Feasibility Study of a Restaurant

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Table of Contents

Informative Analysis3
Front Matter3
General Market Characteristics3
Site Evaluations3
Supply and Demand Information3
Supply and Demand Analysis
Step 1: Calculate the Most Recent 12-Month Average
Daily Seat Turnover, Average Daily Check and Average
Daily Seats Demand of the Most Competitive Restaurants4

Step 2: Composite Growth Rate of Demand from the
Various Markets4

Step 3: Future Seats Demand Year by Year5

Step 4: Future Supply of Seats Required 5

Pro Forma Income Statement6
Breakeven Point Analysis7
Capital Investment7
Reference8 Informative Analysis

Front Matter
This feasibility study is to provide informative and financial analysis for Charlie, who is willing to open his second restaurant, which is similar to his current operation-a relatively medium-price operation catering to the local neighbouring University of British Columbia, Residents and small business trade. The restaurant will serve 62 seats for dinning. The study will evaluate the supply and demand with competitors’ information in the targeted market and budget the new restaurant for the next five years. The new restaurant is expected to open in one year.

General Market Characteristics
The University of British Columbia is one of the most famous universities in Canada. It attracts thousands upon thousands of students over the world. Based on UBC enrolment Statistics 2011/12, the total number of the students in winter session is 48,667 (male students 22082; female students 26585). Amongst all students, the average monthly expenses are $1,107.70 (including rent/residence fees). Over 7 in 10 (74%) students spend money eating out - on fast food or takeout. The new restaurant will be established near the university center on Crescent Road. There are not many restaurants located. But a museum, Buchanan complex, university centre, learning centre, and research centre are located nearby.

Site Evaluations
The new restaurant will be established in the very famous University of British Columbia’s campus. On Crescent Road, in the north-west of the campus, there are not many restaurants, but some learning or research centers. Therefore, the target guests for the restaurant will be the students attend the activities in the centers nearby. The location where the new restaurant will established is also near the tourist attraction-Wreck Beach which attracted around half million people every year. It means the new restaurant will also attract a lot of tourists, passer-bys, .

Supply and Demand Information
Although there are more than 20 restaurants among in UBC campus, there is no Chinese fast-food restaurant nearby. The new restaurant is a Chinese fast-food restaurant called Malan Hand-pulled Noodles. Nowadays, the number of international students from China in UBC is increasing. There are about 5000 Chinese students in UBC which is not including the new immigrant from China studying in UBC. The tourists from China to visit UBC and Wreck Beach are growing these years. Impacted by the Asian students, the local people show a great interesting in tasting Asian food, especially, Chinese food. Actually, most local people are really love Chinese food. So the demand of Chinese fast-food is ongoing growing fast. Supply and Demand Analysis

Step 1: Calculate the Most Recent 12-Month Average Daily Seat Turnover, Average Daily Check and Average Daily Seats Demand of the Most Competitive Restaurants

Restaurant Seat Available Seat TurnoverAverage CheckCurrent Daily Seats Demand The Point Grill503$13.50150
Sage Bistro753$18.13225
Delly652.5$11.80162.50
Neville’s 552.75$15.90151.25
Bistro La France663.5$16.90231
Total311919.75

Average Daily Seat Turnover = 2.95

Average Daily Check= $15.25

Step 2: Composite Growth Rate of Demand from the Various Markets

Markets...
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