PROJECT CHARTER

Project Name Project Manager Owner(s) Oldies Strategic Globalization Initiative Robert Decraene, MPM, PMP Hediberto (Ed) Roman, MPM, PMP Courtney Sheehan, MPM, PMP Mariamawit Wondimu, MPM, PMP Project Number Prioritization Start Date Case # 3 High

March 18, 2013

Scheduled Completion Date: Mission/ purpose

January 6, 2014

The project will accomplish the proposed expansion of Oldies Soda Shoppe into the international marketplace to realize growth potential on a global scale. The global expansion plan is designed to support a growth strategy of which implementation of an international pilot location will work to expand Oldies strategic objective of worldwide operational expansion. It is the first planned project of its type for Oldies and upon successful completion, will springboard the Company into the international marketplace.

SOW

The project will create new opportunities on a global scale for the Company, thus aligning the strategic goals with the planned portfolio of international market growth. The end product will be a fully functional and operational pilot store in a TBD location that is in accordance with Oldies US-based operational standards. Project management methods utilized will follow a waterfall process method. The high-level deliverables for this project are as follows: -Project Scope Statement -Finalized Project Budget and Schedule -Confirmed Storefront locale and accompanying specifications -Risk Management High-Level Report inclusive of all risks pertaining to the project and its international expansion as well as mitigation and resolution strategies for all.

Oldies Soda Shoppe Global Initiative Project (Brazil)

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Objectives

To succeed in global expansion of the business products and services to a single market internationally which will provide additional value to the bottom line within an 8 to 10 month timeframe after the approval of the Project Charter, while staying within the given $12 million budget by: o Facilitating enhanced communication between project members and stakeholders concerning the progress of the project. o Effectively analyzing various markets within a chosen country. o Providing a detailed list of milestones that will be used as a guideline and a measure for progress throughout the life of the project. o Developing a detailed and accurate budget.

Business Need

In order to continue the successful track record maintained by Oldies, it will be vital to consider international expansion for business progression. Market Feasibility Brazil in its current state is experiencing a significant growth trajectory. At the present, 80% of Brazils population is situated in the urban complexes such as Sao Paulo, Rio and Salvador. Although Brazils wages are still lower than that of many western/developed countries, they are the highest of the Latin American region. This is exacerbated by the growing strength of the local currency, the Brazilian Real (BRL) which has slowly appreciated considerably in recent years throughout the global economic crisis of late. Brazilian incomes are rising and putting more than 40 million Brazilians into the middle class for the first time in the countrys history. The country anticipates a vast amount of growth with the upcoming World Cup and the 2016 Olympics shortly thereafter. The GDP of Brazil is rising and at the present is at the $2.5 trillion mark and as such, the economic outlook on Brazil is extremely positive, with a favorable forecast of an expectation to be the 5th largest global economy by 2015. Demand: there already are existing ice cream shops in Brazil catering to the diverse needs of the population Exchange Rate: 1 Brazilian Real is equivalent to $0.51 US Substantial Income: Median Monthly Salary is approximately 7,000.00 BRL GDP Growth: 60% Geography: Tropical climate and 2,075 beaches Unemployment Rate: Brazil unemployment rate is at 6.5% From an overall analysis between three cities (Sao Paulo, Rio de Janeiro, and Salvador), it has been determined that Sao Paulo is the most feasible decision for successful expansion

Oldies Soda Shoppe Global Initiative Project (Brazil)

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of the company.

Rio de Janeiro is the second largest city in Brazil and third largest metropolis in South America. Despite being predominantly urban, Rio has developed around the largest urban forest in the world, the Tijuca Forest. Rio is made up of seas, forest, and mountainous areas. The tropical climate fits well with its 24,622 km of coastline. Rio de Janeiro has a population of over 5 million and is home to one of the largest football stadiums in the world. They will be hosting the 2016 Olympics and tourism is the primary industry for this area. Salvador is known as Brazils capital of happiness with its rich historical heritage and modern life. They have a population of just over 2 million and are noted for their food, music, arts, and architecture. The industries in this area include a petrochemical plant, oil refinery, and tourism. Salvador is one of the most important ports and trade centers, and is host to the largest street party in the world - Carnaval of Salvador de Bahia. Sao Paulo; a vibrant city known for music, theatre, museums, car racing, sports, and a large variety of ethnic cuisine, is also home to 20+ landmarks important to the history of Brazil. Sao Paulo is the premier business center of Brazil. As one of the busiest cities in Brazil, nearly every industry is represented in Sao Paulo. They have a population that falls between 10 and 11 million and hosts one of the largest fashion shows in Latin America Sao Paulo Fashion Week which is held annually. Sao Paulo is home to over 15 universities and colleges and houses 2 major train stations and 2 airports which is a prime location for Oldies to be stationed. Technical Feasibility Internet, phone, and Wi-Fi connectivity is abundant throughout Brazil and is growing at a rapid pace. Rio de Janeiro and Sao Paulo were the first areas to develop this modern technology, making them both prime locations to conduct business. Salvador recently adopted this modern technology around 2009, but is still in the renovation and upgrading stages. With the business expansion, it is important to maintain adequate internet connectivity in order to communicate operational performance with headquarters based in the U.S. Organizational Feasibility For employment with this organization, there are not many specialties required. Adequate training will provide the talents necessary to perform operational and logistical responsibilities required to maintain a successful business. With freedom and happiness appearing prevalent throughout Sao Paulo, the Brazilian clientele will be able to endure our sweet and tasty products and family like atmosphere for years to come. Financial Feasibility Staying within the $12 million budget is important and conceivable. Our initial cost estimate for this project is $1,845,260, which leaves a total of $10,154,740 of cash flow for operations during our start-up time frame. With expansion into the Brazilian Oldies Soda Shoppe Global Initiative Project (Brazil)

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economy, we are witnessing an exchange rate of 1 R$ to .51 U.S. Dollar. Sales per month, for the first 6 months of operations, are estimated at $242,000. The payback period is estimated to be 8 months. With a required rate of return at 3% and the investment of $1,845,260, the NPV for 6 months is -$534,298. After 1 year, the NPV is $563,608. After the second year, the NPV is $2,253,131. The organization will be able to capture higher levels of revenue by capitalizing on the higher population rate of Sao Paulo.

Project Manager & Stakeholders

Robert Decraene is the project manager for this strategic global initiative project. The Project Manager is the main contact person for this project. In addition to that the project manager is responsible for planning, executing and closing this project. The project manager has the responsibility to ensure all the requirements set by the Owners are met and project objectives are accomplished. The Project Core Team consists of four project managers who bring forth a diverse set of expertise and skills. These Project Managers will have a supporting role to the assigned project manager each taking on lead roles to the different deliverables of the project. The Major Stakeholders for this project are: Organizational Stakeholders: Oldies Owners, Management with direct oversight over the Project, and the project core team. Stephanie Zarko: Director of Marketing, Oldies Soda Shoppe, Inc. James Rockwell: Director of Operations, Oldies Soda Shoppe, Inc. Robert Davy: Director of Supply & Vendor Management, Oldies Soda Shoppe, Inc. Financial Stakeholders: Creditors and Banks. Product Stakeholders: Customers, Suppliers, Outside Contractors, Manufacturers, and Distributors. Jose Marquez: International Relations Attorney, International Law Services Eduardo Gonzalez: CEO & Contractor, Contratante Servicos de Gonzalez Nancy Salvador: Portuguese Translator Social Stakeholders: Local government offices with direct oversight over the industry.

Oldies Soda Shoppe Global Initiative Project (Brazil)

PROJECT CHARTER

MILESTONES
Milestones 1 2 3 4 5 6 7 8 9 10 MILESTONE Conduct Market Research & Analysis Select Expansion Location Storefront Selection & Procurement Develop Budget Develop Marketing Strategy Attain Business Licenses and Permits Identification & Selection of Site Contractor Employee Acquisition & Training Advertising and Outreach Identification and Selection of Equipment, Materials, & Local Purveyors Site Renovation & Build Out Equipment & Furniture Installation Purchase & Obtain Inventory Site Evaluation & Testing Approval & Acceptance Soft Opening & Celebration Grand Opening OWNER R. Decraene S. Zarco R. Decraene S. Zarko R. Decraene J. Marquez H. Roman S. Zarko R. Decraene J. Marquez R. Decraene J. Marquez J. Rockwell S. Zarko R. Davey C. Sheehan E. Gonzalez R. Decraene C. Sheehan M. Wondimu E. Roman M. Wondimu J. Rockwell S. Zarko All Stakeholders J. Rockwell R. Decraene START DATE 3/18/2013 4/8/2013 4/16/2013 5/13/2013 5/13/2013 5/31/2013 6/18/2013 7/23/2013 7/23/2013 7/29/2013 END DATE 4/5/2013 4/13/2013 5/31/2013 5/31/2013 7/19/2013 6/14/2013 7/26/2013 12/20/2013 12/6/2013 8/23/2013

11 12 13 14 15 16 17

8/10/2013 11/4/2013 11/18/2013 11/18/2013 11/25/2013 1/3/2014 1/6/2014

11/1/2013 11/15/2013 11/22/2013 11/22/2013 11/29/2013 1/5/2014 1/6/2014

Oldies Soda Shoppe Global Initiative Project (Brazil)

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BUDGET
Budget Item Rent Utilities Description Total of 893 Sq. ft. Basic (Electricity, Heating, Water, Garbage) for 85m2 Apartment Liability, Workers Comp, Medical, dental, etc. Buisiness, Construction, food/health, etc. Redesign of Interior and Exterior of building Ice cream maker, soda machine, sinks, coolers, etc. Cream, sugar, cones, etc. Napkins, cups, straws, etc. Signs, advertisements, newsletters, etc. Travel, hotel, per diem, etc. Sociedade Limitada (LTDA), Corporate Tax Filings, Employment Law, & Foreign Corrupt Practices Act (FCPA) Internet (6 Mbps, Unlimited Data, Cable/ADSL), phone connection 6 Employees & 2 Managers Median Monthly Disposable Salary (After Tax) INITIAL BUDGET ESTIMATES Amount per Description (Monthly) 5000 R$ or $2,540 US Startup and 6-month Sustainment Estimate ($) $22,860

$6,000 $26,000 $9,500 $40,000 $1,200,000 $80,000 $24,000 $200,000 $80,000

Insurance Licenses Contractor Equipment Inventory Supplies Marketing Team Expenses Legal

$30,000

IT Services

75 R$ - Internet

Staff Training Staff Wages Cash Flow TOTAL

$2,400 $4,500 $120,000 $10,154,740 $12,000,000

2,000 R$

Oldies Soda Shoppe Global Initiative Project (Brazil)

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Special Budget Considerations Notes:

Steps involved in setting up a Limitada include (but are not limited to): locating two shareholders to sign the social contract to register equity interest or participation in the Limitada; designating power of attorney (POA) to a legal Brazilian resident to sign the social contract on your behalf (as a nonresident, your signature cannot be recognized by the state of Brazil); obtaining authorization to print invoices and official receipts known as notas fiscals; obtaining operating permits and registering employees with the state unemployment insurance program; and even obtaining a Fire Brigade license from the state in which you have formed your Limitada. The Limitada is so complex that on average it requires approximately one regulatory filing every 10 days during the existence of the business. Compliance Concern #3 (Corporate Tax Filings): Not too long ago, Brazil attempted to transform their tax code to better protect small companies but the result was precisely the antithesis. Today, Brazil has different categories of indirect taxes, both federal and state thus VAT, sales and taxes meet multiple filings requirements making expert accounting help a key consideration for any organization setting up shop in Brazil. To make matters more complex these filings do not occur in concurrence or in consideration of corporate calendars. Instead, filings for different states have different deadlines. In addition, for companies setting up cost centers in Brazil, the regulators do not recognize the generally accepted OECD cost plus model for intercompany agreements. The result: Brazil is an accountants dream and a business owners nightmare so brush up on this subject.

USER ACCEPTANCE CRITERIA

User Location Expectations Acceptance The international location that is chosen for the expansion project shall be economically Criteria/Quality feasible and capable of operating at least five locations throughout neighboring cities. Budget The project team shall not exceed the allocated $12 million budgeted for both the completion of the project and the first six months of operational costs. Legal Provisions International provisions pertaining to commercial businesses and employees must be included in the project plan. The project team and any third-party vendors must adhere to lawful provisions while performing any deliverable labor on the expansion project. Suppliers and Purveyors All prospective international suppliers must meet the same quality and performance Oldies Soda Shoppe Global Initiative Project (Brazil)

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standards that are required by national U.S. suppliers contracted by Oldies. Site Contractor

The pilot storefront design must be approved by Oldies corporate operations personnel and adhered to by third-party contractors. Building and site quality criteria must be achieved in accordance to corporate standards. Employee Training All prospective employees must convey the same qualities, proficiency skills, and educational requirements that are dictated by corporate guidelines. All hired employees must receive suitable training to fully prepare them for the responsibilities they will hold in the pilot store location.

MAJOR RISKS
Major Risks A global Expansion of Oldies Soda Shoppe is a great added value for the company. But it comes with its own risks. Some of the major risks are identified below. 1. External /Country Risk: The country that is considered for this move will have several risk factors that need to be taken into consideration 1.1. Political Risks: The instability of the political climate might hinder the company from safely carrying out its business operations. This is a factor that needs to be taken into consideration when doing the international city analysis. 1.2. Technological Risks: The existence of technology that is needed to carryout day to day business operations. For example: internet connectivity, and technology to carry out safe and reliable electronic transactions. 1.3. Legal Risks: The countrys regulatory and tax laws are anoth er source of risk for Oldies. In addition to that the existence of corruption and unethical business practices need to be taken in to account. 1.4. Financial Risks: These risks include the effect of the exchange rate and monetary policies. 1.5. Social Risks: These are the language and cultural differences that exist between the Oldies owners and the chosen international city. 1.6. Competition: Another risk that needs to be considered is the type and size of direct and indirect competition for Oldies. 1.7. Quality Assurance Risks: The difference in quality standards is another source of major risk. Oldies Soda Shoppe Global Initiative Project (Brazil)

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2. Internal Risks: Risks that are prevalent within Oldies infrastructure workings. 2.1 Inexperience of Oldies personnel in International business relations 2.2 Inability to form partnerships with local businesses

KEY STAKEHOLDERS
Proj. Manager Authority Level Project Core Team Complete responsibility for project delivery and high-level authority to control various resources as needed to complete the project to specifications. Robert Decraene: Project Manager, Scheduler, & Coordinator Hediberto (Ed) Roman: Director of Project Controls Courtney Sheehan: Director of Resource Management Mariamawit Wondimu: Director of Risk & IT Management Stephanie Zarko: Director of Marketing, Oldies Soda Shoppe, Inc. James Rockwell: Director of Operations, Oldies Soda Shoppe, Inc. Robert Davy: Director of Supply & Vendor Management, Oldies Soda Shoppe, Inc. Jose Marquez: International Relations Attorney, International Law Services Eduardo Gonzalez: CEO & Contractor, Contratante Servicos de Gonzalez Nancy Salvador: Portuguese Translator

Subject Matter Experts (SME)

APPROVALS
Type Name Project Manager Approval: Signature Robert Decraene, MPM, PMP Date 3/17/2013

Customer/Sponsor Approval:

Stephanie Zarko, MBA

3/17/2013

Signed off by: Robert Decraene, MPM, PMP Hediberto Roman, MPM, PMP Courtney Sheehan, MPM, PMP Mariamawit Wondimu, MPM, PMP Oldies Soda Shoppe Global Initiative Project (Brazil)

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Works Cited
Baker, L. B. (2013, February 15). 48 hours in laid-back Salvador, Brazil. Retrieved March 15, 2013, from Reuters Web site: http://www.reuters.com/article/2013/02/15/uk-travel-salvador-idUSLNE91E00A20130215 BrazYP.com. (2009). Ice cream parlours in Brazil. Retrieved March 13, 2013, from BrazYP.com: http://www.brazyp.com/category/Ice_cream_parlours CelebrateBrazil.com. (2013). The Top 10 Cities of Brazil. Retrieved March 14, 2013, from Celebrate Brazil Web site: http://www.celebratebrazil.com/cities-in-brazil.html EasyExpat.com. (2010, December 13). Geography of Sao Paulo. Retrieved March 15, 2013, from EasyExpat.com: http://www.easyexpat.com/en/guides/brazil/sao-paulo/overview/geography.htm Freebase.com. (2013). So Paulo. Retrieved March 15, 2013, from Freebase.com: http://www.freebase.com/view/en/sao_paulo Ministry of Development, Industry, and Foreign Trade. (2013, March). News. Retrieved March 15, 2013, from Desenvolvimento.gov.br: http://www.desenvolvimento.gov.br/sitio/ Nair, S. (2011, August 19). Top Five Compliance Issues for Businesses Expanding to Brazil. Retrieved March 13, 2013, from Corporate Compliance Insights Web site: http://www.corporatecomplianceinsights.com/top-fivecompliance-issues-for-businesses-expanding-to-brazil/ Numbeo. (2013). Cost of Living in Rio De Janeiro, Brazil. Retrieved March 13, 2013, from Numbeo Web site: http://www.numbeo.com/cost-of-living/city_result.jsp?country=Brazil&city=Rio+De+Janeiro Rateslist.com. (2013). Brazilian Real vs American Dollar graph. Retrieved March 14, 2013, from Ratelist.com: http://www.rateslist.com/exchange-rates/brazilian-real.html Riodejaneiro.com. (2013). Rio de Janeiro, Brazil City Info Geography. Retrieved March 15, 2013, from Riodejaneiro.com: http://www.riodejaneiro.com/v/geography/ Salary Explorer. (2012). Salary Survey in Sao Paulo. Retrieved March 14, 2013, from Salary Explorer Web site: http://www.salaryexplorer.com/salary-survey.php?loc=260&loctype=3 Sao-Paulo.com. (2013). Sao Paulo, Brazil City Info Geography . Retrieved March 14, 2013, from Sao-Paulo.com: http://www.sao-paulo.com/v/geography/ sao-paulo.info. (2007). Fun Sao Paulo Facts To Entertain and Inform! Retrieved March 15, 2013, from sao-paulo.info: http://www.sao-paulo.info/sao-paulo-facts.html Sistema FIRJAN. (2012). Rio in Figures and Brazil in Figures. Retrieved March 15, 2013, from Sistema FIRJAN Web site: http://www.firjan.org.br/data/pages/2C908CE92593A8810125B15DE2B00200.htm

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Sorveteria da Ribeira. (2013). Sorveteria da Ribeira. Retrieved March 14, 2013, from Sorveteria da Ribeira Web site: http://www.sorveteriadaribeira.com.br/ Statista.com. (2013). Brazil: Unemployment rate from 2003 to 2013. Retrieved March 15, 2013, from Statista.com: http://www.statista.com/statistics/17333/unemployment-rate-in-brazil/ The World Bank. (2013). GDP growth (annual %) . Retrieved March 15, 2013, from The World Bank Group Web site: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG Trading Economics. (2012). Brazil GDP Growth Rate. Retrieved March 14, 2013, from Trading Economics Web site: http://www.tradingeconomics.com/brazil/gdp-growth VivaReal. (2013). Commercial Building for rent in Sao Paulo, Brazil . Retrieved March 13, 2013, from VivaReal Web site: http://www.vivareal.net/commercial-building-37757122/ Wall Street Journal. (2012, December 21). Brazil November Unemployment Rate At 4.9% Vs 5.3% In October - IBGE . Retrieved March 15, 2013, from Wall Street Journal Web site: http://online.wsj.com/article/BT-CO20121221-703246.html

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Oldies Soda Shoppe Global Initiative Project (Brazil)