Papa Geo’s Restaurant

Budget Proposal
for
[2018-2022]

BUSN278
[Term]
Professor[name]
DeVry University
 Papa Geo’s Restaurant

Table of Contents
Section Title Subsection Title Page Number
1.0 Executive Summary 3

2.0 Sales Forecast

2.1 Sales Forecast 4

2.2 Methods and 6

Assumptions
3.0 Capital Expenditure 8
Budget
4.0 Investment Analysis 11

4.1 Cash Flows 12

4.2 NPV Analysis 14

4.3 Rate of Return 15

Calculations
4.4 Payback Period 17
Calculations
5.0 Pro Forma Financial
Statements

5.1 Pro Forma Income 18

Statement
5.2 Pro Forma Balance 19
Sheet
5.3 Pro Forma Cash 20
Budget
6.0 Works Cited 21

7.0 Appendices
7.1 Appendix 1: Revenue 22
Calculations
7.2 Appendix 2: Capital 23
Expense Budget

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 Papa Geo’s Restaurant

1.0 Executive Summary

The proposed restaurant ‘Papa Geo’s’ (PG), shall be located in Orlando, Florida, and have a
capacity to seat and cater to eighty customers at a time. The objective is to provide a family-
friendly ambience where customers can eat moderately priced and wholesome authentic Italian
food. A well-stocked self-serve salad and soda bar and a video games arcade add to its attraction.
There is no direct competition from other fast food restaurants nearby as Papa Geo’s offers a
unique cusine and dining experience. Its aim is to earn a good return on investment while
catering to a clientele comprising of about 10,000 middle and lower-middle class families
resident in the nearby thriving communities. The business aims to generate an income of $40,000
per year starting from the second year of operations.

Using inputs on consumer behavior, spending propensities, and market size and growth for
similar restaurants and video games arcades, we project that following a slow and steady start;
PG can achieve sales exceeding $1.5million in the second year and grow from there as under:

Year 1 Year 2 Year 3 Year 4 Year 5

Sales Revenue $ 791,460 $ 1,582,920 $ 1,701,639 $ 1,661,396 $ 1,966,457

Establishment of the restaurant shall require an initial investment of $381,175 consisting of a

loan for $225,000 including bank charges ($14,062.50) and the promoter’s equity contribution of
the balance $156,175. This translates to equity to debt ratio of 1 to 1.5. Cash flow projections
show a negative flow in year-1 made up by the promoter’s equity. Subsequent years show
healthy positive cash flows to yield good returns from the project.

The net present value (NPV) of future cash flows using a WACC of 9.01% (the average cost of
capital) is positive at $3,876.72, which implies that the project is viable. An internal rate of
return (IRR) of 10.31% and Accounting rate of return (ARR) of 13.14% provide support to this
conclusion. It is important to note that these calculations assume that there shall be no salvage
value at the end of the first five years whereas the restaurant shall generate an intangible
goodwill that can have considerable value for the business or a potential buyer. The four years

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 Papa Geo’s Restaurant

and two month payback period for the project appears a little weak in addition to the consistent
reduction in the quantum of positive cash flows in later years. This is because of the higher
assumed escalation in input costs compared to the growth of sales revenue. Good marketing
efforts can help overcome these difficulties.

This budget proposal describes the financial aspects of starting and operating a single location,
mid-scale casual dining restaurant serving Italian food in Orlando, Florida. Projected financials
reveal that Papa Geo’s shall have no difficulty in meeting its tax and loan repayment
commitments while earning a handsome return on the money invested by the promoter.

2.0 Sales Forecast

The proposed individually owned single-location restaurant ‘Papa Geo’s’, shall be located in
Orlando, Florida, and have a capacity to seat and cater to eighty customers at a time. Its primary
aim is to earn a good return on investment while catering to a clientele comprising of middle and
lower-middle class families resident in the adjoining areas. The business aims to generate an
income of $40,000 per year starting from the second year of operations.

Approximately ten thousand families, comprising an average of four members each, live within a
15-minute drive thereby assuring the restaurant an adequate customer base for its size. A healthy
6% projected growth in this population makes future growth of the business justifiable. Its
location would also help attract further customer footfall from people passing through the area.
Papa Geo’s objective is to provide a family-friendly ambience where families can come together
to share a moderately priced and wholesome meal cooked and served to the highest quality
standards. The restaurant shall serve authentic Italian food, tweaked a little to suit American
tastes, to sit-down customers, who can also partake from self-serve salad and soda bar offerings.
An additional attraction to draw families would be a video games arcade in a 500 square foot
area with the latest games for its customers. Fast food restaurants like McDonalds, Taco Bell,
and Wendy’s nearby also attract some of the customer traffic. However, there is no direct
competition, as Papa Geo’s shall offer a unique cusine and dining experience.

4
 Papa Geo’s Restaurant

The restaurant shall occupy an existing facility after renovating it at a nominal expense of
$15,000. The company shall purchase all equipment required for the kitchen, tables and chairs,
and the video game arcade at market prices using a loan, which the business shall repay along
with interest over ten years. The promoter shall finance all shortfalls in cash flows with personal
financial resources, which shall form his equity capital contribution.

2.1 Sales Forecast

The forecast of annual sales revenue forms the backbone of the budget forecast and thus uses
extra care in its preparation. All numbers rely on extensive research of current resources that
provide insight into potential customer and their inclinations to use services of restaurants similar
to the proposed restaurant.

Sales show a healthy value of an average in excess of 1.57 million dollars.

Sales Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Sales Revenue $ 791,460 $ 1,582,920 $ 1,701,639 $ 1,661,396 $ 1,966,457

The projection of sales revenue uses a detailed analysis of the potential customer base, its
tendency to eat out in restaurants such as Papa Geo’s, and its spending on food and the video
games arcade. The above estimated sales revenue assumes that sales during the first year shall be
only 50% of the calculated value because during this year, the restaurant management shall
resolve all teething troubles and the marketing efforts, including word-of-mouth publicity,
gradually begin to take effect. The second year shall see the restaurant achieve full potential as
calculated. Calculations for the subsequent years use a compounded annual growth rate (CAGR)
of 5%. This is a conservative estimate of the CAGR in view of the reported CAGR of over 4.2%
for the American fast food industry and the effort of Papa Geos, a new entrant offering a unique
menu and dining experience, to increase its market share from the modest 10% used in the base
calculations.

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 Papa Geo’s Restaurant

Customers shall pay using credit cards and the credit card company charges 2.5% as fees. The
above projections do not include this expense, which forms a part of expenses in the cash flow
and profit and loss statements.

2.2 Methods and Assumptions

Customer Base
The population of 10,000 families around Papa Geo’s location primarily consists of middle-
income people. We assume that about 7.5% earn over $75,000, a similar number earn less than
$30,000, and that these people might not form the regular customer group. Therefore, the people
who our restaurant can attract is 8,500 (10,000 – 15%) families.

Each family has an average of four members making the customer base 28,000. We assume that
each family consists of two adults and two children. Papa Geo’s proposes to allow children
below 10 to eat free and charge teenagers a concessional price. The reason underlying this is that
the free meal concept would make the restaurant more attractive for families in keeping with the
restaurant’s theme and that the younger people would spend money at the video games arcade to
offset the concessions offered largely. Thus, potential diner customer base is 17,000 adults. We
assume that the young people comprise of 50% each i.e. 4,250 children below 10 and 4,250
teenagers.

A recent Gallup Poll shows that 61% of adults reported having eaten at a restaurant at least once
in the week1. However, income has significant effect on dining out. Only 44% of those earning
less than $30,000 (lower income group) said they ate out while 67% of the middle-income group
($30,000 to $74,999) and 72 % of the higher-income group (over $75,000) said they had had
dinner at a restaurant at least once in the past week. Based on the findings of the Gallup poll,
11,390 (67%) of the adults along with 2,848 children below 10 and 2,848 teenagers would eat
their dinner at a restaurant at least once a week.

1
https://news.gallup.com/poll/201710/americans-dining-frequency-little-changed-2008.aspx

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 Papa Geo’s Restaurant

A survey by Zagat restaurant guide shows that Americans go out to eat lunch and dinner an
average of 4.9 times every week2. However, this includes all types of restaurants and this budget
assumes a conservative 1.5 meals per family on average, which translates to 17,085 adults and
4,271 younger people in both categories each.

Potential customers have an option to eat any of the four major quick-service restaurants. We
estimate that their market share is:

- McDonalds 30%
- Taco Bells 25%
- Wendy’s 25%
- Papa Geo’s 10%
- Others 10%

This implies that our restaurant can attract about 2,563 adults to visit every week for a meal,
which translates to 366 adult customers per day. There will be 92 children below 10years and 92
teenagers. The restaurant is assumed to remain open for all three meals for 360 days every year.

Spending Behaviour
Meals at Papa Geo’s shall cost an average of $7.50 for adults, children eat free, and teenagers
shall have a concessional rate of $5.0 for ‘all you can eat’ meals. In addition, the younger people
shall spend an average of $2.50 on game tokens. We assume that each family shall spend $4 on
tokens for the vending machines including the soda and salad bars.

Revenue Growth
The next assumption is that the proposed restaurant shall not attract the full load of customers
immediately and that this shall only be 50% of the estimate in the first year and grows to its full
potential once the effect of marketing efforts including word-of-mouth publicity kicks in in the
second year. The American fast food industry expects a compounded annual growth rate

2
https://www.kvia.com/lifestyle/entertainment/survey-shows-americans-eat-out-5-times-weekly/683891542

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 Papa Geo’s Restaurant

(CAGR) of slightly above 4.20% between 2017 and 20223. In addition to the growing size of the
cake, concerns about negative health outcomes associated with other fast food offerings, Papa
Geo’s aims to grow its market share to about 15% during the following three years. However, we
have used a conservative estimate of growth in sales revenue of 7.5% CAGR in this period.

Revenue Calculations
Details of how we used the above investigations, observations, and assumptions in calculating
revenues for the first five years of operations appears as Appendix-1 to this report.

3.0 Capital Expenditure Budget

Accurate estimation of startup costs and avoidance of all unnecessary expenses in the initial
stages can have critical consequences for the success of a restaurant4.

Expense Head Cost Notes

Renovation of Existing Facility $ 15,000 Given
Individual Equipment $ 206,488 Details in Appendix-2
Restaurant Electrification, lighting,
gas connection, signage etc. $ 2,500 Estimated
Expense on statutory licenses/permits $ 1,102 See Works Cited Page
Total $ 225,090

This estimate for capital costs compares well with a survey that showed the median cost of
opening a 90-seat restaurant as $275,000 or $3,046 per seat56. The capital cost for 80 seats using
the median per-seat cost would be $243,680. This is true especially if we consider that, the
proposed capital cost budget includes a sum of $54,150 on the arcade games. This is possible
because of the savings in cost of furnishing a restaurant, which shall require only $15,000.

3
https://globenewswire.com/news-release/2018/04/06/1466298/0/en/Fast-Food-Market-Share-2016-Global-
Industry-Growth-Will-Reach-USD-690-80-Billion-by-2022.html
4
https://restaurantengine.com/startup-restaurants-typically-overspend/
5
http://smallbusiness.chron.com/list-expenses-starting-restaurant-scratch-4580.html
6
https://restaurantengine.com/startup-restaurants-typically-overspend/

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 Papa Geo’s Restaurant

Studies show that 30 percent of diners arrive alone, 40 to 50 percent come in pairs, and 20
percent in groups of four or more7. This observation helps in deciding the layout scheme and the
production areas of the restaurant. Because Papa Geo’s restaurant aims to cater to eighty
customers during the peak hours, the proposed arrangement of the tables and chairs are as
follows:

- Fifteen tables with two chairs each,

- Eight tables with four chairs each, and
- Three tables each with six chairs.

Flexibility in the layout and design of the furniture would enable staff to adjust seating according
to need by pushing tables (and chairs) together to cater to larger groups or splitting the bigger
(four and six seat) tables for individuals of customer pairs.

Renovation of the existing facility shall cost $15,000 as per the given information.

Appendix-2 provides details of the costs expected for all the items required for equipping the
restaurant to cook and serve the expected customer traffic and the video game arcade.
Assumptions and details of sources of the pricing information form part of Appendix-2. It is
essential to point out that the prices of individual equipment are for new equipment and not
negotiated. We shall explore the possibility of reducing prices through negotiations with several
vendors and looking for used equipment in good condition.

The Florida Department of State, Division of Corporations, specifies a filing fee for Articles of
Organization and Designation of Registered Agent of $ 125.00 with an additional $ 30.00 and $5
for obtaining certified copy and Certificate of Status8. While the latter are optional, we consider
these necessary to have for records. The State charges a fee of $138.75 for filing annual reports.
In addition, there is a license fee of $191.50 for public food service establishments9. We shall
require the help of an expert for obtaining other licenses and permits including Sales tax

7
https://www.entrepreneur.com/article/73384
8
http://form.sunbiz.org/pdf/cr2e047.pdf
9
http://www.myfloridalicense.com/dbpr/hr/licensing/documents/FeeCalculator--FoodService.xls

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 Papa Geo’s Restaurant

registration, Employer Identification Number (EIN) or tax ID number, safety and sanitation
inspection, and county/local requirements including a certificate of occupancy, flammable
materials permit, health department permit, and sign permit10. We assume that the expert shall
charge a fee of $750. These costs have been included in the capital expense projections.

Screenshots of calculations follow

Screenshot - 1: Capital Expenditure (a)

10
https://jflawfirm.com/licenses-and-permits-for-opening-a-restaurant-in-florida/

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 Papa Geo’s Restaurant

Screenshot - 2: Capital Expenditure (b)

4.0 Investment Analysis

Investigation of the potential for an investment to yield positive returns over time forms an
essential part of capital budgeting. Several methods could assist in this analysis and the essential
first step is to calculate cash flows and profitability over the expected life of the project. For the
present analysis, we have used Net Present Value (NPV), the Accounting Rate of Return (ARR),
the Internal Rate of Return (IRR), and Payback Period. The following sections provide simple
descriptions of these methods and screenshots of the calculations.

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 Papa Geo’s Restaurant

4.1 Cash Flows

Cash flow projections represent the actual money that flows into and out of the business and
assists management im planning to meet its obligations. It is important to note that depreciation
does not form an outflow of cash per se and therefore not included in the estimation of future
cash flows. However, depreciation does influence the Income Tax calculation as the tax rules
allow deduction of depreciation before calculating tax liability. However, the rules for
calculating depreciation under tax law are different from the proposed straight-line depreciation
over five years. For tax calculation purposes, depreciation is taken at 10% on the written down
value (WDV). The screenshot following the notes on calculation of cash flow provides details of
depreciation calculations.

Screenshot - 3: Cash Flow Projections (a)

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 Papa Geo’s Restaurant

Screenshot – 4: Cash Flow Projections (b)

Screenshot – 5: Cash Flow Projections – Depreciation Schedule

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 Papa Geo’s Restaurant

Cash flows projected over the first five years of operation of the restaurant show a steady growth
because of the expected growth of the restaurant business, increase in the population served, and
increase in market share. On the other hand, costs increase as inflation affects all aspects
including the cost of the raw foodstuff, equipment maintenance costs, and salaries of employees.
While the first two grow at 2.5% and 2% respectively, salaries including benefit costs would
grow at 5%. Some of the costs such as rent, utility bills, consumables’ replacement, and
insurance would not increase as we expect management to enter into long-term contracts that
would fix rates over the period. In addition, we expect the rate of income tax to remain steady.
As a result, the net cash flow shall decline marginally in subsequent years.

4.2NPV Analysis

One approach to budget analysis is to calculate the Net Present Value (NPV) of all cash flows,
which represents the difference between the present value of cash inflows and the present value
of cash outflows over time. A positive NPV shows that the projected earnings generated by a
project or investment (in present dollars) exceed the anticipated costs (also in present dollars) or
that the investment shall yield a profit. The formula used is

T
Ct
NPV = ∑ − C0
(1 + r)t
t=1

In this equation:

Ct = net cash inflow during the period t; Co = total initial investment costs; r = discount rate, and

t = number of periods (years). The discount rate ‘r’ recommended is the Working Average Cost
of Capital (WACC), which requires calculation of the average of rate of interest charged by
lenders (in this case 7.75%) and the rate of return expected by the investor(s). Investors expect to
earn returns (10%) that exceed the returns possible from investments in alternative investments.

Screenshot of calculations appears below

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 Papa Geo’s Restaurant

Screenshot – 6: NPV Calculations

The discount rate selected is 9.01%, which is the calculated Weighted Average of Capital Cost
(WACC) for the restaurant. This relies on the 7.75% interest charged by the bank on loans
exceeding $150,000 and repayment over ten years. The promoter of the business expects a return
of 10% on the investment.
The calculated NPV is positive and this makes the project financially viable. An important aspect
of this calculation is that in the cash flow projections and thus in the calculation of the NPV, we
have assumed the repayment of the borrowed amount to commence from the first year itself.
However, the norm is that lenders normally allow a moratorium of one year in the repayment
plan i.e. loan repayment shall commence only in the second year of operations. If we factor this
into our calculations, the net cash flows improve, as does the NPV.

4.3 Rate of Return

Budget analysis also uses calculation of the Internal Rate of Return (IRR) and the Accounting
Rate of Return (ARR). The IRR calculation uses the discounted cash flow method but with a
difference, which is that we do not use a predetermined rate but calculate the rate that will reduce

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 Papa Geo’s Restaurant

the present value (PV) of all cash flows to zero. One can use an iterative process calculating the
PV at different rates and gradually narrowing down the rate until we arrive at a zero PV.
However, the Excel software provides a simple function that calculates the IRR.
The Accounting Rate of Return (ARR), also called the simple or average rate of return, measures
the amount of profit, or return, expected on an investment. Calculation of ARR requires division
of the average profit by the average of the initial investment to derive the return expected.
Importantly, ARR does not consider the time value of money or cash flows and uses the income
projected. The Income Statement appears in a later section. The following screenshot shows the
IRR and ARR calculation.

Screenshot – 7: Calculation of Rates of Return

The calculated IRR and ARR show values of 10.31% and 13.14% respectively after meeting all
commitments to the lender and other creditors. These are excellent returns from the investment
especially if we compare these with investment in relatively low risk market instruments.

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 Papa Geo’s Restaurant

4.4Payback Period

The payback period is the length of time required to recover the initial investment as cash flows.
The payback period of a given investment is an important determinant of whether to undertake
the investment. Longer payback periods are typically not desirable given that future changes that
could affect the profitability of an investment are fraught with risk and unpredictability. The
payback period ignores the time value of money, unlike other methods of capital budgeting such
as NPV, IRR, and discounted cash flow discussed above.

Screenshot – 8: Calculation of Payback Period

All forms of capital investment appraisal discussed in this section show that investment in Papa
Geo’s restaurant represents a good opportunity. The positive NPV of $4,099 makes the
investment worthwhile. Similarly, an IRR of 10.31 and an ARR of 13.14 together shows that the
investor shall earn a return much higher than alternative investments in market instruments and
securities. The payback period of fifty months appears a little long, but we need to view this
positively because the restaurant shall generate an intangible goodwill for the business that the
owner can capitalize on later. In addition, assuming that the life of the project is only five years

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 Papa Geo’s Restaurant

and that we shall not salvage anything of value at the end appears too pessimistic. A longer life
will improve performance projections.

5.0 Pro forma Financial Statements

The following sections show the expected income for each year and the balance sheets at the end
of each year.

5.1 Pro Forma Income Statement

Income projections appearing in the screenshot below rely on the sales revenue projections and
include the sales of the videogame arcade tokens. We have discussed all numbers appearing in
this statement in earlier sections except the Income Tax aspect. Tax rules provide a complex
array of slabs and rates, ownership patterns, and allowed deductions not investigated fully and
assumed at a middle of the road rate of 37%. Depreciation is taken according to the tax laws. The
first year of operations results in a net loss of $ 160,447.18, which the owner of the restaurant
shall cover using his personal funds and we consider it as part of the owner’s equity. Profits
appear to reduce marginally in years 3, 4, and 5 because of the increase in certain expenses such
as salaries and benefits, cost of food items etc. at rates higher than the increase in sales.

This Pro Forma Income Statement uses the Contribution format, which breaks costs down
between variable (direct) costs and fixed (indirect) costs. We can use this statement only for
internal financial planning and cannot assume that it conforms to accounting norms or
procedures like IFRS etc. All numbers used are the same as presented in the Cash flow analysis
in Section 4.

It appears that, taken alone, the earnings projected from the arcade do not justify the investment.
However, the arcade shall add to the attractiveness of the restaurant in pulling customer footfall
and must therefore form a part of the marketing expenses including cost of replacement of the
equipment or software.

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 Papa Geo’s Restaurant

We began with a target of generating a profit of $40,000 in the second year of operations.
Projections show that this target shall not present any difficulty. A simple ratio analysis of the
Income Statement numbers shows a healthy picture and the net profit margin at over 4% is more
than the 2% expected by the owner.

Screenshot – 9: Projected Income Statement

5.2 Pro Forma Balance Sheets

The screenshot of the projected balance sheets includes all cash generated from operations as
cash balance at the end of each year. This assumes that the restaurant shall not explore and use
opportunities for profitable use of this money such as investments in short-term instruments that
could add to the overall profitability while ensuring liquidity to meet any contingency.

The balance sheet also assumes no ‘accounts receivable’ because all sales are cash transactions
through customer credit/debit cards.

Plant and equipment shall depreciate in a straight line over the five years to reduce to zero on the
close of the fifth year. Current liabilities as ‘accounts payable’ are taken as the value of all direct
costs for a month assuming that all suppliers of these inputs would offer a credit of one month.

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 Papa Geo’s Restaurant

Similarly, ‘other current liabilities’ includes the value of one month of all indirect expenses such
as salaries and wages, utility bills, rent, consumables etc.

Tax liability is assumed as calculated but remaining unpaid as on the last day of the financial
year.

Screenshot 10: Projected Balance Sheets

5.3 Pro Forma Cash Budget

As discussed above, we have not taken any investment of surplus cash in profit-generating
instruments and that the promoter shall bridge all gaps in the cash flow with personal funds.
Therefore, there is no difference between the cash flow statement in Section 4 and Papa Geo’s
cash budget.

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 Papa Geo’s Restaurant

6.0 Works Cited

All sources of information used appear as footnotes in individual sections and listed below

https://news.gallup.com/poll/201710/americans-dining-frequency-little-changed-
2008.aspxhttps://www.kvia.com/lifestyle/entertainment/survey-shows-americans-eat-out-5-
times-weekly/683891542

https://globenewswire.com/news-release/2018/04/06/1466298/0/en/Fast-Food-Market-Share-
2016-Global-Industry-Growth-Will-Reach-USD-690-80-Billion-by-2022.html

https://restaurantengine.com/startup-restaurants-typically-overspend/

http://smallbusiness.chron.com/list-expenses-starting-restaurant-scratch-4580.html

https://restaurantengine.com/startup-restaurants-typically-
overspend/https://www.entrepreneur.com/article/73384

http://form.sunbiz.org/pdf/cr2e047.pdf

http://www.myfloridalicense.com/dbpr/hr/licensing/documents/FeeCalculator--
FoodService.xlshttps://jflawfirm.com/licenses-and-permits-for-opening-a-restaurant-in-
florida/

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 7.0 Appendices

7.1 Appendix 1: Revenue Calculations

Customers Number of Papa Geo's

who eat out Meals Customers Based Average Spend (per visit)
once a Dining Out on Market Share
Details Numbers
week Total
67% 1.5 Per Per day Food Vending Game
Week Machine Tokens
Tokens
Total Population 10,000
(families)
High-income & 15%
Low-income (%)
each
Target Customer 8,500
Base
Number of 34,000
individuals @4 per
family
Adults per family 17,000 11,390 17,085 2,563 366 $ 7.50 $ 2.00 $ 3,477.00
Children
0-10 4,250 2,848 4,271 641 92 $- $ 2.50 $ 230.00
11-19 4,250 2,848 4,271 641 92 $ 5.00 $ 2.50 $ 690.00
Daily Revenue $ 4,397.00
 Papa Geo’s Restaurant

7.2 Appendix 1: Capital Expense Budget

Item Note Unit Cost No. Total Specifications

Base Accessorie Shipping/ Total Cost
Price s Installatio
n
Soda Fountain Bar i 5,625 2,500 250 8,375 1 8,375 8-flavor dispensing machine, ice-maker,
CO2 supply, electric connection
Pizza Ovens ii 1,900 1,250 3,570 6,720 2 3,440 Wood/Gas fired 56"x60"
Pizza Preparation Table iii 4,797 300 5,097 2 0,194 BAPP-3-93 Pizza Preparation Table
Salad and Pizza/Dessert Bar iv 2,850 100 2,950 1 2,950 Refrigerated display
Commercial Refrigerator v 2,819 250 3,069 2 6,138 50cft refrigerators
Commercial Freezer vi 3,380 250 3,630 1 3,630 69.2cft freezer
Cooking equipment vii 4,076 200 4,276 1 4,276 Counter-top fryer, Range with oven (2),
Griddle, microwave, oven, stove & hotplate.
Misc. cooking and food viii 750 750 2 1,500 Chef's knives, ladles, pots, pans, et al.
handling equip.
Dishes, cutlery, drinking ix 5,000 5,000 1 5,000 Good Restaurant Quality
cups
Starting stock of disposables x 1,000 1,000 1 1,000 Includes napery, aprons, detergents, et al.
Commercial Dishwasher xi 3,317 150 3,467 1 3,467 Conveyor Dishwasher MD44 and Table 72-
SD LSS Straight Soiled Side Dish table
Busing Cart xii 200 50 250 2 500 Standard design in stainless steel
Tables with Chairs xiii 600 1 11,329 Tables $760, $804, and $1064; Chairs $124
10,729 11,329
Video Game vending xiv 8,925 100 9,025 6 54,150 Miscellaneous; Suggested short market
machines survey to identify

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 Papa Geo’s Restaurant

Point of Sale hardware xv 1,500 125 1,625 1 1,625 POS display, receipt printer, cash drawer,
credit card reader, etc. (software leasing cost
included in operation costs)
Office desk, laptop computer xvi 1,450 200 50 1,700 1 1,700 Miscellaneous
Staff lunchroom equipment xvii 2,750 50 2,800 1 2,800 Miscellaneous
Total 72,073
Add: Contingency 34,415 Twenty percent of equipment costs
Allowance
Total Spend on Equipment 206,488

Notes and Source of Information

i http://www.sodadispenserdepot.com/pics/sv175systempageweb.htm
ii https://www.fornobravo.com/product-series/modena2g-fa-series/ 30% of oven cost assumed for installation, flue gas line, etc.
iii https://www.restaurant-services.com/refrigerators/pizza-prep-tables/bapp-3-93-pizza-preparation-table.html
iv https://www.restaurant-services.com/cooking-equipment/
v
https://www.restaurant-services.com/refrigerators/upright-refrigerators/commerical-restaurant-kitchen-cr2s-fs-hoshizaki-refrigerator.html
vi https://www.restaurant-services.com/refrigerators/upright-freezers/commercial-restaurant-kitchen-freezer-mbf-8003.html
vii https://www.restaurant-services.com/cooking-equipment/
viii Estimated
ix Estimated; Cost of replacement chinaware cutlery etc. included in operation cost
x Estimated; Cost of subsequent disposables included in operation cost
xi
https://www.restaurant-services.com/commercial-kitchen-dishwashers/commercial-restaurant-conveyor-dishwasher-md44.html
xii https://www.restaurant-services.com/carts/cart-c-3222stainless-welded-cart.html
xiii https://www.tableschairsbarstools.com/
xiv Prices range between $14975 and $2875. Average selected. https://www.bmigaming.com/
xv https://www.expertmarket.com/pos/how-much-does-a-pos-system-cost
xvi Estimated
xvii Estimated

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Papa Geo’s Restaurant

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