Bahia Brazilian Cuisine. Tom Snyder 511 E. Beckwith (406) Missoula, MT

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1 Bahia Brazilian Cuisine Tom Snyder 511 E. Beckwith (406) Missoula, MT Dated: April 26, 2011

2 TABLE OF CONTENTS Executive Summary The Company: Bahia. 1 Business Description.. 1 Management.. 1 Vision Statement... 2 Mission Statement 2 Business Goals. 2 Key Personnel and Responsibilities. 3 Market Analysis. 3 Industry. 3 The Customer 5 Competition.. 6 The Marketing Plan. 8 Target Market Strategy. 8 Product Strategy. 8 Pricing Strategy 8 Distribution Strategy.. 8 Advertising and Promotion. 9 Sales Strategy. 10 Sales Forecast 11 Operations Plan. 11 Operations Plan 11 Ongoing Operations.. 11 Development Plan. 12 Development Strategy. 13 Critical Risks. 13 Market Interest and Growth Potential.. 13 New Entrance Into the Market Food Costs The Financial Plan. 14 Source and Uses of Funding.. 14 Cost and Gross Profit.. 15 Financial Assumptions Income Statement Cash Flow Statement.. 18 Balance Sheet Appendix.. 20 Exhibit 1, Maps of Brazil Exhibit 2, Sample Menu Exhibit 3, Equipment List

3 Exhibit 4, Revenue Year Exhibit 5, COGS Year Exhibit 6, Operating Expense Year Exhibit 7, Hourly Wage Year Exhibit 8, Revenue Year Exhibit 9, COGS Year Exhibit 10, Operating Expense Year Exhibit 11, Hourly Wage Year Exhibit 12, Revenue Year Exhibit 13, COGS Year Exhibit 14, Operating Expense Year Exhibit 15, Hourly Wage Year Exhibit 16, Income Statement Year Exhibit 17, Income Statement Year Exhibit 18, Income Statement Year Exhibit 19, Cash flow Statement Year Exhibit 20, Cash flow Statement Year Exhibit 21, Cash flow Statement Year Exhibit 22, Balance Sheet Year Exhibit 23, Owner, Founder, Tom Snyder s Resume.. 37 Exhibit 24, References... 38

4 Executive Summary Bahia (Buy- yah) is designed to take advantage of the exploding fast casual dining market. The restaurant industry is seeing a strong trend in customers wanting fresh ingredients prepared in a quick manner. Other fast casual dining options, such as Chipotle and Panda Express, cannot keep up with the growth in market demand. Bahia will fill this discrepancy by capturing the growing amount of customers that the industry cannot keep up with. Tom Snyder, a Finance student, came up with the idea after seeing a lack of fast casual dining options in Missoula, Montana. Over the last year and a half he has been experimenting with different cuisine options and surveying the Missoula population. He chose Brazilian cuisine because of the high desire for more rice and bean based dishes, as well as an inherent and indescribable fascination people have for the country of Brazil. Brazil s economy is exploding and they are starting to export their culture around the world. This interest people have in Brazil will only continue to grow with the World Cup in 2014 and Olympic Games in Bahia will enter the market as one of the first fast casual Brazilian style food options in the nation and the first in the state. The combination of delicious, fast, cheap, and fresh food with the growing excitement of Brazil will make it a prime eating destination. Bahia will be serving classic Brazilian favorites with an Americanized twist. Bahia will maintain the authenticity of the cuisine but give it a taste and feel that the American consumer will be more comfortable with. This will create a product at an affordable price, served incredibly fast, that is sure to delight your taste buds. The goal of the business is to have stable revenues of over $450,000 by the end of the third year. From that point, Bahia will look to starting other locations around the state and well- known test markets in the nation such as Columbus, Ohio. Bahia will then look to franchising their restaurants and to become a national player within the fast casual dining industry. Bahia plans to open in the spring of 2012.

5 Page 1 The Company: Bahia Brazilian Cuisine Business Description Bahia is designed to address the current trend toward fast casual dining. Fast Casual Dining is up a staggering 17% due to a strong movement in dining habits of the American consumer in the direction of healthier and fresher food served at a relatively fast pace (McLynn 2011). Bahia will be serving popular Brazilian dishes in a convenient and commercialized fashion. They will add value to the much- loved national cuisines by serving it quickly and at an affordable price. To see a sample of the menu refer to Exhibit 2. Bahia will be started in Missoula, Montana. It will be the first restaurant in Montana to introduce Brazilian style cuisine. Bahia will also be a leader in the nation in offering Brazilian food at a fast pace. It will differentiate itself from other Brazilian restaurants by offering simpler and faster dishes, rather then the classic sit- down Brazilian grills. Bahia will be entering the market in the spring of It will be taking advantage of the exploding Brazilian economy and Brazilian culture that is starting to export itself. Brazil is already starting to become the focus of people s attention as its economy grows and will only continue to capture people s imagination and interest with the upcoming World Cup in 2014 and Olympic Games in With this trend and recognition of Brazil, people will see Bahia as an exciting and relevant option for their dining needs. Management Tom Snyder will be the owner and manager of Bahia and will receive his Bachelor of Science in Business Finance in May of Tom plans to take a year to work at local established fast casual dining restaurant in town to perfect his skills in the industry. Tom will also travel to Brazil in the fall of 2011 to do extensive studying for his menu.

6 Page 2 Vision Statement To be a national leader in serving fresh and delicious food to its customers Bahia will offer fast and convenient options that fit the lifestyle of their customers. Mission Statement The Mission of Bahia is to give its customers the best and freshest food possible at a price and convenience that fits into their busy lives. Bahia will have the highest dedication to customer satisfaction by providing a friendly, fun, creative, and warm dining environment. Bahia will strive to meet the demand of the customer and listen to their wants and needs. Bahia will constantly attempt to make operations more efficient so it can keep prices reasonable and make service faster. Bahia will always keep employees its main priority, making sure they are treated with the utmost respect. This will in turn create employees who treat customers with the same respect and care. Business Goals Year 1 Open the first restaurant in Missoula, Montana in the downtown area. Bahia plans to reach gross revenue of $230,000. For employees, training will emphasize efficiency and knowledge in the kitchen, quality service to customers, and helping to run the business. Year 2 Bahia plans to continue operations in Missoula, Montana while aggressively trying to gain new customers and maintain current customers. By year two Bahia will grow revenue to almost $390,000. Year 3 After two years of successfully operating at the first location, Bahia will look to open a second location outside of Missoula, Montana. This will be in a neighboring city where there will still be some brand recognition. Sales at their first location will be stable at this point at over $450,000.

7 Page 3 Key Personnel and Responsibilities Tom Snyder, Owner and Founder of Bahia will be responsible for: Day to day operations, Ordering inventory, Scheduling, Payroll, Hire and train employees, Public relations, Advertising, And managing the accounting books. Market Analysis Industry People visiting the leading fast casual restaurant chains over the last three years has grown around 17%, while the rest of the industry has dealt with the slowest traffic in nearly a decade (McLynn 2011). Not only has this segment been growing at a significant rate but also the consumer demand is exceeding the unit growth of the fast casual chains by almost 5% according to the NPD Group (McLynn 2011). NPD Crest, which continually tracks consumer usage of food service outlets, showed that the leading fast casual restaurant chains, like Chipotle, Five Guys Burgers and Fries, Noodles & Company, and Panera Bread Company, were up +6% from last year ended December 31st. When we compare this number to the - 1 % decline in the total industry visits over the same period we see that this is a significant amount (NPD Group 2011). According to Bonnie Riggs, restaurant industry analyst at NPD, If we were just looking at the last couple of years, in 2009, when fast casual was up 5 percent, fast food was down 2 percent, and casual dining was down 4 percent. Then in 2010, when fast casual was up 5 percent, fast food was still down 1 percent and casual dining was down 2 percent. Fast casual growth slowed because they curtailed unit expansion somewhat. We can see below the change in traffic over the last three years comparing fast casual restaurants with quick service restaurants (QSR), and total restaurants.

8 Page 4 Figure 1: Fast Casual Traffic Fast Casual Restaurants Change in Traf6ic 7% 6% 4% Fast Casual Total QSR Total Restaurant 1% 0% 0% % - 3% - 3% (McLynn 2011) Riggs goes on to say, Fast casual restaurants have done an excellent job of satisfying their customers needs for quality and service and have built strong customer loyalty as a result. Furthermore she states, The attributes that define the fast casual concept fresh, food quality, and service are the reason why customers give them their highest satisfaction ratings. According to the NPD report, A Look into the Future of Foodservice, the fast casual segment will continue to lead the restaurant industry in terms of growth throughout the next 10 years. Based on population growth and trend momentum, the restaurant industry overall is going to grow less than 1 percent, while fast casual is forecasted to be the strongest growing segment. Currently, a broad range of consumer groups support fast casual growth, but there are other things coming onto the scene that will provide additional support. When we look at customer satisfaction data, consumers rate different attributes on a 5- point scale fast casual is considerably higher than what we see for fast food. When it comes to flavor, taste and quality, they come out way ahead of fast food and casual dining in some instances (Fast Casual 2011).

9 Page 5 Riggs said fast casual diners will continue to cross all age groups, it s just that the older ones will hold a higher share of the market than they currently do, she said. Incremental traffic for fast casual will source to teens and young adults particularly those 10 to 30 years of age (Generation Z), and to a lesser extent, those 55 years plus. By 2019, Generation Z will be the single largest population group at 90 million strong, and that will provide a lot of support for fast casual. As long as the segment stays relevant, which it has, there isn t any reason that it shouldn t continue on this strong growth path. The Customer The immediate market will be the Missoula zip codes of 59801, 59802, and This comprises a population of 65,599 people, which is growing at a rate close to 1%. The median age of this population is 32.6 years old. The racial profile is 91.6% white, 2.9% Native American, 1.5% Asian and the remaining 4% being other (ERSI 2011). Being a food service provider, Bahia wants to target these people who spend money on food away from home. In 2010, this population spent $67,734,242 on food away from home, an average spent of $2, per person, per year (ERSI 2011). With a per capita income of $21,905 we have the potential of capturing 11.28% of their income. More specifically, the top five target segments (as compiled by esri.com) of this market are 31.2% college towns, 13.3% metropolitans, 6.5% old and newcomers, 5.9% great expectations, and 5.2% midland crowd (ERSI 2011). The top two segments compile 44.5% of the market and are the ones Bahia is going to key in on as their main target segments. The average age of a college town is 24.4 years old and the majority fall between years old, this captures Generation Z, which is the dominant fast causal customer (ERSI 2011). Convenience is what dictates their food choices and because of their busy lifestyles they typically will go to a restaurant and take their food to go, or eat at fast food restaurants. The metropolitan is typically a little older with an average age of 37.6 years (ERSI 2011). They are also involved in an active and busy lifestyle and like to go out to eat for social and practical reasons. Both target segments are very involved in outdoor activities like skiing, kayaking, backpacking, and hiking. They both actively volunteer for

10 Page 6 community projects and political parties. They like to listen to music and go to concerts as much as possible. Both segments are connected to the world through their laptops and the Internet, doing much of their shopping and research online. Competition The fast casual dining segment is a fast growing portion of the food industry. There have been very successful new restaurants nationally and locally. However, there are still a limited number of dining opportunities for the growing market demand. The key to Bahia s success is differentiating itself and its product based on a number of attributes, including quality of food, branding, originality, and atmosphere. Figure 2 shows three of Bahia s primary competitors and highlights how Bahia compares to them. Figure 2: The Competitive Matrix Company El Diablo Staggering Ox Doc s Bahia Sandwiches Product Burritos and Sandwiches Sandwiches Brazilian Food Tacos Product Price $ $ $ $ Product All fresh food Fresh and Fresh and All fresh food Quality frozen frozen Ordering 3min 6min 4min 2min Time Originality No Yes No Yes Packaging Tin foil Plastic bag Tin foil Box with logo Marketing advertising Valpack and Boga Valpack N/A Valpack, radio, and guerrilla Distribution Store Store Store Store Atmosphere Location Clean and Simple Beckwith & Higgins Eclectic Clean and Cottage 39 th & Russell Higgins & Front Clean and Modern/rustic N/A

11 Page 7 The highlighted competitors have high quality products and high traffic locations. The factors in the matrix were chosen because they are the primary areas of competition within the fast casual dinning industry. These companies first compete on product quality but customers do differentiate based on price and name recognition. For the Missoula demographic these companies have become important players within the fast casual dining industry. El Diablo Mike Iasmen wanted a burrito shop in town that served all fresh ingredients so he started El Diablo five years ago. It serves the community and is located near The University of Montana. They were voted best burrito shop in Missoula in They have not attempted to expand their locations and are not planning on aggressively growing. Staggering Ox Staggering Ox serves a deli style sandwich. The unique factor is that the bread is baked in a coffee can and then hallowed out in the middle, then the sandwich fillings go inside. They have a large menu of sandwiches, soups, and salads. They don t prepare all of their food fresh and have not marketed their product aggressively (Staggering Ox 2011). Doc s Sandwiches Doc's Gourmet Sandwich Shop is located in downtown Missoula on Higgins Street. It is the creation of Dave O. Conrad and his wife, who started the shop 18 years ago (Doc's Sandwich 2011). They serve gourmet sandwiches, homemade soups and salads. The sandwiches they serve are standard classics and do not have a lot of creativity or differentiation.

12 Page 8 Marketing Plan Target Market Strategy Those who traditionally visit fast food restaurants are now eating at a healthier choice of fast casual and those who normally visit causal dining restaurants are now visiting fast casual restaurants to save money and time. People are now going to a restaurant that serves fresher ingredients at a fast pace but still offers it at a reasonable price. Bahia offers this meal and will capture this growing demographic. Product Strategy Bahia will offer all fresh ingredients. It will have brand recognition re- enforced from the moment you walk into the door to the to- go containers that you carry out. It will offer food that will challenge the customer s concept of fast food. The in house dining atmosphere will attract customers with a clean modern/rustic feel inspired by Brazilian life. Bahia will compete with other fast casual restaurants in town but will offer an originality and differentiation that is unsurpassed. Pricing Strategy Bahia will not only give customers a taste that they will come back for but a price they love. It is priced in line with the fast casual market, which averages an $8.50 ticket, but also offers simpler meals for a cheaper price (Fast Casual 2011). This is above the price of a fast food restaurant but is priced at a premium because of the fresh ingredients. A single dish will retail at $7.50 with simpler dishes, of rice and beans, set at a cheaper price of $3.50. Every meal will cost under $2.50 to produce so at least a 67% gross profit margin will be acquired on most meals. They are priced in line with the market demand approach of $8.50, which includes sides and a drink. Side orders will be an extra $1.00 that consists of traditional Brazilian coconut or coffee cookies. Distribution Strategy Bahia will enter the market through their retail location. Customers will have to come to the brick and mortar location to receive their food. It will be located in a central location that is accessible to customers

13 Page 9 working in the Missoula downtown locations as well as the University of Montana and surrounding high schools. This will provide a strong base of working class and student customers. Bahia will capture the market of full time workers on their lunch break as well as the lunch times provided by the educational institutions. Furthermore, when the full time workers get off work they will look to Bahia as a viable option for dinner instead of cooking for the family after a long day of work or stopping at the usual fast food restaurant like McDonalds. As Bahia grows it will provide more locations. These extended locations will provide an opportunity for customers that work and live in locations distant from the downtown location and are not willing to make the commute. From there Bahia will enter test markets in the mid- west. If successful, Bahia will begin to franchise and create distribution nationwide. Advertising and Promotion Bahia will aggressively advertise and work to get their name out to the community in the first two years. Bahia will target customers in the following three ways: 1. Public relations efforts and donations, 2. Coupons, 3. Website and Internet. Public Relations Efforts and Donations Bahia will take almost all opportunities to donate food and services for special events and non- profit organizations. The target segment actively volunteers for community projects and political parties. By donating to these events Bahia will be able to gain the customers support on a more emotional level. Not only will the volunteers, who are a large part of Bahia s target customer, feel an appreciation for Bahia but also it will help create name recognition to everyone attending the event. Missoula is a very loyal community and appreciates and will reciprocate when people give to them. In order to reach its target customer Bahia will donate to musical events, political parties, and outdoor activities. They will also have a donation day every Tuesday were 5% of sales go toward a local charity or cause. This will still allow for high profit

14 Page 10 margins but will increase sales significantly by bringing the community in for a cause they support. Coupons In the first year of business, when gaining new customers is very important, Bahia will participate in coupon options and other similar incentives. Bahia will have a coupon in Valpak, Boga, and others. This will provide advertising to a new audience and help introduce people to Bahia. It will not be making the 67% gross margin on these coupons but will still be selling at a markup well above cost. Therefore, Bahia will still be making small margins on the coupons but will in turn be gaining a large new audience that will then become recurring customers. After one year Bahia will no longer participate in coupons because at that point it will have introduced their product to a large customer base and will not need to lower profit margins in order to gain new customers. Website and Internet Many of Bahia s target customer segments spend time surfing the web or using social media. Specifically social media will be the cheapest (free) way of connecting with the customer. Bahia will utilize all social media sites and constantly try to attract new customers or stay connected with current ones. Bahia will utilize a simple website with location and contact information, hours of operation, and full menu. This will help gain out- of- state customers while these customers will be in town for a short period and will provide only single or multiple sales over a short period. The website will have key words that will help it come to the top of the list with people type in Missoula dining to Google, Bing, Yahoo, or other search engines. This will include simple ads by these search engines. Also, Bahia will have a Facebook page, Blog, Twitter, and other Internet media sites that will help online searches place Bahia as a top place to eat in Missoula. Many of these strategies will be free or charged based on the number of people who visit the site. Sales Strategy The founder, Tom Snyder, will work with local advertisers such as the Missoulian, Independent, and radio stations, to operate the sales strategy. Tom will organize and operate the majority of sales, which will

15 Page 11 help eliminate the need of hiring and paying a director of marketing. Therefore, sales expenses will be to limited to the occasional use of independent advertising firms for certain marketing projects. Sales Forecast Bahia will gain a rapid customer base in the first two years. In order to help facilitate this growth they will encompass the Missoula market with advertising and public relations. (Refer to Exhibit 16,17, and 18) In the first year the company projects sales of around $230,000 and by year 3 it will grow close to $470,000. This will be facilitated in growth from 125 meals purchased a day to 210. Operations Plan Operations Strategy All raw materials and inputs for the food will be outsourced to Sysco and B&R (Bakery and Restaurant) Supply s. They will provide Bahia with all the meat, vegetables, spices, and other produce needed to create the menu. Whenever local produce is available from these suppliers it will be used in the menu to help create a local and sustainable vibe. Once the raw materials are shipped to Bahia s location in Missoula they will be prepped and prepared by the workers. Whenever possible they will not freeze the food so it is as fresh as possible. This will help give Bahia a competitive advantage of giving the customer the freshest food achievable. Ongoing Operations In order to have fresh food daily there will need to be a 2-3 hours of time spent in the morning prepping the food and then preparing it for the customer before opening. Store hours will be from 11am to 9pm in order to accommodate the lunch and dinner customer. There will be a shift manager that will come in at am- 3:30pm every day and start prepping and cutting all the different meats that will need to be used during the day. They will also start cooking items such as

16 Page 12 stews that will need multiple hours to cook before opening. The shift manager will be responsible for making sure that the line is filled with food and that all cooking is done in order to keep up with customer demand. They are also the person that will make sure that all other employees are acting in accordance to protocol and staying on task. Another shift manager will relieve them at 3:30pm- 10pm and will take over their task. The next employee to come to work will arrive at 9:00am- 3pm to start prepping more basic produce items. This will include starting the rice in the rice cooker and prepping many of the vegetables. They will be responsible for all other prepping that is not taken care of by the shift manager. Once the store opens at 11am they will be responsible for serving customers and making sure basic prep work is done. At 3:00pm- pm someone will come in and take over their responsibilities for the rest of the night. The third employee will arrive at 10am- 4pm and start setting up the store for opening. This will include putting down chairs, stocking drinks, and setting up the line where the food will be served. Once the store opens they will also be responsible for serving customers and basic prep work. They will be relieved from someone working a shift from 4pm- 10pm. All employees will also need to keep the front of the restaurant clean, the front stocked, tables cleaned, floors cleaned, dishes done, utensils stocked, and drink lids/straws stocked. If needed, due to high business, a fourth person will arrive at 12pm- 8pm, the busiest hours of operation, and help with all activities done by the non- shift manager employees. Development Plan Bahia is in the process of creating a strong Brazilian menu to enter the market with. The goal is to have a simple menu of 6-8 main dishes served over a bed of rice, 1 soup/stew, and 1-2 desserts. Bahia is well on its way to fulfilling its menu requirements yet is still in the process of testing recipes and re- working ideas. The tentative date for a completed menu will be October of 2011.

17 Page 13 Development Strategy The development strategy is to start marketing the product well before the opening of the store. This will be done through social media sites, stickers, bumper stickers, and word of mouth. From there Bahia will take initial investing of $105,000 and secure additional investing if needed. (Refer to Exhibit 7) Employee wages will start at $7.50 and as a shift manger $8.00. These are at a slight premium above minimum wage in order to attract a higher end employee so Bahia is willing to pay the premium. This higher end employee will make the customers feel more welcomed and also make them feel that Bahia is serving better food then the traditional fast food restaurant. There will be a shift manger on shift for 14.5 hours a day and he/she will be getting paid $8.00 an hour. The 1 st shift will be there 13 hours, 2 nd shift 12 hours, a possible third shift (which is showed in the calculations to show the maximum possible amount paid to employees) 8 hours a day; they will all receive $7.50 an hour. After one year of employment each employee will receive an increase in their hourly paycheck, this will show an increased employee wage increase from year 1 to year 2. Although there is a high employee turnover in the restaurant industry, we will assume all employees stay and each receive a wage in order to have conservative estimates. Critical Risks Market Interest and Growth Potential Although there is strong market interest in the fast casual dining sector and this growth is projected to continually grow in the next ten years there is a chance that forecasts could change. If consumers have a change in taste and the need of a restaurant serving fresh food in a fast manner decreases then sales would dramatically drop and large growth over the first three years would not be possible. In this case Bahia would quickly change the business model in order to accompany the changing attitudes of their customers. Since Bahia is the first Brazilian restaurant to enter the Missoula location market, interest is harder to predict. It has received a lot of positive feedback about the food and will continue to test the market moving

18 Page 14 forward, changing menu items along the way to keep in line with the market interest. New Entrance Into the Market Since Bahia is one of the first, if not the first, Brazilian style restaurant to enter into the fast casual dining, others could follow. In this case Bahia would not only have to differentiate itself from other fast casual restaurants but from other Brazilian style locations. In this case Bahia would rely on strong brand name recognition and allow for a larger advertising budget. Food Costs A very real risk is rising food prices which affect the cost of goods sold. Foods cost are at almost 8% inflation and some proteins are into the double digits (Davis 2011). These represent some of the highest food prices seen in recent history. With fuel prices rising even more into the summer and unexpected freezes in New Mexico and other major produce producing states these numbers are only expected to rise. In this case profit margins will go down unless prices are increased. Bahia will use price increase as a last option if they are affected by food cost increases. They will instead focus on operating efficiencies in order to drive down costs. They will continue to use fresh ingredients and quality food. Financials Bahia generates revenue by selling Brazilian style dishes. They will augment this revenue with fountain drink sales, classic Brazilian cookies, and apparel. Sources and Uses of Funding Initial funding for Bahia Brazilian Cuisine will be through family members and outside investors. Original funding will cover the initial costs of equipment, leasehold improvement, and starting inventory. An Initial itemized projection of equipment needed is shown in Exhibit 3. From that point forward costs will be covered by operations and sales. This will include inventory purchases and new equipment needed.

19 Page 15 As Bahia expands in year 3 they will look to finance expansion through internal equity first. If needed at that point they will look for outside investors or possible bank loans. Cost and Gross Margin Bahia s cost estimates are based on these historically high food costs. All food costs will be around $2.50 while a meal price is $7.50. These figures give a gross margin of 67.45%. Shown bellow is an example of a meal cost. Figure 3: Cost of Coconut Chicken Coconut Chicken Cost Item Amount (serving 4) Cost (4 servings) 1 Serving Cumin 1 tsp $ $ Cayenne 1 tsp $ $ Turmeric 1 tsp $ $ Coriander 1 tsp $ $ Ginger 1 tbl $ $ Olive Oil 2 tbl $ $ Chicken 4 breasts $ $ Coconut Milk 14 oz $ $ Onion 1 $ $ Jalapeño 2 $ $ Garlic Clove 2 $ $ Tomatoes 3 $ $ Parsley 1 bunch $ $ Rice 4 cups cooked $ $ Total $ $ Price $7.50 Gross Margin 67.45%

20 Page 16 Financial Assumptions Initial costs will not exceed $105,000, which is the maximum equity available. Sales Volume at Bahia is based on information obtained through observation, work experience, and surveys of restaurants. Leasehold improvements are not above $23,000. An established fast casual restaurant in Missoula averages 200 tickets a day or more. o This is shown by our projections at year 3. Operations costs show rent of $1,600 a month, which is average for a 1,600 square foot commercial space. o About $10 per square foot for retail rental Bahia is able to grow unit sales from 125 to 175 to 210 in the first three years. o These are the unit sales in summer months. o Seasonality is accounted for by placing lower % s of sales in slower months accordingly. Payroll taxes and other employee expenses do not exceed 10%. UI Taxes will be $800 annually. Unemployment and Insurance will be $90 Monthly. Current inventory will be offset by accounts payable.

21 Page 17 Income Statements (3 Years) Income Statement (3 Years) Year 1 Year 2 Year 3 Total Revenues $230, $389, $467, Total COGS $75, $128, $153, Gross Profit $155, $261, $313, Operating Expenses Store Rent $16, $19, $19, Hourly Employees $97, $138, $145, Marketing/advertising $5, $6, $6, Utilities $3, $3, $3, Laundry $ $1, $1, UI Taxes $ $ $ Unemployment and Insurance $ $1, $1, Depreciation $4, $5, $5, Miscellaneous $1, $2, $2, Total Operating Expense $129, $177, $184, Earnings From Operations $26, $84, $129, Net Earnings $26, $84, $129,352.46

22 Page 18 Cash Flow Statement (3 Years) Cash Flow Statement (3 Years) Year 1 Year 2 Year 3 Operating Activities Net Earnings $26, $84, $129, Depreciation $4, $5, $5, Working Capital Changes Net Cash Provided/(Used) by Operating Activities $30, $89, $134, Investing Activities Property and Equipment $(55,672.15) $(10,000.00) $(90,000.00) Lease Improvements $(23,000.00) $- $- Net Cash Used in Investing Activities $(78,672.15) $(10,000.00) $(90,000.00) Financing Activities Capital Investments $105, $- $- Net Cash Provided/(Used) by Financing $105, $- $- Increase/(Decrease) in Cash $56, $79, $44, Cash at Beginning of Period $80, $56, Cash at End of Period $56, $136, $180,643.71

23 Page 19 Balance Sheet Year Ended Feb 28 (3 Year) Balance Sheet at Ended December 31 Year 1 Year 2 Year 3 Assets Current Assets Cash $56,662 $136,291 $180,644 Inventory $6,000 $6,000 $6,000 Total Current Assets $62,662 $142,291 $186,644 Long Term Assets Gross Fixed Assets $55,672 $65,672 $155,672 Leasehold improvements $23,000 $23,000 $23,000 Accumulated Depreciation $4,167 $9,167 $14,167 Net Fixed Assets $74,505 $79,505 $164,505 Total Assets $137,168 $221,797 $351,149 Liabilities Accounts Payable $6,000 $6,000 $6,000 Total Liabilities $6,000 $6,000 $6,000 Equity Paid $105,000 $105,000 $105,000 Retained Earnings $26,168 $110,797 $240,149 Total Equity $131,168 $215,797 $345,149 Total Liabilities & Stockholders Equity $137,168 $221,797 $351,149

24 Page 20 Appendix Exhibit 1, Maps of Brazil

25 Page 21 Exhibit 2, Sample Menu All orders come with Brown or White Rice All orders come with Brazilian Cheese Roll Pao de Queijo #1 Brazilian Black Beans & Chicken [Chicken, red & green onion, current & guava jelly, spices] #2 Brazilian Chicken with Coconut Milk [Chicken, jalapeno pepper, spices, tomatoes, coconut, ginger] #3 Brazilian Black Beans & Tomato Salsa [Spices, onion, peppers, tomatoes Vege lovers choice] #4 Brazilian Beef & Campanha Salad [Beef flank, tomato, green onion, peppers, cilantro] #5 Brazilian Shrimp & Rice Vatapa [Shrimp, cilantro, peas, onion] #6 Brazilian Yucca Root/Vegetable Feijoada [Peppers, lime, tomato, black bean, spices, Roasted Yucca Root] #7 Brazilian National Stew Feijoada [Many spices, sausage, pork, beef vegetables] - Dessert- Try delicious Coffee or Coconut cookie or both. - Try Molho sauce. - Try Brazilian lemonade

26 Page 22 Exhibit 3, Equipment List Item Quantity Unit Price Total Swing Door Refrigerator 2 $2, $5, Swing Door Freezer 1 $4, $4, Vegetable Slicer/Chopper 1 $ $ Color Cutting Boards 6 $25.79 $ Measuring Pitchers 3 $13.71 $41.13 Measuring Spoons 3 $6.15 $18.45 Measuring Cups 3 $2.00 $6.00 Neoprene gloves 1 $21.75 $21.75 Garlic Press 1 $4.09 $4.09 Kitchen Shears 1 $13.33 $13.33 Tomato Stem Corer 1 $4.77 $4.77 Knife Sharpener 1 $22.89 $ " Chef's knife 2 $25.79 $ " Granton Edge Santoku 2 $24.89 $ " Stiff Boning 2 $14.64 $29.28 Maple Top Worktable 36" 1 $ $ Maple Top Worktable 96" 1 $ $ Utility Carts 2 $ $ Heavy Duty Post Shelving 3 $ $ Fry Pans 3 $68.49 $ Stock Pots 16 Qt. 2 $ $ Stock Pots 20 Qt. 2 $ $ Tongs 5 $3.59 $17.95 Steel Spoons 12 $2.24 $26.88 Steel Spoons Slotted 4 $7.07 $28.28 Wire Whisks 2 $11.67 $23.34 Sheet Pans 8 $10.99 $87.92 Steam table Pans Half- size 4 $41.89 $ Steam table Pans Third- size 15 $20.24 $ Hot Food Table 2 $2, $4, Kettle 1 $ $ Rice Cooker 2 $ $ Gas Range 1 $3, $3, Backsplash Mount 1 $ $ Pot and Dish Sinks 1 $1, $1, Trash Cans 4 $85.64 $ Mop Bucket 1 $53.99 $53.99 Mop 1 $7.16 $7.16 Broom 2 $9.99 $19.98

27 Page 23 Dust Pan 2 $3.99 $7.98 Neon Open Sign 1 $ $ Apron 24 $4.41 $ Napkin Dispenser 1 $31.99 $31.99 Straw Dispenser 1 $53.99 $53.99 Tables 10 $84.50 $ Chairs 20 $ $3, High Chairs 2 $86.49 $ Bank Bags 1 $22.89 $22.89 Hood System $25, $25, POS System $6, $6, Total $55,672.15

28 Page 24 Exhibit 4, Revenue Year 1 Revenue Worksheet Product Price Units Sold/ Day Total Revenue Average meal $ $ Total $ Exhibit 5, COGS Year 1 Cost of Goods Worksheet Product Price Gross Margin Revenue COGS Average Meal $ % $ Total Revenue $ COGS Earnings after food costs/ day $ Gross Profit Margin 67.45% Exhibit 6, Operating Expenses Year 1 Operating Expense Worksheet Expense Weekly Monthly Yearly Total Store Rent $1,600 $19,200 Hourly Employees $2,701 $129,650 Marketing/advertising $500 $6,000 Utilities $300 $3,600 Laundry $100 $1,200 UI Tax $800 $800 Unemployment Insurance $90 $1,080 Depreciation $417 $5,000 Miscellaneous $2,000 $2,000 Totals $168,530

29 Page 25 Exhibit 7, Hourly Wages Year 1 Store Hours Hourly employee Wages Mon Tues Wed Thurs Fri Sat Sun Total Wage Cost 11:00-11:00-11:00-11:00-11:00-11:00-11:00-9:00 9:00 9:00 9:00 9:00 9:00 7:00 Hours Open Shift Manager 1-3:00-3:00-3:00-3:00-3:00-3:00-2:00 Shift Manager 2 Shift 1 Shift 2 Shift 3 Shift 4 Shift 5 3:00-9:00-3:30 3: :00 4:00-12:00-3:00-9:00-3:30 3: :00 4:00-12:00-3:00-9:00-3:30 3: :00 4:00-12:00-3:00-9:00-3:30 3: :00 4:00-12:00-3:00-9:00-3:30 3: :00 4:00-12:00-3:00-9:00-3:30 3: :00 4:00-12:00-2:00-9:00-2:30 2: :00 3:00-12:00-6:00 Shift Manager 1 hours $8.00 $ Shift Manager 2 hours $8.00 $ Shift 1 hours $7.50 $ Shift 2 hours $7.50 $ Shift 3 hours $7.50 $ Shift 4 hours $7.50 $ Shift 5 hours $7.50 $ Total Shift Hours $2, Payroll Taxes 10% $2,701.05

30 Page 26 Exhibit 8, Revenue Year 2 Revenue Worksheet Product Price Units Sold/ Day Total Revenue Average meal $ $1, Total $1, Exhibit 9, COGS Year 2 Cost of Goods Worksheet Product Price Gross Margin Revenue COGS Average Meal $ % $1, Total Revenue $1, COGS Earnings after food costs/ day $ Gross Profit Margin 67.45% Exhibit 10, Operating Expense Year 2 Operating Expense Worksheet Expense Weekly Monthly Yearly Total Store Rent $1,600 $19,200 Hourly Employees $2,878 $138,125 Marketing/advertising $500 $6,000 Utilities $500 $6,000 Laundry $100 $1,200 UI Tax $800 $800 Unemployment Insurance $90 $1,080 Depreciation $417 $5,000 Miscellaneous $2,000 $2,000 Totals $179,405

31 Page 27 Exhibit 11, Hourly Wages Year 2 Store Hours Hourly employee Wages Mon Tues Wed Thurs Fri Sat Sun Total Wage Cost 11:00-11:00-11:00-11:00-11:00-11:00-11:00-9:00 9:00 9:00 9:00 9:00 9:00 7:00 Hours Open Shift Manager 1 Shift Manager 2 Shift 1 Shift 2 Shift 3 Shift 4 Shift 5-3:00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 2:00-9:00-2:30 2: :00 3:00-12:00-6:00 Shift Manager 1 hours $8.50 $ Shift Manager 2 hours $8.50 $ Shift 1 hours $8.00 $ Shift 2 hours $8.00 $ Shift 3 hours $8.00 $ Shift 4 hours $8.00 $ Shift 5 hours $8.00 $ Total Shift Hours $2, Payroll Taxes 10% $2,877.60

32 Page 28 Exhibit 12, Revenue Year 3 Revenue Worksheet Product Price Units Sold/ Day Total Revenue Average meal $ $1, Total $1, Exhibit 13, COGS Year 3 Cost of Goods Worksheet Product Price Gross Margin Revenue COGS Average Meal $ % $1, Total Revenue $1, COGS Earnings after food costs/ day $1, Gross Profit Margin 67.45% Exhibit 14, Operating Expense Year 3 Operating Expense Worksheet Expense Weekly Monthly Yearly Total Store Rent $1,600 $19,200 Hourly Employees $3,036 $145,728 Marketing/advertising $500 $6,000 Utilities $300 $3,600 Laundry $100 $1,200 UI Tax $800 $800 Unemployment Insurance $90 $1,080 Depreciation $417 $5,000 Miscellaneous $2,000 $2,000 Totals $184,608

33 Page 29 Exhibit 15, Hourly Wages Year 3 Store Hours Hourly employee Wages Mon Tues Wed Thurs Fri Sat Sun Total Wage Cost 11:00-11:00-11:00-11:00-11:00-11:00-11:00-9:00 9:00 9:00 9:00 9:00 9:00 7:00 Hours Open Shift Manager 1 Shift Manager 2 Shift 1 Shift 2 Shift 3 Shift 4 Shift 5-3:00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 3:00-9:00-3:30 3: :00 4:00-12: :00 2:00-9:00-2:30 2: :00 3:00-12:00-6:00 Shift Manager 1 hours $10.00 $ Shift Manager 2 hours $10.00 $ Shift 1 hours $8.00 $ Shift 2 hours $8.00 $ Shift 3 hours $8.00 $ Shift 4 hours $8.00 $ Shift 5 hours $8.00 $ Total Shift Hours $2, Payroll Taxes 10% $3,036.00

34 Page 30 Exhibit 16, Income Statement Year 1 Year 1 Income Statement Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Seasonality Adjustments 60% 60% 60% 80% 90% 100% 100% 100% 100% 90% 80% 70% Total Revenues $22,500 $25,313 $28,125 $28,125 $28,125 $28,125 $25,313 $22,500 $22,500 $230,625 Total COGS $7,325 $8,240 $9,156 $9,156 $9,156 $9,156 $8,240 $7,325 $7,325 $75,076 Gross Profit $15,176 $17,072 $18,969 $18,969 $18,969 $18,969 $17,072 $15,176 $15,176 $155,549 Operating Expenses Store Rent $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $16,000 Hourly Employees $10,804 $10,804 $10,804 $10,804 $10,804 $10,804 $10,804 $10,804 $10,804 $97,238 Marketing/advertising $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $5,000 Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $3,000 Laundry $100 $100 $100 $100 $100 $100 $100 $100 $100 $900 UI Tax $67 $67 $67 $67 $67 $67 $67 $67 $67 $600 Unemployment Insurance $90 $90 $90 $90 $90 $90 $90 $90 $90 $810 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $4,167 Miscellaneous $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $1,667 Total Operating Expense $2,983 $14,044 $14,044 $14,044 $14,044 $14,044 $14,044 $14,044 $14,044 $14,044 $129,381 Earnings From Operations $(2,983) $1,131 $3,028 $4,925 $4,925 $4,925 $4,925 $3,028 $1,131 $1,131 $26,168 Net Earnings $(2,983) $1,131 $3,028 $4,925 $4,925 $4,925 $4,925 $3,028 $1,131 $1,131 $26,168

35 Page 31 Exhibit 17, Income Statement Year 2 Year 2 Income Statement Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Seasonality Adjustments 60% 60% 60% 80% 90% 100% 100% 100% 100% 90% 80% 70% Total Revenues $23,625 $23,625 $23,625 $31,500 $35,438 $39,375 $39,375 $39,375 $39,375 $35,438 $31,500 $27,563 $389,813 Total COGS $7,691 $7,691 $7,691 $10,254 $11,536 $12,818 $12,818 $12,818 $12,818 $11,536 $10,254 $10,254 $128,179 Gross Profit $15,934 $15,934 $15,934 $21,246 $23,901 $26,557 $26,557 $26,557 $26,557 $23,901 $21,246 $17,308 $261,634 Operating Expenses Store Rent $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $19,200 Hourly Employees $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $11,510 $138,125 Marketing/advertising $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000 Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $3,600 Laundry $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $1,200 UI Tax $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $800 Unemployment Insurance $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $1,080 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $5,000 Miscellaneous $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $2,000 Total Operating Expense $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $14,750 $177,005 Earnings From Operations $1,184 $1,184 $1,184 $6,495 $9,151 $11,807 $11,807 $11,807 $11,807 $9,151 $6,495 $2,558 $84,629 Net Earnings $1,184 $1,184 $1,184 $6,495 $9,151 $11,807 $11,807 $11,807 $11,807 $9,151 $6,495 $2,558 $84,629

36 Page 32 Exhibit 18, Income Statement Year 3 Income Statement Year 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Seasonality Adjustments 60% 60% 60% 80% 90% 100% 100% 100% 100% 90% 80% 70% Total Revenues $28,350 $28,350 $28,350 $37,800 $42,525 $47,250 $47,250 $47,250 $47,250 $42,525 $37,800 $33,075 $467,775 Total COGS $9,229 $9,229 $9,229 $12,305 $13,843 $15,381 $15,381 $15,381 $15,381 $13,843 $12,305 $12,305 $153,815 Gross Profit $19,121 $19,121 $19,121 $25,495 $28,682 $31,869 $31,869 $31,869 $31,869 $28,682 $25,495 $20,770 $313,961 Operating Expenses Store Rent $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $19,200 Hourly Employees $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $12,144 $145,728 Marketing/advertising $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000 Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $3,600 Laundry $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $1,200 UI Tax $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $67 $800 Unemployment Insurance $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $90 $1,080 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $5,000 Miscellaneous $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $2,000 Total Operating Expense $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $15,384 $184,608 Earnings From Operations $3,737 $3,737 $3,737 $10,111 $13,298 $16,485 $16,485 $16,485 $16,485 $13,298 $10,111 $5,386 $129,352 Net Earnings $3,737 $3,737 $3,737 $10,111 $13,298 $16,485 $16,485 $16,485 $16,485 $13,298 $10,111 $5,386 $129,352

37 Page 33 Exhibit 19, Cash Flow Statement Year 1 Bahia Cash Flow Statement Year 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Operating Activities Net Earnings $(2,983) $1,131 $3,028 $4,925 $4,925 $4,925 $4,925 $3,028 $1,131 $1,131 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 Working Capital Changes Net Cash Provided/(Used) by Operating Activities $(2,567) $1,548 $3,445 $5,342 $5,342 $5,342 $5,342 $3,445 $1,548 $1,548 Investing Activities Property and Equipment $(55,672) Lease Improvements $(23,000) Net Cash Used in Investing Activities $(78,672) $- $- $- $- $- $- $- $- $- Financing Activities Capital Investments $105,000 Net Cash Provided/(Used) by Financing $105,000 $- $- $- $- $- $- $- $- $- Increase/(Decrease) in Cash $23,761 $1,548 $3,445 $5,342 $5,342 $5,342 $5,342 $3,445 $1,548 $1,548 Cash at Beginning of Period $- $23,761 $25,309 $28,754 $34,096 $39,438 $44,780 $50,121 $53,566 $55,114 Cash at End of Period $23,761 $25,309 $28,754 $34,096 $39,438 $44,780 $50,121 $53,566 $55,114 $56,662

38 Page 34 Exhibit 20, Cash Flow Statement Year 2 Bahia Cash Flow Statement Year 2 Operating Activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Earnings $1,184 $1,184 $1,184 $6,495 $9,151 $11,807 $11,807 $11,807 $11,807 $9,151 $6,495 $2,558 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 Working Capital Changes Net Cash Provided/(Used) by Operating Activities $1,601 $1,601 $1,601 $6,912 $9,568 $12,223 $12,223 $12,223 $12,223 $9,568 $6,912 $2,974 Investing Activities Property and Equipment $(10,000) Lease Improvements $- Net Cash Used in Investing Activities $(10,000) $- $- $- $- $- $- $- $- $- $- $- Financing Activities Capital Investments $- Net Cash Provided/(Used) by Financing $- $- $- $- $- $- $- $- $- $- $- $- Increase/(Decrease) in Cash $(8,399) $1,601 $1,601 $6,912 $9,568 $12,223 $12,223 $12,223 $12,223 $9,568 $6,912 $2,974 Cash at Beginning of Period $56,662 $48,263 $49,863 $51,464 $58,376 $67,944 $80,167 $92,390 $104,614 $116,837 $126,405 $133,317 Cash at End of Period $48,263 $49,863 $51,464 $58,376 $67,944 $80,167 $92,390 $104,614 $116,837 $126,405 $133,317 $136,291

39 Page 35 Exhibit 21, Cash Flow Statement Year 3 Bahia Cash Flow Statement Year 3 Operating Activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Earnings $3,737 $3,737 $3,737 $10,111 $13,298 $16,485 $16,485 $16,485 $16,485 $13,298 $10,111 $5,386 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 Working Capital Changes Net Cash Provided/(Used) by Operating Activities $4,154 $4,154 $4,154 $10,528 $13,714 $16,901 $16,901 $16,901 $16,901 $13,714 $10,528 $5,803 Investing Activities Property and Equipment $(90,000) Lease Improvements $- Net Cash Used in Investing Activities $(90,000) $- $- $- $- $- $- $- $- $- $- $- Financing Activities Capital Investments $- Net Cash Provided/(Used) by Financing $- $- $- $- $- $- $- $- $- $- $- $- Increase/(Decrease) in Cash $(85,846) $4,154 $4,154 $10,528 $13,714 $16,901 $16,901 $16,901 $16,901 $13,714 $10,528 $5,803 Cash at Beginning of Period $136,291 $50,445 $54,599 $58,753 $69,280 $82,994 $99,896 $116,797 $133,698 $150,599 $164,314 $174,841 Cash at End of Period $50,445 $54,599 $58,753 $69,280 $82,994 $99,896 $116,797 $133,698 $150,599 $164,314 $174,841 $180,644