Feasibility Report for a Fast Food Restaurant

FEASIBILITY REPORT FOR A truehearted FOOD RESTAURANT PREAMBLEWe assume taken let on time to de bouncingr this report for several reasons among which ar pic This fancy serves as part of the private-sector participation opening night drive embarked by our comp any(prenominal) pic Our commit to make you reconsider your present gestate block not wanting to trust in the Nigerian economy, for now pic Our doctrine that this report laughingstock progress to a base for an enlarged feasibility report, which we anticipate you, would commission us to carry break through pic Our desire to make you satisfy the fiscal viability of this project pic Our desire to make you see the potentials of the Nigerian market pic Our desire to toy viable investments into this country pic Our desire to impersonate the true image of Nigeria to the egressside valet de chambre pic Our desire to see your play along operating(a) in Nigeria It is at that placefore our firm notion that after read ing through this report, there depart be a impetuous desire to reap the benefits of investing in Africas vauntinglygest market, and partnering with us in its quest to concern hearts through the McDonalds heritage. TABLE OF fill 1. DATA host 2. CONCEPT maturement 3. SITE synopsis 4. COMPETITOR abridgment 5. monetary STATEMENT pic DATA GATHERING picBASIC FACTS ABOUT NIGERIA AFRICAs BIGGEST DEMOCRACY AND MARKET. FEDERAL chapiter ABUJACOMMERCIAL CAPITAL LAGOS universe Nigeria with a population of 113,828,587 (July 1999 EST. ) is the nigh thickly settled country in Africa. It has a race Growth rate 2. 92% (1999 EST. ) era STRUCTURE 0-14 YEARS 45% (MALE 25,613,974 egg-producing(prenominal) 25,397,166) 15-64 YEARS 52% (MALE 30,272,539 egg-producing(prenominal) 29,197,611) 65 YEARS AND OVER 3% (MALE 1,678,732 FEMALE 1,668,565) (1999 EST. ) picMARKET AREA We int fetch up that McDonalds setup its starting time eating place, in Lagos terra firma. It has similarly pinned do wn any of these locations for its premier restaurant, namely Broad and Marina Streets in Lagos Island, Awolowo Road in Ikoyi, and identical Adesola and Ahmadu Bello Way, in capital of Seychelles Island.There is a civilise of thought that says that the Market in Lagos is larger than the Market in other countries of western Africa put together. For people conversant with Lagos, these locations ar prime locations, as they run ab come in of the strawman of Nigerias gamy rise buildings, Nigerias closely successful shops and companies, with their attendant steering and senior staff, who invariably ar Nigerias creme de la creme. These locations can also be regarded as Nigerias Jugular mineral vein in commerce. They also at once boast of hosting the crush spry Food Restaurants in Lagos. We are already looking advancing to a healthy competition mingled with you and them. Another f fertilizeure of these locations is that they can be accessed in spite of appearance 5-10minu tes of each other.It is therefore wonted(prenominal) to see people deviseing in Victoria Island moving over to a restaurant in Ikoyi, or Lagos Island, and viciousness versa. picDEMOGRAPHY OF POTENTIAL CONSUMERS Age Infant 60 and preceding(prenominal) (some debauched intellectual nourishment restaurants concur playing pens for infants) Sex Male feminine (55% 45%) Income $300/ year and above impost Rate tally nerve Scenario calciferol consumers/ daytimetime fairish circumstance Scenario 1200 consumers/day high hat Case Scenario 2000 consumers/day With McDonalds we persuade figures to get as high as 1,500, 2,200 and 2,700 respectively. User Status Ranges from first gear time users, Regular users and Occasional Users. For an h anest day in the 1ST year of operationsFirst Time Users approx. 10% Regular Users approx. 50% Occasional Users approx. 40% Loyalty Status Indifferent (None) 42% Medium 35% Strong 20% Absolute 3% We are just confident that with McDonalds, consu mers can be pulled from the indifferent categories, to being strong and absolute consumers with McDonalds. assembly line predominantly white collar workers, business community also form a level-headed proportion of consumers. During weekends and planeings, the studyity of consumers are in all families, couples, lovers etc. Educational Qualification petty(a) ( high-pitched) school certificate holders to PHD holders. Religion Predominantly Christian and liberal Muslims.This therefore government agency, a unbiddenness/freedom to associate with people, including the oppo locate provoke in public. Provisions for Takeaway snacks also allow the recluse patronize straightaway Food Restaurants. Social Status 80% of all cleares of society BENEFITS These are related to to some kind of advantages looked for in prankish any business. In the case of spendthrift Food Restaurants, the following parameters take a leak been employ to assess patronage Economical disposition of Inve stment Medium Rating gimmick gamey Rating Prestige High Rating Hangout Venue High Rating LOCAL TRAFFIC PATTERNS Lagos has a high craft pattern. On a busy weekday afternoon in Lagos, dealings density is approx. 000 cars/sq. kilometers. pic CONCEPT DEVELOPMENT conceit development means making decisions to the highest degree the components of the flying solid sustenance restaurant concept, including theme, menu, good style, hours of operations. Since this feasibility is for the setting up of an already established name, its concept would basically be centered upon what is straightway obtainable. It is up to now beta to make some urgeations, as the information from the population in the market scope would help in evaluating a riotous pabulum restaurants concept that fits the areas need and preferences. Lagos Island and its sister island, Victoria Island, form what is called Lagos City or EKO.It is a metropolis with a high rate of hassle and bustle. In some parts of thi s city, the lights neer go out. It is a city in which 70 percent of its work repulse comes from smaller towns (3-70 kilometers) from within and outside Lagos democracy, on a daily basis. This scenario automatically cr run downes needs in the minds of some migrants to Lagos City, which must be met, much(prenominal) as 1. Where do we eat break unwavering, considering that we might progress to to wake up very early so as to avoid the early morning rush, which results in traffic jams? 2. Where do we eat lunch, considering the situation the demands of work and the distance between oeuvre and home allow for prevent us from going home? 3.Where do we eat dinner, considering that we might need to allow the traffic jam caused by motorists leaving Lagos City, lower? Apart from these variables, fast nutrient restaurants in Lagos play host to people who live in Lagos City, and also provide a contributing(prenominal) environment for businessmen. We would therefore recommend that hours of operation span from 6. 45am to 9. 45pm daily. pic SITE analysis Specifically, we would like to narrow down our site search to Akin Adesola Street, in Victoria Island. This road is straightway linked to the link that connects Lagos Island at the Ikoyi and Old Ikoyi end of Lagos Island a drive of less than 5 minutes.It is main(prenominal) to note that Old Ikoyi is the most expensive residential area in Lagos State, and it is followed well by Victoria Island, which also houses the most expensive attainice apartments in Lagos State. What this means is that McDonalds would be neighboring the rich and polished people resident in Lagos State. Akin Adesola Street, which spans about 1. 1Km is directly linked to the major(ip)(ip) streets in Victoria Island such as Ahmadu Bello way, Ozumba Mbadiwe, Adeyemo Alakija, Adeola Odeku, Sanusi Fafunwa, Karimu Kotun and Bishop Oluwole Streets. It traffic density is not alike high as the road is dualised. At the other end of this street is t he noted Bar bank with Kuramo beach around the corner. McDonalds would therefore benefit from people feeler to the beach who require Take-away.The charge of the beach also guarantees a constant quantity of fresh air. Presently, just one major fast food restaurant agent has an government issue on this major road. or so Victoria Island there are presently about six fast food restaurants and based on the potentials of this area of Lagos State it would be an understatement to say that that Akin Adesola Street, would advantageously house another restaurant, most especially the first McDonalds restaurant in Nigeria. It is cardinal to note that apart from Lagos City, other towns in Lagos State, such as Ikeja and Apapa can good host a McDonalds restaurant. pic COMPETITOR ANALYSIS Fast foods in Nigeria are as old as Nigeria itself.From the time of Nigerias independence fast food shops squander been assailable in the major towns of Nigeria. It was however not until 1986 that Uni ted African smart set of Nigeria (UACN) in a diversification press opened the first real fast food chain of restaurants in Nigeria. Since therefore a number of other operators hurt graced the fast food restaurant application stage. Presently, it is one of the fastest growing sectors of the Nigerian economy and it would not be out of place to say that there is already a fast food delirium in Nigeria, and this is just the beginning. In monetary term, the fast food industry is some a $40 million one dollar bill market, with over 83% of this market in Lagos State alone.In doing a tight-laced competitor analysis, it will be book to first identify the major competitors whose movement will bring out the best of McDonalds. The major players are MR. Biggs (a fast food restaurant operated by UACN), Tantalizers, Tastees Fried Chicken, kind Sensations, Munchies, Favorites, Friends Eatery, Kas Chicken, Fingers (a fast food restaurant operated by United Trading Company), St. Elmos (a southwestward African Franchise). For this analysis, save the three major fast food joints will be discussed. MR. BIGGS This is a underling of the big compound, United African Company of Nigeria (UACN). It started operations in 1986, and is noted for being the first real operator of fast food restaurants in Nigeria.Presently, there are xxxvii outlets spread all over Nigeria, with a massive twenty-two in Lagos State. Plans are on the ground to increase the total number of restaurants to fifty-seven by the end of the year. An estimated 1200 people visit an mean(a) Mr. Biggs outlet per day. STRENGHTS Biggest monetary muscle vane crap recognition estimable Knowledge of the Nigerian market Complete support of the UACN conglomerate as it is rumored to be the hardly subsidiary presently making a mesh Strong tenseness on family and communicable the young Formation of alliances with companies providing complementary goods Good use of the electronic and print media Start s operations as early as 6. 5am, with the design of attending to people who want a good meal breakfast before working hours commence WEAKNESSES Its strength fizzles out at the arrival of the other major fast food operators to the neighborhood It is presently not noted for its excellent food, as it places emphasis on its snacks The initial tempestuousness that heralded its entrance to the market waits to have been lost, as there seems to be an out of fashion, cover on it with the presence of the new entrants. This feeling is however ridiculous to Lagos, as the opening of any Mr. Biggs restaurant outside Lagos gives a feeling at long last, to the residents of these towns TANTALIZERS One of the most promising fast food restaurants in Nigeria.They began operations in the Festac area of Lagos State in 1995, and within the space of about six years have opened seven other outlets. The management of Tantalizers can be regarded as very self-assertive marketers. Their market strateg y seems to be directly aimed at their competitors. In the last tetrad outlets they have opened, they have set up shops almost directly opposite or at best, a little close to their competitors in the process of drawing customers to their outlets. STRENGTHS useful Marketing Strategy Improving patsy Name Recognition Commendable node Service Vastly improving financial muscle Marketing emphasis is on catching couples and lovers WEAKNESS Increasing heraldic bearing about the quality of their food variegation into Africa Meals may be their undoing as they would be dividing their effort between the Fast food restaurant and the new African food restaurant There seems to be an emerging class distinction within the fast food industry, and the feeling is that Tantalizers locomote within the middle class category. In other words, for serious minded businessmen and the upper-class, Tantalizers would naturally not come as their first choice of a fast food restaurant TASTEE FRIED yell owed It is one of the most promising fast food restaurants in Nigeria. It began operations in Surulere, Lagos State.It is attributed to be the second new multiplication fast food restaurant, after Mr. Biggs. At the time of this report they have only three restaurants. When one considers the time they have spent in the fast food industry in Nigeria, and the fact that they only have three restaurants to show for it, one would want to mistakenly write them off as underachievers. Doing this will however be at ones peril as they seem to be carving a recession among the business and upper classes. STRENGTHS Improving Brand Name Recognition Commendable client Service High taste and consumer conducive environment Regarded as having the best food in the industry Marketing emphasis seems to be on, catching the business class WEAKNESS Ineffective class distinction. club distinction which they claim to be their marketing strategy for luring the business and upper classes, has not seen t hem charging higher prices for their service with the belief that consumers who survey their products and service will be willing to pay for it. In other words, even though it may seem that they are providing better products and service, it has not accrued to comparatively bigger profit, as it seems that their expenses are comparatively higher than their competitors, while the profit, which should be relative to expenditure, is lower. Marketing is not aggressive pic FINANCIAL STATEMENT monetary compendium will be based on the demography of potential consumers of McDonalds as arrived at in the demographic studies (USAGE RATE) on page 4 of this report. According to the survey carried out on existing fast food restaurants, Usage Rate Worst Case Scenario 500 consumers/day Average Case Scenario 1,200 consumers/day Best Case Scenario 2,000 consumers/day With McDonalds we expect figures to get as high as 1,500, 2,200 and 2,700 respectively per restaurant. Using these figures, assuming an average consumer spends $1. 5/visit/day, expected income For Worst Case Scenario 1,500 X $1. 5 X 360 days per year = $810,000 per year For Average Case Scenario 2,200 X $1. 5 X 360 days per year = $1,188,000 per year For Best Case Scenario 2,700 X $1. 5 X 360 days per year = $1,458,000 per yearIn reality, consumers presently spend between $0. 4 $5 per visit, making our estimated income analysis of $1. 50 per visit very conservative. CONCLUSION The constitution of this report has made us only able to do extensive work on areas such as selective information Gathering, Concept Development and Site Analysis. It has only been able to peripherally touch areas such as Competitor Analysis and Financial Statement. A proper analysis on areas such as Competitor Analysis and Financial Statement which form an constitutive(a) part of any Feasibility work, will only be possible if the company for which this report has been done and sent to, finds it prerequisite to commission us on a more extensive feasibility study.