Feasibility Report On Fast Food Restaurant

Presen ted BY: -ABHI JEET

KARMAKARMT14 IND001

Indus t r i a l Eng inee r ing

VN IT NAGPUR

1.IntroductionFast food is food which is prepared and served quickly at outlets called fast-food restaurants. It is a multi-billion dollar industry which continues to grow rapidly in many countries. A fast-food restaurant is a restaurant characterized both by food which is supplied quickly after ordering, and by minimal service.

Purpose

This project is developed to provide the entrepreneur with potential investment opportunity in setting up and operating a medium sized fast food restaurant offering a variety of food items to the general public

The project is designed to provide relevant details (including technical) to facilitate the entrepreneur in making the decision by providing various technological as well as business alternatives.

Fast Food Industries

The presence of multinational fast food chains like McDonalds, KFC, Pizza Express, Pizza Hut, Subway etc. have somewhat catered to the high income segment therefore developing a niche as upscale fast food restaurants.However much of the middle-income segment (which forms a major chunk of fast-food goers) prefers visiting local outlets that offer low cost fast food, hence more frequent visits.

2.Raw material study• Chicken, Fish, egg• Vegetable-potato, Tomato, Onion, Ginger, carrot and many

more• Cheese, Bread• Wheat, Rice• Milk• Butter• Oil• Other ingredientsApproximately total cost of 150000 /- month Expected. (Including its preparation)

3.Market StudyIndia, currently ranked as 2nd in terms of total population, is

characterized by a population growth rate of 1.59% (Indian Economic Survey 2013)

Total population of India in recent survey is 1.252 Billion people .

With this, the per capita income has increased to GNI US$ 5300 while the productive age group (15 to 64) years is said to take the major chunk of population (67% of total population) by 2020.

The growth rate in food consumption is also augmented by the rapid increase in the employment rate for males / female population aging between 20 to 29 years (fast food goers) hence the greater income contribution to the overall income generated is expected to be higher.

Population Growth-As per National Commission of Population (NCI) and Census India

2005 2006 2007 2008 2009 2010 2011 2012 20131050000000

1100000000

1150000000

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1250000000

1300000000

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population Billions

GDP (As per Union Budget and Economic Survey)

20052006

20072008

20092010

20112012

20130

200000000000

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1200000000000

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2000000000000

Series1US$

GNI growth rate (in US $)

2005 2006 2007 2008 2009 2010 2011 2012 20130

1000

2000

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4000

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GNI PER CAPITA

Frequency Of Fast –FoodThis is the study done by GULF news this result shows that

72% of survey group eat at a fast food restaurant once a week

44%

14%8%

6%

28%

Fast-food consumption rate

OncetwiceMore than thriceEvery Daynever

4.Demand Study• There is no restaurant in this region around 4-5 KM.• Naya Raipur is going to be declared as a new capital of

Chhattisgarh.• More traffic intensity• Large number of industrial employee staying near by places

and they are likely to do their dinner at fast food places.• This region required new market for food and technology.

How To Start A Restaurant?• Work in a restaurant• Know your target market• Select a service style or food concept• Develop a business plan• Create “the menu”• Chose a location and layout• Getting the appropriate finding• Be familiar with safety regulation• Hiring employees• Advertise and market

5.Location Study• Anticipated sales volume• Accessibility to potential customers• The rent-paying capacity of your business• Restrictive ordinances• Traffic density• Visibility• Customer parking facilities• Proximity to other businesses• History of the site.• Future development

In this project Raipur is the good location…

22%

19%17%

24%

17%

Population

BilaspurDurgRaigarhRaipurRajnandgaon

According to Directorate of economics and statistics of

Chhattisgarh 2011 total population is 25545198

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000NSDP(Trade hotel &Restaurant)

Series1

NSDP

Project location is between RAIPUR-VIZIANAGRAM NH-30 at NAYA RAIPUR.

Second largest traffic intensity in Chhattisgarh.Climate- Temp ranges 40-42⁰C in summer day and in winter it falls

down to 10-12⁰C. Humidity-average56% Middle income area.Topography- The Chhattisgarh state can be divided into

3physiological zones viz. Bastar plateau , Chhattisgarh plain and Northern Hill region. The districts of Raipur (300 m above MSL)and Dhamtari (305m MSL) are situated in the central flat plain of Chhattisgarh.

Miscellaneous• This geographical place have large surface as well as land

water.• Nearest to airport• All the Historical place of Raipur is located just 0.5-1Km apart

from location in its surrounding.• Nearest to market.• Pollution free environment.

Project Location-(NAYA RAIPUR)

5830

12

% Contribution Area

Dining areaKitchen spaceOffice space

6.Deciding LayoutLayout and design are major factors in your restaurant's

success You'll need to take into account the size and layout of the dining room, kitchen space, storage .

Typically, restaurants allot 40 to 60 % of their space to the dining area,approximately30 % to the kitchen and prep area, and the remainder to storage and office space.

40-50% customer arrived in pair

30 % come alone or inparties of three.

20 % come in groups of four or more.

Following things should be considered before start the restaurant…

Designing & DécorCreating a menuRestaurant Size- 1500 Sq. FeetHiring the Right Employees• Manager / Owner-1• Chefs and cooks-4• Servers-6

7.Legal RequirementFood Safety and Standards Act, 2006 (FSSI) is the law which requires the owners of all types of restaurants to register and obtain a license with the government. The restaurant owner is required to apply to the controller for registration of the restaurant.The Expenditure Tax Act, 1987 governs the taxation process associated with the chargeable expenditure incurred by an individual in a certain hotel or restaurant.The Act applies to chargeable expenditure provided the following criteria are fulfilled- If the charges are incurred in a hotel where the room charges

for an accommodation is INR 3000 per day or in excess of this amount

The charges are incurred in a restaurant

CHHATTISGARH FOOD SECURITY ACT, 2012“An Act to provide for food and nutritional security by ensuring access to adequate quantity of food and other requirements of good nutrition for people of the State, at affordable prices, at all times to live a life with dignity and for matters connectedtherewith or incidental thereto”.A owner would not charge more than the standard price

including all taxes.No provision of child labor Waste and disposal policy of government

8.Milestone Of ProjectWork content

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Project plan

Licensing and registration

Construction of restaurant

Lightning and lamps

Furniture for restaurant

Decorations and cash register

Production and completion of menus

Advertising

Employee training

Project Investment

Cost

Land cost ₹ 1,125,000

Construction cost ₹ 2,500,000

Dining and Office furniture ₹ 200,000

Equipment and machine ₹ 200,000

Preliminary Expenses ₹ 10,000

Working Capital ₹ 562,000

Total ₹ 4,597,000

9.Financial Analysis

Land and Dedicated Space(1500 Sq. Feet)

%contribution Dedicated spaceCost per sq

feet Total cost

Dining 63 945 ₹ 750 ₹ 708,750

waiting 4 60 ₹ 750 ₹ 45,000

Kitchen 25 375 ₹ 750 ₹ 281,250

Office 1 15 ₹ 750 ₹ 11,250

Rest 7 105 ₹ 750 ₹ 78,750

Total ₹ 1,125,000

1. Land Cost

M/c and equipmentM/c and equipment Quantity Unit Price Total cost

Freeze2 ₹ 25,000 ₹ 50,000

Broast M/c 1 ₹ 100,000 ₹ 100,000 Micro Wave

2 ₹ 10,000 ₹ 20,000 Hot plate for kabab

1 ₹ 25,000 ₹ 25,000 Other

₹ 5,000 Total

₹ 200,000

2. Machinery & Equipment-

Dining and office furnitureDescription Quantity Unit Price Total cost

Dining Table(2×2) 15 ₹ 6,000 ₹ 90,000

Chairs 60 ₹ 500 ₹ 30,000

Office table 1 ₹ 10,000 ₹ 10,000

Lights ₹ 10,000

Generator 1 ₹ 50,000 ₹ 50,000

Other ₹ 10,000

Total ₹ 200,000

3. Dining & General Fixture

Human resource Requirement

Quantity Salary per

monthTotal

Owner 1 - -

Kitchen supervisor 2 ₹ 6,000 ₹ 12,000

Shift Supervisor 3 ₹ 8,000 ₹ 24,000

cook 4 ₹ 4,000 ₹ 16,000

Server 6 ₹ 3,000 ₹ 18,000

Cashier 1 ₹ 6,000 ₹ 6,000

Dish Washer 2 ₹ 2,500 ₹ 5,000

Guard 1 ₹ 6,000 ₹ 6,000

Total ₹ 87,000

Human resource Requirement

Utility (Monthly)

Electricity ₹ 20,000 Water ₹ 1,000

Gas ₹ 10,000

Telephone ₹ 5,000

Total ₹ 36,000

Utility Requirement

Working Capital

Monthly 4×Monthly

Utility ₹ 36,000 ₹ 144,000

salary ₹ 87,000 ₹ 348,000

Raw Material ₹ 70,000

Total ₹ 562,000

4. Working capital and Operating cost-

Other Cost-• Machinery Maintenance- All machines require routine cleaning and maintenance after every three months and an annual service which costs around 1% to 5% of the total cost.

• Depreciation on Building & Equipment-Depreciation on Shop, Equipment, Machinery and Fixtures is assumed to be at the rate of 10% per annum based on the diminishing balance method for the projected period.

Food Description Cost Price Units Sales Total Sales Total Cost

Hot soup ₹ 25.00 ₹ 75.00 6 ₹ 450.00 ₹ 150.00

Chicken soup ₹ 50.00 ₹ 140.00 6 ₹ 840.00 ₹ 300.00 Plain rice ₹ 12.00 ₹ 40.00 3 ₹ 120.00 ₹ 36.00

Chicken fried rice ₹ 30.00 ₹ 80.00 12 ₹ 960.00 ₹ 360.00

Chicken chilly ₹ 30.00 ₹ 85.00 6 ₹ 510.00 ₹ 180.00

Egg rice ₹ 20.00 ₹ 70.00 5 ₹ 350.00 ₹ 100.00 Veg rice ₹ 18.00 ₹ 60.00 5 ₹ 300.00 ₹ 90.00

Beef chilly ₹ 30.00 ₹ 75.00 6 ₹ 450.00 ₹ 180.00

Manchurian ₹ 25.00 ₹ 70.00 10 ₹ 700.00 ₹ 250.00 Chicken roast ₹ 35.00 ₹ 65.00 36 ₹ 2,340.00 ₹ 1,260.00

Burger ₹ 20.00 ₹ 50.00 24 ₹ 1,200.00 ₹ 480.00 Club sandwich ₹ 35.00 ₹ 80.00 30 ₹ 2,400.00 ₹ 1,050.00 Cheese burger ₹ 23.00 ₹ 45.00 18 ₹ 810.00 ₹ 414.00

Zinger burger ₹ 40.00 ₹ 80.00 24 ₹ 1,920.00 ₹ 960.00 Total daily sales ₹ 13,350.00 ₹ 5,810.00 Monthly sales ₹ 400,500 ₹ 174,300.00 Yearly sales ₹ 4,806,000 ₹ 2,091,600.00 Additional ₹ 5,000.00 Total cost ₹ 2,096,600.00 Gross profit (yearly) ₹ 2,709,400 Monthly ₹ 225,783 Daily ₹ 7,526

Assumption in this analysisSales Increase- 15% per yearIncrease in Cost of Raw Materials-10% per yearIncrease in Utilities-10% per yearIncrease in Office Expenses-10% per yearDebt / Equity Ratio-50:50Depreciation-10% per yearEquipment Annual Maintenance Cost-10% per yearTax Rate- As per the government policy

Loan ProviderMSME-(Micro small Medium enterprises)-Gov. of IndiaWhich provide loan for small enterprises above 2500000 Rs.

Various Banking options are- SBI HDFC

Income Statement and cash Flow analysis• E:\PPT\Abhi.xlsx

10.Machinery Suppliers• Kamla EnterprisesInfront of Bohara Masjid, Near Saddani Chowk, Nayapara, Sadar Bazar, Raipur (C.G.)

• Klowin Buisness India LimitedC-3, Sri Ram Nagar, Raipur Ho, Raipur-Chhattisgarh - 492001,

• Prem EnterprisesSaraogi House, M G Road Raipur, Raipur-Chhattisgarh - 492001, Near Ram Sagar Para, Jawahar Nagar, Ram Sagar Para

11.Impact Of This Project

Job creation- Provide jobs to the local community.

Tax revenue- Provide sale Tax to local economy.

Increase Farmer income

New market formation

Improved Health

Thank you !!