Download - EB-5 Visa Direct Investment Sample (Yogurt) MasterPlans.com

BLUE SKY FOODS, INC.E B - 5 D i r e c t I n v e s t m e n t B u s i n e s s P l a n

__

CONFIDENTIAL – Do Not Distribute Without Permission

Blue Sky Foods, Inc.

2

THIS IS A SAMPLE BUSINESS PLAN

This file was created by redacting an actual business plan MasterPlanswrote for a client seeking an EB-5 visa in connection with a distressedbusiness in 2015. All client information and propriety content has been

removed. As such, the business model, managers and financial proforma herein are entirely theoretical – only the structure of the plan itself

and portions of the market and industry research remain “real”.

www.masterplans.com

__



3

QUALIFICATION SUMMARY..............................................................................................4EXECUTIVE SUMMARY....................................................................................................5

Company Ownership and Structure ............................................................................ 6Company Location ...................................................................................................... 6

BUSINESS DESCRIPTION ..................................................................................................7Description of the Troubled Business ......................................................................... 7New Commercial Enterprise ....................................................................................... 8Jamba Juice Menu and Offerings ............................................................................... 8

MARKET ANALYSIS SUMMARY ...................................................................................... 12Market Segmentation................................................................................................ 14Industry Analysis....................................................................................................... 15Market Need ............................................................................................................. 17Economic Need......................................................................................................... 17Competitive Comparison........................................................................................... 18Competitive Edge...................................................................................................... 22

STRATEGY & IMPLEMENTATION SUMMARY....................................................................... 23Objectives ................................................................................................................. 23Timeline .................................................................................................................... 23Pricing Strategy......................................................................................................... 24Marketing Channels .................................................................................................. 24

OPERATIONS SUMMARY .............................................................................................. 27Operations ................................................................................................................ 27Permits and Licenses................................................................................................ 27Suppliers................................................................................................................... 27

MANAGEMENT SUMMARY ........................................................................................... 28JOB CREATION SUMMARY ............................................................................................ 29

Timeline .................................................................................................................... 29Job Descriptions ....................................................................................................... 29Organizational Chart ................................................................................................. 31

FINANCIAL PROJECTIONS.............................................................................................. 32APPENDIX I: YEAR 1 FINANCIALS BY MONTH ..................................................................... 43APPENDIX II: TEA DESIGNATION LETTERS......................................................................... 49

TABLE OF CONTENTS

__



4

Name of New CommercialEnterprise (NCE) Blue Sky Foods, Inc.Objective To acquire and convert three strugglingjuice franchises into thriving businesses.Structure of NewCommercial Enterprise CorporationDate of Incorporation June 2012Ownership Structure Mr. Jon Weegan: 40%Mr. Bui Wong (EB-5 Applicant): 60%EB-5 Category of BusinessType DirectLocation of NCE 111 Company DriveSanta Ana, California 92618Targeted Employment Area YesIndustry Sector Juice and Smoothie BarsEB-5 Funds Invested $500,000Total JobsPreserved/Created 15/3Use of Funds Acquisition of businesses, renovations,equipment, working capital.

QUALIFICATION SUMMARY

__



5

Blue Sky Foods, Inc. (also referred to as “the Company”) is a new commercialenterprise formed for the purpose of purchasing three struggling Jamba Juicefranchises. The Company will be led by Mr. Jon Weegan, a restauranteur andindustry professional who has over ten years of experience in restaurantmanagement and in converting troubled restaurants and cafes into thrivingoperations. Blue Sky Foods will use an infusion of $500,000 in EB-5 capital from Mr.Bui Wong to renovate the three existing locations, implement new staff training, andinvest in additional marketing to preserve the existing jobs at each location whilealso creating additional employment opportunities in the communities itsbusinesses serve. Building on the successes made possible by EB-5 funding, theCompany also plans to purchasefranchise rights for additional JambaJuice stores and further expandemployment opportunities in SouthernCalifornia.Juicing has become wildly popular inrecent years, and strong consumerdemand for raw juices and protein-packed smoothies will continue to drivethe Company’s growth. Blue Sky Foodsoperates as part of the $2.2 billion Juiceand Smoothie Bars industry in the U.S., which is expected to grow at an averageannual rate of 2.0% through 2019. The three communities served by the Company’sstores are populated by young, affluent, and image-conscious consumers, fittingideally into the core consumer market for Jamba Juice’s products. While Blue SkyFoods will continue to experience competition from other juice and smoothiefranchises and independent stores, its well-established brand, the support of itsparent company and the Company’s demonstrated record of success in skillfuloperations management ensure the ongoing success of current and future stores.Blue Sky Foods is presently working to achieve numerous operational milestonesthat include continuing to increase annual sales, providing employmentopportunities for the local community, and giving back to local schools andorganizations. To improve upon each location’s success in the market, the Companywill invest in renovations to update and upgrade the space and will develop anddeploy a new marketing campaign aimed at re-introducing the brand and thelocation to area residents. The Company’s marketing strategy will feature new, eye-

EXECUTIVE SUMMARY

__



6

catching signage, an enhanced online presence, print advertisements, andcommunity networking. By executing a well-designed marketing campaign,investing in staff training, and improving the aesthetics of each location, theCompany will foster positive word of mouth in the community and will begin torebuild and revitalize its customer base.Mr. Jon Weegan owns and operates the Company. Mr. Weegan is an experienced andaccomplished business executive who combines strong managerial skills with apassion for helping struggling businesses to thrive. He holds a degree in BusinessAdministration from Loyal Marymount University, and is an active and engagedmember of the area community.Company Ownership and StructureBlue Sky Foods Inc. is a C-Corporation registered in the state of California. TheCompany was formed on February 9, 2014.The Company is owned by Mr. Jon Weegan (60%) and EB-Investor Bui Wong (40%).Company LocationThe Company maintains headquarters at the following location:500 Merced RoadSanta Ana, CA 97201

__



7

Description of the Troubled BusinessThe three Jamba Juice locations targeted for acquisition by Blue Sky Foods, Inc. arecurrently under the ownership and management of Maxim Management, LLC. Allthree locations were launched over the course of 2008. The three Jamba Juicefranchises are located as follows: Riverside, California, inside the Plaza Shopping Center Victorville, California, part of the Dunia Plaza Shopping Center Apple Valley, California, part of Area Crossings shopping centerEach location received positive reception from the local community and maintainedprofitability for the period of 2008-2012. Beginning in 2012 and through presentday, Maxim Management began to see a steady decrease in profits due to decliningrevenue. During this time, the company’s parent company began diversifying itsportfolio of business holdings, keymanagement leaders were shifted awayfrom Maxim Management to manage theparent company’s growing portfolio, andoversight and investment in the threeJamba Juice locations was drasticallyreduced. As of 2013, the value of thebusiness has dropped 23% as a result ofdeclining profits (Profit and LossStatements and Balance Sheets for MaximManagement, LLC are provided asseparate addendums to this document).What’s more, the formerly profitablelocations are now plagued with dateddesign, equipment in need of upgrades,and poor customer service due to lack oftraining and oversight that has led to anegative reputation in the community.

BUSINESS DESCRIPTION

__



8

New Commercial EnterpriseBlue Sky Foods, Inc. was formed for the purpose of acquiring the threeunderperforming Jamba Juice locations. Investment from EB-5 Applicant Bui Wongwill be used to invest in upgrades to each location’s interior and exterior, newequipment, and training programs for staff to improve customer service. Theconversion of the stores from a troubled business to a profitable portfolio of well-performing franchiseswill be overseen andclosely monitored byMr. Weegan and Mr.Wong. Once each of theexisting locations hasreturned to profitability,the Company will alsopursue expansion intoother markets byacquiring franchise andterritory rights foradditional Jamba Juicelocations.Jamba Juice Menu and OfferingsJamba Juice is a juice bar and café with more than 800 locations in 26 states, 517 ofwhich are franchises. Founded in 1990 in Emeryville, California, Jamba Juicefeatures fresh squeezed juices, smoothies, and a selection of healthy food. Jamba,Inc. (the Franchisor) is a publicly traded company (NASDAQ: JMBA) with annualrevenue of $450 million.Each location offers the following menu:1

o Energy Bowls:Acai bowls are made-to-order powerhouses of goodness. Açaí juice isblended with soymilk and whole fruit, then toppped with fresh fruit andother tasty toppings.Acai Berry Bowl™: An irresistible blend of Acai juice, soymilk, strawberries,blueberries and bananas, then loaded up with fresh banana, freshstrawberries, fresh blueberries, sliced almonds and a drizzle of honey.

1 JambaJuice.com/menu

Example of an upgraded interior

__



9

Acai Primo Bowl™: A tasty twist of Acai juice, soymilk, blueberries,strawberries and bananas, which we top with organic granola, fresh bananas,fresh blueberries, coconut, almonds and a drizzle of honey.Tropical Acai Bowl™: Ataste of the tropics! Weblend açaí juice, soymilk,mangos and peaches,then top it off with freshbanana, fresh pineapple,almonds and coconut.

o Fruit and Yogurt Bowls:A mouthwatering blendof nonfat plain Greekyogurt, soymilk andwhole fruit, topped with fresh fruit and other goodies—with protein to helpyou power through your day.Berry Bowl™: A harmonious blend of soymilk, fresh Greek yogurt,strawberries, blueberries and bananas. It’s topped with organic granola,fresh bananas, fresh blueberries and a mixed berry drizzle.Chunky Strawberry Bowl™: A delicious blend of fresh Greek yogurt withstrawberries, bananas, peanut butter, and soymilk. It’s topped with organicgranola, fresh bananas and fresh strawberries and served in a convenient,on–the-go bowl.Mango Peach Bowl™: A delicious blend of fresh Greek yogurt and mangos,peaches, bananas, and soymilk. Topped with organic granola, fresh bananas,coconut and a passion fruit drizzle. Served in a convenient, on-the-go bowl.

o Juices:Freshly squeezed juices are delicious and nutritious, packed with wholesomeingredients. Juicing made simple fresh on-the-spot. They are also available incold pressed on-the-go. Tropical Greens (apple, super greens, pineapple, chia seeds) Citrus Kick (orange, ginger, apple, pineapple) Veggie Harvest (apple, carrot, ginger, beets, super greens) Orange Reviver (orange, apple, beets, banana, chia seeds) Great Greens (lemon, apple, cucumber, super greens, chia)

__



10

Apple Aid (ginger, lemon, apple) Carrot Cayenne (ginger, carrots, apple, cayenne pepper) Garden Medley (apple, carrot, super greens) Purely Orange (fresh orange juice) Purely Carrot (fresh carrot juice) Orange Carrot Twist (fresh orange and carrot juice) Orange Berry Antioxidant (orange, strawberry, raspberry, blueberry) Kale Orange Power(orange, kale, banana) Triple Revitalizer(orange, carrot,banana) Tropical Kick-Start(orange, mango) Super Greens (spinach,kale, chard)

o Smoothies:Made with ingredients so classic, these blended-to-order masterpiecespractically invented smoothies. All of your favorites are in the mix: realwhole fruit and 100% fruit juice. Also available in Make It Light™!* All Fruit Smoothies: Mega Mango, Peach Perfection, PomegranateParadise, Strawberry Whirl Classics: Aloha Pineapple, Banana Berry, Caribbean Passion, Mango-a-go-go, Peach Pleasure, Pomegranate Pick-Me-Up, Razzmatazz,Strawberries Wild, Strawberry Surf Rider (Classic Smoothies nowhave the "Make It Light" option with 1/3 fewer calories, carbs, andsugars. Make It Light dairy base is sweetened with Splenda.) Creamy Treats: Chocolate Moo'd, Matcha Green Tea Blast, OrangeDream Machine, Peanut Butter Moo'd Fruit and Veggie Smoothies: Apple N' Greens, Berry UpBEET, OrangeCarrot Karma, Tropical Harvest Pre-Boosted Smoothies: Acai Super Antioxidant, Protein BerryWorkout, Orange-C-Booster Fit 'N Fruitful Smoothies: Berry Blend, Strawberry Raspberry Banana,Peach Mango Whole Food Nutrition Smoothies: Kale-ribbean Breeze, Carrot OrangeFusion, PB Chocolate Love Seasonal: Pumpkin Smash, Eggnog Jubilee

__



11

Kids: Strawberries Gone Bananas, Poppin’ Peach Mango, Berry Beat It,Strawberry Blueberry Blast-Offo Tasty Bites:Drop the greasy bag and pick upone of our delicious bites. Nomatter the time of day, whetheralone or paired with any of ourdrinks, each one is the perfectchoice to provide a better-for-you alternative to gut rot and aguilty conscience.

Oatmeal Artisan Flatbreads Baked Goods Breakfast Wraps Toasted Bistro Sandwiches

__



12

The three current franchises are each located in major shopping centers, providingeach Jamba Juice store with access to a steady stream of local resident and touristtraffic:Plaza Shopping Center“This vibrant dining, shopping, and entertainment venue is rapidly becoming afavorite community gathering place in the heart of Riverside. Plaza Shopping Centerhas transformed the ordinary shopping trip into an extended, interactive andmemorable experience.”2 This shopping center is anchored by Vons, a 16-screenmovie theater, Nordstrom Rack, and CVS. Trader Joe’s, Jo-Ann Fabric and Crafts, andnumerous other retailers, dining establishments, and entertainment destinationsare also located in the immediate area.River Plaza“The plaza is a master-planned mixed retail development emphasizing restaurants,hospitality and power retailers such as Kohl’s, Lowe’s, Sam’s Club and Wal-Mart.” Anew 45,481-square-foot building is planned as an addition to the current shoppingcenter, and will bring Michaels, Staples, and Dollar Tree to join the current stores.3Area Crossings“Located at the northwest corner of Bear Valley and Apple Valley Roads, this new165,000 square foot regional commercial center is anchored by a newly openedHome Depot and includes existing retailers McDonald’s, Chevron and Johnny D’sRestaurant.” Mojave River Crossings is part of a major shopping area that includesJess Ranch Marketplace and Apple Valley Towne Center.4The following table provides pertinent figures for the population living within fivemiles of each of the Company’s locations. This data is provided by ESRI, a marketresearch firm.5

2 Riverside Plaza. Source: http://www.shopriversideplaza.com/shopdineplay.php3 Daily Press. “Dunia Plaza to welcome more stores.” December 28, 2014. Source:http://www.vvdailypress.com/article/20141228/NEWS/1412298434 Town of Apple Valley. “Retail Projects.” Source: http://www.applevalley.org/index.aspx?page=3485 Business Analyst Online. Source: http://bao.esri.com/

MARKET ANALYSIS SUMMARY

__



13

Full Demographic Report – Radial AnalysisBlue Sky Foods Jamba Juice Locations

Plaza ShoppingCenter Dunia Plaza Area Crossings

2014 Total Population 271,647 173,035 132,4452019 Total Population 284,608 180,801 137,628

2014 - 2019 Annual Rate 0.94% 0.88% 0.77%

2014 Households 81,185 49,537 43,3272014 Average Household Size 3.21 3.48 3.04

2014 Families 57,090 39,676 32,3262014 Average Family Size 3.73 3.84 3.48

Median Household Income2014 $50,023 $47,154 $42,9022019 $54,838 $52,163 $47,795

Per Capita Income2014 $21,106 $16,801 $18,8092019 $24,206 $18,746 $21,383

Median Age2010 29.8 29.1 33.92014 30.4 29.3 33.92019 31.5 29.9 34.2

2014 Households by IncomeHousehold Income Base 81,178 49,537 43,327

< $15,000 12.8% 12.9% 15.7%$15,000 - $24,999 10.4% 10.9% 12.0%$25,000 - $34,999 10.9% 11.1% 10.9%$35,000 - $49,999 15.9% 17.6% 18.7%$50,000 - $74,999 19.1% 20.5% 17.7%$75,000 - $99,999 11.4% 13.5% 10.2%$100,000 - $149,999 11.5% 9.9% 10.4%$150,000 - $199,999 4.2% 2.2% 2.9%$200,000 + 3.9% 1.4% 1.6%

Average Household Income $68,024 $58,272 $57,064

2014 Population by AgeTotal 271,647 173,036 132,445

0 - 4 7.2% 9.0% 7.8%5 - 9 6.9% 8.5% 7.5%10 - 14 6.9% 8.5% 7.5%15 - 24 20.2% 17.1% 15.5%25 - 34 15.4% 14.7% 13.1%

__



14

35 - 44 11.7% 12.4% 10.9%45 - 54 12.0% 11.6% 11.9%55 - 64 10.1% 9.1% 11.3%65 - 74 5.6% 5.3% 8.0%75 - 84 2.8% 2.7% 4.6%85+ 1.3% 1.0% 1.9%18+ 74.8% 68.7% 72.5%

2014 Population by GenderMales 134,886 84,399 64,597Females 136,762 88,636 67,849

Spending of Food Away From Home(Avg. Per Capita/Year)

$4,567 $5,167 $6,145

Spending Potential Index (SPI)* 110 112 120

*Spending data is based on a combination of the latest Consumer Expenditure Surveys (CEX)from the Bureau of Labor Statistics. Data is reported by product or service and includes totalexpenditures, average spending per household, and a Spending Potential Index (SPI). TheSpending Potential Index represents the amount spent in the area relative to a nationalaverage of 100. An SPI of 110 means that the area spends 10 percent more than the nationalaverage on that good or service.

Market SegmentationAnyone who wants to live a healthier life is a potential customer for the Company’sstores. Juicing has quickly developed in recent years from something onlyHollywood stars do to something accessible to the masses. “Southern California isobsessed. Juicing and juice cleansing, once only done by ultimate health nuts, hasgone viral,” writes news site Neon Tommy. “Cleanses wean the body off of sugar, fat,salt, and starchy foods to stop cravings.”6Affluent consumers are the most frequent patrons of juice and smoothie bars, andare anticipated to make up the majority of the Company’s customers as well. Thefollowing chart from market research firm IBISWorld provides an overview ofcustomer segmentation in the national Juice and Smoothie Bars industry.7

6 Neon Tommy. L.A.’s Crazy Juice Cleansing Obsession. February 2013. Source: http://tinyurl.com/czzto7f7 IBISWorld. Juice and Smoothie Bars in the U.S. report. Source: http://www.ibisworld.com.

__



15

Industry AnalysisThe restaurant industry is a major economic driver in the United States. Employingone of every 10 U.S. workers and generating more than $665 billion in annual sales,it’s no surprise the National Restaurant Association bills the industry as a “job andcareer powerhouse.”8 About one-third of all U.S. adults gained their first jobexperience in a restaurant, and restaurant job growth has outperformed the overallU.S. economy for the 13th consecutive year in 2012.9Employment growth is a great indicator of the overall health of the restaurantindustry. The total economic impact of the sector is now estimated at $1.8 trillion – awhopping 4% of the entire U.S. gross domestic product. Of every dollar spent in theUnited States on food, 47 cents is spent at a restaurant. Dawn Sweeney, presidentand Chief Executive Officer of the National Restaurant Association, reports that theeconomic value of the segment extends well beyond its own borders. “Restaurantsales generate tax dollars for local communities, and our huge number of employees– 13 million – translates into healthy contributions to state and federal tax revenues.What’s more, for every dollar spent in restaurants, an additional $2 is generated insales in other industries, generating even more tax dollars and economic activity.”10Blue Sky Foods operates in the Juice and Smoothie Bars sub sector of the Restaurantindustry, which has benefitted over the past years from the rise in popularity of8 NRA. “Jobs & Careers Powerhouse.” 2014. Source: http://www.restaurant.org/Industry-Impact/Employing-America/Jobs-Careers-Powerhouse9 Ibid.10 NRA. “Economic Engine.” 2014. Source: http://www.restaurant.org/Industry-Impact/Employing-America/Economic-Engine

__



16

juicing and consumers’ post-recession spending levels on discretionary purchaseslike juice and smoothies. “Consumers with busier work schedules will also havelimited time to make their own juices at home, making them more likely tooutsource this service to juice and smoothie bars,” writes IBISWorld. “Still, theindustry will face increasing competition from a broader range of retailers that willtake advantage of the cold press juice trend and sell ready-to-drink juices. For thisreason, industry revenue is projected to rise at a modest annualized rate of 2.0% peryear on average to $2.4 billion over the five years to 2019.” 11

11 IBISWorld. Juice and Smoothie Bars in the U.S. report. Source: http://www.ibisworld.com.

__



17

Market NeedNumerous studies have demonstrated the health benefits associated with juicing – aprocess that provides consumers with rapid intake of the essential vitamins andnutrients found in fruits and vegetables. The live enzymes present in fresh juicesupport the body’s healing process while increasing the efficiency and function ofthe digestive system. And juice is a convenient, refreshing way to get much-neededvitamins and minerals, with health in every sip. Juicing “can reduce your risk ofcancer, boost your immune system, help you remove toxins from your body, aiddigestion, and help you lose weight,” according to Mayo Clinic nutritionist Jennifer K.Nelson.12 The Company’s Jamba Juice franchises help to make juicing easy andconvenient for local residents, thereby supporting the health and wellbeing of thecommunity.Economic NeedIn the State of California, the Governor’s Office of Business and EconomicDevelopment is authorized to designate Targeted Unemployment Areas (TEAs).TEAs must meet or exceed 150% of the U.S. annual unemployment rate.As shown on the following map, two of Blue Sky Foods’s three stores are located inRiverside County (indicated in green), which was officially designated as a TEA andnamed the Company’s principle business location in a document dated March 21,2013 and signed by the Governor’s Office of Business and Economic Development’sDeputy Director for International Affairs and Business Development. In addition, the

12 Mayo Clinic. Is juicing healthier than eating whole fruits or vegetables? Obtained at: http://tinyurl.com/7efu5u7

__



18

Company’s location in Apple Valley is also located in Apple Valley Town, which isalso designated as a TEA and named the Company’s principle business location in adocument dated April 10, 2014.

By adding preserving at-risk positions and adding new jobs in a designatedTargeted Employment Area, Blue Sky Foods is offering economic stimulation andopportunity to a community in need. A copy of the TEA designation letters can befound in the Appendix of this plan.Competitive ComparisonThe competitive landscape for the Juice and Smoothie Bars industry combinesinternal competition from smoothie and juice operators with external competitionfrom a fragmented fast food industry – where consumers are inundated with quick-serve choices from restaurants such as McDonald’s, which began offering a line ofsmoothie products to compete with companies such as Jamba Juice. With currenthealth-related trends manifesting strongly, however, any drink and beverageentrepreneur who brings a healthful and flavorful product can capture market sharebased on these qualities alone. Jamba Juice will remain unique in the marketplacethanks to its position as one of the few fresh juice bars that actually offers freshingredients with no additives or preservatives.The maps below depict the closest juice bar competitors for each of the Company’sthree locations. Additional detail and pricing information for these competitorsfollows.

__



19

Plaza Shopping Center

Juice It Up!Juice It Up! is a raw juice bar franchise. Juice It Up! offers smoothies withboosters, raw juices, fruit and veggie fusion juices, and acai bowls. This storeis located approximately three miles from the Company’s Jamba Juicelocation. Prices range from $4.65 for a raw juice to up to$7.10 for a smoothie. Surf City SqueezeSurf City Squeeze is an Arizona-based smoothie franchise. The Riversidefranchise is located 3.1 miles from the Company’s Jamba Juice location. SurfCity Squeeze only sells smoothies and fresh squeezed juices. Prices rangefrom $3.75-$6.50.

__



20

Dunia Plaza

The Dunia Plaza Jamba Juice location benefits from the lack of direct competition inthe immediate area. The only competitor within five miles of the Dunia Plazalocation is a Juice It Up! Raw juice and Smoothie franchise. Prices at this franchisemirror those of the other Southern California franchises: Prices range from $4.65 fora raw juice to up to $7.10 for a smoothie.

__



21

Area Crossings

The Jamba Juice at Area Crossings does not face competition from any franchise-based smoothie and juice bars. However, there are two independent cafes withinthree miles that will serve as competition to the Company. El KioskoEl Kiosko is a dessert shop that sells a variety of juice and smoothies inaddition to a full menu of desserts such as crepes, baked goods, ice cream,and milkshakes. The store does not cater to the health conscious consumer.Prices for smoothies and juices range from $2.25-$4.50 but they are not freshsqueezed and are not offered with boosters or other additional nutritionaladd-ons. Fruit Avenuewww.fruitave.comFruit Avenue is a local espresso and juice bar with two locations inVictorville. The store offers a variety of fresh fruit salads and espresso drinksas well as a selection of fresh squeezed juice and smoothies. The menu forjuice and smoothies is fairly basic as compared to Jamba Juice. Pricing forjuice is $4.50; smoothies range in price from $4.15-$4.65.

__



22

Competitive EdgeThe Company will continue to experience competition from other juice andsmoothie bars in the areas it serves, but will also benefit from its established brandand reputation in the region. Blue Sky Foods will capitalize on its competitors’weaknesses by building on several strengths: Broad menu of juices, smoothies, and other healthy beverages Offers a variety of foods items Ideal locations in high-traffic shopping centers Compelling brand and support of a national franchisor Demonstrated capacity for operational success and quality management Experienced executive Renovated interior and exteriors Dedicated to exemplary customer service and unwavering quality

__



23

The Company will capitalize on the exceptional Jamba Juice menu, while re-establishing a commitment to customer satisfaction, to promote its stores inSouthern California. Blue Sky Foods will develop and deploy a newly designedmarketing campaign to re-introduce the stores to the local community afterupgrades have been completed.ObjectivesBy highlighting the Jamba Juice franchise’s brand and guiding principles, Blue SkyFoods will send a clear message about the quality and selection it offers prospectivecustomers. The Company will promote this message using a comprehensivemarketing strategy that includes print ads, targeted internet advertising, andextensive community involvement. Blue Sky Foods intends to use this approach toaccomplish the following objectives:

Invest in interior and exterior renovations Upgrade equipment Immediately engage in employee training at each store Launch a revitalized marketing campaign Maintain and increase cash flow by the end of second quarter of the first yearof operations. Achieve gross sales of over $2 million by the year 2017. Give back to the community and schools in Riverside, Victorville, and AppleValley in the form of donations and free products. Ensure that every customer who visits one of the three stores will want toreturn soon thereafter for more and recommend us to friends, family, and/oracquaintances.

TimelineThe following chart outlines major milestones Blue Sky Foods aims to achieve overthe next several months:Milestone DateNew Commercial Enterprise Established February 2014EB-5 Investment February 2014Businesses Acquired March 2014Locations to be closed for remodel May 2014Paid Staffing Training May 2014Locations re-launched June 2014

STRATEGY & IMPLEMENTATION SUMMARY

__



24

Pricing StrategyThe Jamba Juice Franchise has established menu pricing along the followingschedule: Smoothies: $4.69-$6.09 Juices: $4.75 - $8.75 Bowls: $5.75 $7.95 Tasty Bites: $3.75-$9.75 Boosters: $1.25-$2.25This pricing level is competitive with other Southern California juice and smoothiebars. Pricing has been established in keeping with ingredient and labor costs, andmay be adjusted over time as these prices fluctuate.

Marketing ChannelsBlue Sky Foods will launch a new marketing campaign, which will include a varietyof advertising channels to increase its exposure among prospective customers andto reinforce the behavior of repeat customers. Specific channels will include:Franchise support: Blue Sky Foods will benefit immensely from the marketingsupport of its franchisor, Jamba Juice. Jamba Juice has already established a widely-recognized brand within the western United States, and engages in regular marketresearch, public relations, and high-level regional advertising campaigns. As afranchisee, the Company will have access to all trade dress, logos, and brandingcreated by Jamba Juice. Blue Sky Foods will also benefit from inclusion on thecorporate website as well as ongoing sales and marketing support for community-centered initiatives.Print media: Blue Sky Foods will place ads in local print publications. Theseadvertisements will communicate key value propositions of the business and willalso include any limited-time discounts or other incentives.Direct mail: Blue Sky Foods will send mailers and postcards directly to localresidences and businesses. Mailers will provide the Company’s contact information,a description of products, and any current promotions.Word of mouth: The advent of social media means that word travels faster thanever before between family members, peers, and colleagues who are pleased withtheir experiences with a particular business. The Company will actively cultivatethis effective and inexpensive resource to generate interest in its beverages.According to research conducted by Nielsen, word of mouth remains among the

__



25

most trusted forms of advertising: 84% of consumers around the world say theytrust earned advertising, such as word of mouth or recommendations from friendsand family, above all other forms of advertising.13Website: The Company will leverage the franchise’s website (www.jambajuice.com)to generate interest in its products. This website is search engine optimized andmobile compatible, and includes product information, photo gallery, companyprofile, list of locations with contact information, and links to the franchise’sextensive social media activities.Outdoor marketing: Blue Sky Foods will create large, eye-catching signs that areprominently placed for maximum visibility to both foot and vehicular traffic tonotify potential customers of the Company’s products and services.Social networking: Blue Sky Foods will develop a distinctive and authenticpresence on social networking sites including Facebook, Instagram, and Twitter, andmay also place advertisements on these sites. Customers can “like” Blue Sky Foods’sJamba Juice stores on Facebook or “follow” the Company’s Twitter or Instagram feedin order to gain access to special discounts or promotions, and Blue Sky Foods willregularly monitor and interact with consumers through social networking sites.According to research gathered by the National Restaurant Association, “65% of alllocation-based traffic on social media comes from restaurants.”14 Check-ins andgeotagging on platforms like Foursquare, Instagram, or Facebook can play a key rolein driving customer traffic to restaurants by combining the credibility of word ofmouth with social networks’ powerful reach. About 72% of all internet users areactive on social networks, while 89% of all Millennial consumers are active socialnetwork users. Almost half of all Americans report that Facebook is their primaryinfluencer of purchase, while 63% of Millennials report using social media to stayupdated on the activity of their favorite brands.15Menus: The Company will offer complimentary takeaway menus. These menus willlist menu items, their nutritional content, and the Company’s location and hours ofoperation.Special events/sponsorships: Blue Sky Foods will sponsor local events andorganizations aligned with its mission in an effort to give back to surrounding13 Nielsen Report. Global Trust in Advertising and Brand Messages. 2013. Source:http://www.nielsen.com/content/corporate/us/en/insights/reports/2013/global-trust-in-advertising-and-brand-messages.html14 National Restaurant Association. “Marketing and Sales” 2014. Source: http://www.restaurant.org/Manage-My-Restaurant/Marketing-Sales/Mobile/Why-a-mobile-strategy-is-essential-for-restaurants15 Pick, Tom. “104 fascinating social media and marketing statistics for 2014 (and 2015).” B2C. 2014. Source:http://www.business2community.com/social-media/104-fascinating-social-media-marketing-statistics-2014-2015-01084935

__



26

neighborhoods and the overall community. This will simultaneously buildawareness of the Company’s products while fostering loyalty from currentcustomers who see Blue Sky Foods participating in local events, functions, andcommunity-building activities. Specifically, the Company will provide support toschools through adopt-a-school programs and product giveaways recognizingattendance and/or academic achievement:

__



27

OperationsEach Jamba Juice location will adhere to the franchise agreement, using only theparent company’s distinctive signage, interior and exterior design, décor, and colorscheme; special recipe and menu items, including proprietary products andingredients; uniforms standards, specifications, and procedures for operations;quality and uniformity of products and services offered; inventory, management,and financial control procedures; training and assistance; and advertising andpromotional programs.The Company will adhere to the territory specified in its franchise agreement. BlueSky Foods will purchase and use the recommended point of sale systems, computerhardware, and software that meet the franchisor’s specifications. The Company willonly sell the menu items that are authorized by Jamba Juice.Permits and LicensesThe Company has obtained the following permits and licenses for each location.

Business registration Environmental health permit Business tax certificateIn addition, all staff members hold current valid food handler’s cards, and completethe requisite training and refresher courses as required by the State of California.

SuppliersThe Company will source its products from Jamba Juice’s list of approved vendors.

OPERATIONS SUMMARY

__



28

Mr. Bui Wong, President and EB-5 ApplicantMr. Wong is a skilled business owner with a record of management success in therestaurant industry in China. Since 2009 he has been the Managing Director of acasual eatery in Beijing. Prior to this, Mr. Wong was the managing director ofmultiple high volume restaurants and provided consulting.Mr. Jon Weegan, Owner and AdvisorMr. Jon Weegan is a restauranteur and restaurant management professional withmore than a decade of experience in the industry. He started his career with thelaunch of an Applebee’s franchise in Simi Valley, California in 2001. Since then, hehas acquired multiple franchises ranging from casual eateries, to quick service cafesand juice bars. He specializes in acquiring restaurants or cafes that areunderperforming, renovating and revamping operations, and then reselling theperforming businesses to entrepreneurs. Mr. Weegan currently has two other caféand restaurants in his portfolio of businesses.Mr. Weegan holds a Bachelor of Science degree in Business Administration with aconcentration in Finance from Loyola Marymount University.

MANAGEMENT SUMMARY

__



29

TimelineThe Company will preserve the currently at-risk jobs and create new employmentopportunities at its three Jamba Juice franchise stores. There are currently a total of15 full time direct jobs filled between the three Jamba Juice locations. The Companywill preserve these positions and add a full time store manager at each locationprior to the re-launch of each location. The following table provides an overview ofthe hiring timeline for the first three years post re-launch.HIRING TIMELINE: MONTHS 1 to 12Months Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15Plaza Shopping Center

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Dunia Plaza

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Area Crossings

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Managers 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0Total Qualifying Jobs 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0

HIRING TIMELINE: MONTHS 13-24Months Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16Plaza Shopping Center

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Dunia Plaza

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Area Crossings

FTE Store Associates 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Managers 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0Total Qualifying Jobs 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0

Job DescriptionsStore ManagerIn line with the guidelines discussed with management, directly control the daily in-Store operations, including the activities identified in the following bullet-points

Operate and control openings and closings of the Store Operate and control all front-of-the-Store stations Operate and control all back-of-the-Store operations Operate and control all in-Store cleaning, sanitation and maintenanceservices Ensure, and bring store associates to ensure, outstanding customer service Work side by side with the Company management to manage and strive hardto improve (i) Store financials, (ii) the store associate’s performance and (iii)customer service

JOB CREATION SUMMARY

__



30

Setting the store associate’s personal weekly goals and help them achievethese goals to grow professionally within the Company by supporting,training and assisting them constantly Foster solid teamwork and commitment to the team among store associates

Store AssociateEnsures company standards are maintained and complies with policies andprocedures. Upholds and executes the vision and mission of Jamba Juice and assistsothers in doing the same.ESSENTIAL JOB FUNCTIONS Cash Handling (drawer balancing, safe deposits, etc.) is accountable forfunds. Assist in training, coaching and development of newly hired Associates. Taste product to ensure quality standards are met. Is the "role-model" for outstanding customer service and overall Associatestandards. Ensures cleanliness, health and safety standards are maintained at all times. Other job-related activities as requested by the owner.CORE COMPETENCIES Ability to maintain a fast pace. Ability to problem solve quickly and effectively. Effective customer service skills delivered with a friendly disposition. Ability to handle responsibility. Ability to communicate clearly and concisely.

__



31

Organizational ChartThe following chart provides an overview of the Company’s structure currently andover the coming five years. Note that Mr. Weegan will fulfill the role of Presidentuntil Mr. Wong receives conditional residence status.

__



32

The following table and graph illustrate the financial goals of the Company duringthe next five years:Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenue $1,704,179 $2,045,015 $2,290,416 $2,519,458 $2,771,404Gross Margin $1,182,492 $1,418,990 $1,589,269 $1,748,195 $1,923,015Operating Expenses $963,633 $1,056,450 $1,143,685 $1,234,504 $1,333,738EBITDA* $270,118 $413,799 $496,843 $564,951 $640,536Net Profit $133,062 $224,242 $279,410 $324,907 $375,300

Profitability RatiosGross Margin/Revenue 69% 69% 69% 69% 69%EBITDA/Revenue 16% 20% 22% 22% 23%Net Profit % 8% 11% 12% 13% 14%

Debt RatiosDebt Ratio (Total Debt/Total Assets) 85.45% 65.90% 49.50% 37.09% 27.66%Interest Coverage Ratio 13.97 23.57 31.60 40.83 53.86Debt Service Coverage Ratio 3.47 5.32 6.39 7.27 8.24

Days on HandReceivables 0 0 0 0 0Inventory 30 30 30 30 30Payables 30 30 30 30 30

Net Cash Flow $208,092 $221,712 $271,384 $317,429 $366,367Cash Balance - Ending $231,116 $452,827 $724,212 $1,041,641 $1,408,008

*Earnings before interest, taxes, depreciation& amortization

FINANCIAL HIGHLIGHTS

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Year 1 Year 2 Year 3 Year 4 Year 5

Financial Highlights

Revenue

Direct Costs

Operating Expenses

Net Profit

FINANCIAL PROJECTIONS

__



33

The table below outlines the sources and uses of funding:EB-5 Investment $500,000Other Investment $100,000

Total Sources $600,000

Purchase of Business $250,000Paid Franchise Fees $30,000Taxes & Licenses $7,614Legal & Professional Fees $19,900Renovations $150,000Equipment $50,000Misc. $1,500Cash Reserves $90,986

Total Uses $600,000

Uses Of Funds

SOURCES & USESSources Of Funds

__



34

The following tables outline the past performance of Maxim Management, LCC prior to theacquisition. PROFIT & LOSS 2012 2013Revenue $655,980 $878,086Gross Margin $399,080 $337,878Gross Margin % 61% 38%Operating Expenses $444,573 $595,504Net Profit ($45,493) ($257,626)

BALANCE SHEETCurrent Assets

Cash $8,935 $0Accounts Receivable $1,957 $0Inventory $13,244 $0Other Current Assets $13,244 $0

Total Current Assets $37,380 $0

Long-term AssetsLong-term Assets $326,083 $0Accumulated Depreciation $25,241 $0

Total Long-term Assets $300,842 $0

Other AssetsOther Assets $0 $0

Total Assets $338,222 $0

Current LiabilitiesAccounts Payable $0 $0Current Borrowing $0 $0Other Current Liabilities $2,685 $0

Total Current Liabilities $2,685 $0

Long-term Liabilities $0 $0Total Liabilities $2,685 $0

Paid-in Capital $335,537 $0Retained Earnings $45,493 $0Current Year Earnings ($45,493) $0

Total Capital $335,537 $0Total Capital and Liabilities $338,222 $0

PAST PERFORMANCE - MAXIM MANAGEMENT, LLC

__



35

The following is a five-year revenue forecast. Direct costs include all costs which can bedirectly tied to revenue and include “cost of goods.”Year 1 Year 2 Year 3 Year 4 Year 5

RevenueAverage Sale $1,738,958 $2,086,750 $2,337,160 $2,570,876 $2,827,963Discounts ($34,779) ($41,735) ($46,743) ($51,418) ($56,559)

Total Revenue $1,704,179 $2,045,015 $2,290,416 $2,519,458 $2,771,404

Direct Cost of RevenueAverage Sale $521,687 $626,025 $701,148 $771,263 $848,389

Subtotal Cost of Revenue $521,687 $626,025 $701,148 $771,263 $848,389Other Direct Cost $0 $0 $0 $0 $0Total Direct Costs $521,687 $626,025 $701,148 $771,263 $848,389

Gross Margin $1,182,492 $1,418,990 $1,589,269 $1,748,195 $1,923,015Gross Margin/Revenue 69% 69% 69% 69% 69%

REVENUE FORECAST

The table below shows the units and pricing assumptions underlying the revenue forecast:Year 1 Year 2 Year 3 Year 4 Year 5

UnitsAverage Sale 419,026 502,831 563,171 619,488 681,437

Total Units 419,026 502,831 563,171 619,488 681,437

Unit PriceAverage Sale $4.15 $4.15 $4.15 $4.15 $4.15

Direct Unit CostAverage Sale $1.25 $1.25 $1.25 $1.25 $1.25

UNIT ASSUMPTIONS

__



36

($20,000)$0

$20,000$40,000$60,000$80,000

$100,000$120,000$140,000$160,000$180,000

Mon

th 1

Mon

th 2

Mon

th 3

Mon

th 4

Mon

th 5

Mon

th 6

Mon

th 7

Mon

th 8

Mon

th 9

Mon

th 1

0

Mon

th 1

1

Mon

th 1

2

Year 1 Revenue Monthly

Discounts

Average Sale

($500,000)

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000


Annual Revenue

Discounts

Average Sale

__



37

The Company’s personnel forecast is outlined below. Personnel wages indicate the averagewage per position and personnel costs are total wages for each position.Year 1 Year 2 Year 3 Year 4 Year 5

Year Average Personnel CountStore Managers

President 1.0 1.0 1.0 1.0 1.0Plaza Shopping Center

FTE Store Employees 5.0 5.0 5.0 5.0 5.0Dunia Plaza

FTE Store Employees 5.0 5.0 5.0 5.0 5.0Area Crossings

FTE Store Employees 5.0 5.0 5.0 5.0 5.0Total Personnel 19.0 19.0 19.0 19.0 19.0

Personnel WageStore Managers

President $23,519 $25,871 $28,458 $31,304 $34,434Plaza Shopping Center

FTE Store Employees $18,720 $20,592 $22,651 $24,916 $27,408Dunia Plaza

FTE Store Employees $18,720 $20,592 $22,651 $24,916 $27,408Area Crossings

FTE Store Employees $18,720 $20,592 $22,651 $24,916 $27,408

Personnel CostsStore Managers

President $23,519 $25,871 $28,458 $31,304 $34,434Plaza Shopping Center

FTE Store Employees $93,600 $102,960 $113,256 $124,582 $137,040Dunia Plaza

FTE Store Employees $93,600 $102,960 $113,256 $124,582 $137,040Area Crossings

FTE Store Employees $93,600 $102,960 $113,256 $124,582 $137,040Total Payroll $391,679 $430,847 $473,931 $521,324 $573,457Payroll/Revenue 22.98% 21.07% 20.69% 20.69% 20.69%

PERSONNEL FORECAST

__



38

The Company intends to deploy its funding to maximize growth and profitability. In theProfit and Loss table below, gross margin equals revenue minus direct costs. The “bottomline” or profit (as measured before and after interest, taxes, depreciation, andamortization) equals gross margin minus operating expenses.Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenue $1,704,179 $2,045,015 $2,290,416 $2,519,458 $2,771,404Total Direct Cost of Revenue $521,687 $626,025 $701,148 $771,263 $848,389Gross Margin $1,182,492 $1,418,990 $1,589,269 $1,748,195 $1,923,015Gross Margin/Revenue 69% 69% 69% 69% 69%

ExpensesBusiness Licenses $5,995 $6,295 $6,609 $6,940 $7,287Outside Services $3,950 $4,148 $4,355 $4,573 $4,801Supplies $2,500 $2,625 $2,756 $2,894 $3,039Equipment Repairs & Maintenance $2,950 $3,098 $3,252 $3,415 $3,586Rent $172,080 $177,243 $182,560 $188,037 $193,678Utilities $77,658 $81,541 $85,618 $89,899 $94,394Bank Fees $51,125 $61,350 $68,712 $75,584 $83,142Business Property Insurance $4,350 $4,568 $4,796 $5,036 $5,287Franchise Marketing Fees $34,084 $40,900 $45,808 $50,389 $55,428Franchise Royalty Fees $102,251 $122,701 $137,425 $151,167 $166,284Miscellaneous $5,000 $5,250 $5,513 $5,788 $6,078Depreciation $51,259 $51,259 $51,259 $51,259 $51,259Payroll Taxes & Benefits $58,752 $64,627 $71,090 $78,199 $86,019Total Personnel $391,679 $430,847 $473,931 $521,324 $573,457

Total Op. Expenses $963,633 $1,056,450 $1,143,685 $1,234,504 $1,333,738

Profit Before Int. & Tax $218,859 $362,540 $445,583 $513,692 $589,277EBITDA $270,118 $413,799 $496,843 $564,951 $640,536Interest Expense $19,329 $17,553 $15,722 $13,835 $11,892Taxes Incurred $66,467 $120,745 $150,452 $174,950 $202,085

Net Profit $133,062 $224,242 $279,410 $324,907 $375,300Net Profit % 7.8% 11.0% 12.2% 12.9% 13.5%

PRO FORMA PROFIT & LOSS

__



39

The table and chart below demonstrate when the Company is expected to becomeprofitable. Break-even occurs when accumulated revenue equals accumulated expenses.According to the forecasted financials, month 1 will be the point at which break-even willoccur.Break-Even Month 1

Accumulated Gross Revenue $120,080

BREAK-EVEN ANALYSIS

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58

Accumulated Revenue

Accumulated Expenses

__



40

The following depictions of the Company’s projected cash flow show that the Companyexpects to maintain sufficient cash balances over the five years of this plan. The “pro formacash flow” table differs from the “pro forma profit and loss” (P&L) table. Pro forma cashflow is intended to represent the actual flow of cash in and out of the Company. Incomparison, the revenue and expense projections on the P&L table include “non-cash”items and exclude funding and investment illustrations.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000


Cash Flow

Net Cash Flow

Cash Balance

Year 1 Year 2 Year 3 Year 4 Year 5OPERATINGNet Profit $133,062 $224,242 $279,410 $324,907 $375,300Adjustments to Net Profit

Depreciation & Amortization $51,259 $51,259 $51,259 $51,259 $51,259(Increases)/Decreases in Accounts Receivable $0 $0 $0 $0 $0(Additions)/Depletions of Inventory ($20,759) ($7,055) ($3,593) ($6,083) ($6,692)Increases/(Decreases) in Accounts Payable $102,944 $13,456 $6,330 $11,255 $12,352

Net Cash From Operating Activities $266,506 $281,903 $333,406 $381,337 $432,219

INVESTINGPurchase of Other Current Assets $0 $0 $0 $0 $0Sale of Other Current Assets $0 $0 $0 $0 $0Purchase of Land $0 $0 $0 $0 $0Sale of Land $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0Sale of Long-term Assets $0 $0 $0 $0 $0Net Cash From Investing Activities $0 $0 $0 $0 $0

FINANCINGInvestment $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0Current Borrowing Repay. $0 $0 $0 $0 $0New Long Term Liabilities $0 $0 $0 $0 $0Long Term Liability Repay ($58,414) ($60,191) ($62,022) ($63,908) ($65,852)Net Cash From Financing Activities ($58,414) ($60,191) ($62,022) ($63,908) ($65,852)NET CASH FLOW $208,092 $221,712 $271,384 $317,429 $366,367Beginning Cash $23,024 $231,116 $452,827 $724,212 $1,041,641Ending Cash $231,116 $452,827 $724,212 $1,041,641 $1,408,008

CASH FLOW

__



41

The balance sheet below highlights the Company’s projected assets, liabilities, and capital:Year 1 Year 2 Year 3 Year 4 Year 5

AssetsCurrent AssetsCash $231,116 $452,827 $724,212 $1,041,641 $1,408,008Accounts Receivable $0 $0 $0 $0 $0Inventory $50,186 $57,241 $60,834 $66,918 $73,610Other Current Assets $0 $0 $0 $0 $0

Total Current Assets $281,302 $510,068 $785,046 $1,108,559 $1,481,618

Fixed AssetsLong-term Assets $768,888 $768,888 $768,888 $768,888 $768,888Accum. Depreciation $212,896 $264,155 $315,415 $366,674 $417,933Land $0 $0 $0 $0 $0

Total Fixed Assets $555,992 $504,733 $453,473 $402,214 $350,955Total Assets $837,294 $1,014,801 $1,238,520 $1,510,773 $1,832,573

Liabilities and CapitalCurrent Liabilities

Accounts Payable $102,944 $116,401 $122,731 $133,986 $146,337Current Borrowing $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0

Subtotal Current Liabilities $102,944 $116,401 $122,731 $133,986 $146,337

Long-term Liabilities $612,525 $552,334 $490,312 $426,404 $360,551Total Liabilities $715,469 $668,734 $613,043 $560,389 $506,889

Paid-in Capital $0 $0 $0 $0 $0Retained Earnings ($11,237) $121,825 $346,067 $625,477 $950,383Earnings $133,062 $224,242 $279,410 $324,907 $375,300

Total Capital $121,825 $346,067 $625,477 $950,383 $1,325,684Total Liabilities and Capital $837,294 $1,014,801 $1,238,520 $1,510,773 $1,832,573

BALANCE SHEET

__



42

The sensitivity analysis below assumes that revenues are 15% higher or lower than figuresprojected earlier in this business plan:Year 1 Year 2 Year 3 Year 4 Year 5

Revenue $1,959,806 $2,351,767 $2,633,979 $2,897,377 $3,187,115Cost of Goods $599,941 $719,929 $806,320 $886,952 $975,647Gross Margin $1,359,865 $1,631,838 $1,827,659 $2,010,425 $2,211,467Gross Margin/Revenue 69% 69% 69% 69% 69%Operating Expenses $963,633 $1,056,450 $1,143,685 $1,234,504 $1,333,738Net Profit $244,987 $362,593 $434,364 $495,356 $562,794Net Profit/Revenue 13% 15% 16% 17% 18%

Cash Flow $320,017 $360,063 $426,338 $487,878 $553,861Cash Balance $343,041 $703,104 $1,129,442 $1,617,320 $2,171,181

2015 2016 2017 2018 2019

Revenue $1,448,552 $1,738,263 $1,946,854 $2,141,539 $2,355,693Cost of Goods $443,434 $532,121 $595,976 $655,573 $721,131Gross Margin $1,005,118 $1,206,141 $1,350,878 $1,485,966 $1,634,563Gross Margin/Revenue 69% 69% 69% 69% 69%Operating Expenses $963,633 $1,056,450 $1,143,685 $1,234,504 $1,333,738Net Profit $14,401 $85,890 $124,456 $154,458 $187,806Net Profit/Revenue 1% 5% 6% 7% 8%

Cash Flow $89,431 $83,360 $116,431 $146,980 $178,873Cash Balance $106,082 $189,442 $305,873 $452,853 $631,726

REVENUE IS 15% GREATER THAN PROJECTED

REVENUE IS 15% LESS THAN PROJECTED

BEST CASE SCENARIO

WORST CASE SCENARIO

__



43

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

Revenue

Average Sale $122,531 $126,207 $129,993 $133,893 $137,909 $142,047 $146,308 $150,697 $155,218 $159,875 $164,671 $169,611

Discounts ($2,451) ($2,524) ($2,600) ($2,678) ($2,758) ($2,841) ($2,926) ($3,014) ($3,104) ($3,197) ($3,293) ($3,392)

Total Revenue $120,080 $123,682 $127,393 $131,215 $135,151 $139,206 $143,382 $147,683 $152,114 $156,677 $161,377 $166,219

Direct Cost of Revenue

Average Sale $36,759 $37,862 $38,998 $40,168 $41,373 $42,614 $43,892 $45,209 $46,565 $47,962 $49,401 $50,883

Subtotal Cost of Revenue $36,759 $37,862 $38,998 $40,168 $41,373 $42,614 $43,892 $45,209 $46,565 $47,962 $49,401 $50,883Other Direct Cost $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Direct Costs $36,759 $37,862 $38,998 $40,168 $41,373 $42,614 $43,892 $45,209 $46,565 $47,962 $49,401 $50,883

Gross Margin $83,321 $85,820 $88,395 $91,047 $93,778 $96,592 $99,489 $102,474 $105,548 $108,715 $111,976 $115,335Gross Margin/Revenue 69% 69% 69% 69% 69% 69% 69% 69% 69% 69% 69% 69%

REVENUE FORECAST

APPENDIX I: YEAR 1 FINANCIALS BY MONTH

__



44


Units

Average Sale 29,525 30,411 31,324 32,263 33,231 34,228 35,255 36,313 37,402 38,524 39,680 40,870

Total Units 29,525 30,411 31,324 32,263 33,231 34,228 35,255 36,313 37,402 38,524 39,680 40,870

Unit Price

Average Sale $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15 $4.15

Direct Unit CostAverage Sale $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25

UNIT ASSUMPTIONS

__



45


Personnel Count

Store Managers

President 1 1 1 1 1 1 1 1 1 1 1 1


FTE Store Employees 5 5 5 5 5 5 5 5 5 5 5 5

Dunia Plaza

FTE Store Employees 5 5 5 5 5 5 5 5 5 5 5 5

Area CrossingsFTE Store Employees 5 5 5 5 5 5 5 5 5 5 5 5

Total Personnel 19 19 19 19 19 19 19 19 19 19 19 19

Personnel WageStore Managers

President $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960


FTE Store Employees $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560

Dunia PlazaFTE Store Employees $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560

Area Crossings


Personnel Costs

Store Managers

President $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960Plaza Shopping Center


Dunia Plaza

FTE Store Employees $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800Area Crossings


Total Payroll $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640Payroll/Revenue 27.18% 26.39% 25.62% 24.88% 24.15% 23.45% 22.76% 22.10% 21.46% 20.83% 20.23% 19.64%

PERSONNEL FORECAST

__



46


Total Revenue $120,080 $123,682 $127,393 $131,215 $135,151 $139,206 $143,382 $147,683 $152,114 $156,677 $161,377 $166,219

Total Direct Cost of Revenue $36,759 $37,862 $38,998 $40,168 $41,373 $42,614 $43,892 $45,209 $46,565 $47,962 $49,401 $50,883

Gross Margin $83,321 $85,820 $88,395 $91,047 $93,778 $96,592 $99,489 $102,474 $105,548 $108,715 $111,976 $115,335

Gross Margin/Revenue 69% 69% 69% 69% 69% 69% 69% 69% 69% 69% 69% 69%

Expenses

Business Licenses $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Outside Services $329 $329 $329 $329 $329 $329 $329 $329 $329 $329 $329 $329Supplies $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208

Equipment Repairs & Maintenance $246 $246 $246 $246 $246 $246 $246 $246 $246 $246 $246 $246Rent $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340 $14,340

Utilities $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472 $6,472Bank Fees $3,602 $3,710 $3,822 $3,936 $4,055 $4,176 $4,301 $4,430 $4,563 $4,700 $4,841 $4,987

Business Property Insurance $363 $363 $363 $363 $363 $363 $363 $363 $363 $363 $363 $363

Franchise Marketing Fees $2,402 $2,474 $2,548 $2,624 $2,703 $2,784 $2,868 $2,954 $3,042 $3,134 $3,228 $3,324

Franchise Royalty Fees $7,205 $7,421 $7,644 $7,873 $8,109 $8,352 $8,603 $8,861 $9,127 $9,401 $9,683 $9,973

Miscellaneous $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417Depreciation $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272

Payroll Taxes & Benefits $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896 $4,896

Total Personnel $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640 $32,640Total Op. Expenses $77,890 $78,286 $78,694 $79,115 $79,548 $79,994 $80,453 $80,926 $81,414 $81,916 $82,433 $82,965

Profit Before Int. & Tax $5,431 $7,534 $9,701 $11,932 $14,231 $16,598 $19,036 $21,548 $24,135 $26,799 $29,544 $32,370

EBITDA $9,703 $11,806 $13,972 $16,204 $18,502 $20,870 $23,308 $25,819 $28,406 $31,071 $33,815 $36,642Interest Expense $1,677 $1,665 $1,653 $1,641 $1,629 $1,617 $1,605 $1,593 $1,580 $1,568 $1,556 $1,544

Taxes Incurred $0 $0 $2,817 $3,602 $4,411 $5,243 $6,101 $6,984 $7,894 $8,831 $9,796 $10,789

Net Profit $3,754 $5,869 $5,231 $6,689 $8,191 $9,738 $11,330 $12,971 $14,660 $16,400 $18,192 $20,037Net Profit % 3.1% 4.7% 4.1% 5.1% 6.1% 7.0% 7.9% 8.8% 9.6% 10.5% 11.3% 12.1%

PRO FORMA PROFIT & LOSS

__



47


OPERATING

Net Profit $3,754 $5,869 $5,231 $6,689 $8,191 $9,738 $11,330 $12,971 $14,660 $16,400 $18,192 $20,037

Adjustments to Net Profit

Depreciation & Amortization $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272 $4,272

(Increases)/Decreases in Accounts Receivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

(Additions)/Depletions of Inventory ($6,829) ($1,088) ($1,120) ($1,154) ($1,189) ($1,224) ($1,261) ($1,299) ($1,338) ($1,378) ($1,419) ($1,462)

Increases/(Decreases) in Accounts Payable $73,498 $1,467 $4,289 $2,331 $2,401 $2,474 $2,548 $2,625 $2,704 $2,785 $2,869 $2,955

Net Cash From Operating Activities $74,695 $10,520 $12,671 $12,138 $13,675 $15,259 $16,889 $18,568 $20,298 $22,079 $23,913 $25,802

INVESTINGPurchase of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sale of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase of Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sale of Land $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

Sale of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Cash From Investing Activities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

FINANCING

Investment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $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

Current Borrowing Repay. $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 $0Long Term Liability Repay ($4,801) ($4,813) ($4,825) ($4,837) ($4,849) ($4,862) ($4,874) ($4,886) ($4,898) ($4,910) ($4,923) ($4,935)

Net Cash From Financing Activities ($4,801) ($4,813) ($4,825) ($4,837) ($4,849) ($4,862) ($4,874) ($4,886) ($4,898) ($4,910) ($4,923) ($4,935)

NET CASH FLOW $69,893 $5,706 $7,846 $7,301 $8,826 $10,397 $12,015 $13,682 $15,400 $17,168 $18,990 $20,867

Beginning Cash $23,024 $92,917 $98,624 $106,469 $113,770 $122,596 $132,993 $145,008 $158,690 $174,090 $191,258 $210,249Ending Cash $92,917 $98,624 $106,469 $113,770 $122,596 $132,993 $145,008 $158,690 $174,090 $191,258 $210,249 $231,116

CASH FLOW

__



48


Assets

Current Assets

Cash $92,917 $98,624 $106,469 $113,770 $122,596 $132,993 $145,008 $158,690 $174,090 $191,258 $210,249 $231,116

Accounts Receivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Inventory $36,256 $37,343 $38,464 $39,618 $40,806 $42,030 $43,291 $44,590 $45,928 $47,305 $48,725 $50,186

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

Total Current Assets $129,173 $135,967 $144,933 $153,388 $163,402 $175,023 $188,299 $203,280 $220,018 $238,564 $258,973 $281,302

Fixed Assets

Long-term Assets $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888 $768,888Accum. Depreciation $165,909 $170,180 $174,452 $178,723 $182,995 $187,267 $191,538 $195,810 $200,081 $204,353 $208,625 $212,896

Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Fixed Assets $602,979 $598,708 $594,436 $590,165 $585,893 $581,621 $577,350 $573,078 $568,807 $564,535 $560,263 $555,992

Total Assets $732,152 $734,675 $739,369 $743,552 $749,295 $756,644 $765,649 $776,359 $788,824 $803,099 $819,237 $837,294

Liabilities and Capital

Current LiabilitiesAccounts Payable $73,498 $74,965 $79,254 $81,585 $83,986 $86,460 $89,008 $91,632 $94,336 $97,121 $99,989 $102,944

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

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $73,498 $74,965 $79,254 $81,585 $83,986 $86,460 $89,008 $91,632 $94,336 $97,121 $99,989 $102,944

Long-term Liabilities $666,138 $661,324 $656,499 $651,662 $646,812 $641,951 $637,077 $632,191 $627,293 $622,382 $617,460 $612,525

Total Liabilities $739,636 $736,289 $735,753 $733,247 $730,798 $728,410 $726,085 $723,823 $721,629 $719,503 $717,449 $715,469

Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Retained Earnings ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237) ($11,237)

Earnings $3,754 $9,623 $14,853 $21,543 $29,733 $39,471 $50,802 $63,772 $78,433 $94,833 $113,025 $133,062Total Capital ($7,483) ($1,614) $3,616 $10,306 $18,496 $28,234 $39,565 $52,535 $67,196 $83,596 $101,788 $121,825

Total Liabilities and Capital $732,152 $734,675 $739,369 $743,552 $749,295 $756,644 $765,649 $776,359 $788,824 $803,099 $819,237 $837,294

BALANCE SHEET

__



49

APPENDIX II: TEA DESIGNATION LETTERS

SAMPLE ONLY

__



50

__



51

SAMPLEONLY

__



52