LTD NEW YORK STYLE PIZZA & PASTA Franchise Investment Guide New York Style Pizza & Pasta #4-6304 Dover Rd Vivian - Cell 250-618-2954
N E W Y O R K S T Y L E P I Z Z A & P A S T A L T D.
Table of Contents 1 1 THE HISTORY OF NEW YORK STYLE PIZZA & PASTA 1 2 3 THE RESTAURANT INDUSTRY 3 3 5 NEW YORK STYLE FRANCHISING CORPORATION 5 EXPANSION PHILOSOPHY 5 INITIAL ASSISTANCE & TRAINING 5 SUPPORT 6 SITE SELECTION 6 FINANCING 6 CONTRACT 6 OUR FUTURE GROWTH 7 YOUR NEXT STEP 7 THE EVALUATION PROCESS 7 COSTS 12 FORMS 15
N E W Y O R K S T Y L E P I Z Z A & P A S T A L T D. Chapter THE HISTORY OF NEW YORK STYLE PIZZA & PASTA The history of New York Style Pizza & Pasta is really the background of Per and Vivian Maltesen. In 1991 they pursued the dream of going into business for themselves. With their two daughters, the original 92 seat restaurant and take out pizza business was established. A logo-mark was developed to establish the restaurants identity to its patrons. The most readily recognizable image appropriate to New York City was, of course, its famous Manhattan skyline, with the addition of a "big apple" to put on the final touch. With good food, affordable prices, large portions, sauces, and desserts made on the premises, New York Style Pizza & Pasta Ltd. secured itself in the market place. Pete has been named Restaurateur of the Year six times and he is the current President of the Restaurant Association for mid Vancouver Island. In September 2016, New York Style Pizza & Pasta was formed for franchising the New York Style concept. The menu for New York Style Pizza & Pasta is pizza, pasta, prawns, parmesan chicken, Manhattan chicken, and barbequed ribs. We have a lunch menu that also features soup and sandwiches. Everything is made with the highest quality of ingredients and the portions are extremely generous. We sell our dressing, Manhattan Dressing in local grocery stores, delis and meat markets. We also sell our sauces, pizza crusts for customers to take home as a healthy alternative to other fast foods. Our pizza is considered one of the best ever. It takes three and half hours to make our pizza dough. Our latest concept added to our existing restaurant is Take n' Bake, where we make the pizza and the customer bakes the pizza. We give the customer a price break and the customer also gets a better pizza whenever they want it. The pizza is hot, fresh baked in their own oven. The pizza is never cold, late or soggy. The decision to franchise was not one that was made in haste. It is the best strategic option for operating multiple New York Style Pizza & Pasta Restaurants. The result will be to spread the great taste around for everyone to enjoy, and for families to 1
N E W Y O R K S T Y L E P I Z Z A & P A S T A L T D. experience the special home-style feeling New York Style has to offer. We also offer the Express Unit, which is a take out & delivery and dine in concept with up to 10 tables. New York Style is looking for franchisees and master franchisees in cities of 50,000 or more and for smaller units, rural towns with a trading area that has a population of approximately 25,000. As a New York Style Franchisee, you will learn how to make our sauces, lasagna, pizza crusts, and soups and how to maintain our high quality of food and service. We know what it would be like to be a franchisee as we also run a restaurant so we have made the Franchise Agreement fair. It clearly establishes the rights and obligations of both parties. 2
N E W Y O R K S T Y L E P I Z Z A & P A S T A L T D. Chapter THE RESTAURANT INDUSTRY Pizza is big business - $15 billion a year and the fastest growing segment of the food industry. Pizza is ranked 5 th as the most popular items chosen in the food industry. Top 10 Foods 2009 1 French Fries 2 Hamburgers 3 Salads 4 Chicken 5 Pizza 6 Sandwiches 7 Chinese/Oriental/Stir Fry 8 Ice Cream/Frozen Yogurt 9 Donuts 10 Soup 3
In 2009 Full Service restaurants grew by 5.6% in nominal terms, making it the fastestgrowing sector, with the average restaurant ringing in sales of $673,404 in 2009. Canada s food share of the food dollar still falls below that of the U.S. where foodservice enjoys a 41.4% market share. Canada s total foodservice of the food dollar is 24.5 cents for 2009 There are nearly one million employed in foodservice. One in five foodservice workers is a food and beverage server. Women represent 61% of foodservice employees compared to 46% of the Canada workforce. Canada s foodservice industry is an important source of first time jobs for young people and part-time jobs for students: 46% of foodservice workers are under the age of 25, and 42% of foodservice employees work part-time. In BC the number of food service employees was 168,000 with 76,900 of those employees are under the age of 25. Not only do Canadians have less time to cook, they often have less time to dine out. As a result, off- premise dining has outpaced on-premise dining-driven largely by the convenience of pick-up and drive-thru. As their lives get busier, more and more time-pinched Canadians are turning to restaurants for their meals. The number of meals that Canadian households purchased from restaurants jumped by 5.8% in 2009-the fourth consecutive year of growth. 4
Chapter NEW YORK STYLE FRANCHISING CORPORATION EXPANSION PHILOSOPHY A t New York Style Pizza & Pasta Franchising Corporation, we believe that successful growth must be matched by support for that growth. In keeping with this philosophy, we believe in offering a quality franchise program and doing everything we can to build a successful network. We are looking for a select number of individuals we can work with this year. What this means to those selected is personal attention and service. And, our company continues to be managed and directed by seasoned executives with many years of experience in operating restaurants. We also invite independent pizza operators to inquire about converting their pizza operation to a New York Style Franchise. INITIAL ASSISTANCE & TRAINING If your franchise application is approved, we will implement a systemized program to help you get your restaurant open and operating with the greatest possible ease. We'll provide you with the kind of support you need when you need it and, you will be assisted by experienced personnel during each phase of the development process, and beyond. While the restaurant is being built, you will be trained in a corporate restaurant. Areas covered will be hiring and scheduling of employees, health standards, food quality, management, profit & loss analysis of food 5
& liquor, security, safety procedures and cooking. The time needed for training will depend on the franchisees experience in the food industry but a minimum of SIX weeks will be needed in Nanaimo or your own unit. You will receive an operation manual filled with marketing ideas and will include regular marketing updates. SUPPORT After your Pizzeria is open, you ll continue to receive professional assistance and support from our operations and support department. We will do periodic visits to your restaurant for assistance and on-site reviews, but you may call for help or advice any time.. This will provide you with professional guidance and information you need to realize your restaurant's full potential. And throughout our business relationship, we will provide management, consultation and updated of trends and industry improvements. SITE SELECTION The first step in creating a successful restaurant is the identification of a good site and construction of an appropriate facility. We can help you find a site, but we believe that no one knows the local area better than you do, so if you already have a site picked, let us know. Management will still need to approve a site only after carefully evaluating an array of data, including population density, traffic patterns, cost of space, availability of parking, site size, and cost of overall development. Other factors are the closeness to a business district, large grocery store, neighbourhood strip mall and a college or university. All franchisees receive a protected area, which is defined as a stated radius around their business premises. FINANCING All franchisees must personally fund the cost of the restaurant. The New York Style Pizza & Pasta Franchising Corporation does not provide financing or loan guarantees, nor does it allow absentee ownership. Success only happens with hard work and a fulltime effort. CONTRACT The franchisee has to commit to the full-time management of the restaurant and cannot be an absentee owner. The success of the restaurant will be achieved with the owners complete involvement in all aspects of the business. The franchise agreement between New York Style Pizza & Pasta and the individual entrepreneur grants the rights necessary to operate a specific restaurant for a period of 10 years, together with 6
an option to extend the franchise for an additional 10-year term. In return, the franchisee and master franchisee pays certain fees: one time initial franchise fee, $25,000 for a restaurant & training fee of $5,000, (this is for training additional staff for the new franchise) as well as a weekly royalty fee based upon gross sales performance. This fee will be 5% royalty, minimum $1000 for an ExpressUnit, plus 2% advertising & training fee. In addition, each Franchisee and Master Franchisee must spend a specified percentage of gross sales for marketing efforts in their local area, at least 1% to 2% to start. Master Franchisees will pay a Franchise Fee of $25,000 plus a training fee of 5000. The advertising fees are the same as for a one unit franchisee. Franchisees and Master Franchisees will receive suggested advertising programs as well as Grand Opening Ideas. Our franchise fee secures the right to own and operate a New York Style Express unit in a given territory and to use our trademarks, recipes, buying products from our main store, and marketing plans, ongoing operational support and help with lease negotiation. OUR FUTURE GROWTH The future of New York Style Pizza & Pasta depends upon finding qualified ambitious persons who are sales and management oriented. This restaurant is within reach of the small investor, providing the opportunity to be independent while offering the advantages of a parent corporation. You can begin an investment in your future for as little as 125,000 for an Express unit- 1000 sq feet. These are approximate costs in BC. Costs are not for Units starting from the ground up but in spaces that already have infrastructure. Conversion of existing restaurants, or Take Out Express Units may cost a lot less as they only have to be modified to a New York Style format. YOUR NEXT STEP If you feel you would enjoy the Restaurant, or smaller restaurant with a focus on Take Out & Delivery business, and would like us to consider you as an applicant for our franchise program, please take the time to complete and return the enclosed Confidential Evaluation Report. For priority treatment, you can phone Vivian Maltesen at 250.618.2954. THE EVALUATION PROCESS After we receive your completed application, our Evaluation Committee will review it. If we feel our interests are mutual, you will be invited to a personal meeting to discuss our franchise program in detail. At this meeting you will be given a copy of the Franchise Agreement containing important information about our franchise 7
relationship. You may review the agreement with your lawyer. The other steps you need to take are: Submit the formal application with the applicable fee Sign the Franchise Agreement and or Area Development Agreement. Select a site and receive approval. Make financial arrangements. Training will take place while your restaurant is being built or modified or at your restaurant when it is open for business.. Pasta. Prepare the Grand Opening in cooperation with New York Style Pizza & 8
ADDITIONAL QUESTIONS 1. Is previous restaurant experience necessary? Restaurant experience is helpful, but we have a complete training program and manuals that help you learn the business. We also provide ongoing support for you. 2. Is there a cost for training? 3. How much does a New York Style Pizza & Pasta cost? The franchise fee is $25,000 plus $5000 training fee Your cost for training is included in the franchise fee. This is training in our restaurant for up to six weeks. The $5000.00 will include our staff training your staff at your location when it is opened, up to four weeks. and payable on signing the franchise agreement. For costs to open a store look at the Investment Costs below and if it is a conversion of an existing restaurant to our format. 4. What is my territory and protection from other stores opening near me? You have the protection of a 5 mile radius. The only exception is a mall location. If a mall location was in you radius, you would receive first refusal. 5. May I open other stores? Yes. When you sign the agreement for your first store, you may sign a Development Agreement as well. Each store you agree to open will cost $25,000and is due when sign your development agreement. When signing a development agreement, you have six months to develop each store from the time of signing of the agreement for each additional store. Each store will have the same protection as your initial store and also have any first right of refusal for any other stores near or in your areas. 6. Master Franchise Agreement. You may buy a territory or province master franchise. Initial cost of a Master Franchise is $100,000 (for up to 4 units). This includes the franchise fee for the initial unit you set up. The cost of the set up of the unit would be your cost as well. (That will vary if you find a location that can be easily changed over to a New York Style Pizza format.) You still have to pay for initial training to us and that may be $5000-$7000. As all training may have to take place in your unit with my staff training your staff. This may take 9
up to 3 or 4 weeks. When you sell sub franchises, we would share equally in the franchise fee and royalty fees. You receive the training fee for each unit, as you are then responsible to train the new franchisees, unless you want us to train them, then the training fee would be paid to us and we would send our staff to train your franchisee staff for up to 2-3 weeks. 7. How much is the Royalty fee? 8. How much is the advertising fee. 9. What does a franchise include? Royalty fees are 5% of gross sales and paid on a weekly basis with a minimum of $1000 for the Express Unit. You must use the POS system we designate with internet access at your store location. Your POS system will be polled to keep track of sales. Advertising fees can be up to 2% of gross sales. 1% to start (the first year) and you are required to spend 1% on local advertising. Advertising fees are used for commercial media, market research and training. The advertising fees go into a separate account and is never used by the franchisor to solicit new franchisees. Use of trademarks, brand name, recipes, operational systems and methods, decor. You will also receive site location and architectural design. Assistance in lease negotiation, specifications for fixtures, equipment and leasehold improvements. Kitchen and Back of the House Workflow design. Front of the house design. Ongoing support and training. Favourable contracts with suppliers. List of products bought from a supplier that have to be the same brand as all stores. Buying spice packs from the Franchisor to make sauces, so as to keep the product the same for each store. Operating Manuals, policies, procedures and management systems. 10
If you have any questions, please do not hesitate to contact: Vivian Maltesen: 250-754.0112 or 250.618.2954 We look forward to hearing from you soon. 11
NEW YORK STYLE PIZZA & PASTA LTD. INITIAL INVESTMENT COSTS
New York Style Pizza & Pasta Franchising Corporation These costs are all estimates and based on new equipment purchases and leased equipment as well as good refurbished equipment.. Expenditure Sit Down When Due To Whom Approx costs- for an Express Unit for 1000 1500 sq ft Franchise Fee $25,000 Express Pre-opening Training Fee $5,000 Express Leasehold Improvements $45,000 Express Fixtures & Equipment $50,000 Express Date Franchise Agreement signed NYSFC Date lease signed & training starts @ NY Style in Nanaimo Date Franchise Agreement signed NYSFC Date Franchise Agreement signed NYSFC NYSFC $125,000 Express Sub-Total Initial Inventory Food Liquor First/Last Month s Rent approx*** Grand Opening Advertising Other costs. $3500 Express $1000 Express When supplies arrive $5,000.Express Date Franchise Agreement signed 1,000 Express Date Franchise Agreement signed Suppliers Landlord Newspapers Flyers etc. Licenses 1,000 Express City, Health, Liquor Board Lawyer fees 1,000 Express Lawyer Working Capital (Line of Credit) 7,500 Express Open a Bank Account $145,000 Estimates would be a lot less if good quality used equipment is purchased. *New York Style Franchising Corporation (NYSFC) *** The leaseholds and equipment can be lowered by at least half the amount when buying good used equipment as well as leasing equipment and converting a restaurant location to our concept. *** The training fee of $5000 and could take 3-4 weeks. We work with your staff at your location when your location opens for at least 3-4 weeks. This is usually enough 13
time to train staff front and back. If they need more training after the three to four weeks then a fee will be assessed to cover our staff costs. ***Rent is estimated at no more than 6% of gross sales. Rent areas are class B space in class A neighbourhoods. Full Service Express Units are restaurants approximately 1000 to 1500 sq. ft. in size, plus Express Units will have a liquor license with or without a lounge area. The full service will also have Delivery, Pick Up and Take n' Bake. A full service express restaurant should have a neighborhood or city minimum base of 50,000 people and a trading area of 60,000 people. Large cities could support five Express units with a radius of 5 miles for each unit. An existing restaurant may be modified for about $50,000 add franchise fee and training and you could get into a restaurant for a very low investment. If a restaurant is modified and has washrooms and a lot of the kitchen equipment needed such as a pizza oven then the cost can be low. Units would be modified to our Dover Bay Express Restaurant in Nanaimo, BC. 14
FORMS 15
New York Style Pizza & Pasta Franchising Corporation CONFIDENTIAL EVALUATION REPORT This report will aid in presenting personal information for the confidential use of our Franchise Evaluation Committee. Completing and returning this Report does not obligate either party. This is not a contract. Your Name: Spouses Name: Date of Birth SIN #: Home Address: How long have you lived there? City: Province: Postal Code: Home Phone: Best Time To Reach You: Business Phone: Best Time To Reach You: Name and Ages of Dependents: Your Business Experience From: To: Company: Position: Annual Income: Your Spouses Business Experience From: To: Company: Position: Annual Income: How do you intend to finance your New York Style Franchise? When would you be able to start this venture?
Areas/locations you prefer? 1.) 2.) 3.) Have you ever had a business fail? Are there any lawsuits pending against you? If yes, please give particulars. Do you regard a New York Style Franchise/Express Outlet as: A Career: An Investment: Second Source of Income: Your Education Please list schools attended, any Majors, Minors, degrees, diplomas or certificates you have obtained (include the year). How did you find out about our franchise opportunity? What magazines and newspapers do you read? List your Hobbies and Interests Important questions you have about the New York Style Franchising Program: 17
Express Unit 18
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