4 Moons Pizzeria

May 2005

This sample business plan has been made available to users of Business Plan Pro, business
planning software published by Palo Alto Software. Names, locations and numbers may have
been changed, and substantial portions of the original plan text may have been omitted to
preserve confidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not have
permission to reproduce, publish, distribute or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should be
emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For
product information visit our Website: www.paloalto.com or call: 1-800-229-7526.

Copyright Palo Alto Software, Inc., 1995-2005 All rights reserved.

 Confidentiality Agreement

The undersigned reader acknowledges that the information provided by

_________________________ in this business plan is confidential; therefore, reader agrees
not to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all

respects confidential in nature, other than information which is in the public domain through
other means and that any disclosure or use of same by reader, may cause serious harm or
damage to _________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________
Signature

___________________
Name (typed or printed)

___________________
Date

This is a business plan. It does not imply an offering of securities.

 Table of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

6.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

6.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

7.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

7.1 Start-up Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.3 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.4 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.5 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.6 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.7 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
 4 Moons Pizzeria

1.0 Executive Summary

The following plan is based on years of experience, is highly focused and promises to follow a
path of prosperity. It is based on conservative sales figures, and actual sales may be higher.
The projections contained herein are authentic and will be used as the budget for the business.
4 Moons Pizzeria will show a profit immediately, and will increase sales and profits each year
thereafter.

Highlights

$800,000

$700,000

$600,000

$500,000
Sales
$400,000 Gross Margin

$300,000 Net Profit

$200,000

$100,000

$0
FY 2006 FY 2007 FY 2008

1.1 Objectives

The objective is to lease a site at 555 West Blue Plum Lane. We will need to remodel the
interior according to the Franchisor's design. We plan to duplicate and massage the successful
formula used by Franchisor. We will use our own personal strategies and skills to create our
own success in our 4 Moons Pizzeria. We plan to train our crew to ensure outstanding results
in quality food and customer service. Our objectives are as follows.

Be the first 4 Moons Pizzeria in Nevada

Provide the highest quality product, duplicating Franchisor's successful pizzerias in
Oregon
Give top notch service in a quick and efficient manner
Keep our menu simple to maintain low food cost
Maintain the competitive, fast-casual dining at the mid-range price point
Use marketing strategies to build volume quickly
First year sales (May 2005 to April 2006) of $677,313 with a 6% growth yearly
Maintain and expand an outstanding reputation as being the best neighborhood pizzeria

Page 1
 4 Moons Pizzeria

1.2 Mission

4 Moons Pizzeria exists for the purpose of generating sales and profit. Because we are a
service business, we will also exist to serve our customers. These two reasons for our
existence are inextricable. If one aspect does not exist, the other will cease to exist.

We will always offer a fresh product and welcoming environment

We will remain cheerful, courteous, well trained, and focused on pleasing our guests
We will strive to become the first destination of choice for those in our neighborhood
and community
Our staff will be offered a workplace where they can prosper and grow in a dignified,
fun, and rewarding manner
We will give support to and contribute to our community schools, churches, groups,
and businesses

1.3 Keys to Success

Our policy of being operating managing members is to make sure we pass by every table to
greet, visit with, or at least send a smile to our guests.

We will visit any table or answer to any phone call that has feedback, positive or negative. We
will use every means available to satisfy our customers.

We will be committed to the success and happiness of our staff.

We will be committed to providing quality food and beverage at all times.

We will consistently follow the franchisor's proven methods.

2.0 Company Summary

Established in 1958, 4 Moons Pizzerias are an award winning, "Home of the brick oven Pizza".
They offer a comfortable, friendly ambience, with its new "Modern Pizzeria" design. The menu
features pizza, hot calzones, strombollis, sandwiches, baked pastas, and fresh tossed salads.
The pizza dough is made fresh everyday on site. Beverages include soft drinks, imported and
domestic beer, micro brews, and an impressive wine list. Food ingredients are the finest
available including USDA Choice meats.

2.1 Company Ownership

We are an LLC, limited liability company, with four managing owners holding an equal share
(25%) and interest in the franchise.

Carol Mittani: General Managing Owner - Hands-on management of all daily restaurant
and company operations.
Steve Solutrian: Vice Managing Owner / Sales and restaurant operations. Hands-on
management of daily operations and sales trends.
Diane Solutrian: Vice Managing Owner / All office procedures. Hands-on management
of daily operations.
Rikard Mittani: Vice Managing Owner / Marketing and future finances and investments.

Page 2
 4 Moons Pizzeria
Hands-on management of daily operations.

2.2 Start-up Summary

We hope to take advantage of an existing structure located at 555 West Blue Plum Lane, at
Lakeside Center. It is 2,828 square feet. We will remodel according to the Franchisor's designs
to make our concept both visually and functionally suitable.

Construction is estimated at $214,630 - see attached "Franchisor's Construction Cost Sheet"

for item breakdown.*

Start-up cash on hand is estimated for 3 months working capital, inventory, labor and rent.

Short-term assets include phone equipment, smallwares, booths, chairs, tables, pendants,
sconces, and lighting.

Long-term assets include all kitchen equipment, POS system, and signage.

*Confidential and proprietary information omitted from this sample plan.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Remodel Costs $214,630
Proscreen/Wallpaper-Menu Boards $3,644
Insurance $1,500
Franchise Fee $25,000
1st month rent $4,242
Drafting/Engineering $3,000
City fees/Misc costs $2,491
Beer and wine license $500
Training/travel $2,000
Utility start-up costs $5,000
Design $4,200
Total Start-up Expenses $266,207

Start-up Assets
Cash Required $87,286
Other Current Assets $41,775
Long-term Assets $99,732
Total Assets $228,793

Total Requirements $495,000

Page 3
 4 Moons Pizzeria

Start-up

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$0
Expenses Assets Investment Loans

3.0 Services

4 Moons Pizzerias are comfortable and inviting. We are a fast-casual operation with dine in,
take-out, and delivery. The decor and theme are centered around the cutting edge open
kitchen with brick arches and distinctive lighting. Our energy and atmosphere will appeal to
families, groups, and schools.

The real power and energy of the pizzeria will come from the attentive and courteous service
provided by our managers and staff. Our fresh menu will be prepared by our motivated
kitchen team, and carefully orchestrated to provide the best service to our customers who are
our priority. We will have at least one manager on duty at all times.

Our hours are Sunday thru Thursday 11 am. to 10 pm. Friday and Saturday 11 am. to 11 pm.
Take out available during store hours. Delivery hours are 4 pm to closing everyday we are
open. We will offer delivery all day on Saturday and Sunday and some holidays.

4.0 Market Analysis Summary

Ohno is one of the fastest growing cities in America with Nevada being voted the best small
business state in the country. Ohno is a community diverse in the arts and culture. We have a
strong labor market, low taxes, affordable housing, and natural amenities making Ohno an
attractive place to live and do business.

The greater Ohno metropolitan area population has grown one third through the last decade
and is projected to grow 11.4% in the next five years.

The median age is 36 years old with household incomes averaging $65,895. With a strong
local economy we have a population with disposable cash for dining and entertainment.

According to the Nevada Restaurant Association, Nevada restaurants are expected to lead the

Page 4
 4 Moons Pizzeria
nation in sales growth at 7.6%. Nevada is also the fastest growing state in the union.

4.1 Market Segmentation

4 Moons target market is a three mile radius of site location. Within the three mile operating
radius is a population of 121,705. The total number of households in this area is 48,839 with
an average income of $58,197.

This area is densely populated, and a desirable part of town in which to live. It is an under-
served portion of town, especially to the west up to the Caughlin Ranch area. It is on one of
the most traveled corridors in Ohno, Blue Plum Lane. Located near two of Ohno's most popular
malls, Parklane and Shopper's Square.

Our target market includes adults 20 to 54 years old who socialize and have families. Children
are a big part of our market, at a third of the population is this area. Ages 4 to 19 prefer pizza
over any fast food and often influence family dining decisions. According to one study, 93% of
the U.S. population eats pizza. If we sold one pizza per month with an average of $17.00 per
household, we would generate $721,141 in one month. This illustrates that with effective
marketing, superior product, and proper management we will reach and exceed our projected
sales goals.

In this area we have some of the best schools. 4 Moons Pizzerias provides support for local
area school groups and sports teams, as well as local church groups. We will be involved
through providing sponsorships, discounts, and donations.

Table: Market Analysis

Market Analysis
2005 2006 2007 2008 2009
Potential Customers Growth CAGR
Ages 0-19 (preferred
4% 30,426 31,643 32,909 34,225 35,594 4.00%
fast food)
Ages 20-54
4% 61,583 64,046 66,608 69,272 72,043 4.00%
(w/disposable cash)
Over 55 3% 26,775 27,685 28,626 29,599 30,605 3.40%
Total 3.87% 118,784 123,374 128,143 133,096 138,242 3.87%

Page 5
 4 Moons Pizzeria

Market Analysis (Pie)

Ages 0-19 (preferred fast food)

Ages 20-54 (w/disposable cash)
Over 55

4.2 Target Market Segment Strategy

We haven't ruled any one group or class out in our target market area. Just about everyone
eats pizza. Most residents in this area have busy schedules, and find value in exceptional and
timely service, as well as mouth watering, delightful food. We believe most everyone will
appreciate our value based menu and family atmosphere. We have a strong commitment to
community involvement including sponsorship for school/group teams.

We strongly believe we will overcome any competition in our area. The local competition
includes Sticky Paws Pizza, Damynos, Gridlow's Pizza, Hoopla Take-and-Bake, Clodhopper's,
and Little Sayzar. Most of these are at least two miles from our location and are no
competition to our concepts, ideals, fresh products, and welcoming service.

4.3 Service Business Analysis

Pizza Statistics:

Represent 17% of all restaurants.

Americans eat approximately 100 acres of pizza a day.
Pizza is a $32+ billion per year industry with continuing overall restaurant growth.
Accounts for 10% of all food service sales.
93% of Americans eat pizza at least once a month.
67% of Americans order pizza for a casual evening with friends.
Children between 3-11 prefer pizza over all other food groups.

Page 6
 4 Moons Pizzeria

4.3.1 Competition and Buying Patterns

4 Moons Pizzerias are competitive in the mid price point, fast casual dining market. With an
average ticket of $17.00, we are priced above Hoopla Take-and-Bake and Damyno but below
Squaretable.

Quality, Quick, and Simple is the goal of 4 Moons Pizzerias. The customers are provided with
the highest quality product. Store design provides a warm and friendly environment for all.

5.0 Strategy and Implementation Summary

Emphasize service
We will differentiate ourselves with SERVICE! We will establish our business offering as a clear
and viable alternative for our target market.

Build a relationship-oriented business

Build long-term relationships with customers, not single-visit deals. Become their restaurant
and 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 we
should own. We do not want to compete for the buyers who go to "fast food" or "take and
bake" types of restaurants. We definitely want to be able to sell to smart, quality conscious
customers.

Utilize the various skills of our Managing Owners and learn through the extensive
training program provided by Franchisor.

5.1 Competitive Edge

Clearly our competitive edge will be our customer service experience and management
approach. Our smiling, unassuming, and good natured approach to all of our customers will be
evident, and highly appreciated.

We will constantly monitor our product to ensure quality food and beverage at all times. Our
recipes are delicious, made fresh daily, and our toppings go all the way to the edge of the
pizza crust.

5.2 Marketing Strategy

We will start our marketing during the construction phase. Our main factor in success is simply
that a person can enjoy a good pizza, fast service, and friendly familiar faces.

We will all be involved in Sales and Marketing. We will gather information about the
neighborhoods, use our POS System to track top sellers and gather a customer base for
marketing offers.

Kids school tours

Gift Certificate Program
Phone book advertisement

Page 7
 4 Moons Pizzeria
Coupons
Door hangers
Sporting events for schools and group events
Eye catching signage
Excellent service and high quality food
Word of mouth

5.3 Sales Strategy

The marketing strategy discussed previously in this business plan will generate the desired
sales.

We require our staff to have a thorough and comprehensive understanding of the menus,
ingredients and methods of preparation of all of our foods. We train our staff to always
describe and recommend items, even to regular customers, and to always up-sell. The key to
our employee's success in up-selling is the realization that it almost always brings in better tips
because the checks are higher.

We will emphasize service to differentiate ourselves. We will establish our business offerings as
a clear and viable alternative for our target market, from the scores of "slow delivery", "frozen
dough", and "your average" pizza chains.

We will build long-term relationships with our customers, becoming their destination of choice
for delivery, take out, and dine in. We will sell ourselves as the best neighborhood and
community pizzeria.

5.3.1 Sales Forecast

We are forecasting sales of approximately $677,313 in our first fiscal year (May 2005 to April
2006) with an opening date of mid-May 2005. We foresee sales increasing at .5% monthly, an
overall yearly rate of 6% per year. Our forecast is conservative and is based on an average of
$17.00 average per order.

We are convinced that our business will increase with time. We have a strong management
team who will be on property daily to monitor daily operations. We will constantly watch food
quality, customer service, and costs.

Table: Sales Forecast

Sales Forecast
FY 2006 FY 2007 FY 2008
Sales
Total Restaurant Sales $677,297 $717,935 $761,011
Other $0 $0 $0
Total Sales $677,297 $717,935 $761,011

Direct Cost of Sales FY 2006 FY 2007 FY 2008

Cost of Sales $135,461 $143,590 $152,206
Other $0 $0 $0
Subtotal Direct Cost of Sales $135,461 $143,590 $152,206

Page 8
 4 Moons Pizzeria

Sales Monthly

$70,000

$60,000

$50,000

$40,000
Total Restaurant Sales
$30,000 Other

$20,000

$10,000

$0
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Sales by Year

$800,000

$700,000

$600,000

$500,000
Total Restaurant Sales
$400,000
Other
$300,000

$200,000

$100,000

$0
FY 2006 FY 2007 FY 2008

Page 9
 4 Moons Pizzeria

6.0 Management Summary

4 Moons consists of four members with an equal concern in our franchise. We will owner
operate our pizzeria daily. We will keep our starting salaries low to keep labor costs down.
Each member contributes with a generalized assignment as well as being trained in all
restaurant operations, including making pizza, working the counter, and delivering pizza. We
are an extremely experienced, and well balanced team.

Please see our attached resumes for a precise summary.*

Carol Mittani will be General Manager working every day to insure success. Steve Solutrian,
Diane Solutrian, and Rikard Mittani will be on site various hours, and during peak dinner hours
to help with general operational tasks, plus opening to closing hours on the weekend.

* Confidential and proprietary information omitted from this sample plan.

6.1 Personnel Plan

We plan to have a part-time staff to include pizza makers, delivery drivers, and counter
persons. We are planning on a staff of 10 employees to come on at peak business levels.

Our first month will have a higher labor rate due to training, pre-opening preparation and
grand opening labor.

We have forecasted labor at 18% of gross sales. We will strive to keep our payroll at 18% or
lower.

Table: Personnel

Personnel Plan
FY 2006 FY 2007 FY 2008
Wages $126,738 $129,228 $136,982
Other $0 $0 $0
Total People 14 14 14

Total Payroll $126,738 $129,228 $136,982

7.0 Financial Plan

Our main concerns will be aggressive time management to keep labor costs under control.
Proper purchasing, food preparation and handling, and control of cheese consumption to keep
food costs down. Growth will be sustained through increased sales.

Page 10
 4 Moons Pizzeria

7.1 Start-up Funding

Our start-up figures are approximate costs for start up of a 4 Moons Pizzeria franchise as
prescribed by the Franchisor.

4 Moons has paid a franchise fee of $25,000 and has $125,000 initial investment.

Our estimated start up is $470,000. We are seeking an SBA Loan in the amount of $345,000
(see Long term liability line).

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $266,207
Start-up Assets to Fund $228,793
Total Funding Required $495,000

Assets
Non-cash Assets from Start-up $151,507
Cash Requirements from Start-up $87,286
Additional Cash Raised $0
Cash Balance on Starting Date $87,286
Total Assets $238,793

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $345,000
Other Current Liabilities $0
Total Liabilities $345,000

Capital

Planned Investment
Solutrian, Steve and Diane $75,000
Mittani, Rikard and Carol $75,000
Additional Investment Requirement $0
Total Planned Investment $150,000

Loss at Start-up (Start-up Expenses) ($266,207)

Total Capital ($116,207)

Total Capital and Liabilities $228,793

Total Funding $495,000

7.2 Important Assumptions

We are projecting profit based on the performance of other franchises and our own judgement
based on the following:

We assume by using marketing strategies, sales strategies, good customer

relationships, fresh food, and good management practices, we will succeed.
In order to meet the sales of $677,313 in the first year, open for at least 360 days, we
would have to sell 111 checks each day with a $17 per check average.
Our sales each day should reach an minimum average of $1881.43.
Our forecast is based on an average. Some months will increase and others decrease.
We do not predict any major decreases in sales, as Ohno area restaurants are busy all
year round.

Page 11
 4 Moons Pizzeria

Table: General Assumptions

General Assumptions
FY 2006 FY 2007 FY 2008
Plan Month 1 2 3
Current Interest Rate 0.00% 0.00% 0.00%
Long-term Interest Rate 7.00% 7.00% 7.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.3 Break-even Analysis

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

Annual break even point is approximately $435,204.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $36,365

Assumptions:
Average Percent Variable Cost 20%
Estimated Monthly Fixed Cost $29,092

Break-even Analysis

$30,000

$20,000

$10,000

$0

($10,000)

($20,000)

($30,000)

$0 $12,000 $24,000 $36,000 $48,000 $60,000

Monthly break-even point

Break-even point = where line intersects with 0

Page 12
 4 Moons Pizzeria

7.4 Projected Profit and Loss

As the Profit and Loss table shows, the company expects to continue its steady growth in
profitability over the next three years. We predicted a conservative 6% per year increase in
sales.

The first month may have higher payroll due to employee training and restaurant set up.

Our operating expenses include rent at $4,242 estimate per month, royalty fees of 5% of
gross sales, equipment rental and repair, utilities projected at 11% of gross sales,
administrative charges including PC charges, cleaning supplies, payroll charges, and office
supplies.

Marketing fees are 4% of gross sales per month.

Table: Profit and Loss

Pro Forma Profit and Loss

FY 2006 FY 2007 FY 2008
Sales $677,297 $717,935 $761,011
Direct Cost of Sales $135,461 $143,590 $152,206
Other Costs of Sales $0 $0 $0
------------ ------------ ------------
Total Cost of Sales $135,461 $143,590 $152,206

Gross Margin $541,836 $574,345 $608,805

Gross Margin % 80.00% 80.00% 80.00%

Expenses
Payroll $126,738 $129,228 $136,982
Marketing/Promotion $27,092 $28,717 $30,440
Depreciation $30,000 $30,000 $30,000
Rent $50,904 $50,904 $52,431
Royalty fees $33,865 $35,897 $38,051
Equip rent/repair $3,000 $5,400 $5,400
Utilities $74,503 $78,973 $83,711
Admin charges $3,000 $3,000 $3,000
------------ ------------ ------------
Total Operating Expenses $349,102 $362,119 $380,015

Profit Before Interest and Taxes $192,734 $212,226 $228,790

Interest Expense $23,367 $21,648 $19,738
Taxes Incurred $50,810 $57,173 $62,716

Net Profit $118,557 $133,404 $146,336

Net Profit/Sales 17.50% 18.58% 19.23%

Page 13
 4 Moons Pizzeria

Profit Monthly

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0

($2,000)
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Profit Yearly

$160,000

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

$0
FY 2006 FY 2007 FY 2008

Page 14
 4 Moons Pizzeria

Gross Margin Monthly

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Gross Margin Yearly

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
FY 2006 FY 2007 FY 2008

Page 15
 4 Moons Pizzeria

7.5 Projected Cash Flow

The cash flow depends on assumptions for good daily operational management, good traffic
counts in the restaurant, inventory turnover, payment days, and accounts receivable
management. We do not predict any new financing until we open our second franchise.

Principal amounts are based on a loan of $345,000 with a 10 year SBA Loan at 7% interest.

Cash

$250,000

$200,000

$150,000
Net Cash Flow

$100,000 Cash Balance

$50,000

$0
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Page 16
 4 Moons Pizzeria

Table: Cash Flow

Pro Forma Cash Flow

FY 2006 FY 2007 FY 2008
Cash Received

Cash from Operations

Cash Sales $677,297 $717,935 $761,011
Subtotal Cash from Operations $677,297 $717,935 $761,011

Additional Cash Received

Sales Tax, VAT, HST/GST
$49,985 $52,984 $56,163
Received
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $727,282 $770,919 $817,174

Expenditures FY 2006 FY 2007 FY 2008

Expenditures from Operations

Cash spending $126,738 $129,228 $136,982
Bill Payments $367,514 $406,680 $442,822
Subtotal Spent on Operations $494,252 $535,908 $579,804

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $49,757 $52,985 $56,164
Principal Repayment of Current
$0 $0 $0
Borrowing
Other Liabilities Principal
$0 $0 $0
Repayment
Long-term Liabilities Principal
$22,576 $26,332 $28,237
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $566,585 $615,225 $664,205

Net Cash Flow $160,696 $155,693 $152,968

Cash Balance $247,982 $403,676 $556,644

Page 17
 4 Moons Pizzeria

7.6 Projected Balance Sheet

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

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2006 FY 2007 FY 2008
Assets

Current Assets
Cash $247,982 $403,676 $556,644
Other Current Assets $41,775 $41,775 $41,775
Total Current Assets $289,757 $445,451 $598,419

Long-term Assets
Long-term Assets $99,732 $99,732 $99,732
Accumulated Depreciation $30,000 $60,000 $90,000
Total Long-term Assets $69,732 $39,732 $9,732
Total Assets $359,489 $485,183 $608,151

Liabilities and Capital FY 2006 FY 2007 FY 2008

Current Liabilities
Accounts Payable $34,488 $53,111 $57,981
Current Borrowing $0 $0 $0
Other Current Liabilities $228 $226 $225
Subtotal Current Liabilities $34,716 $53,337 $58,206

Long-term Liabilities $322,424 $296,092 $267,855

Total Liabilities $357,140 $349,429 $326,061

Paid-in Capital $150,000 $150,000 $150,000

Retained Earnings ($266,207) ($147,650) ($14,246)
Earnings $118,557 $133,404 $146,336
Total Capital $2,350 $135,754 $282,090
Total Liabilities and Capital $359,489 $485,183 $608,151

Net Worth $2,350 $135,754 $282,090

Page 18
 4 Moons Pizzeria

7.7 Business Ratios

The company's projected business ratios are provided in the following table. The final column,
Industry Profile, shows ratios for the "Pizza Restaurant Industry", as determined by the
Standard Industry Classification 5812.0600 with annual sales of $500,000 to $999,000.

Table: Ratios

Ratio Analysis
FY 2006 FY 2007 FY 2008 Industry Profile
Sales Growth 0.00% 6.00% 6.00% 5.24%

Percent of Total Assets

Other Current Assets 11.62% 8.61% 6.87% 35.11%
Total Current Assets 80.60% 91.81% 98.40% 43.74%
Long-term Assets 19.40% 8.19% 1.60% 56.26%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 9.66% 10.99% 9.57% 18.93%

Long-term Liabilities 89.69% 61.03% 44.04% 25.48%
Total Liabilities 99.35% 72.02% 53.62% 44.41%
Net Worth 0.65% 27.98% 46.38% 55.59%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.00% 80.00% 80.00% 61.91%
Selling, General & Administrative
62.50% 61.42% 60.77% 39.08%
Expenses
Advertising Expenses 4.00% 0.00% 0.00% 2.55%
Profit Before Interest and Taxes 28.46% 29.56% 30.06% 1.38%

Main Ratios
Current 8.35 8.35 10.28 1.14
Quick 8.35 8.35 10.28 0.79
Total Debt to Total Assets 99.35% 72.02% 53.62% 49.97%
Pre-tax Return on Net Worth 7208.17% 140.38% 74.11% 3.97%
Pre-tax Return on Assets 47.11% 39.28% 34.37% 7.93%

Additional Ratios FY 2006 FY 2007 FY 2008

Net Profit Margin 17.50% 18.58% 19.23% n.a
Return on Equity 5045.72% 98.27% 51.88% n.a

Activity Ratios
Accounts Payable Turnover 11.66 8.01 7.72 n.a
Total Asset Turnover 1.88 1.48 1.25 n.a

Debt Ratios
Debt to Net Worth 152.00 2.57 1.16 n.a
Current Liab. to Liab. 0.10 0.15 0.18 n.a

Liquidity Ratios
Net Working Capital $255,042 $392,114 $540,213 n.a
Interest Coverage 8.25 9.80 11.59 n.a

Additional Ratios
Assets to Sales 0.53 0.68 0.80 n.a
Current Debt/Total Assets 10% 11% 10% n.a
Acid Test 8.35 8.35 10.28 n.a
Sales/Net Worth 288.25 5.29 2.70 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Page 19
 Appendix

Appendix Table: Sales Forecast

Sales Forecast
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Sales
Total Restaurant Sales 0% $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Direct Cost of Sales May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Page 20
 Appendix

Appendix Table: Personnel

Personnel Plan
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Wages 18% $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 14 14 14 14 14 14 14 14 14 14 14 14

Total Payroll $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879

Page 21
 Appendix

Appendix Table: Profit and Loss

Pro Forma Profit and Loss

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440
Direct Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Cost of Sales $5,750 $11,500 $11,557 $11,616 $11,673 $11,732 $11,791 $11,849 $11,909 $11,968 $12,028 $12,088

Gross Margin $23,000 $46,000 $46,231 $46,460 $46,693 $46,926 $47,161 $47,397 $47,633 $47,872 $48,111 $48,352
Gross Margin % 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00%

Expenses
Payroll $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879
Marketing/Promotion 4% $1,150 $2,300 $2,312 $2,323 $2,335 $2,346 $2,358 $2,370 $2,382 $2,394 $2,406 $2,418
Depreciation $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Rent $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242 $4,242
Royalty fees 5% $1,438 $2,875 $2,889 $2,904 $2,918 $2,933 $2,948 $2,962 $2,977 $2,992 $3,007 $3,022
Equip rent/repair $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Utilities 11% $3,163 $6,325 $6,357 $6,388 $6,420 $6,452 $6,485 $6,517 $6,550 $6,582 $6,615 $6,648
Admin charges $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $22,992 $29,092 $29,201 $29,311 $29,421 $29,532 $29,644 $29,755 $29,868 $29,981 $30,095 $30,209

Profit Before Interest and Taxes $8 $16,908 $17,030 $17,149 $17,272 $17,394 $17,517 $17,642 $17,765 $17,891 $18,016 $18,143
Interest Expense $2,013 $2,001 $1,989 $1,977 $1,966 $1,954 $1,942 $1,930 $1,918 $1,905 $1,893 $1,881
Taxes Incurred ($601) $4,472 $4,512 $4,552 $4,592 $4,632 $4,673 $4,714 $4,754 $4,796 $4,837 $4,879

Net Profit ($1,403) $10,435 $10,528 $10,620 $10,714 $10,808 $10,903 $10,998 $11,093 $11,190 $11,286 $11,383
Net Profit/Sales -4.88% 18.15% 18.22% 18.29% 18.36% 18.43% 18.49% 18.56% 18.63% 18.70% 18.77% 18.83%

Page 22
 Appendix

Appendix Table: Cash Flow

Pro Forma Cash Flow

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Cash Received

Cash from Operations

Cash Sales $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440
Subtotal Cash from Operations $28,750 $57,500 $57,788 $58,076 $58,366 $58,658 $58,952 $59,246 $59,542 $59,840 $60,139 $60,440

Additional Cash Received

Sales Tax, VAT, HST/GST Received 7.38% $2,122 $4,244 $4,265 $4,286 $4,307 $4,329 $4,351 $4,372 $4,394 $4,416 $4,438 $4,460
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 $30,872 $61,744 $62,053 $62,362 $62,673 $62,987 $63,303 $63,618 $63,936 $64,256 $64,577 $64,900

Expenditures May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Expenditures from Operations

Cash spending $10,000 $10,350 $10,402 $10,454 $10,506 $10,558 $10,611 $10,664 $10,718 $10,771 $10,825 $10,879
Bill Payments $588 $18,205 $34,220 $34,363 $34,507 $34,651 $34,796 $34,943 $35,088 $35,236 $35,384 $35,533
Subtotal Spent on Operations $10,588 $28,555 $44,622 $44,816 $45,013 $45,209 $45,408 $45,607 $45,806 $46,007 $46,209 $46,412

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $2,122 $4,243 $4,254 $4,264 $4,275 $4,286 $4,297 $4,307 $4,394 $4,416 $4,438 $4,461
Principal Repayment of Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal
$0 $1,993 $2,005 $2,017 $2,028 $2,040 $2,052 $2,064 $2,076 $2,088 $2,100 $2,113
Repayment
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 $12,710 $34,791 $50,881 $51,097 $51,316 $51,535 $51,757 $51,978 $52,276 $52,511 $52,747 $52,986

Net Cash Flow $18,161 $26,952 $11,172 $11,265 $11,358 $11,452 $11,546 $11,640 $11,660 $11,745 $11,830 $11,914
Cash Balance $105,447 $132,400 $143,572 $154,836 $166,194 $177,646 $189,192 $200,832 $212,493 $224,238 $236,068 $247,982

Page 23
 Appendix

Appendix Table: Balance Sheet

Pro Forma Balance Sheet

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Assets Starting Balances

Current Assets
Cash $87,286 $105,447 $132,400 $143,572 $154,836 $166,194 $177,646 $189,192 $200,832 $212,493 $224,238 $236,068 $247,982
Other Current Assets $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775 $41,775
Total Current Assets $129,061 $147,222 $174,175 $185,347 $196,611 $207,969 $219,421 $230,967 $242,607 $254,268 $266,013 $277,843 $289,757

Long-term Assets
Long-term Assets $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732 $99,732
Accumulated Depreciation $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 $27,500 $30,000
Total Long-term Assets $99,732 $97,232 $94,732 $92,232 $89,732 $87,232 $84,732 $82,232 $79,732 $77,232 $74,732 $72,232 $69,732
Total Assets $228,793 $244,454 $268,907 $277,579 $286,343 $295,201 $304,153 $313,199 $322,339 $331,500 $340,745 $350,075 $359,489

Liabilities and Capital May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Current Liabilities
Accounts Payable $0 $17,065 $33,075 $33,213 $33,352 $33,491 $33,632 $33,773 $33,914 $34,057 $34,200 $34,344 $34,488
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 ($0) $0 $11 $33 $65 $108 $162 $227 $228 $228 $228 $228
Subtotal Current Liabilities $0 $17,064 $33,075 $33,224 $33,385 $33,556 $33,740 $33,935 $34,141 $34,284 $34,427 $34,572 $34,716

Long-term Liabilities $345,000 $345,000 $343,007 $341,002 $338,985 $336,957 $334,917 $332,865 $330,801 $328,725 $326,637 $324,537 $322,424
Total Liabilities $345,000 $362,064 $376,082 $374,226 $372,370 $370,513 $368,657 $366,800 $364,942 $363,009 $361,064 $359,109 $357,140

Paid-in Capital $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000
Retained Earnings ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207) ($266,207)
Earnings $0 ($1,403) $9,032 $19,560 $30,180 $40,895 $51,703 $62,606 $73,604 $84,697 $95,887 $107,173 $118,557
Total Capital ($116,207) ($117,610) ($107,175) ($96,647) ($86,027) ($75,312) ($64,504) ($53,601) ($42,603) ($31,510) ($20,320) ($9,034) $2,350
Total Liabilities and Capital $228,793 $244,454 $268,907 $277,579 $286,343 $295,201 $304,153 $313,199 $322,339 $331,500 $340,745 $350,075 $359,489

Net Worth ($116,207) ($117,610) ($107,175) ($96,647) ($86,027) ($75,312) ($64,504) ($53,601) ($42,603) ($31,510) ($20,320) ($9,034) $2,350

Page 24
 Appendix

Appendix Table: General Assumptions

General Assumptions
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Tax Rate Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Page 25