Fire Fountain Grille

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Table of Contents

Page 1

1.0 Executive Summary.............................................................................................................................1Chart: Highlights ......................................................................................................................1

1.1 Objectives ...................................................................................................................................11.2 Mission ........................................................................................................................................21.3 Keys to Success ........................................................................................................................2

2.0 Company Summary.............................................................................................................................22.1 Company Ownership .................................................................................................................22.2 Start-up Summary ......................................................................................................................3

Chart: Start-up .........................................................................................................................3Table: Start-up .........................................................................................................................4

2.3 Company Locations and Facilities ..........................................................................................53.0 Products and Services........................................................................................................................5

3.1 Competitive Comparison ..........................................................................................................53.2 Product and Service Description .............................................................................................6

3.2.1 Menu ...............................................................................................................................74.0 Market Analysis Summary ..................................................................................................................9

4.1 Market Segmentation ..............................................................................................................11Chart: Market Analysis (Pie)................................................................................................11Table: Market Analysis .........................................................................................................12

4.2 Target Market Segment Strategy...........................................................................................134.2.1 Market Trends .............................................................................................................134.2.2 Market Growth .............................................................................................................144.2.3 Market Needs ..............................................................................................................14

4.3 Service Business Analysis .....................................................................................................144.3.1 Competition and Buying Patterns .............................................................................144.3.2 Main Competitors .......................................................................................................154.3.3 Business Participants.................................................................................................15

5.0 Strategy and Implementation Summary ..........................................................................................155.1 Competitive Edge....................................................................................................................155.2 Marketing Strategy ..................................................................................................................16

5.2.1 Positioning Statement ................................................................................................165.2.2 Pricing Strategy...........................................................................................................165.2.3 Promotion Strategy .....................................................................................................165.2.4 Marketing Programs ...................................................................................................17

5.3 Sales Strategy..........................................................................................................................175.3.1 Sales Forecast ............................................................................................................17

Table: Sales Forecast.................................................................................................18Chart: Sales Monthly ...................................................................................................18Chart: Sales by Year ...................................................................................................19

5.4 Strategic Alliances...................................................................................................................195.5 Milestones ................................................................................................................................19

Table: Milestones..................................................................................................................206.0 Web Plan Summary ..........................................................................................................................21

6.1 Website Marketing Strategy ...................................................................................................216.2 Development Requirements ...................................................................................................21

7.0 Management Summary ....................................................................................................................217.1 Personnel Plan .........................................................................................................................22

Table of Contents

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Table: Personnel ...................................................................................................................238.0 Financial Plan ....................................................................................................................................24

8.1 Start-up Funding ......................................................................................................................24Table: Start-up Funding........................................................................................................25

8.2 Break-even Analysis................................................................................................................26Table: Break-even Analysis .................................................................................................26Chart: Break-even Analysis .................................................................................................26

8.3 Projected Profit and Loss .......................................................................................................26Chart: Gross Margin Monthly ...............................................................................................27Chart: Gross Margin Yearly..................................................................................................27Table: Profit and Loss ..........................................................................................................28Chart: Profit Monthly .............................................................................................................29Chart: Profit Yearly ................................................................................................................30

8.4 Projected Cash Flow ...............................................................................................................31Table: Cash Flow ..................................................................................................................31Chart: Cash ...........................................................................................................................32

8.5 Projected Balance Sheet ........................................................................................................33Table: Balance Sheet ...........................................................................................................33

8.6 Business Ratios .......................................................................................................................34Table: Ratios .........................................................................................................................35

8.7 Long-term Plan.........................................................................................................................36Table: Sales Forecast ...............................................................................................................................1Table: Personnel ........................................................................................................................................2Table: General Assumptions ....................................................................................................................4Table: Profit and Loss ...............................................................................................................................5Table: Cash Flow .......................................................................................................................................7Table: Balance Sheet ................................................................................................................................8

The Fire Fountain Grille

Page 1

1.0 Executive Summary

The following plan is based on years of experience, is highly focused and promises to follow apath of prosperity for its investors, owners, managers and staff. It is based on conservativesales figures, and actual sales may be higher. The projections contained herein are authentic

and will be used as the budget for the business. The Fire Fountain Grille® will show a profitimmediately, and will increase sales and profits each year thereafter.

The Fire Fountain Grille is a comfortable, inviting restaurant designed to make our customersfeel as if they are enjoying VIP services in a world all to themselves. The decor and theme isbased on an exterior fountain located at the main entrance that has a cascading waterfountain combined with flame throwing torches. The show kitchen will also feature a custommade "Fire Fountain", a unique show kitchen grill that also has a cascading water fountaincombined with flame throwing torches. This spectacular marvel will be visible from the diningroom side, and will be a functioning 48" gas powered steak grill on the kitchen side. The energyand atmosphere of the restaurant is high, and draws some of its power from the dazzling "FireFountain". By offering an exciting, tantalizing and rewarding experience for its customers, theFire Fountain Grille and its service oriented approach will be immediately embraced by thosethat love dining out!

1.1 Objectives

1. Sales for the first full calendar year will be $2.3 million, with Net Profit/Sales in excessof 19%.

2. A second unit will be opened in the first quarter of year three.3. A third unit will be opened in the first quarter of year four.


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1.2 Mission

· Fire Fountain Grille is a commercial enterprise, and as such, exists for the purpose ofgenerating sales and profits for its investors, owners, managers and staff. Because FireFountain Grille is a service business, it also exists to serve its customers. These tworeasons for its existence are inextricable. If one aspect does not exist, the other willcease to exist.

· Fire Fountain Grille will offer mouth-watering meals and beverages in a soothingenvironment.

· Our staff will be cheerful, courteous, and focused on pleasing our customers.· Our customers will always be treated with importance and warmth. When it comes time

for our customers to decide where to spend their entertainment dollars, we will strive tobecome their first destination of choice.

· Our staff will be offered a workplace where they can prosper and grow in a dignified,fun and rewarding manner.

· Our investors will see a lucrative return on their dollars, and will have opportunity forfuture growth and prosperity with our company.

· Our vendors will be treated with loyalty, and they will find their future with us to befruitful.

· We will be a good neighbor to the businesses in our area, and we will be acontributing and supportive member of our community

1.3 Keys to Success

1. Our policy of having a manager pass by every table in the dining room every night togreet, visit with, or at least make eye contact with (with a smile) our customers.

2. Our policy of having a manager visit any and every table that has a question, or if thecustomer has positive or negative feedback. The manager is required to use everymeans possible to satisfy our customers.

3. Our commitment to the success and happiness of our staff.4. Our commitment to providing excellent quality food and beverages at all times.

2.0 Company Summary

The Fire Fountain Grille is a steakhouse concept. It offers a comfortable, upscale ambience,replete with its signature fountains of flames and water. The menu features original variationsof American favorites with a tantalizing array of seasoned steaks, prime rib, roasted caramelchicken, hot gourmet sandwiches and hearty salads. Beverages include an impressive wine list,microbrew beers, and festive cocktails. Fire Fountain Grille, Unit One, will be located in a newerfree standing building. This location is an extremely high visibility spot on one of the most popularcommercial corridors in the region. It has excellent parking, excellent ingress and egress froman eight lane thoroughfare.

2.1 Company Ownership

Fire Fountain Grille - Unit One LP, is projected as a Limited Partnership, but may switch the


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preferred structure to a stock "C" Corporation or Limited Liability Corporation "LLC", forpurposes of investment structuring (see section 6.1.1 "Investment Summary"). The number ofinvestors could vary, based on various interpretations under SEC "Regulation D".

OPERATING PARTNERS

1. General Managing Partner, with 31% ownership.2. Vice Managing Partner for Dining Room and Human Resource Operations, with 9%

ownership.3. Vice Managing Partner for Beverage and Entertainment, with 9% ownership.4. Vice Managing Partner for Kitchen and Catering Operations, with 9% ownership.

INVESTMENT PARTNERS

1. Limited Partner Group One, with 14% ownership.2. Limited Partner Group Two, with 14% ownership.3. Limited Partner Group Three, with 14% ownership.

2.2 Start-up Summary

Fire Fountain Grille, Unit One, is a project that will take advantage of a newer, existing structure.Start-up costs will cover a number of details to convert the structure to suit our concept bothvisually, and functionally. Included in start-up costs are all necessary expenditures to coverthe pre-opening hiring and training of our staff, adding and revising equipment needs, supplyingsmallwares and servicewares, inventory and other essentials.


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Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $5,000

Stationery, Menus, Brochures $4,000

Food Inventory $20,000

Alcohol Inventory $8,000

Operating Supplies $5,000

Smallwares $22,000

Uniforms $3,000

Linen $1,500

Two Fire Fountains $30,000

Kitchen Improvements $15,000

Leasehold Improvements $30,000

Exterior Improvements $10,000

Catering Vehicle & Equipment $23,000

Signage $15,000

Liquor License $4,000

Point Of Sale System $10,000

Computers & Peripherals $5,000

Office Furnishings $1,500

Pre-opening Management Labor $15,000

Pre-opening Labor/Training $16,000

Pre-opening Advertising & Marketing $8,000

Permits & Fees $3,000

Insurance $7,500

Rent $15,000

Research and Development $5,000

Util ity Deposits $10,000

Cash Reserve $25,000

Other $8,000

Total Start-up Expenses $324,500

Start-up Assets

Cash Required $580,500

Start-up Inventory $0

Other Current Assets $0

Long-term Assets $65,000

Total Assets $645,500

Total Requirements $970,000


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2.3 Company Locations and Facilities

The Fire Fountain Grille is locate in a large stand-alone building with plenty of parking next to theAcres & Acres Mall, in Electrumburg, a fast growing suburb of Starburstville.

3.0 Products and Services

The Fire Fountain Grille is a comfortable, inviting restaurant designed to make our customersfeel as if they are enjoying VIP services in a world all to themselves. The decor and theme iscentered around the custom made "Fire Fountain", a unique show kitchen grill that has acascading water fountain combined with flame throwing torches on the dining room side, and is asizzling 48" gas powered steak grill on the kitchen side. The energy and atmosphere of therestaurant is high, and draws some of its power from the dazzling "Fire Fountain".

The real power and energy of the restaurant comes from the attentive and courteous serviceprovided by our floor staff, and the indescribably delicious steaks and other entrees caringlyprepared by our motivated kitchen team. Each night that we are open, two managers are onduty. One manager carefully orchestrates the proper execution of the kitchen, so that all foodcomes out prepared perfectly, and on time. The other manager attends to the flow of thedining room, there to facilitate outstanding customer service and satisfaction. Our floormanagers are extremely high profile, taking the time to greet every customer at some point intheir stay. Our customer service policy is simple: All customers must leave happy about ourservice and food!

We are a dinner-house, but we do offer lunch on Friday, Saturday and Sunday. We have a"late-night seating" 10:00 pm-1:00 am Friday and Saturday. The lights come way down,and customers enjoy light jazz music, and a discount on certain food and beverage items. GiftCertificates always available. We have private dining facilities for group events, and we offerfull catering services for events at any location! We offer "take-out" food for those on therun! Visitors to our website will find upcoming events, specials, and catering and gift certificateinformation.

The restaurant hours are: Monday-Thursday 3:00 pm-10:00 pm; Friday and Saturday 11:00am-1:00 am; Sunday 11:00 am-9:00 pm.

3.1 Competitive Comparison

PF Chang's®, Houston's® and TGI Friday's® are chains that offer fun atmospheres forcomparison purposes. Our most competitive edge is our managers, and their ability andwillingness to create goodwill among our customers, and to overcome any perceived difficulty,and indeed, turn it around into a positive experience.

The Fire Fountain Grille offers steaks and other foods that are prepared with an irresistiblecombination of flavors and spices. No one else in the industry serves steaks as delicious as ours.


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3.2 Product and Service Description

Our menu consists of juicy, thick steaks that are coated with a secret combination of flavoringsand zesty spices. These steaks are grilled to perfection. We offer mouth watering prime rib,available "Fire Fountain Style", in four portion sizes. The menu also consists of butter-roastedand seasoned chicken dishes, fresh grilled seafoods, imaginative salads, cold melon chowders,a variety of huge burgers and grilled sandwiches, tender pork chops, soups, appetizers withberry barbecue sauces, refreshing fountain drinks, and flaming desserts.

From the bar patrons can order a wide range of American wines, as well as dozens of beersincluding the most popular microbrews. The bar also offers festive martinis, margaritas,specialty frozen drinks, and hundreds of cocktails.


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3.2.1 Menu

Fire Fountain Grille Menu

We have a "late-night seating" 10:00 pm-1:00 am Friday and Saturday, with a discount on fooditems printed in red...

Fire Fountain Specialties...These meals come with your choice of baked tater or sweet tateror red beans n' rice or veggies or fries. Also, you get fresh baked rolls, butter, and a salad! Allsteaks are seasoned USDA Prime Cuts! You can also order anything on this menu withoutseasonings!

RIBEYE - Perhaps the tastiest of all steaks! Hand cut daily, choose from big (16 ounce) $16.95or huge (22 ounces) $22.95!!

FIRE FOUNTAIN FILET - Tender 9 ounce filet, lightly seasoned and sizzle-grilled $14.95

METROPOLITAN STRIP STEAK - 14 ounce Strip steak, with Bay Shrimp and Citrus-BearnaiseSauce $17.95

NEW YORK STRIP - Classic Strip Cut, seasoned and grilled $13.95

TOP SIRLOIN - Prime delicate cut, seasoned and grilled to order. America's#1 steak! $11.95

PRIME RIB - Hand carved cuts, slow roasted, and served with au jus and whipped horseradishsauce: 20 ounce - $19.95; 16 ounce - $16.95; 12 ounce - $13.95; 8 ounce - $10.95

Also, try our Fire Fountain Style of Prime Rib! Ask your server!

Seafood...

HONEY/CHILI GLAZED SALMON - Fire-Grilled Salmon, brushed with honey-chili glaze and toppedwith black bean salsa $13.95

GRILLED SALMON - With your choice of side dish $12.95

JAMAICAN SNAPPER - Pan charred, topped with a sweet coconut-tomato glaze $11.95

ROASTED PRAWNS - 12 Grilled Jumbo Shrimp over rice $13.95

CHICKEN ASTORIA - Breast of chicken, topped with Bay Shrimp and asparagus spears, finishedwith Citrus-Bearnaise sauce $11.95

FIRE-SMOKE CHICKEN - Robust, entirely dark meat, quarter of a chicken, smoke-roasted,


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served with Three Berry Barbecue Sauce $12.95

CARAMEL FLAMED CHICKEN - Tender Chicken breast, buttered and basted with sweet caramelglaze, then charred over an open flame $10.95

Burgers ‘n such......they come with fries..

THE BACON SPECTACULAR - Broiled 1/3 pound burger with bacon, Cheddar cheese, lettuce, dillpickle and tomato. $5.95

BURGER BURGER - Juicy ½ pounder served on a toasted onion bun with pickle, onion, lettuce andtomato $4.95... add cheese $.50

THE HIGHWAYMAN - Colossal. Char-broiled. One entire pound of juicy ground beef withCanadian bacon, Swiss cheese, lettuce, grilled onions, barbecue sauce and tomato on a giantbun $7.95

SLOPPY JOE - Sweet ‘n zesty, a mouth-watering favorite! $4.95

SHAVED PRIME RIB SANDWICH - With smoked bacon-horseradish sauce and smothered withmelted Monterey Jack cheese $4.95

BARBECUE-BEEF - Huge pile of beef, slathered with barbecue sauce and melted Cheddar cheese-served open-faced $4.95

CHICKEN RANCH SANDWICH - Golden deep-fried chicken, served on a kaiser roll with Ranchsauce, lettuce and tomato $4.95

Appetizers...

GRILLED CHICKEN STRIPS - Served with Three Berry Barbecue Sauce $4.95

GRILLED STEAK SKEWERS with Ginger Red Sauce $4.95

FIRE STICKS - Fried Pepper-Jack cheese with cool Ranch Dip $3.95

CHILLED MELON CHOWDER - Bowl $2.95 Cup $1.95

BEER BATTERED SHRIMP with Pineapple Salsa $5.95

CHICKEN STRIPS with Honey-Dijon Sauce $4.95

From The Fountain...

Coffee $1.25, Decaf $1.25; Coke, Root Beer, 7-UP, Diet Coke, Iced Tea $1.50; Milk, Large$1.50 Small $1.25;

Draft Beers...Pint $2.75, Glass $1.50; Microbrews...Pint $3.00, Glass $1.95


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Wines...House Glass $3.95, House Carafe $12.00. Please ask your server for a wine list.

Desserts...

Flaming Fruit Kebabs with ice cream $5.95; Cherries Jubilee $5.95; Key Lime Pie $3.95

Milk Shakes $2.95; Banana Split $5.25; Ice Cream Sundae $2.50; Carrot Cake $3.95

Completely Fat-Free Dessert: Chewy Brownies with Frozen Yogurt $2.95

JUST FOR KIDS...Yaaay!!

Kids meals come with fries..

Little Burger $3.95; Chicken Toes $3.95; Little Steak $5.95; Cheesaroni $2.95; Corny Dog $3.95;Hot Doggy $3.95...kids soda pop is free!!!

Salads...

SMOKED CHICKEN SALAD - with caramelized Hazel nuts and Ginger-Orange dressing $7.95

Grilled Sirloin Caesar $7.95; Grilled Chicken Caesar $7.95; Grilled Shrimp Caesar $7.95; TraditionalCaesar $2.95; Fresh Garden Salad $2.95; - with these dressing choices: Ranch, Bleu Cheese,Catalina, Honey-Mustard, Low-Fat Italian

Chilled Melon Chowder - Bowl $2.95, Cup $1.95; Side of Fries $1.95; Sides of Red Beans 'n'Rice or Baked Tater, Sweet Taters, Mashed Taters, or Veggies are $1.95; Grilled Onions $1.95;Daily Soup -Bowl $2.95, Cup $1.95

Remember! We offer "to-go" food for those on the run!

Please visit our Website!

4.0 Market Analysis Summary

Electrumburg is a dynamic city located in the rapidly growing Southeast part of theStarburstville metropolitan area. The city is known for its excellent medical and educationalinstitutions, beautiful neighborhoods, easy access to freeways and a diversified economicbase. From a residential perspective, Electrumburg features master-planned communities,luxury executive homes, older residences in tree-lined neighborhoods and affordable starterhousing. A robust economy, attractive residential developments, exciting commercial andbusiness growth, dynamic neighborhoods and abundant civic pride combined with outstandingcity services - Electrumburg has all of the amenities necessary for ensuring a quality lifestyle.

Electrumburg has been one of the fastest-growing cities in one of the fastest-growingmetropolitan areas in the United States over the past three decades. The city's populationgrew 48 percent during the 1990s. Today, Electrumburg has a population of more than225,000. Electrumburg is adjacent to Starburstville (pop. 500,000), within the Valley with 1.6million residents.


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The median age of "Electrumburgians" is 39 years, and more than 59 percent of its residentsare college-educated. Of the five largest cities in the Valley, Electrumburg has the mosthomes with married couples (53 percent) and the largest percentage of households withchildren under 18 years old living at home (32 percent). The demographics of Electrumburg'sworkforce are almost identical to that of the region, providing an excellent labor pool forbusinesses of all sizes. The fact that Electrumburg is part of a vibrant metropolitan area makes ita very attractive place to live and establish a business.


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4.1 Market Segmentation

Fire Fountain Grille, Unit One, is located in Electrumburg. According to the Electrumburg Chamberof Commerce and the US Census Bureau, the population within a five mile radius of this addressis nearly 125,000, with over 59,000 households, and over 400 businesses. Income within one mileis over $81,000, $72,000 within three miles and $60,000 within five miles. Per capita retailspending in this area exceeds $13,000, with total retail spending exceeding $2.8 billion!

The first tier target segment for Fire Fountain Grille concentrates on the 30-44 year old agerange, with income in the $40,000 - $80,000 range, located within a five mile radius. Second tieris the 45-59 year old range, with income in the $55,000 - $90,000 range, located within a fivemile radius. Third tier is the 21-29 group, with income at $36,000 - $60,000, located within a fivemile radius. Fourth tier is a combination of the age and income ranges mentioned in tiers 1-3, butextends the geographic radius to seven miles. Fifth tier is age ranges 60+, within five miles, andincome of $65,000+. Sixth, and final tier is a composite of age ranges 60+, 10-20, and under 10,with a radius of five - seven miles, and a mixture of incomes.


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Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Ages 30-44 (within 5 mile

radius)

10% 48,000 52,800 58,080 63,888 70,277 10.00%


radius)

9% 30,000 32,700 35,643 38,851 42,348 9.00%


radius)

9% 24,000 26,160 28,514 31,080 33,877 9.00%

Ages 60 + (within 5 mile

radius)

7% 42,000 44,940 48,086 51,452 55,054 7.00%


radius)

5% 30,000 31,500 33,075 34,729 36,465 5.00%


radius)

2% 26,000 26,520 27,050 27,591 28,143 2.00%

Total 7.41% 200,000 214,620 230,448 247,591 266,164 7.41%


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4.2 Target Market Segment Strategy

Strategically, targeting the 30-44 year old age range in upper middle class areas close to ourrestaurant helps serve the needs and requirements of our customers, and ties in logically withour marketing plan (see Marketing Plan) and style of restaurant. Typically, the upper middle classin the 30-44 range are raising families whose children range from toddlers to teens, yet tend tocontinue to have "disposable" dollars available for a quality diversion (such as Fire Fountain Grille)to get them away from home and work. These customers have regimented schedules in theirlives, and find value in exceptional service, timely service, and mouth watering, delightful food. Ifa couple chooses to leave the kids home, they'll find value in the form of satisfaction and funtogether, in their diversionary time. If they bring the kids, they will appreciate a value based kidsmenu. This first tier of our market segment, is also the primary focus of our marketing plan(see Marketing Plan), which has a deep commitment to focusing on kids, at their schools and intheir community. These kids are primarily the children of our 30-44 tier-one group. Industryresearch (Nation's Restaurant News®) has shown that the 30-44 age group appreciatessteaks, chops, chicken and seafood dishes prepared with lightly seasoned recipes, which is aperfect fit for Fire Fountain Grille.

Our SECOND-TIER market group (45-59 / $55,000 - $ 80,000), will also find value in greatservice, and delicious food, and will appreciate a restaurant with a much better wine list thanwhat is normally available in the upscale casual dining niche. Fire Fountain Grille will also beconsidered a refreshing escape from restaurants that sing and clap for birthdays.

Our THIRD-TIER group, the 21-29 year olds will find that the menu contains many favoritesavailable to them that are considered essential: tantalizing appetizers, spicy steaks, andhundreds of cocktails and specialty beers. The Fire Fountain turns down the lights for latehour business on the weekends, and offers jazz and food and beverage specials, offering ourcustomers a chance for some socializing and conversation.

FOURTH-TIER simply extends the market radius out to a five mile area, with the samedemographics included in tiers 1-3.

FIFTH-TIER (60+ / $65,000+), represents a market that has abundant disposable income, andtruly reveres attentive, efficient service. Fire Fountain Grille serves all of its meals with theoption of cooking with little or no spices. This customization is much more appreciated by thisgroup, who often prefer meals prepared to their own specifications. Because Fire FountainGrille has only one purpose in mind when it comes to our customers – All Customers MustLeave Happy, customizing a meal to our treasured customers will always be a pleasure!

The SIXTH-TIER group will benefit from all of the quality approaches that are marketed to theprevious five tiers, and will gain exposure to us primarily through our community involvementand word-of-mouth.

4.2.1 Market Trends

The trends in the Starburstville Metro market rely heavily on visual appeal, and locations. Mostrestaurants overlook targeting kids as a way to market to the parents. The Fire Fountain Grilledoes not seek to market to kids to get them to eat at our restaurant, but rather as a way to gettheir parents to eat there.


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4.2.2 Market Growth

Steak restaurants comprise less than 5% of the total restaurant market. Service orientedsteak houses have room to grow. Meat and potatoes is still what Americans want, and theywant it with good service.

4.2.3 Market Needs

The market suffers from a lack of service oriented restaurants. The market needs a restaurantthat values the customer as its number one priority.

4.3 Service Business Analysis

All restaurants combined, from fast food to fine dining, show an average bottom line profit of 3-10%. Margins are much better in full service restaurants with good management, good staff,good concepts, good menus and wine lists, good location and good financial controls. A fullservice steakhouse with all of these factors should show a bottom line profit of 13% - 25%.

4.3.1 Competition and Buying Patterns

The general nature of competition in this business, and how the customers seem to chooseone provider over another can be measured by customer loyalty and positive word of mouth.Customer loyalty and brand preference come from developing a trust between the customerand the business. To be successful in the hospitality business, one must truly believe in, andalways apply, the fundamental meaning of hospitality, which simply stated is, one must alwaysbe hospitable, and the customer must truly be made to feel welcome and cared for. The trustthat a customer feels, is based upon the business' ability to recognize what it takes to pleasea customer, and then is built upon by continuously delivering to that customer at, or above,the level of expectation that the customer expects. Fire Fountain Grille has carefully selecteda management team that has been specially trained in the high art of exceptional customerservice. The screening, hiring and training standards for front-of-the house staff are thehighest in the industry.

The level of attention and care that our staff bestows upon our customers sets us far above ourcompetition. Fire Fountain Grille also has extremely high standards for professionalism in thekitchen. Cleanliness, freshness of ingredients, adherence to recipe and cooking standards, andefficiency are constantly applied. Prices are reasonable, and are perceived as being anexceptional value. Fire Fountain Grille offers extremely delicious steaks, tantalizing chickendishes, savory grilled seafoods, tender prime rib, fresh salads, sensational appetizers, temptingdesserts and refreshing beverages. All of this can be found in an environment with an ambiencethat is unusual, and very comfortable. Our signature "Fire Fountain" fills the restaurant with anexciting glow, and the soothing sounds of falling water. The seating is almost all privatebooths, creating an atmosphere of relaxation and comfort.

The Fire Fountain Grille is conveniently located on a highly visible ingress near a successfulmall. The restaurant has a huge, secure parking lot, excellent ingress and egress, and a beautifuland highly noticeable exterior. This area has other restaurants, which is a definite plus for us.This allows us to capitalize on a positive "clustering" effect, and works well with our marketing


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strategy.

4.3.2 Main Competitors

Competition comes from major chains and from various independents.

4.3.3 Business Participants

The general category is eating and drinking places. Typically, this can be broken down asfollows:

1. Fine dining (white tablecloths, expensive wines).2. Private Clubs and Country Clubs3. Upscale4. Upscale casual (good prices, fun) 5. Boiler plate casual6. Neighborhood places7. Breakfast/lunch/dinner chains8. Fast Food

The Fire Fountain Grille will participate in the upscale casual category.

5.0 Strategy and Implementation Summary

Emphasize service

We will differentiate ourselves with SERVICE! We will establish our business offering as a clearand viable alternative for our target market, from the scores of "rubber chicken", frozen food,and "Happy Birthday singing" restaurant chains.Build a relationship-oriented business

Build long-term relationships with customers, not single-visit deals. Become their restaurantand destination of choice. Make them understand the value of the relationship.

Focus on target markets

We need to focus our offerings on specific population groups as the key market segment weshould own. We do not want to compete for the buyers who go to fast food or "microwavefrozen foods" types of "restaurants. We definitely want to be able to sell to smart, qualityconscious customers.

5.1 Competitive Edge

Clearly, our competitive edge is the customer service experience and approach that ourmanagement team will bring to the table. Our smiling, unassuming and good natured approachto all of our customers is evident, and highly appreciated. Our recipes are delicious, and theportions are large. The foods are fresh and satisfying, and the drinks are fulfilling and refreshing.


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5.2 Marketing Strategy

An overview of the marketing plan includes:

• Kids Tours • Gift Certificate Program • In-store comp cards

• Direct mail • Free surprise dinners for radio station DJ's.

• Charity events for senior citizens, high schools, grade schools, churches and communitycenters.

• Trade shows • Vintner and Chef Dinners

• Eye-catching exterior and interior neons, fountains and torches.

• High profile interaction between our managers, and the customers.

• Excellent service and high food quality every single day in the restaurant.

5.2.1 Positioning Statement

The Fire Fountain Grille. Sizzling, Refreshing, Exciting! For A Dinner To Remember...

5.2.2 Pricing Strategy

Prices are fit to attract the consumer who prefers a quality steak for a reasonable price. Theprices are above those of operators such as Sizzler®, El Paso BBQ® and Black Angus®, arebelow Ruth's Chris® and Morton's®.

5.2.3 Promotion Strategy

The Fire Fountain Grille uses a mix of various promotions and media to spread news aboutourselves. This includes:

1. Direct mail, generated from in-store "Event Cards" and customer's business cards. Eventcards are forms that the customers fill out so as to receive notices of our upcomingevents.

2. Young people's tours, to generate enthusiasm among the kids in our area, who in turnspread it to their folks.

3. Eye-catching exterior neons and torches.4. In-store comp cards for appetizers and desserts.5. Free surprise dinners for radio station DJ's.6. Charity events for senior citizens, high schools, grade schools, churches and community

centers.7. Trade shows, to promote private dining, banquets and catering.8. "Vintner and Chef Dinners" bringing together the wine making and culinary fields at


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showcase events, to be held at the Fire Fountain Grille.9. High profile interaction between our managers, and the customers.

10. Excellent service and high food quality every single day in the restaurant.

5.2.4 Marketing Programs

Children's tours will be an ongoing program that has proven to work over and over again. Thekids are brought to the restaurant by teachers or parents, in groups of no more than 25, and aregreeted at the door by our manager. They all go inside and are seated near the Fire Fountainwhere they are told a cool short story. They then are taken on a tour of the store and kitchenand get to go inside of a giant refrigerator, and see some cool cooks doing their thing. Theneveryone is seated for a free lunch of "Chicken Toes" or "Hot Doggies" and soda pop. Everybodytalks a little about restaurants and other neat stuff. When its time to say goodbye, we takepictures and everybody gets an appetizer or dessert card, and some promotional menus. Whenthe kids come back with their parents, we address the kids by their first names and treat themspecial.

5.3 Sales Strategy

We require our servers to have a thorough and comprehensive understanding of the menus,ingredients and methods of preparation of all of our foods and beverages. We train our staff toalways describe and recommend items, even to regular customers, and to always upsell. The keyto a server's success in upselling is the realization that it almost always brings in better tipsbecause the checks are higher.

GIFT CERTIFICATES

The Fire Fountain Grille will aggressively sell gift certificates. The strategy behind giftcertificate sales is simple and proven. Most GC sales occur during the holidays. Most GC's arethen redeemed in the post holiday months of January and February, helping drive sales in thosetraditionally slower months.

5.3.1 Sales Forecast

The first month sales will open strongly, because of the advance buzz created by our pre-opening marketing, and our Grand Opening Festivities. Sales will drop off slightly as we begin tosort out our operational patterns. September is a slower month for restaurants. October andNovember see sales begin to build as we continue with our marketing, and relentless quality.December sees a sharp spike upward as the Holidays are in full swing. A typical week for the firstsix months will look like this (conservative estimate):

Sun. Mon. Tues. Wed. Thurs. Fri. Sat. Total Sales

$8,500 $4,000 $4,000 $5,500 $7,000 $9,500 $11,500 $50,000

Years 2005 - 2008 will see an 8% annual increase. Costs will be higher during the start-up months.


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Table: Sales Forecast

Sales Forecast


Sales

Food $1,058,353 $1,935,200 $2,090,016 $2,257,217 $2,437,794

Beverage $43,588 $70,800 $76,464 $82,581 $89,187

Liquor $59,890 $106,200 $114,696 $123,871 $133,781

Beer $83,801 $153,400 $165,672 $178,925 $193,239

Wine $52,325 $94,400 $101,952 $110,108 $118,916

Total Sales $1,297,957 $2,360,000 $2,548,800 $2,752,702 $2,972,917

Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Food $359,706 $657,968 $710,605 $767,453 $828,850

Beverage $2,955 $5,664 $6,117 $6,606 $7,135

Liquor $7,949 $16,057 $16,048 $17,342 $18,729

Beer $15,716 $32,214 $34,791 $37,574 $40,580

Wine $10,795 $20,768 $22,429 $24,223 $26,161

Subtotal Direct Cost of Sales $397,121 $732,671 $789,990 $853,198 $921,455


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5.4 Strategic Alliances

The Fire Fountain Grille will align with hotels, movie theatres, live theatres, cab companies, banksand retail stores in an informational brochure exchange. Each business will have a chance topromote the other businesses at their place of business. Additionally, our respectivebusinesses will barter with each other, using gift certificates and comps.

5.5 Milestones

The milestone table is set up as a flow-chart. We opted to exclude budgeted dollars in themilestone category because we detailed these dollars in the start-up table. The milestonetable is specific in detail, allowing for the smooth flow of functions that are necessary to setup the restaurant on schedule for the Grand Opening. Each function is timed to coincide with theproper execution and time needed to complete each task. Each Managing Partner has specificduties assigned specifically to his area of expertise. The end of the milestone table also showsthe beginning of the 2004 marketing plan.


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Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Office/Computer Supplies 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Install Accounting Programs 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Set Up Uti l i ty Accounts 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Finan./Legal/Ins. Accounts 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Expedite Liquor License 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Order POS System 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Begin Screening/Hiring 4/1/2004 4/5/2004 $0 MP 4 Personnel

Order Kitchen Equipment 4/1/2004 4/5/2004 $0 MP 1 Kitchen

Order Dining Room Equip 4/1/2004 4/5/2004 $0 MP 1 Finance/Ops.

Order Fountain & Decos 4/1/2004 4/7/2004 $0 MP 1 Finance/Ops.

Computerize Food Accts. 4/1/2004 4/7/2004 $0 MP 3 Kitchen

All Other Vendor Accounts 4/1/2004 4/7/2004 $0 MP 3 Kitchen

Produce Brochures 4/1/2004 4/7/2004 $0 MP 4 Marketing

Brochures To Printers 4/1/2004 4/7/2004 $0 MP 4 Marketing

Order Smallwares 4/2/2004 4/7/2004 $0 MP 3 Kithcne

Invites To Opening Events 4/2/2004 4/7/2004 $0 MP 4 Marketing

Dates Final Inspections 4/2/2004 4/10/2004 $0 MP 1 Finance/Ops.

First Hiring Goals Attained 4/2/2004 4/10/2004 $0 MP 4 Personnel

Signs/Exterior Neons 4/2/2004 4/10/2004 $0 MP 1 Finance/Ops.

Hire Tradesmen 4/2/2004 4/10/2004 $0 MP 2 Start-up

Purchase Catering Vehicle 4/8/2004 4/10/2004 $0 MP 2 Start-up

Alcohol Accounts 4/8/2004 4/10/2004 $0 MP 2 Beverages

Rec/Install Kitch Equipment 4/8/2004 4/16/2004 $0 MP 3 Kitchen

Install Dining Furn 4/8/2004 4/16/2004 $0 MP 2 Start-up

Install Fountain/Decos 4/8/2004 4/16/2004 $0 MP 4 Start-up

Install Signs & Neons 4/8/2004 4/16/2004 $0 MP 2 Start-up

Train POS System 4/8/2004 4/16/2004 $0 MP 1 Finance/Ops.

Final Test Of All Equipment 4/15/2004 4/16/2004 $0 MP 1 Finance/Ops.

Order Dry Goods 4/15/2004 4/18/2004 $0 MP 3 Kitchen

Building & Fire Inspect 4/15/2004 4/18/2004 $0 MP 2 Start-up

Receive Smallwares 4/15/2004 4/18/2004 $0 MP 3 Kitchen

Health Dept. Inspection 4/15/2004 4/15/2004 $0 MP 3 Kitchen

Receive Dry Goods 4/15/2004 4/15/2004 $0 MP 3 Kitchen

2nd Hiring Goals 4/15/2004 4/15/2004 $0 MP 4 Personnel

Place 1st PFG (food) Order 4/21/2004 4/21/2004 $0 MP 3 Kitchen

Place 1st Alcohol Orders 4/21/2004 4/21/2004 $0 MP 2 Beverages

Begin Training FOH Staff 5/1/2004 5/15/2004 $0 MP 4 Personnel

Begin Training Bar Staff 5/1/2004 5/15/2004 $0 MP 2 Beverages

Begin Training Kitchen Staff 5/1/2004 5/15/2004 $0 MP 3 Kitchen

1st Produ/Dairy/Bread 5/1/2004 5/1/2004 $0 MP 3 Kitchen

Receive 1st PFG Shipment 5/15/2004 5/15/2004 $0 MP 3 Kitchen

Produce/Dairy/Bread Delivery 5/15/2004 5/15/2004 $0 MP 3 Kitchen

Achieve Final Hiring Goals 5/15/2004 5/15/2004 $0 MP 4 Personnel

Test Night For Staff 5/29/2004 5/29/2004 $0 MP 2 Beverages

Associates Night 5/30/2004 5/30/2004 $0 MP 4 Marketing

Fundraiser For Senior Center 5/31/2004 5/31/2004 $0 MP 1 Finance/Ops.

Grand Opening 6/1/2004 6/1/2004 $0 MP 4 Sales

Staff Party 6/10/2004 6/10/2004 $0 MP 2 Marketing

Kids Tour 6/11/2004 6/11/2004 $0 MP 4 Marketing


Free Lunch Chamb Comm 7/1/2004 7/1/2004 $0 MP 1 Finance/Ops.


1st Rotary Lunch 7/26/2004 7/26/2004 $0 MP 1 Finance/Ops.


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Totals $0

6.0 Web Plan Summary

Our website, is an opportunity to offer current information on special events, menu offerings,public service announcements and comp specials.

6.1 Website Marketing Strategy

Our website will be promoted on all of our menus, and promo pieces. We will link to CitySearch.com® and many other hospitality oriented websites and portals.

6.2 Development Requirements

The Fire Fountain Grille website will be initially developed with few technical resources. VeriSign®will host the site and provide the technical back end. We will maintain a simple, classy, yetInternet focused site. The website logos, and graphics will be the same artwork found on ourhard-copy menus, and in various spots in the business plan. Our managers will maintain thewebsite. As the website rolls out future development such as restaurant delivery options,newsletters and downloadable market research reports, a technical resource may need to becontracted to build the trackable download and the newsletter capabilities. We will also look intopre-packaged solutions through VeriSign® and other Web hosting resources.

7.0 Management Summary

We will open with a team of four manager/owners, one bookkeeper, and fifty-three staffmembers. Each member of the management team has specific industry experience that willapply to their assignment. Each Vice Managing Partner will also cross train for one year inpreparation for their promotions to their own Fire Fountain Grille units. This is an extremelyexperienced and well balanced team. There are no gaps in its structure.


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7.1 Personnel Plan

The personnel table (labor pro-forma) shows the number, and structure of the "back-of-the-house" (BOH), "front-of-the-house" (FOH), and management staffs. June 2004 has a higherlabor cost, as is usual in a restaurant start-up. Labor costs come down as the operation beginsto flow more smoothly. The service staff is large, and is necessary to provide the level of servicethat the Fire Fountain Grille needs to set it apart from the competition.


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Table: Personnel

Personnel Plan


Production Personnel

Assistant Chef $1,750 $3,000 $3,036 $3,121 $3,184

Lead Cook/Gril l $10,340 $17,725 $18,079 $18,441 $18,809

Gril l Two $4,180 $7,165 $7,308 $7,454 $7,603

Broiler Cook One $10,240 $17,554 $17,905 $18,263 $18,628

Broiler Cook Two $4,180 $7,165 $7,308 $7,454 $8,050

Fry Cook One $8,600 $14,742 $15,037 $15,338 $15,644

Fry Cook Two $4,300 $7,371 $7,518 $7,668 $7,822

Wheel Man One $4,300 $7,371 $7,518 $7,668 $7,822

Wheel Man Two $2,780 $4,765 $4,860 $4,957 $5,056

Salad Cook One $8,600 $14,742 $15,037 $15,338 $15,644

Salad Cook Two $4,300 $7,371 $7,518 $7,668 $7,822

Prep Cook One $8,260 $14,160 $14,443 $14,732 $15,026

Prep Cook Two $8,260 $14,160 $14,443 $14,732 $15,026

Prep Cook Three $8,260 $14,160 $14,443 $14,732 $15,026

Dish One $7,440 $12,754 $13,009 $13,269 $13,534

Dish Two $4,350 $7,371 $7,518 $7,668 $7,882

Subtotal $100,140 $171,576 $174,980 $178,503 $182,578

Sales and Marketing Personnel

One (1) Floor Supervisor $1,980 $3,360 $3,427 $3,495 $3,564

One (1) Window Expediter $3,380 $5,760 $5,875 $5,992 $6,111

Ten (10) Full-time Servers $27,264 $46,000 $46,000 $46,000 $46,000

Ten (10) Part-time Servers $13,632 $23,004 $23,004 $23,004 $23,004

Four (4) Full-time Bartenders $15,940 $26,880 $26,880 $26,880 $26,880

Two (2) Full-time Hostesses $5,120 $8,640 $8,640 $8,640 $8,640

Three (3) Part-time Hostesses $2,560 $4,320 $4,320 $4,320 $4,320

Four (4) Bussers $2,500 $4,200 $4,200 $4,200 $4,200

Food Runner $3,500 $6,000 $6,000 $6,000 $0

Subtotal $75,876 $128,164 $128,346 $128,531 $122,719

General and Administrative Personnel

Managing Partner 1 $17,500 $30,000 $30,000 $30,000 $30,000




Bookkeeper $11,200 $19,200 $20,160 $21,168 $22,226

Subtotal $81,200 $139,200 $140,160 $141,168 $142,226

Other Personnel

Event by Event Basis TBD $0 $0 $0 $0 $0

Event by Event Basis TBD $0 $0 $0 $0 $0

Subtotal $0 $0 $0 $0 $0

Total People 0 0 0 0 0

Total Payroll $257,216 $438,940 $443,486 $448,202 $447,523


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8.0 Financial Plan

Our main concerns will be aggressive time management, so that our labor costs stay undercontrol, and proper purchasing, prep and food handling to keep food costs down, as well asmanaging the higher costs of meats and seafoods. Secondarily, hiring the best grill and broilercooks, training them properly and retaining them will be a critical component to good meat andseafood costs. A good grill cook does not waste steaks by burning them, nor does he angercustomers by undercooking them. He must also be accurate time after time in how he carveshis prime rib.

Growth will be sustained through a contribution to an expansion fund, and potential investmentfrom current investors in a "roll-over" plan, and from potential future investors or bank capital.

8.1 Start-up Funding

We are seeking $900,000 (see section 2.2 "Start-up Summary"), and will seek it from one, two,or three investment groups, or under an SEC "Regulation D" equity offering (where thecompany sells partial ownership in the company - via the sale of stock or a membership unit, toraise capital). We prefer this approach as an early stage company because there is no setrepayment schedule or debt service payments - the investors profit when the company profits.Initially, the company is projected as a Limited Partnership, but may switch the preferredstructure to a stock "C" Corporation or Limited Liability Corporation "LLC". The preparation ofthe investment documents will be handled in a cooperative effort by the legal firmsrepresenting each party individually. These documents will include, but are not limited to:

Private Placement Memorandum

The Private Placement Memorandum, or "PPM", is the document that disc loses all pertinentinformation to the investors about the company, proposed company operations, thetransaction structure (whether we are selling equity ownership or raising debt financing fromthe investors), the terms of the investment (share price, note amounts, maturity dates, etc.),risks the investors may face, etc.

Form D SEC Filing

It notifies the SEC that we are using the Regulation D program and provides them basicinformation on the company and the offering. It is not an approval document or registration - itis merely a filing that notifies the SEC that we have a Regulation D Offering in place. Raisingcapital from investors without filing this document with the Federal government could place acompany in violation of securities laws.

Subscription Agreement

The Subscription Agreement sets forth the terms and conditions of the investment. It is the"sales contract" for purchasing the securities.

Promissory NoteFor a debt offering (if necessary), outlining the terms of any loan arrangement with the


Page 25

investors. The note is the actual "loan document" between the company and the investor.

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $324,500

Start-up Assets to Fund $645,500

Total Funding Required $970,000

Assets

Non-cash Assets from Start-up $65,000

Cash Requirements from Start-up $580,500

Additional Cash Raised $0

Cash Balance on Starting Date $580,500

Total Assets $645,500

Liabil ities and Capital

Liabil ities

Current Borrowing $0

Long-term Liabil ities $50,000

Accounts Payable (Outstanding Bills) $10,000

Other Current Liabil ities (interest-free) $10,000

Total Liabil ities $70,000

Capital

Planned Investment

Investor Group One $300,000

Investor Group Two $300,000

Investor Group Three $300,000

Investor Contingency $0

Additional Investment Requirement $0

Total Planned Investment $900,000

Loss at Start-up (Start-up Expenses) ($324,500)

Total Capital $575,500

Total Capital and Liabil ities $645,500

Total Funding $970,000


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8.2 Break-even Analysis

Break-even based on fixed costs including rent, insurance, maintenance, investor note, andpre-opening amortization. Additionally, controllables such as service labor, kitchen labor,management labor, payroll taxes, property taxes, excess rent, advertising and legal/professional fees are included.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $64,679

Assumptions:

Average Percent Variable Cost 31%

Estimated Monthly Fixed Cost $44,890

8.3 Projected Profit and Loss

2004 is not a full year on the yearly P&L. Highlights include a bottom line of better than 18%for every year. The numbers reflect realism in the start up and continuing operations of therestaurant. We begin contributing aggressively to an expansion fund in 2005. We beginaccruing for vacations immediately, and we are budgeting money from the insurance line forhealth benefits, all as an early commitment to the future prosperity of our staff. Thesenumbers are an excellent indication that our investors, owners, partners and staff will all


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prosper and grow with the Fire Fountain Grille!


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Table: Profit and Loss

Pro Forma Profit and Loss


Sales $1,297,957 $2,360,000 $2,548,800 $2,752,702 $2,972,917

Direct Cost of Sales $397,121 $732,671 $789,990 $853,198 $921,455

Production Payroll $100,140 $171,576 $174,980 $178,503 $182,578

Other Costs of Goods $0 $0 $0 $0 $0

Total Cost of Sales $497,261 $904,247 $964,970 $1,031,701 $1,104,033

Gross Margin $800,696 $1,455,753 $1,583,830 $1,721,001 $1,868,884

Gross Margin % 61.69% 61.68% 62.14% 62.52% 62.86%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $75,876 $128,164 $128,346 $128,531 $122,719

Operating Supplies $12,940 $23,600 $27,840 $32,860 $38,770

Janitorial $10,500 $18,000 $18,000 $18,000 $18,000

Repairs $1,750 $3,000 $6,000 $6,000 $9,000

Aprons, Towels & Napkins $7,000 $12,000 $12,000 $12,000 $12,000

Menus $1,050 $1,800 $1,800 $1,800 $1,800

Miscellaneous Supplies $1,750 $3,000 $3,000 $3,000 $3,000

Miscellaneous Purchases $51,500 $3,000 $3,000 $3,000 $3,000

Complimentary Meals or Drinks For PR $5,250 $9,000 $9,000 $9,000 $9,000

Advertising/Promotion $3,000 $6,000 $6,000 $6,000 $6,000

Credit Card Charges $10,760 $23,600 $27,840 $32,680 $38,775

Fraud Credit Cards/Checks $1,050 $1,800 $1,800 $1,800 $1,800

Professional Fees $1,000 $3,000 $3,000 $3,000 $3,000

Membership Fees $525 $900 $900 $900 $900

Uniforms $600 $1,800 $1,800 $1,800 $1,800

Travel $0 $3,000 $3,000 $6,000 $6,000

Employee Discounts $3,500 $6,000 $6,000 $6,000 $6,000

Total Sales and Marketing Expenses $188,051 $247,664 $259,326 $272,371 $281,564

Sales and Marketing % 14.49% 10.49% 10.17% 9.89% 9.47%

General and Administrative Expenses

General and Administrative Payroll $81,200 $139,200 $140,160 $141,168 $142,226

Sales and Marketing and Other Expenses $0 $0 $0 $0 $0

Depreciation $13,500 $24,000 $24,000 $24,000 $24,000

Leased Equipment $1,050 $1,800 $1,800 $1,800 $1,800

Util ities $58,000 $99,000 $105,000 $108,000 $111,000

Amortization $35,000 $60,000 $60,000 $60,000 $60,000

Debt Service $25,000 $75,000 $150,000 $175,000 $175,000

Insurance $21,000 $36,000 $38,000 $40,000 $42,000

Excess Insurance $3,500 $6,000 $6,500 $7,000 $7,500

Property Taxes $10,500 $18,000 $19,000 $20,000 $21,000

Excess Taxes $3,500 $6,000 $6,200 $6,300 $6,400

Vacation Accrual $2,450 $4,200 $4,300 $4,500 $4,700

Base Rent $42,000 $72,000 $72,000 $72,000 $72,000

Percentage Rent $12,958 $23,600 $27,848 $32,860 $38,775

CAM Rent $5,250 $9,000 $9,500 $10,000 $10,500

Payroll Taxes $25,722 $43,894 $44,349 $44,820 $44,752

Other General and Administrative

Expenses

$0 $0 $0 $0 $0

Total General and Administrative

Expenses

$340,630 $617,694 $708,657 $747,448 $761,653

General and Administrative % 26.24% 26.17% 27.80% 27.15% 25.62%


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Other Expenses:

Other Payroll $0 $0 $0 $0 $0

Consultants $0 $0 $0 $0 $0

Expansion Fund $10,000 $50,000 $40,000 $75,000 $125,000

Total Other Expenses $10,000 $50,000 $40,000 $75,000 $125,000

Other % 0.77% 2.12% 1.57% 2.72% 4.20%

Total Operating Expenses $538,681 $915,358 $1,007,983 $1,094,819 $1,168,217

Profit Before Interest and Taxes $262,015 $540,395 $575,847 $626,182 $700,667

EBITDA $275,515 $564,395 $599,847 $650,182 $724,667

Interest Expense $4,928 $3,916 $2,860 $1,804 $748

Taxes Incurred $38,510 $80,472 $93,110 $93,657 $113,737

Net Profit $218,577 $456,007 $479,877 $530,721 $586,182

Net Profit/Sales 16.84% 19.32% 18.83% 19.28% 19.72%


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8.4 Projected Cash Flow

The cash flow depends on assumptions for good daily operational management, good trafficcounts in the restaurant, inventory turnover, payment days, and accounts receivablemanagement. We will need no new financing until we open our second unit.

Initial projections are a sales-to-investment ratio in excess of 2-to-1, return on investment inexcess of 30 percent and return on equity of 20 percent-plus.

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $1,297,957 $2,360,000 $2,548,800 $2,752,702 $2,972,917

Subtotal Cash from Operations $1,297,957 $2,360,000 $2,548,800 $2,752,702 $2,972,917

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0 $0 $0

New Long-term Liabil ities $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0

Subtotal Cash Received $1,297,957 $2,360,000 $2,548,800 $2,752,702 $2,972,917

Expenditures Year 1 Year 2 Year 3 Year 4 Year 5

Expenditures from Operations

Cash Spending $257,216 $438,940 $443,486 $448,202 $447,523

Bill Payments $738,769 $1,521,269 $1,551,338 $1,739,681 $1,908,341

Subtotal Spent on Operations $995,985 $1,960,209 $1,994,824 $2,187,883 $2,355,864

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0

Other Liabil ities Principal Repayment $0 $0 $0 $0 $0

Long-term Liabil ities Principal Repayment $9,600 $9,600 $9,600 $9,600 $9,600

Purchase Other Current Assets $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0

Subtotal Cash Spent $1,005,585 $1,969,809 $2,004,424 $2,197,483 $2,365,464

Net Cash Flow $292,372 $390,191 $544,376 $555,219 $607,453

Cash Balance $872,872 $1,263,063 $1,807,438 $2,362,657 $2,970,110


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8.5 Projected Balance Sheet

The balance sheet is quite solid. We do not project any real trouble meeting our debtobligations--as long as we can achieve our specific objectives.

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $872,872 $1,263,063 $1,807,438 $2,362,657 $2,970,110

Inventory $61,302 $123,910 $78,081 $84,467 $91,224

Other Current Assets $0 $0 $0 $0 $0

Total Current Assets $934,174 $1,386,973 $1,885,519 $2,447,125 $3,061,334

Long-term Assets

Long-term Assets $65,000 $65,000 $65,000 $65,000 $65,000

Accumulated Depreciation $13,500 $37,500 $61,500 $85,500 $109,500

Total Long-term Assets $51,500 $27,500 $3,500 ($20,500) ($44,500)

Total Assets $985,674 $1,414,473 $1,889,019 $2,426,625 $3,016,834

Liabil ities and Capital Year 1 Year 2 Year 3 Year 4 Year 5

Current Liabil ities

Accounts Payable $141,197 $123,589 $127,858 $144,342 $157,970

Current Borrowing $0 $0 $0 $0 $0

Other Current Liabil ities $10,000 $10,000 $10,000 $10,000 $10,000

Subtotal Current Liabil ities $151,197 $133,589 $137,858 $154,342 $167,970

Long-term Liabil ities $40,400 $30,800 $21,200 $11,600 $2,000

Total Liabil ities $191,597 $164,389 $159,058 $165,942 $169,970

Paid-in Capital $900,000 $900,000 $900,000 $900,000 $900,000

Retained Earnings ($324,500) ($105,923) $350,084 $829,961 $1,360,682

Earnings $218,577 $456,007 $479,877 $530,721 $586,182

Total Capital $794,077 $1,250,084 $1,729,961 $2,260,682 $2,846,864

Total Liabil ities and Capital $985,674 $1,414,473 $1,889,019 $2,426,625 $3,016,834

Net Worth $794,077 $1,250,084 $1,729,961 $2,260,682 $2,846,864


Page 34

8.6 Business Ratios

The table follows with our main business ratios. We do intend to improve gross margin, collectiondays, sales and labor controls. Our ratios are compared to industry ratios for SteakRestaurants - SIC code 5812.0802.


Page 35

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profi le

Sales Growth n.a. 81.82% 8.00% 8.00% 8.00% 6.96%

Percent of Total Assets

Inventory 6.22% 8.76% 4.13% 3.48% 3.02% 3.90%

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 28.39%

Total Current Assets 94.78% 98.06% 99.81% 100.84% 101.48% 37.68%

Long-term Assets 5.22% 1.94% 0.19% -0.84% -1.48% 62.32%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabil ities 15.34% 9.44% 7.30% 6.36% 5.57% 19.17%

Long-term Liabil ities 4.10% 2.18% 1.12% 0.48% 0.07% 29.21%

Total Liabil ities 19.44% 11.62% 8.42% 6.84% 5.63% 48.38%

Net Worth 80.56% 88.38% 91.58% 93.16% 94.37% 51.62%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 61.69% 61.68% 62.14% 62.52% 62.86% 59.31%

Selling, General & Administrative Expenses 44.89% 42.42% 43.12% 43.35% 42.99% 39.09%

Advertising Expenses 1.00% 1.00% 1.09% 1.19% 1.30% 2.75%

Profit Before Interest and Taxes 20.19% 22.90% 22.59% 22.75% 23.57% 1.59%

Main Ratios

Current 6.18 10.38 13.68 15.86 18.23 1.26

Quick 5.77 9.45 13.11 15.31 17.68 0.87

Total Debt to Total Assets 19.44% 11.62% 8.42% 6.84% 5.63% 3.27%

Pre-tax Return on Net Worth 32.38% 42.92% 33.12% 27.62% 24.59% 54.38%

Pre-tax Return on Assets 26.08% 37.93% 30.33% 25.73% 23.20% 7.17%

Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Net Profit Margin 16.84% 19.32% 18.83% 19.28% 19.72% n.a

Return on Equity 27.53% 36.48% 27.74% 23.48% 20.59% n.a

Activity Ratios

Inventory Turnover 10.91 7.91 7.82 10.50 10.49 n.a

Accounts Payable Turnover 6.16 12.17 12.17 12.17 12.17 n.a

Payment Days 27 32 29 28 29 n.a

Total Asset Turnover 1.32 1.67 1.35 1.13 0.99 n.a

Debt Ratios

Debt to Net Worth 0.24 0.13 0.09 0.07 0.06 n.a

Current Liab. to Liab. 0.79 0.81 0.87 0.93 0.99 n.a

Liquidity Ratios

Net Working Capital $782,977 $1,253,384 $1,747,661 $2,292,782 $2,893,364 n.a

Interest Coverage 53.17 138.00 201.35 347.11 936.72 n.a

Additional Ratios

Assets to Sales 0.76 0.60 0.74 0.88 1.01 n.a

Current Debt/Total Assets 15% 9% 7% 6% 6% n.a

Acid Test 5.77 9.45 13.11 15.31 17.68 n.a

Sales/Net Worth 1.63 1.89 1.47 1.22 1.04 n.a

Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a


Page 36

8.7 Long-term Plan

Our long term plan is to continue to maintain a cash flow of 19-20% while increasing salesannually, thereby increasing actual dollars earned by our investors, principals and staff.

Appendix

Page 1

Table: Sales Forecast

Sales Forecast

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Sales

Food 0% $0 $0 $0 $0 $0 $163,188 $144,048 $154,627 $135,464 $138,591 $138,591 $183,844

Beverage 0% $0 $0 $0 $0 $0 $7,582 $6,903 $7,155 $4,956 $5,133 $5,133 $6,726

Liquor 0% $0 $0 $0 $0 $0 $9,127 $7,911 $8,439 $7,764 $7,955 $7,955 $10,739

Beer 0% $0 $0 $0 $0 $0 $12,677 $11,646 $12,517 $10,308 $11,018 $11,018 $14,617

Wine 0% $0 $0 $0 $0 $0 $8,024 $6,460 $6,060 $6,707 $8,401 $8,401 $8,272

Total Sales $0 $0 $0 $0 $0 $200,598 $176,968 $188,798 $165,199 $171,098 $171,098 $224,198

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Food $0 $0 $0 $0 $0 $59,500 $52,500 $56,000 $47,600 $47,850 $46,400 $49,856

Beverage $0 $0 $0 $0 $0 $514 $468 $485 $336 $348 $348 $456

Liquor $0 $0 $0 $0 $0 $1,315 $1,139 $1,215 $1,052 $1,011 $943 $1,274

Beer $0 $0 $0 $0 $0 $2,471 $2,270 $2,439 $1,921 $2,054 $1,960 $2,601

Wine $0 $0 $0 $0 $0 $1,566 $1,478 $1,386 $1,477 $1,780 $1,566 $1,542

Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $65,366 $57,855 $61,525 $52,386 $53,043 $51,217 $55,729

Appendix

Page 2

Table: Personnel

Personnel Plan


Production Personnel

Assistant Chef $0 $0 $0 $0 $0 $300 $240 $240 $240 $240 $240 $250

Lead Cook/Grill $0 $0 $0 $0 $0 $1,700 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440

Grill Two $0 $0 $0 $0 $0 $700 $580 $580 $580 $580 $580 $580

Broiler Cook One $0 $0 $0 $0 $0 $1,600 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440

Broiler Cook Two $0 $0 $0 $0 $0 $700 $580 $580 $580 $580 $580 $580

Fry Cook One $0 $0 $0 $0 $0 $1,400 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Fry Cook Two $0 $0 $0 $0 $0 $700 $600 $600 $600 $600 $600 $600

Wheel Man One $0 $0 $0 $0 $0 $700 $600 $600 $600 $600 $600 $600

Wheel Man Two $0 $0 $0 $0 $0 $500 $380 $380 $380 $380 $380 $380

Salad Cook One $0 $0 $0 $0 $0 $1,400 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200

Salad Cook Two $0 $0 $0 $0 $0 $700 $600 $600 $600 $600 $600 $600

Prep Cook One $0 $0 $0 $0 $0 $1,300 $1,160 $1,160 $1,160 $1,160 $1,160 $1,160

Prep Cook Two $0 $0 $0 $0 $0 $1,300 $1,160 $1,160 $1,160 $1,160 $1,160 $1,160

Prep Cook Three $0 $0 $0 $0 $0 $1,300 $1,160 $1,160 $1,160 $1,160 $1,160 $1,160

Dish One $0 $0 $0 $0 $0 $1,200 $1,040 $1,040 $1,040 $1,040 $1,040 $1,040

Dish Two $0 $0 $0 $0 $0 $750 $600 $600 $600 $600 $600 $600

Subtotal $0 $0 $0 $0 $0 $16,250 $13,980 $13,980 $13,980 $13,980 $13,980 $13,990

Sales and Marketing Personnel

One (1) Floor Supervisor $0 $0 $0 $0 $0 $300 $280 $280 $280 $280 $280 $280

One (1) Window Expediter $0 $0 $0 $0 $0 $500 $480 $480 $480 $480 $480 $480

Ten (10) Full-time Servers $0 $0 $0 $0 $0 $4,260 $3,834 $3,834 $3,834 $3,834 $3,834 $3,834

Ten (10) Part-time Servers $0 $0 $0 $0 $0 $2,130 $1,917 $1,917 $1,917 $1,917 $1,917 $1,917

Four (4) Full-time Bartenders $0 $0 $0 $0 $0 $2,500 $2,240 $2,240 $2,240 $2,240 $2,240 $2,240

Two (2) Full-time Hostesses $0 $0 $0 $0 $0 $800 $720 $720 $720 $720 $720 $720

Three (3) Part-time Hostesses $0 $0 $0 $0 $0 $400 $360 $360 $360 $360 $360 $360

Four (4) Bussers $0 $0 $0 $0 $0 $400 $350 $350 $350 $350 $350 $350

Food Runner $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 $500

Subtotal $0 $0 $0 $0 $0 $11,790 $10,681 $10,681 $10,681 $10,681 $10,681 $10,681

General and Administrative Personnel

Managing Partner 1 $0 $0 $0 $0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500




Bookkeeper $0 $0 $0 $0 $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600

Subtotal $0 $0 $0 $0 $0 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600

Appendix

Page 3

Other Personnel

Event by Event Basis TBD $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Event by Event Basis TBD $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $0 $0 $0 $0 $0 $39,640 $36,261 $36,261 $36,261 $36,261 $36,261 $36,271

Appendix

Page 4

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%

Long-term Interest Rate 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00%

Tax Rate 30.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

Appendix

Page 5

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $0 $0 $0 $0 $0 $200,598 $176,968 $188,798 $165,199 $171,098 $171,098 $224,198

Direct Cost of Sales $0 $0 $0 $0 $0 $65,366 $57,855 $61,525 $52,386 $53,043 $51,217 $55,729

Production Payroll $0 $0 $0 $0 $0 $16,250 $13,980 $13,980 $13,980 $13,980 $13,980 $13,990

Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $0 $0 $81,616 $71,835 $75,505 $66,366 $67,023 $65,197 $69,719

Gross Margin $0 $0 $0 $0 $0 $118,982 $105,133 $113,293 $98,833 $104,075 $105,901 $154,479

Gross Margin % 0.00% 0.00% 0.00% 0.00% 0.00% 59.31% 59.41% 60.01% 59.83% 60.83% 61.89% 68.90%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $0 $0 $0 $0 $0 $11,790 $10,681 $10,681 $10,681 $10,681 $10,681 $10,681

Operating Supplies $0 $0 $0 $0 $0 $2,000 $1,760 $1,890 $1,650 $1,720 $1,720 $2,200

Janitorial $0 $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Repairs $0 $0 $0 $0 $0 $250 $250 $250 $250 $250 $250 $250

Aprons, Towels & Napkins $0 $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Menus $0 $0 $0 $0 $0 $150 $150 $150 $150 $150 $150 $150

Miscellaneous Supplies $0 $0 $0 $0 $0 $250 $250 $250 $250 $250 $250 $250

Miscellaneous Purchases $0 $0 $0 $0 $0 $50,000 $250 $250 $250 $250 $250 $250

Complimentary Meals or Drinks For

PR

$0 $0 $0 $0 $0 $750 $750 $750 $750 $750 $750 $750

Advertising/Promotion $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $0 $500

Credit Card Charges $0 $0 $0 $0 $0 $1,760 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Fraud Credit Cards/Checks $0 $0 $0 $0 $0 $150 $150 $150 $150 $150 $150 $150

Professional Fees $0 $0 $0 $0 $0 $250 $250 $250 $0 $0 $0 $250

Membership Fees $0 $0 $0 $0 $0 $75 $75 $75 $75 $75 $75 $75

Uniforms $0 $0 $0 $0 $0 $150 $150 $150 $0 $0 $0 $150

Travel $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Employee Discounts $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 $500

Total Sales and Marketing

Expenses

$0 $0 $0 $0 $0 $71,075 $19,716 $19,846 $19,206 $19,276 $18,776 $20,156

Sales and Marketing % 0.00% 0.00% 0.00% 0.00% 0.00% 35.43% 11.14% 10.51% 11.63% 11.27% 10.97% 8.99%

General and Administrative Expenses

General and Administrative Payroll $0 $0 $0 $0 $0 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600 $11,600

Sales and Marketing and Other

Expenses

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix

Page 6

Depreciation ($100) ($100) ($100) ($100) ($100) $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Leased Equipment $0 $0 $0 $0 $0 $150 $150 $150 $150 $150 $150 $150

Utilities $0 $0 $0 $0 $0 $8,000 $7,500 $8,500 $8,000 $8,500 $8,500 $9,000

Amortization $0 $0 $0 $0 $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 . $0 $25,000

Insurance $0 $0 $0 $0 $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Excess Insurance $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 $500

Property Taxes $0 $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Excess Taxes $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 $500

Vacation Accrual $0 $0 $0 $0 $0 $350 $350 $350 $350 $350 $350 $350

Base Rent $0 $0 $0 $0 $0 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000

Percentage Rent $0 $0 $0 $0 $0 $2,000 $1,760 $1,887 $1,650 $1,710 $1,710 $2,241

CAM Rent $0 $0 $0 $0 $0 $750 $750 $750 $750 $750 $750 $750

Payroll Taxes 10% $0 $0 $0 $0 $0 $3,964 $3,626 $3,626 $3,626 $3,626 $3,626 $3,627

Other General and Administrative

Expenses

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total General and Administrative

Expenses

($100) ($100) ($100) ($100) ($100) $45,314 $44,236 $45,363 $44,626 $45,186 $45,186 $71,218

General and Administrative % 0.00% 0.00% 0.00% 0.00% 0.00% 22.59% 25.00% 24.03% 27.01% 26.41% 26.41% 31.77%

Other Expenses:

Other Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Expansion Fund $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000

Total Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000

Other % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4.46%

Total Operating Expenses ($100) ($100) ($100) ($100) ($100) $116,389 $63,952 $65,209 $63,832 $64,462 $63,962 $101,374

Profit Before Interest and Taxes $100 $100 $100 $100 $100 $2,593 $41,181 $48,084 $35,001 $39,613 $41,939 $53,105

EBITDA $0 $0 $0 $0 $0 $4,593 $43,181 $50,084 $37,001 $41,613 $43,939 $55,105

Interest Expense $451 $444 $436 $429 $422 $414 $407 $400 $392 $385 $378 $370

Taxes Incurred ($105) ($52) ($50) ($49) ($48) $327 $6,116 $7,153 $5,191 $5,884 $6,234 $7,910

Net Profit ($246) ($292) ($286) ($280) ($273) $1,852 $34,658 $40,532 $29,417 $33,344 $35,327 $44,824

Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.92% 19.58% 21.47% 17.81% 19.49% 20.65% 19.99%

Appendix

Page 7

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $0 $0 $0 $0 $0 $200,598 $176,968 $188,798 $165,199 $171,098 $171,098 $224,198

Subtotal Cash from Operations $0 $0 $0 $0 $0 $200,598 $176,968 $188,798 $165,199 $171,098 $171,098 $224,198

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $0 $0 $0 $0 $0 $200,598 $176,968 $188,798 $165,199 $171,098 $171,098 $224,198

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $0 $0 $0 $0 $0 $39,640 $36,261 $36,261 $36,261 $36,261 $36,261 $36,271

Bill Payments $10,012 $347 $392 $386 $379 $7,995 $224,568 $96,396 $113,157 $87,893 $100,059 $97,187

Subtotal Spent on Operations $10,012 $347 $392 $386 $379 $47,635 $260,829 $132,657 $149,418 $124,154 $136,320 $133,458

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $10,812 $1,147 $1,192 $1,186 $1,179 $48,435 $261,629 $133,457 $150,218 $124,954 $137,120 $134,258

Net Cash Flow ($10,812) ($1,147) ($1,192) ($1,186) ($1,179) $152,163 ($84,661) $55,341 $14,981 $46,144 $33,978 $89,940

Cash Balance $569,688 $568,541 $567,349 $566,164 $564,984 $717,148 $632,487 $687,828 $702,809 $748,954 $782,932 $872,872

Appendix

Page 8

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $580,500 $569,688 $568,541 $567,349 $566,164 $564,984 $717,148 $632,487 $687,828 $702,809 $748,954 $782,932 $872,872

Inventory $0 $0 $0 $0 $0 $0 $71,903 $63,641 $67,678 $57,625 $58,347 $56,339 $61,302

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $580,500 $569,688 $568,541 $567,349 $566,164 $564,984 $789,050 $696,127 $755,506 $760,434 $807,301 $839,271 $934,174

Long-term Assets

Long-term Assets $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000

Accumulated Depreciation $0 ($100) ($200) ($300) ($400) ($500) $1,500 $3,500 $5,500 $7,500 $9,500 $11,500 $13,500

Total Long-term Assets $65,000 $65,100 $65,200 $65,300 $65,400 $65,500 $63,500 $61,500 $59,500 $57,500 $55,500 $53,500 $51,500

Total Assets $645,500 $634,788 $633,741 $632,649 $631,564 $630,484 $852,550 $757,627 $815,006 $817,934 $862,801 $892,771 $985,674

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities

Accounts Payable $10,000 $334 $379 $373 $367 $361 $221,375 $92,594 $110,241 $84,552 $96,875 $92,318 $141,197

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Subtotal Current Liabilities $20,000 $10,334 $10,379 $10,373 $10,367 $10,361 $231,375 $102,594 $120,241 $94,552 $106,875 $102,318 $151,197

Long-term Liabilities $50,000 $49,200 $48,400 $47,600 $46,800 $46,000 $45,200 $44,400 $43,600 $42,800 $42,000 $41,200 $40,400

Total Liabilities $70,000 $59,534 $58,779 $57,973 $57,167 $56,361 $276,575 $146,994 $163,841 $137,352 $148,875 $143,518 $191,597

Paid-in Capital $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000 $900,000

Retained Earnings ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500) ($324,500)

Earnings $0 ($246) ($538) ($824) ($1,103) ($1,377) $475 $35,133 $75,665 $105,082 $138,426 $173,753 $218,577

Total Capital $575,500 $575,254 $574,962 $574,676 $574,397 $574,123 $575,975 $610,633 $651,165 $680,582 $713,926 $749,253 $794,077

Total Liabilities and Capital $645,500 $634,788 $633,741 $632,649 $631,564 $630,484 $852,550 $757,627 $815,006 $817,934 $862,801 $892,771 $985,674

Net Worth $575,500 $575,254 $574,962 $574,676 $574,397 $574,123 $575,975 $610,633 $651,165 $680,582 $713,926 $749,253 $794,077

Documents

Fire Fountain Grille