curry Dabbawalla Take Away $($CD Take Away$)$

Required:

You are a business advisor working for a Venture Capital Investment Group $($VCap$)$ doing business opportunity analysis using your accounting education. Your boss, Pat W$.,$ has asked you to write a concise and professional report to analyze Cynthia D$$s proposal for $$300,000$ to be accessed over three years $($$$100,000$ each year$)$ to fund her proposed expansion. In exchange for the total $$300,000$ investment CD will give VCap $40\%$ ownership in the total venture. You are also asked to provide appropriate and specific recommendations regarding the proposed investment as well as a list of any additional information that your company VCap may need to finalize the decision.

The case facts are the exact same with the required above the only additional information

Five years ago, Cynthia D$.($CD to her friends$)$ completed her degree in marketing and received a great offer from Alphabet Ltd $($Google$)$ to work in their marketing department. As a rising superstar she moved up the organization and was seen to be a future corporate vice president or even CEO.

CD as an enterprising and ambitious young woman declined the offer and started her own new enterprise. Based on travels through Great Britain and sub$-$continental India $($specifically the Mumbai area$),$ she had identified an interesting fast food opportunity in East Indian Curry referred to as $$Take Away$$ in England and $$Dabbawalla$$ in India.

She was convinced that because of changing lifestyles, a curry fast food establishment would be profitable in Canada and especially in Calgary. Through multiple family sources of financing she raised $$75,000.$ Part was a loan $($$$50,000$ no interest rate discussed$)$ and part equity shares of $$25,000.$ The shares represented non$-$voting common Class B and gave her mom and dad $10\%$ interest in the company.

CD used $$55,000$ to renovate and build her first location in the recently renovated Curry Barracks $($pun intended$)$ in SW Calgary. CD named the new venture Curry Dabbawalla Take Away $($CD Take Away for short$).$ The balance $($$$25,000)$ she used personally to live on while starting the company.

As she hoped and believed, $$CD Take Away$$ was very well received in the Calgary market. Within three years, Cynthia wanted to add another location in the east industrial part of Calgary near $52$nd Street and Glenmore Trail with excellent visible exposure. This location is to be the first of a multi$-$store expansion $$ one new location a year for three years and then maybe franchising if things work out.

For the first new store she has a budget of $$100,000$ to renovate and build the new location. Her goal is to leave the day$-$to$-$day operations of each location to a store manager and focus her own attention on overseeing the expansion of the entire enterprise to build an empire of CD Takeaways across North America, starting in Calgary first and then Alberta and British Columbia. She recently hired a part$-$time assistant for $$25,000$ a year to do the record keeping and selected administrative tasks as she concentrates on the expansion plans.

CD is extremely passionate about expanding the venture and current operations and has been speaking to local Venture Capital Groups about her expansion plans.

Her expectations are that every new location will mirror similar results as achieved by her first store; annual revenues of $ $2,200$ per day for an average of $340$ days per year, fixed facility costs $$175,000,$ fixed labor costs $$162,000$ which includes a store manager and direct food costs $30\%$ of gross sales. Cynthia knew she needed a strong marketing plan so she was budgeting to spend $$25,000$ for each location. She also knew that her wage and the assistant$$s wage needed to be part of each location costs so budgeted $$30,000$ head office overhead charge of $$30,000.$