Cool Moose Creamery Essay Example | Topics and Well Written Essays - 1750 words

Cool Moose Creamery - Essay Example In the new franchisee, a new product will added with the existing product line up of this company. This report is about the financial assessment of the overall business plan. This financial analysis report is related to the feasibility of this new franchisee development by four partners who are willing to invest equally for this business. So, this financial planning assessment determines the feasibility of this business according to the current demand of the product and growth of the parent company Cool Moose Creamery. In this report a qualitative analysis has been made by supported by facts and data from the Cool Moose’s business. The new franchisee of this company will be taken and set up by total four partners among one has already invested $10,000 for developing new product and other three are interested in this business who will equally invest $10,000 each in cash this business. The amount they are willing to invest is $10,000 in cash each. One of the partners already dev eloped a new product related to the product line up of this business. The name of the product is Snofroze which is confectionary food like frozen snacks. The partners have decided that this product will influence the demand of itself as well as the existing products of the company whose franchisee will be taken. The partners agree to take a quarter of the new business each in return of $30,000 each. The partners will set up a shop where they will set up the franchisee business of the company. Actually the main aim of them is to get a brand name to include their developed product in the existing product line up of the brand. For developing this shop the company need to buy fixtures and fittings for the shop and other machineries. One of necessary machineries, the company need buy is single-head soft-serve machine. The partners have decided to take bank loan for buying the necessary fixed assets and initial cost for setting up the ice cream shop. Apart from, purchase of fixed assets r elated cost the company need to pay a flat fee upfront for taking up the franchisee. For all these initial expenses the partners have decided to take bank loan of $20,000. They are expecting to payback this amount in monthly instalments basis to the bank within a maximum payback period over 3 years. Total investment for this business is $160,000 which will be invested by the four partners equally and each of them will be getting a quarter stake of the company and also the selling writs of the new product Snofroze. Another $20,000 will be added in the total initial investment that will be taken from bank loan. So, total initial capital is $180,000. The company has decided to break even this initial investment from the total profit of 3 years. So, in the first three years the company needs to earn an average profit of $60,000 per year. If the company only focus on selling the product Snowfroz then it needs to sell total 60,000 pieces of the Snoforze and approximately 167 pieces daily if the profit per unit of the product is assumed as $1. So, the competitive price of a single Snowfroz is assumed as $2 and the cost of sells is assumed as 1 which includes production cost and other contributed cost per unit. 360 opening days of the shop is considered in this analysis and 5 days is deducted for closing of the shop regarding any issues. So, if the company can 167 unit per day at a assumed price of $2 per unit then the company can breakeven in next three years from the starting of its operation. The company will sell the products in the shop and also they will distribute in the many restaurants in the city. The product will get a good demand in the market as it is a confectionary snacks product. So, the company will do business selling also apart from retail