Fast Food Fun Booklet Business Plan

 “The recession and the subsequent squeeze on disposable income has encouraged

millions of families to cut back on spending on luxuries, especially on meals in

restaurants. This has encouraged many to trade down to cheaper meals, especially

burgers and fried chicken.” (The Telegraph, 15th January 2012)

Consumer expenditures for fast food and home delivery industry in the UK grew by 6% in 2011, to £10.28bn, the overall fast-food and home-delivery industry has remained robust, in spite of the economic downturn.

Key Note anticipates that the fast-food and home-delivery market will carry on increasing for the next 5 years. The continued problems with the economy together with the busy lifestyle of the consumer will carry on pushing the demand in the fast-food and home-delivery market place, the grow is expected to be 24.5% between 2012 and 2016.

At the same time, the damaging relationship between fast food and poor quality and unhealthy foods continues to blight the market.  Organisations are repeatedly attacked and held responsible for their contributory part to the obesity epidemic in the UK.

“A recent survey by the consumer group Which? found that two out of

three adults would like to see the calorie information clearly displayed

on all fast-food products.” (Pizza News, 22nd September 2011)

Note:  Small-scale catering units, such as motor vans, that can be found at festivals and along roadsides are excluded from the Key Note analysis.

3.1 Customers

FFF market analysis, which is broadly based is defined by three customer groups, they are…

1. The Fast Food industry (advertisers)
2. Publication buyers
3. Franchisee

The following will overview the approach taken by FFF to identify and target our market segments; the marketing strategy and execution will vary by segment.  FFF will in the fullness of time look to use a number of different demographics, lifestyle and geodemographical (demographic lifestyle and geography) classifications to determine the market segmentation methods that will identify FFF’s target customer base.  The methods that FF will ultimately look to use include…

• Demographic Segmentation - Segment customers based on measurable statistics such as age, income, occupation, etc.
• Psychographic Segmentation - Segment customers based on lifestyle preferences such as music lovers, city or urban dwellers, etc.
• Use-based Segmentation - Segment customers based on frequency of usage such as recreational drinking, traveling, etc.
• Benefit Segmentation - Segment customers based on their desire to obtain certain product benefits (e.g. luxury, thriftiness, comfort from food, etc.)
• Geographic Segmentation - Segment customers based on their location, i.e. home address, business address, etc.

Social class (or grade) definitions and geodemographics are mainly used by marketing professionals and statistical researchers to enable the classification and measurement of people of different social grade and income and earnings levels, for market research, targeting, social commentary, lifestyle statistics, and statistical research and analysis.

Resulting terms like 'ABC1' - as a definition of consumer types - are often used to describe a profile of users or target customers.

The table below defines broadly the six social grades used and is based on the occupation of the head of the household, type of dwelling or other environmental factors.  

3.2 Market Research

1. Fast Food advertising

The fast-foods and home-delivery industry is extremely competitive, with aggressive competition in the industry.  Marketing activities are vital to fast-food and home-delivery chains and restaurants in the UK with organisation using advertisements to introduce new products, send messages to consumers and raise brand awareness. Major Fast Food organisations increased their spending on main media advertising by 3.1% between Q2 2011 and Q2 2012 to £115.4m.

The number of businesses with a turnover of £50,000 or less declined by 13.5% in 2011. This reflects the fact that smaller restaurants and takeaways are finding it difficult to survive the economic crisis, Key Note Report - Fast-Food & Home-Delivery Outlets 2012.

It is anticipated that FFF Ltd will assist FF organisations to increase their competitive advantage by maximising the exposure to the correct market segment.

2. Publication

According to NEMS Market Research consumers are opting to eat in fast-food restaurants, which offer good value, as summarised by a Fast Food Nation article on 29th March 2012, declaring:

“As the recession starts to take effect on our bank balances, fast food is

undergoing a renaissance with offers of cheap, filling food attracting people

through the doors with the possibility of a meal for four for under £10

being the main motivator.”

Consumers choosing to make use of FF establishments do so for a number of different reasons, they include…

• Value for money
• Convenience
• Nutrition

The initial target market for the FFF booklet, summarised from analysed Key Note data determines that key customer groups would include:

• Primarily female between 25 to 34 years of age, married with more than 4 persons in a household and of social grade C2, C1 and B whilst working full time and are buying their own home.  
• Secondly males between 20 to 34 years who are single and from a singles size household, who are also from social grade C2, C1 and B but are either working part time or are full-time students. 

Moreover, recently, fast-food and takeaway chains have been expanding their menu selection to include healthier products in an attempt to appeal to a broader consumer base and to give consumers more choice and increase frequency of visit.

And in spite of fast-food and takeaway chains attempts in expanding their menu selection to include healthier products, 43.1% of respondents believe that they would eat more fast food if there were more healthy options advertised on the menu. This means that there remains a niche in the market for both healthier meals and there advertisement in the fast-food and takeaway industry in the UK.

3. Franchise

The number of franchisors was estimated to increase by 12.5% to 907 between 2007 and 2011, and with the franchising market continuing to show resilience it is estimated that growth will be by 3.2% to £12.8bn in 2011, Key Note - Market Report - Franchising 2012.

Key Note estimates that the UK franchising market will grow by 1.6% in 2012 in terms of turnover.  Moreover, banks are keen to back new franchises, with NatWest announced that £100m of loans would be available, with specific concessions for new franchisees.

4. Milestones

The outline timescale for this Project, which begins in January 2013 is summarised below.  The milestones give an indication of how long each key stage will take.  The more detailed plan outlined in appendix D can be used to monitor and manage the crucial stages of this Project.

This project will be measured against a project baseline, and with be governed by the use of Prince2 project methodology with any revision being impacted against the original project plan.

The important milestones are summarised below:

Following the launch event and the issue of issue one the project ceases and normal operational activities begins.  

5. Finance Plan

This finance plan consists of a number of projections, including a 3 years projected cashflow to show that FFF’s working capital will be adequate and the first years projected profit and loss statement, which are summarised below and outlined in more detail in appendix F and G.  Together they constitute a sensible estimate of FFF financial future performance.

The company will be privately held by Robert and Sue Moss, however 20% equity in shares will be offered in the operation in Britain.  

Following the initial capitalisation, growth will be financed largely through cash flow, profit and ‘short term loans’ via any creditors as long as revenue targets are met.  FFF will generate cash as soon as the sales base reaches critical mass.   In the event of a shortfall in sales, additional funding or investment may be sought if growth demands need more funding or alternatively, operational activity such as marketing can be cut back temporarily to preserve cash.

5.1 Start-up Funding

The owners joint contribution of £15,000 will, with a loan of £25,000, be more than enough for the start-up requirements, as well as providing FFF with a cash cushion to use for expansion over the first year.

Further research is being undertaken to assess any other funding options such as..

• grants,
• awards,
• sponsorship

that are available to finance the FFF booklet, although at this stage this is not required.  

5.2 Important Assumptions

The financial assumptions used as the basis for the FFF business plan, include…

• The twelve inventory turnovers per year, reflect the number of issues of the booklet and advertising revenue.

Note: Advertising space will be treated as an inventory item

• Most booklet sales will be paid in cash.
• Advertising will be paid in advance in cash or by standing order, it is expected that only a balance of 10% of receivables will be collectable and those will be within 30 days, primarily from wholesale accounts.

Note: Wholesalers are notoriously slow payers, so care must be taken not to let these collections run past 60 days. This will be more significant if booklet sales via retail outlets become a higher-than-expected percentage of revenue.

FF will track essential operating data, which is not necessarily part of cash flow but will allow tracking of numbers that may have an impact on cash flow, i.e. sales recognition patterns or unique ‘service’ purchases.

5.3 Key Financial Indicators

The first financial indicator is the projected profit and loss, made up of sales and payments made from the Cashflow projections; the financial indicator will demonstrate the level of profit that may be expected in the first three years.

Figure 1 - FFF 3 Year Projected Profit

Figure 2 below represents the projected changes in a number of the financial variables over the next three years.  The chart indicates the rise in sales revenue due to uptake of county franchising in the second and third year and shows the controlled expenses as well as the increasing profit in the second and third year.

Figure 2 Financial Indicators

Appendix

1. Company Objectives

A1 – Mission

A2 - Keys to Success

2. Company & Personnel Summary
3. Strategy and Implementation Summary
4. Internet Strategy Summary
5. Milestones –

1.  Outline Project Plan

6. Risk and Issues Analysis & Risk and Issues Logs
7. Key Stakeholder Analysis
8. Finance Plan –

1. 3 years Projected Sales Forecast (by purchase price choice)
2. 3 years Projected Cashflow.
3. FFF Year one projected Profit and Loss
4. FFF Franchise Cashflow Model year 1
5. Printing Estimate Dec 2012

Bibliography

Appendix A - Company Objectives

The initial objectives of FFF Ltd are as follows:

1. To raise the initial capital of £25,000 ensuring publication of the promotion booklet by month four and establishing a cash reserve to grow sales, develop the website and app and develop the framework for the franchising opportunity.
2. To establish a presence as a successful fast food review medium and gain a market share in Britain’s advertising of the fast food industry and make FFF a ‘must have’ publication for local fast food consumers.
3. To publish two 50 page promotional booklets initially with press runs of 1,000 copies for pre-issues A and B in month 4 and 5 of operation respectively.
4. To sell an average of 65 advertising pages per issue for the first six issues growing to 90 advertising pages for year two.
5. Obtain an average advertising page fee of £55.00 per issue for the first year.
6. To publish 100 page booklets for issue number one in month six and increase press runs to 3,500 copies per month.
7. To have more than 3,000 booklet sales per month, 18,000+ sales by the end of year one and to increase booklet sales to 3,500 booklet sales per month (or 42,000+) for year two through distribution points, direct marketing and retail outlets.  
8. To sell the franchise of neighbouring counties initially, such as Hertfordshire, Northants, Buckinghamshire and Cambridgeshire from month six over the following twelve months.
9. To expand into an online presence (supported by an app) by month six.

A1 – Mission

The FFF booklet’s initial main goal is to be one of the most successful fast food reviewers in Bedfordshire and then eventually Britain, to be a platform to provide information on healthy eating aimed to increase people’s knowledge, awareness and skills around healthy eating; as a result we hope to encourage people to eat well and lead healthier lives

We want our customers to have the total experience when reading our booklet, using our app or visiting our website; where they will learn all about this fascinating new brand.  Our mission is to promote the concept of factual reviewing of ‘local’ fast food providers in the local (and eventually national) marketplace.

A2 - Keys to Success

The keys to success are:

• Raising the initial investment capital.
• Attaining targeted readership and subscription levels, see appendix h.
• Controlling costs while maximising the booklets penetration through marketing etc. in year one.
• Franchise sales of three to four neighbouring counties in the first two years.
• Accomplishing targeted advertising fee levels for the relevant periods see appendix h.
• Be ‘noticed’ for the quality editorial content in each issue.
• Achieve production and distribution dates for each issue.
• Accomplishing targeted cashflow and profit levels

Appendix b - Company & Personnel Summary

AMC Ltd is a management consultancy that has two senior management professionals; Robert Moss and Sue Moss.  FFF will be a privately held limited company with ownership 40% - Robert Moss, 40% - Sue Moss with 20% equity stake.

FFF Ltd will have exclusive rights for all "FFF” related print media, electronic media (Internet home page, Interactive Publications, etc.), catalogues and possible meetings and conferences devoted to the fast food reviews.

FFF Ltd will

• develop and maintain the website with content provided from local booklets
• develop and maintain an app
• license the "FFF" brand to any county franchisee for an agreed sum
• protect all brands and trademarks utilised in providing the FFF service

It is expected that the website and app organised by FFF Ltd will be a powerful promotional vehicle for the FFF booklet.

2.1 Start-up Summary

FFF will be a privately held limited company with ownership 40% - Robert Moss, 40% - Sue Moss with 20% equity stake.  The following information and chart outlines the start-up requirements and funding needed.  FFF will seek an initial loan of £25,000 from a competitive lender, repayable over 5 years; the purpose of this finance will be to raise the needed investment to launch the booklet, develop the website and app, as well as the franchise framework.

It is expected that no further finance or investment will be needed in the short term; however, 20% equity investment in the FFF brand is expected to be available to outside investors.

2.2 Company Ownership

Robert and Sue Moss are the founders of AMC Ltd the owners of the FFF concept. FFF will be a privately held limited company with ownership 40% - Robert Moss, 40% - Sue Moss, 20% equity stake.

2.3 Company Locations and Facilities

AMC Ltd is currently (and FFF will be) located at

1 Any Road,

Stevenage,

Hertfordshire

SG11 8AG

Telephone: 07997897XXX

E‐Mail: [email protected]

All business, management and editorial functions will be performed at the office address which is fully equipped and functional, it is not anticipated that further facilities will be needed for the first two years of operation.  

All printing, mailing, warehousing, and fulfilment will be outsourced, details of the outsource providers and subsequent contractual arrangements will be provided when the procurement process is concluded, an initial estimate for the printing is attached see Appendix h (e).

Management and Organisational Summary

With production and fulfilment services outsourced, FFF only has the need for general management, artistic & editorial expertise and legal and financial expertise.

Project and General Management Team

Robert Moss who is a management consultant holds a BSc Hons in Information Systems who has worked for public, private and charitable organisations is a true entrepreneur.  Sue Moss is a Marketing Executive who also holds a BSc Hons in Information Systems and has more than 20 years’ experience in the food industry.

FFF Team Gaps

FFF has outlined a process (and milestone) to recruit the contract artistic & editorial expertise that is required to draw together the booklet and the aligned website and app.  The legal and financial expertise will be hired as ‘contract labour’, on individual set briefs.   Moreover, any additional sales persons required will be hired as temporary contract labour via an agency.

Appendix C - Strategy and Implementation Summary

The strategy at FFF is to serve a large clearly defined local market well, by targeting the identifiable markets in a ‘taster’ county (Bedfordshire) with…

• an additional advertising channel for the FF provider
• information, related memberships and offers/discounts for the consumer and
• a franchise framework for the concept for replication around the country

A thirst exists for not only information about what we eat but also where we can get it for the best possible value, especially in this tough economic climate.  

The initial issues which will be published in early summer of 2013 will reach out and assist or inform the target markets.  The strategy will be to combine direct selling, direct mailing, and subscription or membership to build up circulation through multi-channel distribution and to give the providers an additional advertising channel direct to their target market; with the added benefit of a scalable business model that can be replicated in the other 85 counties.

Marketing Strategy

The advertising revenue will be generated by outlining the benefits via direct mailing to the local businesses in the first instance, and gauging the response.  This would then be followed by an introductory phone call and then finally by a visit to the premises and discussion with the owner or manager.  

Booklet sales will be generated primarily by using direct sales methods, at locations where the target market will have a ‘foot fall’ such as shopping centres, universities schools and youth clubs, there will also be use of direct mailing from mailing lists, there are several database lists available to purchase.

The promotional runs will be 50 page promotional booklets initially with press runs of 1,000 copies for pre-issues A and B in month 4 and 5 of operation respectively.  All costs associated with the promotional runs will be included in the advertising and promotion budgets for those months.  A total of £2000 in the first year will be spent on direct mail focusing on growing the readership, as the subscription base grows the focus will gradually move to franchise development.

Finally, sales to retail outlets through distributors will also be accomplished; key distributors will be contacted again in the near future, and have already expressed interest in the publication.

Distribution Strategy

Distribution of the booklet will be through a number of channels, they include…

• direct selling (projected to be 70%)
• direct mailing (projected to be 20%)
• retail channels (projected to be 10%).

All sales will be booked at full revenue, fulfilment costs will be expensed.

Advertising revenue will be generated in a number of different ways, and include face to face sales people, telephone sales and direct marketing; all advertising revenue will be booked at full value with fulfilment costs being expensed.

There are more than 86 counties in the United Kingdom, with 39 in England, 13 in Wales and 34 in Scotland; all franchise revenue will be booked at full revenue with administration costs being expensed.    

A number of strategic alliances can be explored and exploited between FFF and FF providers, radio station and other publications, focus will be given to this activity once the booklet is published and established.

Promotion Strategy

In addition to advertising, direct selling and mailing FFF will endeavour to use public relations exposure to benefit and promote the FFF brand.   Robert Moss will seek to appear and be interviewed on local T.V and radio programs announcing competitions and local sponsorship to generate interest and calls either for subscription, advertising or franchising information.

A promotion strategy for subscription sales through retail organisations will include percentage rebate of the first year's subscription revenue.

Pricing Strategy

Advertising in the FFF booklet will be £60 per page per issue

• A one-year up front subscription will be £600
• A two-year up front subscription will be £960

The FFF booklet will sell for £1.00 per single issue through distribution points.

• A one-year subscription will be £10.00
• A two year subscription will be £18.00  

Website private membership access will sell for £10.00 per quarter.

• A one-year subscription will be £20.00
• A two year subscription will be £35.00  

The county franchise will sell for £1,000 per month for a yearly license.

• A one-year up front franchise license will be £10,000
• A two year up front franchise license will be £18,000  

Sales Strategy

FFF will combine a sales strategy of selling advertising space and booklet sales (through direct selling, mailing and organisational sales) as well as internet and franchise revenue, the yearly sales goals are as following:

• £70,000 ex VAT – year one.
• £136,000 ex VAT – year two.
• £180,000 ex VAT – year three

Figure 3 - FFF Revenue for first three years

Two franchisee license sales are factored into the second half of year one and five more for year two however, sales goals are modest.

Sales Forecast

The products sales forecasts (by purchasing pricing choice) for the first three years are present in the tables in appendix h (a) and are summarised in the charts below.

Figure  - FFF Sales Revenue by channel

 Note: Year one is for six months only

Appendix D - Internet Strategy Summary

As well the traditional content of company details and customer service contact details etc. the website will contain quality fun content and also detail county FF provider information as previously detailed.  The website will show visitors everything about FFF’s culture, including the history of the fast food industry and its providers.  

Moreover, customers will be able to add (with a short delay) their comments and suggestions about the FF providers on our website; this will be edited and monitored by FFF.  To make the website truly interactive, FFF will offer competitions and promotions where visitors will be able to print the promotional vouchers and take it to the FF providers to fulfil.  

It is expected that the website and app organised by FFF Ltd will be a powerful promotional vehicle for the FFF booklet. In the future, the FFF website will display information about franchising/licensing the brand as well as investment opportunities when available.

6.1 Internet Marketing Strategy

FFF will leverage the visibility of the fast food provider’s websites by cross linking between sites. We will also post twitter, Facebook and other social media sites to ‘spread the word’ and develop the brand.

6.2 Development Requirements

The development and maintenance of the website and supporting technology will be put out to tender and will be in line with the corporate branding.  

The app will developed for a number of reasons including the ability to advertise the brand to a bigger audience at a comparatively low cost.  The owner’s previous experience in Information Technology will enable the cost efficient tendering of the development of the website, database and app for our project.

Appendix E - Outline Project Plan

Appendix F. Risk and Issue Analysis & Risk and Issues Logs

The introduction of a risk management plan for FFF is essential to allow the correct selection of suitable controls or countermeasures to quantify each risk and to ensure the correct risk mitigation is suggested and put forward for approval.

An outline of FFF’s risks and issues are summarised below, it's important to appreciate that risk analysis is not just confined to the project, they also apply to the ongoing business activity, the suppliers, the people working on the project as well as the systems and people that have to support and use the project.

The initial risk assessment has been carried out and is defined in the Risk and Issue Log below,  it identifies potential risks and explains how they will be managed during the project lifecycle.  A major concern is the appropriate communication of any risk information, in particular where escalation is required.  Other logs will be needed for the project they include the Project Delay Log.

An outline of FFF’s risk and issues are summarised below…

Note: There are currently no issues

Appendix G - Key Stakeholders Analysis

To maintain and strengthen relationships with long-term customers and suppliers, FFF will initiate frequent conversations, correspondence and meetings. As an example, our regular and informative interactions with suppliers will cover topics such as our medium and long-term needs, on-site quality and performance expectations and our position and requirements concerning diversity, ethics and other sustainability issues.

4.1 The key stakeholders in this Project.

Key stakeholders are any persons that have a

• divested interest.
• decision-making authority.
• expert business understanding.
• the vision of the future process.
• role in the implementation process

http://www.requirementsquest.com/wp-content/uploads/2010/04/RQ-How-to-Get-the-RIGHT-Stakeholder-Involvement.pdf

There are key internal and external stakeholders for this project and include they are…

4.2 Internal stakeholders

Suppliers and contractors – that include

• Other internal and external business partners

• Direct mail vendor, warehousing etc.
• Printers & fulfilment

• Artistic and editorial expertise
• Legal and financial expertise and the
• Bank

Communication with these stakeholders will be via our secure extranet site, where our business partners can provide and receive information interactively.

Shareholders – We will communicate the financial and operating performance with our shareholders through company reports and Securities and Exchange Commission filings, and annual shareholders meetings. Further, we will make internet links to these events and other information available on our web site.

4.3 External stakeholders

Customers will be able to contact us by phone or in writing and through the website or by submitting an .

Competitors - we will connect with various competitors and industry peers through active involvement via several possible channels.

Note: a given area/topic can have more than one stakeholder

4.4 Getting better project results

To achieve better project results a process can be undertaken that will assist, it includes

• surveying the stakeholder
• assessing stakeholder survey results

and identifying the level of expertise that each stakeholder possesses.  Moreover, if stakeholder profiling techniques are used a better inter organisational fit may be gained.  Finally, an assessment of the stakeholders impact on the project and on-going operational activities should be undertaken, table 1 below shows a template that will be used, as it is important to appreciate the impact on the project and operations.

Table 1, Stakeholder Impact Assessment Form

Once the above assessment is undertaken it is important to secure the resource needed appropriately, to confirm their availability for the project timeline, as unavailable resources may pose a significant project risk.

Appendix f (b) Year 1 Projected Cashflow

Appendix f (d) FFF Franchise Cashflow Model year 1

Appendix f (e) Printing Estimate Dec 2012

Bibliography

Key Note - Market Report - Franchising 2012

Key Note - Publishing Industry 2010

Key Note - Fast-Food & Home-Delivery Outlets 2012

http://www.requirementsquest.com/wp-content/uploads/2010/04/RQ-How-to-Get-the-RIGHT-Stakeholder-Involvement.pdf