MacGyver’sMacGyver’sSports Bar and GrillSports Bar and Grill

Business PlanPrepared for TCF Financial Bank of MinnesotaMay 24, 2008

This business plan has been submitted on a confidential basis. It may not be reproduced or distributed without explicit permission.Table of Contents

I. Executive Summary1.1. The Opportunity1.2. The Company1.3. Objective1.4. Growth Plan1.5. The Team

1.6. The FinancialsII. The Industry, Target Customers, and Competitors

2.1 The Restaurant2.2 Target Customer

1. Sports Enthusiasts2. Busy Entertainer and Traveler

3. Local night crowd4. Families

2.3. Competitors2.4. Competitive Advantage

III. The Company3.1. Company Overview3.2. The Menu3.3. Store Layout

IV. The Marketing Plan4.1. Marketing Objectives4.2. Targeting4.3. Market Penetration4.4. Pricing Strategy4.5. Marketing Strategy

V. The Operations Plan5.1. Real Estate Criteria

1. Population2. Traffic Volume3. Site Visibility

5.2. Hours of Operation5.3. Employee Hiring and Training5.4. The Production5.5. Employees5.6. Facilities and Equipment

VI. Development PlanVII. The Growth PlanVIII. The TeamIX. Financial Plan

9.1. Single Store Assumptions9.2. Revenue9.3. Start-up9.4. Personnel

9.5. Overall Financial Performance9.6. Profits and Losses9.7. Projected Cash Flow9.8. Projected Balance Sheet9.9. Exit Strategy

I. Executive Summary

1.1 The OpportunityThe MacGyver’s Sports Bar and Grill will establish a successful presence in the food and beverage service industry. The main location is located in Elk River, Mn and hopes to gross $1 million in the first year of operation. The restaurant industry has continued to grow and is expected to grow another 4.4% in 2008. The restaurant industry is also expected to boost the economy by 1.5 trillion dollars in 2008.

Sports themed bar and grills have continued to excel in the market as patrons have demanded better quality food with reasonable prices, in which they can relax, watch and cheer on their favorite sports teams. Management has recognized the rapid growth potential by the quick success and fast turn around on investments from past research. Customers are currently limited to hamburgers and sandwiches; however The MacGyver’s has added more varieties of food for fine dining, such as steaks, seafood, and pasta. In recent years, sports bars have begun to emerge in various regions in the area, including Time Out, Finish Line, Shooters, and Billy’s that have been profitable and are considered good competitors in the region.

1.2 The Company The MacGyver’s is a Sports Bar and Grill serving quality food, at affordable prices, in a

fun, friendly atmosphere. Sports based themes – The establishment will focus on themes that have mass appeal. The establishment will contain three sections that include a bar, casual dining, and a

formal dining area. Restaurant hours will be 11 am to 1 am Monday thru Friday, 10 am to 1 am on

Saturdays, and 10 am to 9 pm on Sundays. Saturdays and Sundays will include a breakfast menu from 10 am to 2 pm. Take out will be available.

The size of the restaurant will be approximately 6000 square feet and will seat from 200 – 350 people.

1.3 ObjectivesThe following objectives have been established:

Have all stores operational within five years. Maintain tight control of costs and operations by hiring quality management at each

location and utilizing automated computer control. Keep food costs under 32% of revenue. Keep beverage costs under 21% of revenue. Select only locations that meet all the parameters of success.

1.4 The Growth PlanOur plan is to expand one more facility within five years via franchising and will be funded by the owner, outside investors, and by internally generated cash flow which will enable to open additional restaurants. Sales projections for the next three years are based on the current planned restaurant opening.

1.5 The Team

Management Team:Founder: At the present time Darren Mattern runs all operations for The MacGyver’s Bar and Grill. Darren has an A.A.S. degree in Business Administration from Minnesota School of Business. Prior to acquiring a degree, Darren has previously worked in a Bar and Restaurant in Princeton for 10 years as a dishwasher, Prep Cook, and Line Cook. Even though his background is in Business, his passion lies in the food service industry.

General Manager: Daniel Mattern has 8 years experience in financial services and 9 years in Operations Management. Daniel will work with the founder on day-to-day operations to develop and to achieve maximum profits of the business for future endeavors and possible franchising.

Supervisory Manager: Joe Brooks has an A.A.S. degree in Anthropology and has 2 years of supervisory management. Joe will oversee the training of servers, bartenders, and host/hostesses. Joe will also solve any problems related to any issue that an employee or customer might have and report to the General Manager.

Chef: Dennis Nord was a manager/chef of a bar and restaurant in Hawaii for over 15 years. The chef will oversee food preparation in the kitchen and develop trainees within the cooking processes.

1.6 The FinancialsWe are personally committed to $60,000 of capital, plus a $200,000 SBA 7(A) loan guarantee and seeking an additional $125,000 from outside investors to start up the company.

Projected Performance FY 2008 FY 2010 FY2012Revenue $943,882 $1,085,465 $1,248,285 Cost of Sales $311,481 $358,200 $411,934EBIT $223,411 $215,507 $299,405EBITDA $223,411 $215,507 $299,405Operating Expenses $408,990 $511,755 $536,946Interest Expense $13,139 $11,532 $9,747Net Profit $137,906 $132,583 $189,484

II. The Industry, Target Customers, and Competitors

2.1 The Restaurant Industry The restaurant industry has continued to grow

throughout the years with the average of $112 billion dollars in sales every ten years. Sales are expected to

grow 4.4% in 2008 and equal 4% of the U.S. Gross Domestic Product. The industry is also expected

to boost the economy by $1.5 trillion dollars in 2008.

83% of people said that there are more healthy options available at restaurants than two years ago.

2.2 Target Customer Consumers are increasingly looking for establishments were they can relax and enjoy watching sports and having a good time with quality food and beverages at a reasonable price with a great atmosphere.

1) Sports enthusiastsOne of Americas past times is watching sports on Saturdays, Sundays, and Monday nights. The MacGyver’s would be ideal for and sports fanatic to come and enjoy time to watch their favorite sports team and to have fun.

2) Busy entertainer and travelerWith a fine dining section located in our establishment, The MacGyver’s would be an ideal place to hold business meetings for clients. It is professional and relaxing at the same time to conduct business.

3) Local night crowdWith entertainment and drink and food special, we look to target adults to come enjoy the festivities and relax from a hard days work. It is time to unwind and recharge your batteries.

4) FamiliesThe MacGyver’s is also a great place to hold family to enjoy a night out. With everyone’s hectic schedule, families do not get to eat together as much. The MacGyver’s is a place to have a family dinner and to enjoy the entertainment for the adults and the kids.

2.3 CompetitorsThe MacGyver’s competitors include Time Out Restaurant, Finish Line, Shooters, and Billy’s that are in a regional area. However, with our variety of food, we have emerged in the recent months as a benchmark for other companies and future potential competitors.

2.4 Competitive AdvantageOur competitive advantage lies in our customer service, quick service, quality food, and our friendly wait staff and bar staff. We have developed a standardized kitchen and front-end operations, which cut down costs and enable us to be the best.

III. The Company

3.1 Company OverviewThe key elements of The MacGyver’s restaurant concept are as follows:

The MacGyver’s is a Sports Bar and Grill serving quality food, at affordable prices, in a fun, friendly atmosphere.

Sports based themes – The establishment will focus on themes that have mass appeal. The establishment will contain three sections that include a bar, casual dining, and a

formal dining area. Restaurant hours will be 11 am to 1 am Monday thru Friday, 10 am to 1 am on

Saturdays, and 10 am to 9 pm on Sundays. Saturdays and Sundays will include a breakfast menu from 10 am to 2 pm. Take out will be available.

Retail merchandising will include an integrated retail store offering premium quality merchandise displaying the company’s logo design.

Quality food – The MacGyver’s will serve freshly prepared, high quality, popular cuisine that is targeted to appeal to a variety of tastes and budgets with an emphasis on reasonably priced signature items of particular appeal to the local market.

Quality service – In order to maintain great customer service, the company will provide attentive and friendly service with a high ratio of service personnel to customers and also invests in the training and supervision of its employees.

The size of the restaurant will be approximately 6000 square feet and will seat from 200 – 350 people.

We will have special occasions such as Mother’s Day, Father’s Day, Thanksgiving, Valentines Day, New Years Eve, and any other special occasion you may need.

3.2 The Menu

Appetizers Southwest Nachos Stuffed Bacon Cheese Skins Mozzarella Cheese Bread Mozzarella Sticks Quesadillas Chicken Fingers The MacGyver’s Sampler Platter

Salads Taco Salad Buffalo Chicken Salad Caesar Salad Dinner Salad

Dressings include: French, Ranch,Thousand Island, Bleu Cheese,Italian, Oil and Vinegar

Soups Soup de Jour French Onion Soup Chicken Wild Rice Soup

Burgers Hamburger Cheeseburger California Burger Mushroom Swiss Burger Patty Melt

Sandwiches BLT Mile High Turkey Reuben Club Buffalo Chicken Sandwich French Dip Steak Sandwich

Entrees Top Sirloin Spaghetti with Meat Sauce Pork Chops Fettuccini Alfredo T-Bone New York Strip BBQ Pork Ribs

DessertsTurtle Cheesecake Ice CreamChocolate CakePie (Apple, Blueberry, Cherry)

Beverages Soft Drinks Lemonade Ice Tea Milk/Chocolate Milk

3.3 The Store LayoutThe store layout will facilitate customer flow. There will be two registers, or Point of Sale (POS) in the bar area and another register in the waitress station. In the bar area, customers pay as they go or pay on tab in which a credit card is required. In the dining areas, the food is delivered to their tables and then pays at front desk or pays your waitress.

Kitchen/Waitress Station

POS 3

Formal Dining Area

Casual Dining Area

POS 1 POS 2

Bar Area

DJ

Stat

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IV. The Marketing Plan4.1 Marketing Objectives

The MacGyver’s Bar and Grill’s marketing mix will target customers to:

Come for a first visit. (New customers) Visit our website for information and feedback. (Build brand loyalty) Spread the word. (Generate word-of-mouth) Become a regular customer. (Generate repeat business)

4.2 TargetingOur strategy is based on serving our niche markets well, such as the sports enthusiast; the business entertainer and traveler, the local night crowd, as well as families dining out all can enjoy the MacGyver’s experience.

4.3 Market PenetrationThe store will be located in a high visibility and car traffic, with nearby retailers and entertainment. We expect to receive a high pre opening interest from local residents, via advertisements in the local paper with coupons, and local radio advertisements.

We promote sports, sports, and more sports. The universal appeal of sports and sports marketing never been higher with the teams of the Minnesota Twins, Vikings, and the Wild (State of Hockey), among other local teams. Many new residents and many existing residents are fans of teams in other markets. The MacGyver’s is a place for all. Each patron can watch his or her game of interest.

Advertising budgets and sports event promotion will promote the brand name and keep The MacGyver’s at the forefront of sports theme establishments in the target area.

Our Financial Plan in section IX provides further details on the costs involved in our marketing budget.

4.4 Pricing Strategy

Sports enthusiast

Local night crowd

Families

BusinessEntertainer/traveler

All menu items are moderately priced. An average customer ticket is between $10 and $20 including food and drink. Tickets are considerably larger for game day visitors. Our average customer spends more than the industry average for moderately priced establishments. We tend to believe that this is due to our creating an atmosphere that encourages longer stays and more spending but still allows adequate table turns due to extended hours.

4.5 Marketing StrategyA combination of local media and event marketing will be utilized at the location. Word-of-mouth will be our primary marketing ploy, along with local print media. After we have become more established, then broader media will be employed.

V. The Operations Plan5.1 Real Estate Criteria 1. Population We aim to target market of young adults, sports enthusiasts, working professionals, and

family oriented patrons that earn an average income. The following are our criteria: Near residential area, and Near young professionals, and Near local businesses.

2. Traffic VolumeWe desire a high traffic area such as a major highway or a retail outlet to draw foot traffic, such as shopping and daytime employment.

3. Site visibility The site should be easily spotted by a driving target from both sides of the highway.

5.2 Hours of OperationThe restaurant will operate during lunchtime and dinner, daily with breakfast on Saturdays and Sundays. Restaurant hours will be 11 am to 1 am Monday thru Friday, 10 am to 1 am onSaturdays, and 10 am to 9 pm on Sundays.

5.3 Employee Hiring and TrainingWe will develop a training manual that will describe each of the job descriptions, rules, and objectives. Kitchen employees will be hired based on experience and reliability. However, dishwashers will be hired based on reliability and work ethic. They will be trained in by Dennis Nord, the head chef. The bar and wait staff will also be hired based on experience, reliability and attitude. They will be trained in by the Supervisory Manager. All will be responsible to learn the processes in which they are hired for.

5.4 The ProductionThe kitchen will be closed for viewing to create a clean look and feel. The kitchen is about 35% of the establishment in which orders are sent front any of the three Point of Sales (POS) registers.

5.5 EmployeesEmployees needed

Management Team: The Founder General Manager (2) Supervisory Manager Chef

Kitchen Employees: Sous Chef with experience 2 Cooks/Prep Cooks 2 Dishwashers

Service Employees: 1 Full Time Bartender 2 Part Time Bartenders (Rotate) 4 Servers (1 server/bartender) 1 Hostess 1 Busboy/Cleaner 1 DJ

5.5.6 Facilities and EquipmentSpace: We will focus on a space that is approximately 6000 square feet and needs to be a facility that needs minor modifications.

Equipment: Equipment and accessories will be purchased and installed to fit our needs such as: Grills, Dishwasher, Ovens, Utensils, Glasses, Plates, bar stools, Tables, POS registers,

TV’s, DJ system.

We will have napkins and uniforms cleaned from a private company on a weekly basis.We will reorder supplies on an as-needed basis.We will purchase food and beverages on a weekly basis from an undisclosed source.

VI. Development PlanThe following table lists important program benchmarks, with monthly schedules that indicate our emphasis on planning for implementation.

What the table doesn’t show is the commitment behind it. Our business plan includes complete provisions for plan-versus-actual analysis, and we will hold monthly follow-up meetings to discuss any course corrections.

Oct Nov Dec Jan Feb Mar Apr May Jun July AugLook at site with Real EstateRemodelingOf RestaurantCost out Menu Items Determine Equip. needs Line up fundingAcquire Permits

LightingFurnitureSuppliesDecorationsPOS equipProductionOf MenusBuy Kitchen SuppliesLine up vendors and deliveriesOpen RestaurantGrand OpeningAdvertisingBusiness Plan ReviewWebsiteEmployee TrainingUpgrades

VII. The Growth Plan

Our plan is to grow via franchising within five years at another undetermined location. Franchises are to be funded by the owner, outside investors, and internal cash flow from

the first establishment.

VIII. The Team

Management Team:Founder: At the present time Darren Mattern runs all operations for The MacGyver’s Bar and Grill. Darren has an A.A.S. degree in Business Administration from Minnesota School of Business. Prior to acquiring a degree, Darren has previously worked in a Bar and Restaurant in Princeton for 10 years as a dishwasher, Prep Cook, and Line Cook. Even though his background is in Business, his passion lies in the food service industry.

General Manager: Daniel Mattern has 8 years experience in financial services and 9 years in Operations Management. Daniel will work with the founder on day-to-day operations to develop and to achieve maximum profits of the business for future endeavors and possible franchising.

Supervisory Manager: Joe Brooks has an A.A.S. degree in Anthropology and has 2 years of supervisory management. Joe will oversee the training of servers, bartenders, and host/hostesses. Joe will also solve any problems related to any issue that an employee or customer might have and report to the General Manager.

Chef: Dennis Nord was a manager/chef of a bar and restaurant in Hawaii for over 15 years. The chef will oversee food preparation in the kitchen and develop trainees within the cooking processes.

IX. The Financial Plan9.1 Single Store AssumptionsImportant assumptions: The financial plan depends on important assumptions such as:

We assume a slow growth economy, without major recession. We assume that there are no unforeseen changes in the expectancy in the popularity of

our establishment. We assume access to investments and financing are sufficient to maintain and fulfill our

financial plan.

9.2 Revenue: Sales projections for the first year are presumed to reach an average of $68,186 in gross sales. That is 30 people for lunch spending approximately $15 per person, and for dinner approximately 50 people spending an average of $25 per person. Our total cost of goods sold is 33% of total sales. We expect sales to increase 15% after the first year.

9.3 Start-up: The following table is the start-up costs that totals $385,000 which is mostlyequipment, furniture, painting, reconstruction, rent, start-up labor, liquor license, six months operating cash, and legal and consulting firms associated with opening the restaurant.

Start-upRequirementsStart-up ExpensesLegal $5,000Stationary and Sign $5,000

Office Supplies $5,000Uniforms $2,000Insurance $2,000Rent and Security Deposit $18,000Outdoor and Patio Settings $10,000Liquor License $75,000Furniture $40,000Cash Register/Software $10,000Bathroom Repair $15,000Window Repair $5,000Floor and Wall Coverings $20,000Paint $4,000Lighting and Lamps $12,000Phone and Gas Deposit $1,000Food and Liquor $30,000Kitchen Supplies $30,000Music/Stereo/TV $4,000Cleaning $1,000High Chair and Booster Seats $200Advertising and Website $5,800Total Start-up Expenses $30,000Start-up Assets_____________________________________Cash Required $85,000Other Current Assets $0Long Term Assets $0Total Assets $85,000Total Requirements $385,000

Start-up FundingStart-up Expenses to Fund $300,000Start-up Assets to Fund $85,000Assets $385,000Non Cash Assets from Start-up $0Cash Required from Start-up $85,000Additional Cash Raised $0Cash Balance on Starting Date $85,000Total Assets $85,000Liabilities and CapitalCurrent BorrowingLong-term Liabilities $200,000Accounts Payable $0Other Current Liabilities $0Total Liabilities $200,000CapitalPlanned InvestmentDarren $60,000Investor 2 $25,000Investor 3 $50,000Investor 4 $50,000

Additional Investments $0Total planned Investment $185,000Loss at Start-up (Start up Expenses) ($300,000)Total Capital ($115,000)Total Capital and Liabilities $85,000Total Funding $385,000

9.4 Personnel: The following table is a breakdown of personnel wages. The staff will include 12 full-time employees and 9 part-time employees, who will work an average of 754 manhours per week and generate an average of weekly gross payroll of $4,929 for the first year of business. The estimated gross annual payroll of $236,592 is 22% of total sales.

PersonnelPersonnel Plan FY 2008 FY 2010 FY2012General Manager $0 $36,000 $36,000Front Manager $20,160 $26,880 $26,880Supervisor 1 $11,760 $11,760 $11,760Server 1 $5,040 $5,040 $5,040Server 2 $3,864 $3,864 $3,864Server 3 $4,200 $4,200 $4,200Server 4/Bartender $6,840 $6,840 $6,840Bartender $10,800 $10,800 $10,800Busboy/Cleaner $7,920 $7,920 $7,920DJ $6,216 $6,216 $6,216Hostess $6,384 $6,384 $6,384Chef $32,400 $32,400 $32,400Sous Chef $32,400 $32,400 $32,400Cook 1 $23,040 $23,040 $23,040Cook 2 $17,760 $17,760 $17,760Dishwasher/Prep $10,560 $10,560 $10,560Dishwasher $8,400 $8,400 $8,400

Bartender $8,544 $8,544 $8,544Bartender $8,544 $8,544 $8,544 Total Payroll $236,592 $301,512 $307,512

9.5 Overall Financial PerformanceBreak-even Analysis: We assume running costs include our full payroll, rent and utilities, and other expenses.

Break-even AnalysisMonthly Revenue Break-evenAverage Percent Variable Cost Estimated Monthly Fixed Cost

$50,869 $50,8$50,869 33%

$34,082

9.6 Profits and Losses: Profits and Losses are projected from the assumptions made. Drastic changes in the Profits and Losses will increase in the forth and fifth year.

Projected Profits and Losses FY2008 FY2010 FY2012Sales $943,882 $1,085,465 $1,248,285Direct Cost of Sales $311,481 $358,203 $411,934Total Cost of Sales $311,481 $358,203 $411,934Gross Margin $632,401 $727,262 $836,351Gross Margin % 67.00% 67.00% 67.00%Expenses Payroll $236,592 $301,512 $307,512Sales and Marketing andOther Expenses $55,897 $75,564 $85,291Depreciation $0 $0 $0Leased Equipment $2,004 $2,004 $2,004Professional Fees $2,004 $2,004 $2,004Licenses and permits $996 $1,152 $1,320Other Supplies $2,004 $3,200 $4,800Postage $996 $2,300 $3,300Utilities $20,004 $21,996 $22,992Insurance $15,000 $18,000 $21,600Rent $36,000 $36,000 $36,000Payroll Taxes $35,489 $45,227 $46,127

Total Operating Expenses $408,990 $511,755 $536,946EBIT $223,411 $215,507 $299,405EBITDA $223,411 $215,507 $299,405Interest Expense $13,139 $11,532 $9,747Taxes Incurred $72,364 $71,391 $100,173Net Profit $137,908 $132,583 $189,484

Profit Yearly

9.7 Projected Cash FlowThe cash flow depends on the assumptions for inventory turnover, payment days, and accounts receivables. Month-by-month assumptions for projected cash flow are included in the following table.

Cash Flow FY 2008 FY2010 FY2012Cash Sales $943,882 $1,085,465 $1,248,285Cash Received Subtotal Cash from OperationsCurrent Borrowing Current Assets Subtotal Cash Received

ExpendituresCash Spending Payments Subtotal Spent on Operations

Long-term

$0

$943,882

$0 $0

$943,882

$236,592 $546,311

$782,903

$0

$1,085,465

$0 $0

$1,085,465

$301,512 $620,903

$922,415

$0

$1,248,285 $0 $0

$1,248,285

$307,512 $743,076

$1,050,588

Liabilities PrincipalsDividendsSubtotal Cash SpentNet Cash FlowCash Balance

$22,950 $22,200

$828,053 $115,829 $200,829

$24,607 $22,200

$969,222 $116,243 $317,071

$26,388 $27,750

$1,104,726 $143,559 $460,630

9.8 Projected Balance SheetWe anticipate meeting our debt obligations providing that we achieve our specific goals.

Balance Sheet FY2008 FY 2010 FY2012AssetsCashOther Current Assets

$200,829

$0

$317,071

$0

$460,630

$0Total Current AssetsLong-term AssetsAccumulated DepreciationTotal Long-term Assets

$200,829$0

$0

$200,829

$317,071$0

$0

$317,071

$460,630$0

$0

$460,630

Current LiabilitiesAccount PayableCurrent BorrowingSubtotal Current LiabilitiesLong-term Liabilities

$23,071$0

$23,071

$177,050

$53,537$0

$53,537

$152,443

$61,750$0

$61,750

$126,055

Total LiabilitiesPaid-in CapitalRetained EarningsEarningsTotal CapitalTotal Liabilities and CapitalNet Worth

$200,151$185,000($322,200)$137,908$708

$200,829$708

$205,980$185,000($206,492)$132,583$111,091

$317,071$111,091

$187,805$185,000($101,659)$189,484$272,826

$460,630$272,826

9.9 Exit StrategyIn case of a business failure, MacGyver’s Sports Bar and Grill are dedicated to our concept and viability. In the event that our failure does not succeed and cannot achieve profitability, we will firs attempt to sell the operation and use the proceeds to clear all outstanding balances. If we are unable to sell the operation for profitability, we will be forced to default whereby the SBA loan will be the senior standing. Any further outstanding balances will be subjected to the investors on a weighted percentage basis of the total amounts due to bankruptcy.