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Nukarn Suwatikul

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Famous 'Top 40 Bangs. for the Buck' --Zagat 2003. Burritos Nutritional Fact ... as several major tourist. attractions, shops, restaurants and ... destinations. ... – PowerPoint PPT presentation

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Title: Nukarn Suwatikul


1
Lets Make a Deal!
Modesty, casualness, and an air
of nonchalance are characteristic
attitudes in Australian business
culture.
Nukarn Suwatikul Amit Shah Don Ta Lloyd Well
ington
Hazem Yassin
Brought to you by
2
Outline
  • Mission Overview of the Wrap
  • Core Competencies
  • Country Profile
  • Economic Summary
  • Australia-US Comparison
  • Investment Incentives
  • Business Set-Up Checklist
  • Australian Food Industry Characteristics
  • Marketing Strategy
  • Financial Strategy

3
Mission
  • The company's goal is that of financial success
    through a multi-faceted
  • approach. We will meet this goal while trying to
    consider
  • the effect of our products on the health and well
    being of our customers (and our staff),
  • the impact that our business practices and
    choices will have on the environment, and
  • the high quality of attitude, fairness,
    understanding, and generosity between management,
    staff, customers, and vendors.
  • Awareness of all these factors and the
    responsible actions that result
  • will give our efforts a sense of purpose and
    meaning beyond our basic
  • financial goals.

4
Overview
  • In 1996, fast, fresh, healthy food was difficult
    to find in Boston.
  • These wildly popular food concepts existed en
    masse in California, but were far and few between
    in Massachusetts and other parts of the country.
  • The Wrap was launched as a restaurant that
    featured wraps, burritos, smoothies in a
    friendly, casual environment.
  • Building and running the first location helped
    the management team identify the competencies
    that are now at the core of The Wrap.
  • Success required three key ingredients always
    being fresh, friendly, and fast.

5
Core Competencies
  • A unique recipe for success in hand Bringing
    the healthy concept to more Bostonians.
  • Penetrating the markets of and eventually
    acquiring competing businesses.
  • Fast menu that focused on simplicity,
    mouth-watering recipes, and custom-ordering.
  • Keeping the focus on our customers - as long as
    our customers continue to give thumbs up, The
    Wrap will slowly expand to communities that value
    its food and its services, as well as its desire
    to give back to its neighbors.

6
Famous
7
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8
"Top 40 Bangs for the Buck" --Zagat 2003
9
Burritos Nutritional Fact Sheet
10
New Location
  • P. Sherman 42 Wallaby Way Sydney

11
Country Profile
  • Prime Minister John Howard.
  • Independence January 1, 1901
  • Population 19,731,984
  • Total area 7,687 Sq. Km
  • Major Cities Sydney, Melbourne, Canberra
    (Capital), Brisbane, Perth, Adelaide
  • Languages English, native languages
  • Ethnic Groups Caucasian (92), Asian (7),
    aboriginal and other (1)
  • Religions Anglican (26), Catholic (26), other
    Christian (24), non-Christian (11)

12
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13
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14
Economic Summary
  • Currency Australian Dollar (A)
  • Market Exchange Rate US 1A1.34
  • GDP per Capita US 30, 695
  • GDP Growth Rate 3.7
  • Inflation Rate (Consumer prices) 3.1
  • Unemployment Rate 5.7
  • Major Trading Partners Japan, other Far East,
    European Union, United States
  • Major Exports crude materials, food live
    animals, mineral fuels lubricants
  • Major Imports machinery transport equipment,
    manufactured goods, chemicals

15
Economic/Industrial Trends
  • Traditional strength of manufacturing employment
    is declining, however it remains strong.
  • Key employment areas - wholesale trade, finance,
    business services, health insurance, property and
    community services.
  • Growth areas retail trade, construction,
    restaurants, transport, storage, cultural and
    recreational services

16
Employment Trends
17
Australia-US Comparison
  • Australia US
  • Total area 7687 Sq. Km 9629 Sq. Km
  • Population in millions 20.1 293
  • GDP per Capita US
    30,695 39,862
  • GDP Growth 3.7 3.2
  • Unemployment Rate 5.7 5.4
  • Corporate Income tax 30 40
  • Highest Personal Income tax 47 35
  • Quality of Life 9.35 8.11
  • Primary Industries

Financial ServicesTransportationTechnologyHealt
hcareReal Estate
Agriculture Food Forest Sea food Wine Industr
y
18
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19
Age Groups
20
Population Density
21
Investment Incentives
  • Australia gives investors a competitive and
    quality choice in the Asia-Pacific region
  • Average business costs in Australia. is around 8
    to 9 per cent below those in the US.
  • Australia is ranked the second most cost
    competitive country for business operations in
    the industrialized world.
  • Cheap real estate Sydney is approx. 66 less
    thanin London, 46 less than in Tokyo, 11
    less than in New York.

22
More Incentives
  • Australia's transport and logistics systems
    provide a mature, efficient and cost effective
    means of delivering products and services.
  • Cost competitiveness coupled with a superior
    workforce and a low overall cost of living
    implies that the commercial advantages of doing
    business in Australia are excellent.
  • Australia's overall tax burden as a share of GDP
    is significantly lower than its western
    competitors.
  • Level of corruption is among the lowest of OECD
    (Organization for Economic Cooperation and
    Development) member nations.

23
Business Set-Up Checklist
  • Human Resource
  • Business Documentation
  • Budgeting Finance Control
  • Marketing Advertising
  • Target Industry Characteristics
  • Legal aspects
  • Registration Insurance
  • Feasibility Study
  • Location Premises
  • Licenses and Permits
  • Business Planning
  • Finance/Funding
  • Business Structure
  • Taxes

24
Australian Cuisine At a Glance
  • Traditionally-based on English cuisine e.g.,
    roasts, grilled chops, other forms of meat,
    accompanied with vegetables (mashed potatoes,
    beans, peas, and carrots)
  • Currently very diverse, reflective of its
    multi-cultural influences. South East Asian,
    Greek, Lebanese, and Italian foods are very
    common.
  • Australian Government, through health initiatives
    and cultural marketing efforts, is promoting a
    push towards healthy food choices.

25
Australias Fast-Food Industry
  • Australian fast-food market was US6.2billion in
    2003
  • Market is an Oligopoly, with independent outlets
    e.g., McDonalds, Burgers Burritos Nachos and
    Tacos (BBNT), Subway, KFC, Pizza Hut, Burger King
    (a.k.a. Hungry Jacks) accounting for 70.5 of
    total number of fast food outlets
  • McDonalds is the market leader in Australia,
    with a market share of 34.7. This figure is a
    decrease from its 2002 market share.

26
Australias Fast-Food Industry Cont.
  • Fast food market in Australia is predicted to
    grow about 17 to 7.25 billion by 2008.
  • Takeaway foods favorites in Australia are
  • meat pie
  • fish chips
  • sausage rolls

27
Marketing Strategy
  • Fresh-Friendly-Fast
  • Fresh fresh ingredients make a tasty product.
  • Friendly- friendly atmosphere suits our customer
    base and our work culture.
  • Fast- fast service to maximize our clients lunch
    and relaxation time.
  • But Also Healthy-Reasonable
  • Healthy- we serve fast, healthy food to fit the
    lifestyles of our customers.
  • Price- quality offerings at reasonable prices has
    and will enable us to increase our market share.

28
Marketing Strategy
  • Our Customers
  • Professionals and young adults our stores are
    typically found close to business districts and
    universities.
  • Everyone that shares our ideology of a tasty,
    healthy meal at an affordable price.

29
Marketing Strategy
  • Promotions and Advertising Strategy
  • Our theme is Fresh-Friendly-Fast
  • Primary medium for advertisement will be the
    radio. Radio spot and jingle will create brand
    recognition.
  • Special promotions will be advertised in
    newspapers. We will also do flyers and coupons
    periodically.
  • Frequent customer reward card.
  • We will also sponsor health events.

30
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31
Setup Costs of a Typical Deli Franchise
  • Investment required 100,000-200,000
  • Includes 60,000-80,000 towards
    furniture/fixtures
  • Initial Franchise Fee 10,000-25,000
  • Royalty Fees 6-8
  • Advertising Fund 3.5-4.5
  • 6-8 employees
  • 2-4 weeks of management training

32
Franchise Costs in Australia
  • Investment Required 125,000
  • 80,000 in Equipment, Furniture Fixtures
  • Initial Franchise Fee 15,000
  • Royalty Fees 6
  • Advertising Fund 4
  • 4 weeks of management training

33
Breakdown of Initial Investment
34
Industry Derived Values
  • Broken down from annual sales
  • 25 target profit
  • Ranges from 20-30
  • 75 expenses
  • 25 dedicated to food and paper costs
  • Range from 70-80
  • The value of the business is typically sold 3-4
    times the annual profit
  • Expect positive return on investment after 4-5
    years

35
Australia Investment Strategy
  • Use current retained earnings of 400,000 to
    penetrate the growing health conscious Australian
    fast food market
  • Establish one store in each of the largest two
    cities
  • Sydney and Melbourne
  • Aggressively develop the business and create
    franchising opportunities

36
Australia Investment Strategy
  • Franchise at a pace of two locations annually
  • Sell the Melbourne store after the 5th year
  • Maintain the Sydney operation as a
    franchisor-owned location where management
    training and franchisee consulting takes place
  • By the end of the 10th year, comprise of at least
    20 franchisee-run stores while achieving a
    positive present value return and to further
    expose as an expanding
    international franchise opportunity

37
1) Melbourne Acquisition Target
  • Asking Price 52,238 US
  • Annual Sales of 111,940 US
  • Low start-up capital required as the majority of
    the furniture/fixtures can be carried over
  • Situated in the heart of the citys business and
    residential population considered one of the
    best locations in the Melbourne Central Business
    District
  • New local university opening soon
  • High visibility in an upscale shopping plaza
  • Annual lease is US25,224 for 1,200 sq ft
  • Total acquisition and transition start-up costs
    is less than US100,000

38
2) Establish in the Prime Darling
Harbor area in Sydney
  • Darling Harbor
  • Houses Sydney's convention and exhibitioncenters,
    as well as several major tourist attractions,
    shops, restaurants and cafes
  • One of the worlds leading waterfront leisure
    and entertainment destinations.
  • Attractions include the Imax Theatre, Sydney
    Aquarium, Chinese Garden of Friendship,
    Australian National Maritime Museum, Powerhouse
    Museum, Harbourside Shopping Centre and Cockle
    Bay Wharf.

39
2) Establish in the Prime Darling
Harbor area in Sydney
  • King Street Wharf
  • The most recent prestigious waterfront
  • office location overlooks the Harbor
  • The location will be larger than normal to
    accommodate itself as the management training and
    corporate store
  • Annual lease is 100,000 for 2,980 sq ft
  • 1,635 for restaurant and 1,345 for office
  • Total investment costs at 250,000

40
Tax methods
  • Companies are taxed at a straight 30 rather than
    at a marginal tax rate
  • Depreciation
  • For each capital cost worth under 1,000,
    depreciation is calculated at 37.5 of the annual
    value until it is fully depreciated
  • Items over 1,000 use 15 the first year and 30
    annually thereafter
  • Capital gains tax is not a separate tax, but a
    component of income tax

41
10 year Business Plan - Assumptions
  • Tax rate at 30
  • Depreciation at 37.5
  • No capital gains tax (rolled into income)
  • Annual Escalators
  • Sales Revenue and Royalty Income
  • 3 yrs. 2-3
  • 4 yrs. 4-5
  • 5 yrs. 6-10
  • Expenses
  • 4 yrs 2-5
  • 2.8 yrs. 6-10 (inflation rate and max operation
    efficiency)
  • Discount rate at 11, with 10 and 12 as
    alternatives

42
10 year Business Plan - Financials
  • 400,000 initial investment
  • 350,000 actual investment cost
  • 50,000 in reserves for unexpected costs
  • Achieve a positive return at the end of the 5th
    year when the Melbourne restaurant is sold for
    approximately 150,000.
  • Projected annual royalty income of 0.5 million
    by the 10th year, assuming two franchises are
    established annually.

43
Present Value and Rate of Return
  • 10 year Net Present Values range from
    800,000-1,300,000,using 10-12 discount
    rates.
  • Internal Rates of Return range from 33-34 after
    taxes.

44
  • As evidenced by the projected return with a
    conservative 10 year forecast, this project is
    guaranteed to be a market success for the
    expanding health conscious sector in Australia
    and
  • Project will open the doors for future
    development in Asia and Europe.

45
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