Reference no: EM131902281

We are making the plan for expanding the business( Exporting ) in France from the US.

The business is Taco Bell ( Mexican Fast foods).

Please make a prediction about financial with using the data.

Years 1 through 5-PROJECTED

Basic Profit & Loss FOR the PRODUCT/SERVICE

Revenue

COGS

GM

SG & A

EBITDA

MAJOR COST REQUIREMENTS (if any)

ASSUMED MARKET SHARE/PENETRATION

IMPORTANT--TO BE ABLE TO DEVELOP FINANCIALS NEED TO HAVE GOOD DATA ON MARKET SIZE

What are the initial franchise fee and royalty fees?

Initial Franchise Fee = $45,000

Monthly Service Fee (Royalties) = 5.5% of Gross Sales

Marketing = 4.25% of Gross Sales (Includes national and local contributions)

Fast food operators gained considerable recognition in the French consumer foodservice landscape over the review period. After a slowdown in 2015 due to external economic factors such as VAT increases in 2012 from 5.5% to 7% and in 2014 from 7% to 10%, value growth surged again in 2016 driven by the growing popularity of bakery products fast food which succeeded in offering various dishes at attractive prices. Furthermore, there was the revival of burger fast food through an evolving competitive landscape in this category with the return of Burger King in France in 2014. The introduction of Big Fernand in 2013 and Five Guys in 2016 reveals a dynamic segment. Demand preferences have evolved towards premium burgers which has considerably impacted unit prices to rise in fast food as quality becomes the main factor influencing purchase decision-making. With the search for higher quality has emerged the new segment of fast casual, considered as premium fast food in line with the growing interest in proper nutritional balance and healthier diet.

Holding a 56% value share in chained fast food in 2016, McDonald’s Corp remained the outright leading player in fast food, owing primarily to franchises with EUR3.8 billion in value sales, representing 82% of McDonald’s Corp’s total value sales in France. The player is primarily a franchiser as it allows the delivering of great tasting food adjusted to local preferences. Moreover, the franchise system drives profitability for the operator and gives incentives to franchisees to develop the brand while also benefiting from the financial strength and global experience of McDonald’s Corp. Even though McDonald’s recorded a loss in fast food value share in 2016 due to external economic factors, the operator is making steady progress in improving the customer experience. According to the company’s sources, France is the furthest market in the use of digital, web ordering and self-order kiosks. Furthermore, as part of McDonald’s Corp’s strategy and in order to differentiate itself from competitors, a loyalty programme through a web application was launched in 2016. It offers points which are accumulated at each ordering and which are tradable against free products. Even though this remains limited to a small number of outlets, this experience is the first led by the company worldwide. The second main player in fast food was Quick Restaurants SA with an 8% value share of chained fast food in 2016 to reach EUR696 million. This player enjoys a position in high-growing burger fast food, being the main competitor to McDonald’s Corp and continues to invest in product innovations and communication despite being cannibalised by Burger King restaurants. With a 7% value share of chained fast food in 2016, Yum! Brands Inc enjoyed third rank through its brand, KFC. Over the review period, the chicken fast food specialist was not particularly interested in developing in France. In 2016, the company opened 18 franchise outlets reflecting an accelerated development strategy in a context of stronger competition in fast food.

Despite being deeply entrenched in culinary traditions, French consumer preferences and eating habits have changed to converge towards fast food. While this phenomenon is not new, the forecast period is not expected to exhibit a reversal. The emergence of millennial consumers becoming a major part of the workforce reflecting higher purchasing power will enhance this trend. Indeed, millennials are the most sensitive to fast food which allows for shorter lunch breaks and better convenience. Fast food is expected to be dynamited by innovative players competing in a highly challenging environment. Supply is diversifying through the introduction of financially solid multinationals such as Burger King and large retailers. In the case of convenience stores fast food, there are huge opportunities for retailers to grow with partnerships aimed at establishing specific corners. These concepts are newly created and are expected to gain increasing successes through the strong competitive advantage of large retailers in terms of costs and customer experience.