5% of their disposable personal income on food: 4.9% on food at home and 4.6% on food away from home.

In 2019, households in the lowest income quintile spent an average of $4,400 on food (representing 36% of income), while households in the highest income quintile spent an average of $13,987 on food (representing 8% of income). Increased spending on food depicts the opportunities prevalent in the restaurant industry in the United States.

Market Share of Different Segments in 2020

1 Million+

15.6 Million

Number of restaurant locations in the United States

Number of employees in the U.S. restaurant industry in 2020

90%

95%

199,549

Percentage of guests who research a restaurant online before eating there

Percentage of restaurant owners who say that technology improves the overall efficiency of their eateries

Number of quick-service restaurant franchise establishments in the United States in 2020

MARKET RESEARCH – RESTAURANT INDUSTRY OVERVIEW

STRONG PENT-UP DEMAND: According to the ‘State of the Restaurant Industry 2022’ report issued by the National Restaurant Association, nearly 60% of adults are not eating at restaurants as often as they would like. Similarly, one in three adults livings in households with income above $100k are not eating at restaurants as often as they would like. These higher-income households are responsible for more than 4 in 10 dollars spent in restaurants, so any amount of unfulfilled demand is a positive sign for the industry. As that unmet demand once met can generate substantial revenue for the restaurant industry.

63% of adults including 75% of millennials and 70% of Gen Z feel restaurants are an essential part of their lifestyle.

80% of adults say going out for eating with family and friends give them the chance to enjoy time together and is a much better leisure time.

UNFULFILLED DEMAND

68% of adults like to spend money on an experience like a restaurant or other activity vs buying something from a store.

43% of adults in urban areas, 54% in suburban areas, and 56% in rural areas are not eating at restaurants as often as they would like.

STRONG PENT-UP DEMAND

6 in 10 consumers in households with income below $50k say they would like to go out to restaurants more often.

38% of adults say the availability of locally sourced food would make them more likely to choose one restaurant over another.

1 in 3 adults living in households with income above $100k say they aren’t eating on-premise at restaurants as often they’d like.

75% of adults believe that restaurant food provides flavor and taste sensations that just can’t be easily replicated at home.

MARKET RESEARCH – BARBECUE RESTAURANTS IN THE U.S.

INDUSTRY OVERVIEW: Over the five years from 2016 to 2021, the barbecue restaurants industry in the United States has experienced an increase in demand. Barbecue menu items, such as pulled pork, brisket, and ribs, have been trending in restaurants. As a result, industry revenue has increased at an annualized rate of 2% to $4 billion by 2021.

CRAZE OF BARBECUE FOOD AMONG AMERICANS: Americans have been in love with barbecue and are particularly fond of barbecue cuisine. Recent data shows that hamburgers, beef steaks, chicken, and ribs are the most popular barbecue food items among Americans.

AMERICA’S IDEAL BARBECUE PLAT (% OF U.S. ADULTS)

DINE OUT KEY FACTS

Nearly 163 million Americans dine out at least once a week, with average weekly spending of $71.

50% of U.S. adults believe that dining out is an essential part of their lifestyle.

83% of the U.S. adults prefer to dine at fast-food and fast-casual restaurants with 67% preferring the convenience of utilizing takeout or delivery services.

72% of people with children dine out at least once a week and 41% are dining out more often than two years ago.

Other Mains

✓ Sausages:- 37%

✓ Chicken wings:- 32%

✓ Pulled pork:- 29%

✓ Brisket:- 27%

✓ Pork chops:- 16%

✓ Turkey burger:- 11%

✓ Plant-based burger:- 9%

Other Sides

✓ Chips:- 48%

✓ Macaroni and Cheese:- 41%

✓ Cole slaw:- 41%

✓ Pasta salad:- 36%

✓ Garden salad:- 34%

✓ Cornbread:- 27%

✓ Other breads/rolls:- 21%

$4 BILLION

The barbecue restaurants industry’s revenue in the United States in 2021.

4th JULY

The most popular U.S. holiday to have a barbecue party.

JULY

Most popular month for a barbecue party among Americans.

MEAT

Most popular barbecue food item among Americans.

95%

Over 95% of Americans enjoy BBQ cuisine.

1/3rd

Nearly one-third of Americans eat barbecue or barbecue-sauced food in a week.

MARKET RESEARCH – BARBECUE RESTAURANTS IN THE U.S.

RISING DEMAND FOR BARBECUE: Barbecue is growing in restaurants as people who follow diet trends such as the Keto diet are gravitating toward grilled, fire, and roasted cooking processes. Barbecue has likewise found new life in fast-casual. Once a regional staple, barbecue is perfectly positioned to capitalize on fast-casual, considering its authentic roots, its low-and-slow cooking preparations, and the broader experience it offers. And while barbecue frequency is low, plenty of American consumers simply don’t have access yet to the category.

AMERICA’S FAVORITE BBQ STYLE: According to a survey conducted by HuffPost/YouGov Poll, smoked brisket without sauce leads the way. About one in five (22%) of Americans like Texas-style barbecue followed by Carolina, Kansas, and Memphis style all tied with 10%. Whereas only 3% of Americans like the Alabama style of barbecue, making it the least-liked regional BBQ style.

REGIONAL ANALYSIS: Midwesterners (19%) prefer Kansas City-styled barbecue – known for thick molasses and tomato sauce. 15% of Americans in the northeast say that Texas-style BBQ is their favorite. In the South, Texas-style dominates with one in four (26%) Americans stating it’s their favorite, followed by Carolina style (16%). Americans in the West (29%) also agree, naming the lone star state their favorite.

37% of consumers say “USDA-certified” is the most appealing claim for beef.

70% of Americans like to have beef once a week and 49% like to have pork once a week.

Kids’ menu items have jumped by 15.4% in the past five years to 2020.

An average American eats about 55 pounds of beef per year.

59% of Americans believe that eating red meat is part of the American way of life.

AMERICA'S FAVORITE REGIONAL STYLE OF BBQ

68%

Percentage of restaurants with barbecue on the menu offer at least one dish paired with chicken followed by pork with 37%.

17,243

The number of barbecue restaurants in the United States in 2021.

50%

Percentage of Americans that prefer grilled vegetables.

88%

Percentage of Americans who attended barbecue gatherings and preferred meat or steak as their choice of food at the event.

72%

Percentage of Americans who like barbecue because of its flavors.

MARKET RESEARCH – BARBECUE RESTAURANTS IN THE U.S.

MAIN DISHES IN AMERICA’S IDEAL BARBECUE PLATE

MARKET RESEARCH – FOOD TRUCKS IN THE UNITED STATES

INDUSTRY OVERVIEW: The food trucks industry has expanded over the five years to 2021 and is one of the bestperforming segments in the broader foodservice sector. The industry's remarkable rise is largely attributable to changing consumer preferences in favor of unique, gourmet cuisine at lower prices than a sit-down restaurant.

Consumers are also changing the way they access and interact with food truck operators. One recent trend has been the emergence of food trucks at weddings. In addition to enabling couples to customize menu options and personalize aesthetics, food trucks can also be a huge money saver for brides and grooms.

INDUSTRY REVENUE: Over the five years to 2021, the industry revenue has increased at an annualized rate of 6.6% to $1,162 million, including growth of 4.7% in 2021 alone. However, in 2020, the industry revenue declined sharply due to the negative effects of the COVID-19 pandemic. The growing household incomes and changing consumer preferences toward healthy and gourmet cuisine will continue to drive growth over the five years to 2026. Over the next five years to 2026, the industry revenue is forecast to grow at an annualized rate of 1.6% to $1,261 million.

MAJOR MARKET SEGMENTATION: According to Best Customers: Demographics of Consumer Demand, consumers aged 25 to 34 spend the most at food trucks on a monthly basis. Similarly, older consumers aged 35 to 44 also turn to food trucks regularly for convenient meals that offer interesting menu items. Consequently, according to IBISWorld, consumers aged 25 to 44 generated 36.7% of the industry’s revenue in 2021.

Another factor that influences the clientele that food trucks attract is social media and smartphone usage among consumers. Consequently, consumers under the age of 25 are more willing to spend on food trucks partially, and generated 14.5% of the industry’s revenue in 2021. Consumers aged 45 to 54 generated 20.7% of the industry’s revenue in 2021. Consumers aged 55 and over accounted for more than one-fourth of the market for food trucks and held a share of 28.1% of the industry’s revenue in 2021.

PRODUCTS AND SERVICES SEGMENTATION: American food generates the largest share of the industry’s revenue. This segment has increased over the five years to 2021 and accounted for 34% of the industry’s revenue in 2021 followed by Asian food with 18.3%.

MARKET RESEARCH – FOOD TRUCKS IN THE UNITED STATES

BUSINESS LOCATIONS

Mirroring the overall foodservice sector, establishments in the food truck industry are located in densely populated cities and regions. According to the United States Chamber of Commerce, the cities with the most food trucks are Los Angeles, San Francisco, Portland, OR, Washington, DC, and Miami, respectively. As a result, the majority of industry establishments are in the West (24.3%). The Southeast and MidAtlantic regions trail closely behind with 22.5% and 13.4% of the industry establishments, respectively. Establishments are also more concentrated in areas with nonrestrictive regulations for street vendors and where access to mobile food permits is relatively easy.

MARKET SHARE CONCENTRATION:

The industry exhibits a low level of concentration due to its highly fragmented nature of the industry. Most food trucks are owner-operated and do not employ any workers. Additionally, there are no major players in this industry that control more than 5% of the market share. According to IBISWorld, the top four players generated less than 5% of the industry’s revenue in 2021.

MARKET RESEARCH – FAST FOOD RESTAURANTS INDUSTRY

INDUSTRY OVERVIEW: Over the past five years till 2021, the industry has grappled with shifting consumer preferences and a saturated food service landscape that has kept prices low. The addition and popularity of fast-casual restaurants have also boded well for this industry as a whole, helping the industry maintain revenue growth before taking a hit in 2020.

Eating habits have changed as people have become increasingly health-conscious, demanding alternatives to traditional fastfood options. While major fast-food retailers have expanded their healthy offerings, the general trend toward health awareness has decreased demand for traditional fast-food restaurants in favor of growing fast-casual restaurants. Many major chains have invested in meat alternatives and other dietary changes to attract nontraditional consumers as part of a long-term strategy to adjust to the changing consumer landscape.

INDUSTRY REVENUE: Over the past five years till 2021, the industry revenue has increased at an annualized rate of 2.4% to $296.5 billion, including an increase of 15.8% in 2021 alone. The industry revenue is expected to continue growing over the next five years till 2026 as the domestic economy improves and is expected to reach $343.7 billion by 2026 by growing at an annualized rate of 3%.

CONSUMER

TRENDS: As a consumer-focused industry, fast-food restaurants rely heavily on consumer spending and confidence levels. Consumer spending has increased at an annualized rate of 2.4% in the past five years till 2021, enabling consumers to flock to fast-food restaurants during the period as they provide convenient meals at competitive price points. However, as consumer spending has increased, consumers have also increased visits to full-service restaurants and other industry alternatives. This has driven many consumers to seek alternatives to traditionally unhealthy fast-food establishments.

Fast-casual restaurants that do not offer table service but provide a higher quality of food and ambiance compared with traditional fast-food restaurants have been experiencing particularly strong growth over the past five years. As a result, major players have introduced their own fast-casual concepts.

$350 BILLION

Revenue of industry in the United States in 2021

Projected industry revenue in the United States by 2027

4.8 MILLION Employment generated by the industry in the U.S. in 2021

197.7K

$296.5 BILLION 3%

Number of businesses in the industry in the United States in 2021

Nearly 3% of restaurants in the U.S. have permanently exited the industry because of COVID-19 3%

Projected growth in the industry revenue between 2022 and 2026

MARKET RESEARCH – FAST FOOD RESTAURANTS INDUSTRY

PRODUCTS AND SERVICES SEGMENTATION: The industry is segmented based on the main type of food served. IBISWorld has segmented the fast-food restaurants industry in the United States as follows:

BURGERS: Burgers are almost synonymous with fast food, and restaurants specializing in burgers dominate the top 50 fast-food chains. Burgers are heavily immersed in US culture and have therefore been a major driver of the industry's growth over the past half-century. However, over the past five years till 2021, many traditional burger chains have struggled with flat or declining sales as consumers move away from generic brands toward niche or gourmet offerings. In 2021, this segment generated 33.2% of the industry’s revenue.

CHICKEN: Chicken has long been a popular fast food menu item, and the majority of nonchicken chains now dedicate growing menu space to chicken items due to its perceived health benefits. Major burger chains have used chicken wraps and chicken salads to combat consumer unrest about unhealthy fast food. This segment experienced substantial growth during the latter half of the period due to the chicken sandwich wars. Over the past five years, this segment's share of revenue has increased and accounted for 12.2% of the industry’s revenue in 2021.

SANDWICHES: As a simple, tasty, and generally healthy food option, sandwich-centered restaurants have remained a large portion of industry revenue, accounting for nearly 9.4% of revenue in 2021.

GLOBAL FOOD: Global foods typically consist of Asian and Mexican food establishments, which account for 9.1% of industry revenue in 2021. The adoption and acceptance of global foods have increased over the past half-century as tastes have developed, and people have become more adventurous in trying other cuisines. Higher rates of global travel and increased exposure to new cultures have also driven growth in the popularity of global cuisine.

PIZZA AND PASTA: Due to the wide influence of Italian immigrants in US culture over the past century, many regional forms of pizza have developed. Due to its products' general popularity and affordability, this segment has become increasingly defined as carryout or delivery of food for offices, birthday parties, or other large gatherings of people. Over the past five years till 2021, this segment’s share of revenue has increased, accounting for 8.9% of the industry’s revenue in 2021.

MARKET RESEARCH – FAST FOOD RESTAURANTS INDUSTRY

MAJOR MARKET SEGMENTATION: The major markets in the fast-food restaurants industry can be segmented based on several factors, including income, age, geographic location, and family structure. Fast food consumption patterns differ from full-service restaurants where income is a more important determinant of demand. According to trends in data provided by the Bureau of Labor Statistics' Consumer Expenditure Survey, people's visits to fast-food restaurants increase with their incomes up to a certain point.

HOUSEHOLDS EARNING MORE THAN $100,000: In 2021, households earning between $100,000 and $149,999 generated 20.3% of industry revenue, and households earning between $150,000 and $199,999 generated 11% of the industry revenue. Households that earn more than $200,000 accounted for 16% of industry revenue in 2021.

These individuals spend more eating away from home than those in lower-income brackets, increasing their overall spending at fast-food restaurants. However, as household income reaches between $100,000 to $150,000, visits to fast-food restaurants decline and are replaced by fullservice and sit-down dining at higher prices. For this reason, the biggest consumers of fast food in the United States are lower-middle and middle income households.

HOUSEHOLDS EARNING BETWEEN $50,000 AND $99,999: This segment generated 26.6% of the industry’s revenue in 2021. Consumers in this income bracket have a higher annual income than the low-income group but remain price-conscious as they still have a fixed level of disposable income. Due to this, fast-food operators are relatively inexpensive options when individuals decide to eat away from home. This segment has increased as a share of revenue over the past five years.

HOUSEHOLDS EARNING LESS THAN $50,000: This segment generated 26.1% of the industry’s revenue in 2021. This segment represents a significant share of revenue due to the low price point of industry operators. The share of revenue generated from this segment has decreased over the past five years.

MARKET SHARE CONCENTRATION: Major players in the industry accounted for less than 10% of the market share in 2021, giving this industry a low level of concentration. Given the diversity of food styles and operations, nearly 41.6% of industry establishments are small-business operators with nine or fewer employees in 2021. An additional 58.0% of establishments have between 10 and 99 employees, with 94.2% of establishments having fewer than 50 employees in 2021.

MAJOR MARKET SEGMENTATION

earning less than $50,000

Households earning between $100,000 and $149,999

Households earning more than $200,000

Households earning between $150,000 and $199,999

SHARE CONCENTRATION

MARKET RESEARCH – FAST FOOD RESTAURANTS INDUSTRY

BUSINESS LOCATIONS

The business locations in the industry are largely distributed according to population. Since the industry provides quick meals to consumers, successful operators need to be located in close and convenient proximity to their customer base. As a result, the Southeast is home to the highest concentration of franchised establishments and population, accounting for 39% and 25.8%, respectively, in 2021.

The West follows as the second-highest concentrations, representing 10.5% of establishments in 2021. This region's concentration is dominated and driven by California. Due to California's size and population concentration, it represents 12.8% of industry establishments in 2021.

The Mid-Atlantic is also dominated by a single state. New York's large population concentration lends it to be the third-largest state by establishments, accounting for 7.1% of establishments, while the total Mid-Atlantic accounts for 12.2% of industry establishments in 2021.

MARKET RESEARCH – CONSUMER BEHAVIOR

ALLOCATION OF BUDGET BY DIFFERENT GENERATIONS: Of the three generations, millennials dedicate the most of their annual spending towards food, at 13.4%, while baby boomers allocate the least at 12.5%. Millennials tend to spend more on eating out than Gen Xers and baby boomers.

Share of annual spending on food by Generation X

Share of annual spending on food by millennials

Annual spending on food by baby boomers

Spending on food-away-fromhome in overall food spending by baby boomers

Spending on food-away-fromhome in overall food spending by millennials

Percentage of millennials who try a new restaurant after seeing foodrelated content online

MARKET RESEARCH – CONSUMER EXPENDITURE

SPENDING ON FOOD AWAY FROM HOME: Food spending is a substantial expense for millions of Americans. In 2019, the average food away-from-home expenditure of U.S. households amounted to about $3,526.

AVERAGE ANNUAL FOOD AWAY-FROM-HOME EXPENDITURE OF U.S. HOUSEHOLDS

SPENDING ON FOOD BY AGE GROUP: Individuals aged 35-44 years held the largest share of average spending on food in the United States - $4,249 in 2018, followed by people between 45-54 years, who spent an average of $4,157. Expenditure by people aged 35-44 years old was valued at $4,302 in 2019, an increase of 1.25% that solidified its top position in this category.

In total food expenditure on food away-from-home, the millennial generation led the others with a share of 7%, followed by Gen X.

MARKET RESEARCH – ONLINE ORDERING

ONLINE FOOD ORDERS: Digital ordering and delivery have grown 300% faster than dine-in traffic since 2014. According to the National Restaurant Association, three in five U.S. consumers order delivery or takeout at least once a week. Other statistics regarding online ordering habits have been presented as follows:

▪ Online ordering for restaurants was valued at $26.5 billion in 2020 and is projected to reach $32.2 billion by the end of 2024.

▪ The market’s largest segment is restaurant-to-consumer delivery, with an estimated market volume of $15.6 billion in 2020.

▪ 25-34-year-olds are the largest segment to use online ordering (32%), followed by 34-44-year-olds (24%).

▪ 70% of consumers say they’d rather order directly from a restaurant, preferring that their money goes straight to the restaurant and not a third party.

▪ 60% of restaurant operators say that offering delivery has generated incremental sales.

Expected revenue from the restaurant-to-consumer delivery segment in 2021 $16.56 BILLION

Expected revenue from the restaurant-to-consumer delivery segment in 2024 $18.47 BILLION

Number of users in the restaurant-to-consumer delivery segment by 2024 89.6 MILLION

30% Digital channels are expected to account for 30% of total restaurant sales by 2025

60%

User penetration in the restaurant-to-consumer delivery segment in 2024 26.5%

TOP POSITION

The United States holds the top position in the restaurant-to-consumer delivery segment

The average revenue per user in the restaurant-toconsumer delivery segment in 2021 $200.34

34%

Percentage of U.S. consumers who order delivery or takeout once a week

Percentage of consumers who spend at least $50 per order when ordering food online

45%

Percentage of consumers saying that offering mobile ordering or loyalty programs would encourage them to use online ordering services more often

MARKET RESEARCH – FAST-CASUAL INDUSTRY

GLOBAL INDUSTRY: Fast-casual restaurants are typically a mix of quick-service restaurants and full-service restaurants. Their menus often consist of better-quality ingredients combined with the speed and convenience of a QSR. According to Statista, consumers are more likely to choose a fast-casual restaurant as an alternative to fast food than casual dining.

An increase in the popularity of fast-casual restaurants and low entry barriers & high profits drives the growth of the global fast-casual restaurant market. The global fast-casual restaurant market reached $125.6 billion in 2019 and is estimated to reach $209.1 billion by 2027, registering a CAGR of 10.6% from 2021 to 2027. The United States, The United Kingdom, Canada, and Mexico are the key players in the fast-casual restaurant industry worldwide.

REGIONAL ANALYSIS: Based on region, North America accounted for the highest share based on revenue, holding for nearly half (50%) of the global fast-casual restaurant market in 2019, and is projected to maintain its dominant position in the future.

UNITED STATES FAST CASUAL RESTAURANT INDUSTRY:

The fast-casual restaurants market size in the United States is set to grow by $35.01 billion, accelerating at a CAGR of almost 8%, during the period spanning over 2020 to 2024. One of the key factors driving growth is the demand for innovation and customization in food menus. The demand for new flavors and combination food infused with premium flavors is rising in the United States. Changing lifestyles and a rise in demand for on-the-go food is a significant trend that will further stimulate market growth. The rise in the number of dual-income families have increased consumers' preference for on-the-go food.

PRODUCT SEGMENTATION: The North American food segment led the market in 2019. It includes food products such as chicken wings, burgers, BBQ, sandwiches, and other North American cuisines. These are widely consumed by children and teenagers in the United States, and most of them obtain more than half (50%) of their daily diet requirements through these foods.

63.9% of the consumers say that they believe fastcasual food is generally healthier

$35.01 Billion

Growth in market size of fast-casual restaurants from 2020 to 2024

34,800

Number of fast-casual restaurants in the United States in 2018

REASONS TO RETURN TO A FAST CASUAL RESTAURANT IN FUTURE

MARKET RESEARCH – FAST-CASUAL INDUSTRY

CUSTOMER FREQUENCY: In terms of frequency of visits, the majority of the customers visit the fast-casual restaurants once a month with an estimated share of 30%, followed by customers who visit two to three times a month with a share of 29%, and once a week with 23%.

ANNUAL SALES OF DIFFERENT PLAYERS: The bakery chain Panera held the top position in terms of sales generated by fast-casual restaurants in the United States in 2019. The company has been growing on a delivery model and increased sales from $4.8 billion in 2015 to $5.93 billion in 2019. Runner-up Chipotle grew three years in a row after sales went stagnant in 2016 and reached a revenue of $5.5 billion in 2019.

FAST CASUAL RESTAURANT EXPERIENCE

HIGH-PRIORITY CHARACTERSTICS

Sales of the Bestselling Fast Casual Food Chains in the United States in 2019

MARKET RESEARCH – IMPACT OF COVID-19

SPENDING HABITS: The coronavirus pandemic has affected many aspects of Americans’ daily lives, including their budgets. Roughly two-thirds of Americans (64%) say that their spending habits have changed since the start of the pandemic. Their monthly spending on food and dining increased to $920 in 2020, compared to $862 in 2019, an increase of 6.73%.

Monthly Spending on Food and Dining

ONLINE FOOD ORDERING:

Digital and delivery penetration was already gaining momentum before the pandemic. Now, a transformation projected to take years is happening in just months. According to Morgan Stanley, the total online food delivery through online delivery platforms and restaurant self-delivery reached $45 billion in 2020, vs. the prior estimate of $41 billion in 2021, reaching 13% of the addressable market in the year 2020 and 16% by 2022, vs. 2025 in the prior estimate.

Online

Delivery Penetration Share of Total Addressable Market

Estimated U.S. Food at Home/Away From Home Mix

FUTURE: The trend toward “ghost kitchens”-warehouse-style spaces that house multiple delivery-only restaurants-could finally pick up speed. The industry may also see increased mergers and acquisitions amid the growing value of scale and market share, especially the technological benefits of a shared services model. Lastly, the role of kitchen automation may become more relevant as worker health concerns remain.

MARKET RESEARCH – LOCATION ANALYSIS

PRESCOTT OVERVIEW: The company is purchasing an already running barbecue restaurant in Prescott, Arizona. It will target people in and around Prescott and Prescott Valley area including vacationers, college students, and traffic on Hwy 69 and Hwy 89. The details regarding the population, number of households, and the average income are as hereunder:

2,263

344

Number of households with income <$50k around 1 mile

Number of households with income $100k-200k around 1 mile

646

12,053

Number

7,248

Number of households with income <$50k around 5 mile

83

Number of households with income $50k-$100k around 5 mile

4,521

Number of households with income >$200k around 1 mile

928

Number of households with income $100k-200k around 5 mile

Number of households with income >$200k around 5 mile

MARKET RESEARCH – LOCATION ANALYSIS

MARKET RESEARCH – LOCATION ANALYSIS

MARKET RESEARCH – TARGET CUSTOMERS

PEOPLE LOOKING FOR MOBILE FOOD OPTIONS (FOOD TRUCK)

PEOPLE ORDERING FOOD ONLINE

LOCAL BUSINESSES

DINE-IN CUSTOMERS (FAMILIES, TEENAGERS, AND MEN & WOMEN OF ALL AGES)

PRESCOTT AND YAVAPAI COLLEGE STUDENTS

VACATIONERS OR TRAVELERS

MARITAL STATUS Married - 58.3%,

$35,540

45.8 Years

LOCATION - PRESCOTT, AZ

FAMILY SIZE

Average of 2.3 Members

LANGUAGES

English and Spanish

Education

College Degrees - 25.8 %

MARKET RESEARCH – TARGET CUSTOMERS’ NEEDS

All food meals are prepared daily and are ready for consumption SPEED

Food is prepared using the highest-quality meats that are antibiotic and hormone free QUALITY

The restaurant must open daily RELIABILITY

LOCATION

Centrally located in Prescott, AZ

The restaurant must provide a relaxing family atmosphere COMFORT

Value in terms of high-quality and portions PRICE

High in quality food and portion sizes VALUE

Excellent and friendly customer service CUSTOMER SERVICE

CONVENIENCE

Curb side service, call ahead delivery through Grub hub, dine in, and take out service

COMPETITOR ANALYSIS

A study of key players operating in the barbecue restaurant industry, including their strengths, weaknesses, and key information.

MARKET RESEARCH – COMPETITOR ANALYSIS

COLT GRILL: COLT Grill is a small group of BBQ smokehouses located in the coolest cities and towns of Northern Arizona. Each restaurant has a full bar and a menu entirely made from scratch, centered around smoked meats. It is a family-owned restaurant group. It cooks its food carefully in giant steel smokers with genuine hardwoods, ensuring each item is permeated with rich smoked flavors that typify the American West. All sauces and sides are hand-made from scratch.

KEY STATISTICS: Other company statistics are as follows:

▪ The restaurant’s menu includes smoked baby back ribs, brisket, chicken, and pulled pork, paired with its prizewinning hand-ground prime burgers, tacos, and large fresh-cut salads.

▪ The company operates 4 restaurants across Arizona.

▪ The restaurants also cater to weddings and events of every size and occasion. It has specialization in hearty portions of hand-rubbed smoked meats pulled right off the smoker for guests to enjoy. For delivery, the minimum order size is $300. In case the order is less than $300, customers have to pick order from the restaurant.

▪ The restaurants also have a variety of semi-private spaces for parties booking. However, it accepts reservations for parties of 20 guests or more.

▪ It also runs a COLT exclusive VIP Text Club, which offers exclusive access to its members to join onsite events like BBQ smoking classes, free meals, discounted food and drinks, and much more.

▪ It received the 2020 best BBQ of Greater Prescott in the best barbecue category by the Prescott Living, Best of Edition.

STRENGTHS:

▪ Customers are satisfied with the quality of food offerings.

WEAKNESSES:

▪ The catering menu is only offered for parties of 20 guests or larger. In case of less gathering, customers have to order as regular menu as a pick-up order.

▪ Some customers are finding the food items over-priced, and they are also complaining of poor customer service.

Founding Year: 2017

Owner: Brenda Clouston

Timing: 11AM – 8PM

Segments: Dine-in, delivery, online ordering, and catering

Number of Restaurants: 4

Menu: Burgers, chicken, pork, ribs, tacos, brisket, and fresh-cut salads

MARKET RESEARCH – COMPETITOR ANALYSIS

UNCLE BUD’S PLACE

Uncle Bud’s Place is a restaurant where one can find the finest Cajun, creole, BBQ, and homestyle foods. The restaurant’s owner and chef started cooking at home with his dad at the age of 8 and has spent more than 35 years as a professional chef and restauranteur. The restaurant’s food is the product of the owner’s dad’s teachings and how he expanded on these concepts as a chef.

KEY STATISTICS: Other company statistics are as follows:

▪ Some of the restaurant’s recipes are more than 50 years old.

▪ There is no fryer and no microwave, instead the food is cooked with cast iron. The food is roasted low and slow for smoky flavors.

▪ The company sources its ingredients from local farmers’ markets to maintain freshness.

▪ There is also a retail space in the restaurant, where customers can purchase all of Uncle Bud’s blends, rubs, BBQ sauces, dressings, and merchandise.

▪ The restaurant also offers catering services and vegan options for its customers.

▪ The recipe for the success of Uncle Bud's Place is its tasty bread pudding.

▪ The place is suitable for those who like to have a snack on the go. Visitors also recommend this spot because of its democratic prices.

▪ Google users assigned 4.9 stars to this place.

STRENGTHS:

▪ Customers are loving the restaurant’s food.

WEAKNESSES:

▪ The restaurant remains functional only for 5 days a week and remains closed on Sunday and Monday.

▪ The website of the company is not user-friendly and does not allow the customers to book tables online.

Prescott, AZ

Cuisine: Barbecue

Owner and chef: Chris Buell

Timing: 11:30 AM – 7:30 PM

Segments: Dine-in and catering

Restaurant: 1

Menu: Soup & salad, sandwiches, chicken, house made sides, platters, entrées, desserts, and drinks

MARKET RESEARCH – COMPETITOR ANALYSIS

THE SQUEALING HOG

The Squealing Hog is a food trailer specialized in smoked eats and meats. The restaurant allows its customers to tr good pork, brisket, and pork sandwiches. The restaurant remains closed on Monday and Tuesday. The website of the restaurant does not function properly and lacks important information. The Squealing Hog has received Google 4.7 according to the visitors' opinions.

LUCKY'S BARBEQUE

Lucky’s Barbecue is a small mom-and-pop restaurant serving fresh food daily. The restaurant is located on Highway 69. The primary products offered by the restaurant include smoked brisket, coleslaw, and pork ribs. The restaurant does not allow online reservations. This BBQ is famous for its great service and friendly staff, that is always ready to help visitors. The comfortable atmosphere and fancy décor attract customers to the place and encourage them to try the food at the restaurant.

Distribution Channels: Dine-in, and curbside pickup

Timings: Wednesday to Saturday (11AM to 8PM) and Sunday (11AM to 6PM)

Price: $3 to $16

Menu: Sandwiches, brisket, pulled pork, squealer, sausages, beef ribs, bulk meat, burgers & dogs, country beans, and sweet eats.

Cuisines: Smoked Eats and Meats

Features: Offers delivery, outdoor seating, takeout, & catering, wheelchair accessible, and parking available

Strengths: People are satisfied with the food quality and the customer service offered by the owner and the staff.

Weaknesses: People have to wait for long times to get their meal due to rush at the restaurant.

Founding Year: 2012

Timings: Tuesday to Saturday (11AM to 7.30PM)

Price: $15 to $30

Menu: Brisket, pulled pork, sausage, ribs, chicken, chicken breast, chicken leg, tacos, barbecue plates, sidekicks, kids combos, burgers, and beverages.

Cuisines: American and Barbecue

Features: Takeout, seating, parking available, wheelchair accessible, table service, highchairs available, and serves alcohol

Strengths: People are satisfied with the quality and quantity of food served by the restaurant at a reasonable price.

Weaknesses: The restaurant remains closed for Monday and Sunday and it does not offer home delivery.

MARKET RESEARCH – COMPETITIVE ADVANTAGE

SUPERIOR FOOD

The meat served at the restaurant will be of the highest quality and hormone & antibiotic free placing it ahead of its competitors. Moreover, the consistency in the food quality will be maintained through the implementation of the best cooking systems and adherence to predefined recipes & operational manuals. Moreover, having differentiated grilled food items will allow the company to capture the consumer segments who are looking for purely grilled items.

USE OF TESTED OPERATIONAL SYSTEMS

The acquirer will utilize already developed and proven systems enabling him to provide high-quality products or services at a lower cost. These systems have been developed by the acquirer while managing two restaurants under his ownership and serving as the general/sales manager at various organizations. The systems to be adopted will include serving freshly prepared food daily, and overnight smoking of meat for 14 hours.

EFFICIENT CUSTOMER SERVICE

Overall customer satisfaction is crucial to the business’s continued survival, and the sale of high-quality food products will assist the company in building a loyal customer base that will drive the business to success. The company will employ an experienced team of servers and attendants to assure family-friendly and comfortable service throughout its distribution channels. The feedback system will be kept transparent so that corrective actions can be taken as soon as possible by improving the product offerings and making additions to the menu. The team at the company will strive to satisfy customers and resolve their concerns regarding food orders, taste, pricing, etc. to build a positive public image of the restaurant. Moreover, its set up as a quick-service BBQ restaurant and it’s unique to the industry, which speeds up the customer service.

DUAL FOCUS

The majority of the restaurants always give quality with no quantity or quantity with no quality. On the other hand, the acquirer believes that nothing good comes with cutting corners. So, the sole focus will be on providing quality and quantity to the customers who offer value for money products. Moreover, the company will follow a differentiation pricing strategy attracting individual as well as business customers.

MULTIPLE FOOD OPTIONS

XXXX BBQ aspires to be Prescott's only quick-service restaurant that offers sausages, sandwiches, sides, meals, and beverages all under one roof. Having multiple food options in a single place will allow the restaurant to target families having different preferences. The company will also look to innovate new recipes to expand its product offerings in the future.

MARKET RESEARCH – SWOT ANALYSIS

STRENGTHS

▪ Experienced acquirer having over 14 years of experience in the food and other industries.

▪ Various authentic and high-quality food options will be offered at value for money prices.

▪ Use of top-quality locally sourced ingredients to offer quality food items.

▪ Strong relationships with local suppliers.

▪ Experienced team of professionals and chefs providing exceptional customer service.

▪ Convenient location.

▪ Beautiful environment with attention to the modern interior.

▪ Focus on high volume sales to increase profitability.

▪ Technology-oriented business launching its own website for online orders.

▪ Unique variety of meats that are hormone & antibiotic-free.

▪ Honest and transparent adherence to internal policies.

▪ Highly successful go-to-market strategies.

▪ Well updated with the latest market trends and changing customer behavior.

▪ Extensive reward and loyalty programs for customer acquisition and retention.

WEAKNESSES

▪ Lack of financial resources to acquire the restaurant and expand the offerings.

▪ Already entrenched chains of barbecue restaurants in the target area.

▪ Difficult to onboard experienced staff at the beginning.

OPPORTUNITIES

▪ Increased online orders due to COVID-19.

SThe barbecue restaurant industry is growing and evolving, and many new opportunities and threats come with that.

WSWOT

The industry can fluctuate depending on the national and local economies. However, it remains somewhat consistent because of the increased spending on food and growing preference among people to try new cuisine.

OT▪ The growing population in the target area will present opportunities for the food and restaurant companies.

▪ Opportunity to attract new customers through loyalty bonuses and attractive offers.

▪ Demand for grilled food products is increasing rapidly with the increase in customers' disposable income.

▪ Growing preference among people to dine out at regular intervals.

▪ Opportunity to add additional products to the menu of offerings.

▪ As there is no quick-service restaurant offering both quality and quantity in the targeted location, the company will have a great opportunity to capture a huge market share.

▪ Opportunity to expand the market reach by opening up additional units.

▪ Increasing number of smartphone users and growing internet penetration creating demand for online food ordering platforms.

THREATS

▪ Changing customers’ tastes and preferences can affect the demand for the company’s products.

▪ Margin pressures in the food businesses are mounting on the restaurant, mostly because of the pandemic.

▪ Expected economic slowdown.

▪ Rising labor and ingredients cost for the restaurants.

MARKETING STRATEGY

A list of marketing strategies to be followed by the company to attract the target clients and grow the business beyond boundaries.

MARKET ANALYSIS – MARKETING STRATEGIES

WEBSITE

E-MAIL MARKETING

Restaurant email marketing is another vital strategy to effectively market a restaurant business. According to Statista, 49% of consumers like to receive weekly promotional emails from their favorite brands. The company will collect the customers’ email addresses through various online channels. It will create monthly newsletters, including various sections that will highlight the additions to the menu, information regarding opening up at a new location, and exciting offers that will be communicated to existing and potential customers by email. Having a website for a restaurant business is equivalent to having a food shop in every part of the world. 35% of guests discover restaurants through online reviews and the restaurant’s website. The majority (49%) find them through recommendations from friends and family. The company will create a user-friendly website listing food items offered and pricing for the same. Customers will also be provided with the ‘order online’ button to place online orders quickly. The website will also be the easiest way to get information like the menu, timings, contact info, and the latest offers on food items. The company will engage users through its website and give them more reasons to stay connected with the restaurant. It will share quality images and videos of food on its website to attract potential customers and regularly update its website content and features to keep itself at the top of search engine results.

CONTESTS

Offering contests is an excellent way to spread the word about a restaurant. The company will run offline and online contests. Customers attending the contests at the restaurant’s facilities will also share a glimpse of contests on social media channels, further spreading the word about the brand. Customers winning the contests will be offered coupons or discount vouchers that they can redeem on their visit to the restaurant or when ordering food online through the website or third-party platforms.

REMARKETING

Over 90% of web traffic does not take action on their first website visits. Remarketing will allow the company to encourage those interested but not ready to commit leads to return and sample the food options available at the restaurant. The retargeting ads will recapture that traffic by showing ultra-targeted ads only to people who have already visited or performed a specific action on the website or other digital channels.

MARKET ANALYSIS – MARKETING STRATEGIES

SOCIAL MEDIA

SOCIAL MEDIA USAGE STATISTICS:

✓ 10% of restaurant guests said that a restaurant’s social media or email marketing tactics influence them to return to a restaurant.

✓ 50% of consumers expect a response on social media within 30 minutes. However, only 50% of companies meet this expectation at present.

✓ 20% to 40% - The likelihood that customers will spend time in restaurants that they have engaged on social media.

✓ Restaurant diners are more likely to leave high ratings on Facebook compared to other review sites.

✓ The top Instagram hashtag is #food which garnered 25,279,694 mentions in 2020.

✓ In 2020, the top hashtag by engagement rate for the food and beverage industry is #giveaway, which generated an engagement rate of 3.65% for companies that used it.

✓ In 2020, #food had 1,129,432 mentions on Twitter and 37% of food conversations happened on Twitter.

Regarding social media, restaurants are most likely to use Facebook (91% of restaurants) and Instagram (78%). Instagram has skyrocketed in popularity for restaurant promotion since 2019 when more than 24% reported using it. Over one billion people are active on Facebook, and over 100 million people use Instagram every month. According to Statista, the average internet user spends two hours and 23 minutes on social media daily. Although this varies per country, it presents an unmissable opportunity for every restaurant business operator. Considering these usage statistics, XXXX BBQ will use various social media networks, like Facebook and Instagram, to reach out to its potential customers. These social media channels will be used to approach potential customers, build a community, and spread brand awareness. The company will create its tribe (followers) and post images of food and material related to the XXXX BBQ brand daily. The company will also share special offers to get the restaurant up and running. Additionally, the company will engage with the customers by liking images that have been uploaded to them and writing comments about them. The company will also set aside a monthly budget with images or video ads that will pop up in people’s newsfeed within a certain radius with the option to place an order right away or download the mobile app.

Additionally, the company will use social media influencers to share their experiences about the environment and food products. The company will put its logo on every menu and flyer. The company will collect the customer’s information through its POS and online ordering system and send them weekly coupons via email to engage indepth with the rewarded members.

The company will create social media accounts for Facebook, Instagram, Twitter, and Google My Business. The detailed strategy has been presented as follows:

▪ XXXX BBQ will create and promote content regularly. The company will utilize daily stories to highlight daily menus and specials, showcase the vibe of the restaurant, and share user-generated content.

▪ The company will organize special events and run promotional social media campaigns.

▪ It will create more engaging content for Facebook and Twitter.

▪ The company will incorporate more real photos of the food rather than stock photos.

▪ The company will showcase customer reviews within images.

▪ It will set up an automated Facebook chat option on each page.

▪ Social media goals include:

✓ Increase engagement by 100 followers per month across all platforms.

✓ Establish KPIs (Key Performance Indicators): followers/engagers, clicks to the website, and reach and impressions.

✓ Increase brand awareness by 2% per month.

✓ Increase website traffic by 2% per month.

MARKET ANALYSIS – MARKETING STRATEGIES

INFLUENCERS MARKETING

XXXX BBQ will leverage the network of local food bloggers and influencers by connecting with them and getting them to share content related to the restaurant. The company will give them incentives, such as free meals, coupons, discount vouchers, etc., to get them to popularize the brand among their network. Partnering with these influencers will generate quality content that will be shared across the company’s social media channels, which, in turn, will bring in more leads to the business. Moreover, these influencers and food bloggers will also share this content through their social media channels to encourage their followers to visit the restaurant and try the company's products.

LISTING ON ONLINE FOOD PLATFORMS

Several food apps have sprung up over the years due to popular demand by consumers, including UberEats, Grub Hub, Postmates, Delivery.Com, etc. People find it easy to install an app where they can find all the nearby restaurants and place orders of their choice conveniently. In addition to its own web portal, the company will get its restaurant registered on popular online food platforms, which will bring in more business.

ONLINE REPUTATION

No customer wishes to visit a restaurant with bad reviews. The company will strengthen its online reputation by responding to customer queries promptly and replying to both negative and positive reviews in a way that would portray the restaurant in a favorable light. The company’s customer care staff will be provided regular training on handling customer complaints and improving the brand’s reputation in the market. The customer feedback and reviews will also be used to improve the product offerings. The company aims to increase customer satisfaction by taking corrective actions as suggested by the customers.

PROGRAMMATIC ADVERTISING

The detailed strategy has been outlined as follows:

▪ Geotarget the Prescott area initially.

▪ Whitelist websites for targeted advertising.

▪ Create dynamic creatives to increase user engagement and click-through.

▪ Create and collect audience pools for retargeting campaigns and lookalike audiences for broader reach and acquisition.

▪ Optimize throughout the campaigns.

CONTENT MARKETING

OFFER COUPONS AND DISCOUNTS

GOOGLE ADS

GEO FENCING

STRATEGIES

User-generated content is a proven way to develop personal engagement with customers. The restaurant will host a photo contest by asking customers to share pictures of their favorite meal at the restaurant on a dedicated content page on the website and other social media channels. It will also award random lucky contestants with free food items or other prizes. Posting high-quality and unique blogs will improve the search engine rankings and boost the restaurant’s online reputation, ensuring that more people see and visit the locations or place online orders through the website, or third-party food ordering websites.

Providing coupons and discounts is always a surefire way to bring customers to the business. The company will offer a free dish to the new e-mail newsletter subscribers or users placing online orders for the first time through the website. In addition to offering direct coupons, the company will also offer discounts to customers placing orders through third-party delivery apps. People participating in online or offline contests will also be offered enticing deals to encourage them to generate referral business. Moreover, the corporate customers and people placing huge orders will be offered special discounts for bulk purchases.

The detailed strategy to target the customers through Google Ads is outlined as follows:

▪ Run responsive search ads and responsive display ads with various keyword groups to help maximize exposure when being searched.

▪ Target the nearby regions to the restaurant location.

▪ Use keyword groups: location, restaurant-specific, and generic keywords.

▪ Research competitors and their keywords.

▪ Include site link extensions and phone call extensions.

XXXX BBQ will use geofencing to target nearby areas from Prescott and other cities across Arizona, which will help it acquire a relevant customer base and target relevant audiences. The customers to be targeted will be based on the following parameters:

▪ All genders

▪ All ages with a special focus on adults, teenagers, college students, and travelers

▪ Middle-class and upper-class population with disposable income

MARKET ANALYSIS – MARKETING STRATEGIES

PRICE

The company will follow a value-for-money pricing strategy to stay ahead of the competition and gain a substantial market share in the barbecue restaurant industry. The company will follow a rigorous mechanism to check the quality of food products by following sampling techniques to ensure high-quality delivery at all times. The pricing of products has been listed as follows:

▪ By the Pound: $11.95 to $21.95

▪ Sandwiches: $6.95 to $8.95

▪ Sides: $1.65 to $9.95

▪ Picnic Meal: $45.95

▪ Plates: $4 to $13.95

▪ Beverages: $2 to $4

▪ Kids Meal: $6.50

PROMOTION

XXXX BBQ will incorporate a variety of digital and social media strategies to help promote awareness and generate sales. Additionally, the company will use food bloggers and influencers to share their experiences about the restaurant's environment and quality of food. The company will promote its restaurants through multiple channels, including newsletters, flyers, rewards, etc. It will also organize multiple contests on its social media pages and write interesting food blogs to encourage people to participate and spread the word about the restaurant. The company will also attend food events and trade shows to spread the word about the restaurant.

PRODUCT

The acquirer is acquiring an already running barbecue restaurant in Prescott, AZ. The aim of the acquirer is to modify the operational aspects of the restaurant business and place it among the top barbecue restaurants in the target area. The restaurant will be owned and managed by the acquirer XXXX McCoy holding a 100% share in the company. All the food items at the restaurant will be prepared with a combination of locally sourced ingredients, freshly procured meats, and in-house sauces. The company will also employ an experienced team of chefs and support staff to prepare high-quality food items and provide high customer satisfaction. The main items on the menu will include smoked meats, sandwiches, sides, plates, and beverages.

PLACE

XXXX BBQ is located in Prescott, AZ, offering high-quality barbecue food options to the customers (individual and business). Considering the demographics of the area, the place is regarded as an ideal location to set up a food business due to its position between two highways, the low cost of living, convenient transportation infrastructure, and diverse talent pool. After establishing a foothold in Prescott, the company will look to expand the business by opening additional units in Prescott city and other cities across Arizona. The aim of the company is to be recognized as the top quick-service restaurant in the United States.

MANAGEMENT SUMMARY

WORK EXPERIENCE

Position: Chief Executive Officer (CEO)

OVERVIEW:

EDUCATION

Position: Chief Executive Officer (CEO)

RESPONSIBILITIES: The responsibilities of the acquirer and CEO are listed as follows:

WORK EXPERIENCE

SOURCES AND USAGE

The acquirer will invest equity funds in the business and will satisfy the additional funding requirements from bank loan.

SOURCES AND USAGE OF FUNDS

USAGE OF FUNDS

$400,000

FINANCIAL PLAN

These are our financial projections for the first five years of operations, depending on the market conditions.

Note: First year of operations consist of 6 months from July to December 2022, as the restaurant will resume operations in July 2022 after acquisition by the acquirer.

FINANCIAL PLAN – INCOME STATEMENT

FINANCIAL PLAN – INCOME STATEMENT

FINANCIAL PLAN – CASH FLOW STATEMENT

FINANCIAL PLAN – CASH FLOW STATEMENT

FINANCIAL PLAN – BALANCE SHEET

FINANCIAL PLAN – BALANCE SHEET

FINANCIALS