Feasibility Report for a Fast Food Restaurant

FEASIBILITY REPORT FOR A FAST nutrition RESTAURANT PREAMBLEWe endure taken erupt time to redeem this report for several reasons among which argon pic This project serves as part of the private-sector meshing initiative drive embarked by our comp each pic Our passion to make you reckon your present stand rough non wanting to invest in the Nigerian economy, for now pic Our belief that this report tramp mildew a base for an enlarged feasibility report, which we hope you, would electric charge us to prevail out pic Our desire to make you see the financial viability of this project pic Our desire to make you see the potentials of the Nigerian market pic Our desire to bring executable investments into this country pic Our desire to portray the true image of Nigeria to the outside sphere pic Our desire to see your company operational in Nigeria It is in that locationfrom our unfaltering belief that afterwards reading through this report, there will be a burning desire to reap the benefits of investing in Africas high-riskgest market, and partnering with us in its quest to touch hearts through the McDonalds heritage. TABLE OF bailiwick 1. DATA GATHERING 2. creation DEVELOPMENT 3. localize ANALYSIS 4. antagonist ANALYSIS 5. pecuniary STATEMENT pic DATA GATHERING picBASIC FACTS ABOUT NIGERIA AFRICAs BIGGEST state AND MARKET. FEDERAL CAPITAL ABUJACOMMERCIAL CAPITAL LAGOS POPULATION Nigeria with a population of 113,828,587 (July 1999 EST. ) is the well-nigh populous country in Africa. It has a universe of discourse Growth place 2. 92% (1999 EST. ) AGE STRUCTURE 0-14 YEARS 45% (MALE 25,613,974 FEMALE 25,397,166) 15-64 YEARS 52% (MALE 30,272,539 FEMALE 29,197,611) 65 YEARS AND all over 3% (MALE 1,678,732 FEMALE 1,668,565) (1999 EST. ) picMARKET AREA We int give the sack that McDonalds setup its inaugural eating house, in Lagos ground. It has also pinned down any of these locations for its first restaurant, namely Broad and Marina Streets i n Lagos Island, Awolowo Road in Ikoyi, and homogeneous Adesola and Ahmadu Bello Way, in Victoria Island.There is a school of thought that says that the Market in Lagos is bigger than the Market in new(prenominal) countries of West Africa put together. For commonwealth conversant with Lagos, these locations are outpouring locations, as they boast of the front man of Nigerias spirited rise buildings, Nigerias most successful shops and companies, with their attendant management and senior staff, who invariably are Nigerias creme de la creme. These locations can also be regarded as Nigerias Jugular vein in commerce. They also presently boast of armying the dress hat Fast nutrition Restaurants in Lagos. We are already looking forrader to a healthy competition between you and them. A nonher feature of these locations is that they can be accessed within 5-10minutes of each other.It is thusly usual to see sight working in Victoria Island moving over to a restaurant in Ikoyi, or Lagos Island, and vice versa. picDEMOGRAPHY OF POTENTIAL CONSUMERS Age Infant 60 and above (some prodigal regimen restaurants have run acrossing pens for infants) Sex manly Female (55% 45%) Income $300/ class and above Usage score Worst fountain Scenario euchre consumers/ twenty-four hour period number Case Scenario 1200 consumers/ mean solar day Best Case Scenario 2000 consumers/day With McDonalds we expect figures to get as high as 1,500, 2,200 and 2,700 respectively. User Status Ranges from first time users, Regular users and nonchalant Users. For an intermediate day in the 1ST socio-economic class of operations origin Time Users approx. 10% Regular Users approx. 50% Occasional Users approx. 40% faithfulness Status Indifferent (N champion) 42% Medium 35% Strong 20% Absolute 3% We are moreover confident that with McDonalds, consumers can be pulled from the indifferent categories, to universe strong and absolute consumers with McDonalds. Occupation Predominantly was hrag collar workers, businessmen also get a sizable simile of consumers. During weekends and evenings, the major(ip)ity of consumers are whole families, couples, lovers etc. Educational Qualification secondary ( superior) school certificate holders to PHD holders. Religion Predominantly Christian and liberal Muslims.This therefore means, a willingness/freedom to associate with people, including the opposite sex in public. nutriment for Takeaway snacks also allow the recluse patronize Fast Food Restaurants. Social Status 80% of all classes of society BENEFITS These are colligate to some kind of advantages looked for in patronizing any business. In the vitrine of Fast Food Restaurants, the following parameters have been used to assess endure Economical Nature of Investment Medium Rating Convenience mettlesome Rating Prestige High Rating Hangout Venue High Rating LOCAL TRAFFIC PATTERNS Lagos has a high concern pattern. On a busy weekday afternoon in Lagos, traffic density is a pprox. 000 cars/sq. kilometers. pic CONCEPT DEVELOPMENT Concept development means making decisions astir(predicate) the comp mavennts of the sporting intellectual nourishment restaurant concept, including theme, menu, service 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 presently obtainable. It is all the same outstanding to make some recommendations, as the data from the population in the market area would help in evaluating a fast food restaurants concept that fits the areas demand and preferences. Lagos Island and its sister island, Victoria Island, form what is called Lagos City or EKO.It is a city with a high rate of hustle and bustle. In some parts of this city, the lights never go out. It is a city in which 70 percent of its work force comes from littler towns (3-70 kilometers) from within and outside Lagos State, on a daily basis. This scenario automatically creates needs in the minds of some migrants to Lagos City, which must be met, such as 1. Where do we eat breakfast, considering that we might have to wake up very primal so as to avoid the earlyish morning rush, which results in traffic jams? 2. Where do we eat lunch, considering the fact the demands of work and the distance between employment and home will 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, subside? Apart from these variables, fast food restaurants in Lagos play host to people who live in Lagos City, and also provide a contributive 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 directly linked to the bridge that connects Lagos Island at the Ikoyi and Old Ikoyi en d of Lagos Island a drive of less than 5 minutes.It is important to note that Old Ikoyi is the most expensive residential area in Lagos State, and it is followed closely by Victoria Island, which also houses the most expensive posture byments in Lagos State. What this means is that McDonalds would be neighboring the rich and tasteful people resident in Lagos State. Akin Adesola Street, which spans about 1. 1Km is directly linked to the major 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 too high as the road is dualised. At the other end of this street is the famous Bar shore with Kuramo beach around the corner. McDonalds would therefore benefit from people coming to the beach who require Take-away.The presence of the beach also guarantees a constant supply of fresh air. Presently, only unmatchable major fast food restaurant operator has an outl et on this major road. Around 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 comfortably house another restaurant, most especially the first McDonalds restaurant in Nigeria. It is important to note that apart from Lagos City, other towns in Lagos State, such as Ikeja and Apapa can comfortably 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 have been exposed in the major towns of Nigeria. It was however not until 1986 that unite African Company of Nigeria (UACN) in a diversification bid opened the first real fast food chain of restaurants in Nigeria. Since wherefore a number of other operators have graced the fast food restaurant sedulousness stage. Presently, it is single of the fastest growing sectors of the Nigerian ec onomy and it would not be out of place to say that there is already a fast food craze in Nigeria, and this is just the beginning. In financial term, the fast food industry is approximately a $40 jillion dollar market, with over 83% of this market in Lagos State alone.In doing a proper competitor analysis, it will be appropriate to first identify the major competitors whose presence will bring out the high hat of McDonalds. The major players are MR. Biggs (a fast food restaurant operated by UACN), Tantalizers, Tastees fried Chicken, Sweet Sensations, Munchies, Favorites, Friends Eatery, Kas Chicken, Fingers (a fast food restaurant operated by United job Company), St. Elmos (a South African Franchise). For this analysis, only the three major fast food joints will be discussed. MR. BIGGS This is a subsidiary of the big conglomerate, 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 Nig eria.Presently, there are thirty-seven outlets spread all over Nigeria, with a colossal twenty-two in Lagos State. Plans are on the ground to increase the tote up number of restaurants to fifty-seven by the end of the year. An estimated 1200 people visit an average Mr. Biggs outlet per day. STRENGHTS Biggest financial brawn Brand flesh recognition total Knowledge of the Nigerian market Complete support of the UACN conglomerate as it is rumored to be the only subsidiary presently making a emolument Strong emphasis on family and catching the young Formation of alliances with companies providing complementary approximates Good use of the electronic and print media Starts operations as early as 6. 5am, with the intention 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 propinquity It is presently not noted for its excellent food, as it pla ces emphasis on its snacks The initial excitement that heralded its entrance to the market seems 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 peculiar to Lagos, as the opening of any Mr. Biggs restaurant outside Lagos gives a feeling at long know, 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 aggressive marketers. Their marketing dodge seems to be directly aimed at their competitors. In the last four 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 design customers to their outlets. STRENGTHS Effective marketing Strategy Improving Brand Name mention Comm endable Customer Service Vastly improving financial muscle Marketing emphasis is on catching couples and lovers WEAKNESS Increasing malady about the quality of their food Diversification into Africa Meals may be their undo 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 waterfall within the middle class category. In other words, for serious apt(p) businessmen and the upper-class, Tantalizers would naturally not come as their first survival of a fast food restaurant TASTEE FRIED CHICKEN 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 generation 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 i ndustry 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 thinning a niche among the business and upper classes. STRENGTHS Improving Brand Name Recognition Commendable Customer 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 uneffective class distinction. Class distinction which they claim to be their marketing dodge for luring the business and upper classes, has not seen them charging higher(prenominal) prices for their service with the belief that consumers who nourish 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 relatively bigger profit, as it seems that their expenses are relatively higher than their competitors, while the profit, which should be proportional to expenditure, is lower. Marketing is not aggressive pic FINANCIAL STATEMENTFinancial Analysis 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 live 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. exploitation 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 pre sently spend between $0. 4 $5 per visit, making our estimated income analysis of $1. 50 per visit very conservative. CONCLUSION The nature of this report has made us only able to do elongated work on areas such as Data Gathering, Concept ontogenesis 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 integral part of any Feasibility work, will only be possible if the company for which this report has been done and sent to, finds it necessary to commission us on a more extensive feasibility study.