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Segment
Latest Reported Latest Reported Net Net Profit
Market
Rev. ($millions) Earnings ($millions) Margin
Share
# of Average # of
Average price
offerings price offerings
Antipasti 12 $10 5 $8
Soups 3 $6 2 $5
Salads 7 $8 2 $6
Pizza * * 4 $11
House specialty
6 $17 3 $14
entrees
Pasta entrees 20 $15 6 $12
Seafood entrees 5 $19 2 $15
Meat and chicken
9 $17 4 $14
entrees
Side dishes 5 $6 3 $4
Desserts 5 $6 3 $5
Wines (choices
24 5**
available)
Coffees 5 $4 5 $4
* Pizza is on Porcini’s lunch menu only ** By the glass only at Pronto’s
Exhibit 3 Characteristics of selected full-service chains (e = estimated)
Average
Outlets in Average sq. Average
rev/outlet
NE US footage seating
(millions)
Cracker Barrel* 23 9,200 195 $3.30
Olive Garden 61 7,600 170 $4.80
Denny’s 79 4,900 112 $1.40
Pizza Hut (dine-in) 187 936 78 N/A
Porcini’s 23 6,900 142 $4.10
Porcini’s Pronto -- 4,200e 85e $2.4e
Company
Owned/Operated Syndicated Franchised
$2.5 million
syndicate $1.0 million**
Porcini’s investment $2.1 million per site transaction cost*
Franchisee
responsible for
buying or leasing
well-situated land,
and building
restaurant to
Investors buy land company specs.
Company buys land, and buildings from Responsible for
Ownership builds facilities company financing.
Franchisee manages
according to Pronto
Operational control Company Company specs
Estimated profit
margin*** 6% of revenues
$40,000 (used to vet
Franchise application appliant and
fee negotiate deal)
Operating
commission and
incentive fee to
Porcini’s 4% of revenues ***
5% of revenue (less
Pronto’s franchise 3% costs) = 2% net
operating fee to Porcini’s***
Training/advice;
menu development;
co-op marketing; etc
Services provided by (the 3% costs noted
Company above)
*Estimated syndication transaction costs at 6% for $44.5 million syndication deal, yielding
$42 million to Procini’s (enough to build 20 Pronto restaurants over its planning horizon). The
team assumed that it would float one syndication deal for half of that amount in 2012 and
another in 2015.
Franchised
Units opened during year 0 0 4 4 4 5 5
Cumulative 0 0 4 8 12 17 22
Syndication
Units opened during year 0 0 2 3 3 4 4
Cumulative 0 0 2 5 8 12 16
* Purchased test restaurants
Source: Consultant’s study
2018
2
14
6
28
4
20