Frozen Custard Shop Business Plan

Company Summary

Bauman's Frozen Custard and Italian Ice will purchase frozen custard mix and Italian Ice base from a distributor in Pennsylvania. We will use a frozen custard freezer to quickly freeze the custard product into a premium, dense and creamy frozen dessert. We will feature vanilla and chocolate flavors each day plus one or two additional flavors of the day. 

The Italian ice base mix will be made into approximately 30 various flavors using flavor concentrate from a distributor in Salem, Oregon. The Italian Ice will then be frozen in a specialty machine known as a batch freezer.  It will then be stored in a display case at a high enough temperature to keep the product in a "liquid frozen" state.

The finished products will be sold from a retail outlet in downtown Eugene, Oregon. We have selected the Aurora building on the corner of East 11th Avenue and Oak Street. This is a new building and we will be leasing 1,055 square feet at a price of $1.00 per square foot/month. We have chosen this location because it meets our criteria (set forth below) and includes a generous offer of $15 per square foot that will be allocated to our business lease-hold improvement costs. This will significantly help us reduce costs associated with starting this business.

The Aurora building provides Bauman's Frozen Custard and Italian Ice with a prime location in the downtown sector. We will be positioned between the University of Oregon campus and the West Eugene neighborhoods. Our location is 9 blocks from the campus Ben and Jerry's, 8 blocks from the nearest Dairy Queen, and 3 blocks from the Pearl Street Ice Cream Parlour. The Aurora building offers Bauman's Frozen Custard and Italian Ice the following  requirements suggested by another owner of a frozen custard shop:

• Optimum size: 800-1,000 square feet.
• Traffic Count: 15,000 daily vehicle count is preferred.
• Demographics: Typically 25,000 people in a three (3) mile radius.
• Must be able to be approved for walk-up window service. 
• Signage: Trademark back-lit awnings and dome signs required.
• Parking: Ideally the site will have clearly visible parking in excess of 20 spaces.

On a recent Friday evening between the hours of 8:30-9:30pm, we observed 462 cars, 18 cyclists, 6 buses, and 96 pedestrians on East 11th Avenue. This number is half of the estimated traffic flow past our location, as Oak Street has just as much traffic flow. The Aurora building, then, would have an estimated count exceeding 18,000 vehicles per day. This provides Bauman's Frozen Custard and Italian Ice with a prime, highly visible location in downtown Eugene.

Our customers are primarily young people ages 18-25, and families who have pre-teen children. These individuals seek out flavorful sweet treats. Currently Bauman's Frozen Custard and Italian Ice is in the beginning of its planning stages. The company will be organized as a closely-held LLC with a majority of the ownership retained by the founder and primary investor.

The company is seeking to raise approximately $70,000 in loans and another $10,000 from private investors, with $15,000 invested by Matthew Bauman, for start-up purposes.

2.1 Start-up Summary

To start up this business, we expect to incur short-term debt of $5,000 to cover initial inventory and other expenses for the first three months. We also anticipate the need for a long-term loan of $70,000 to cover equipment and fixtures costs. We also expect to incur $675 worth of legal expenses based on the cost of forming the LLC and other legal liability issues.

2.2 Company Ownership

The company will be owned by Matthew Bauman and one or two additional partners.  Bauman will contribute $15,000 and the other investor(s) will contribute a combined additional $10,000.  This will keep the majority of the equity in the company under Bauman's control.  A buy/sell agreement will be established with the other investors when the Limited Liability Corporation (LLC) is formed, to allow an exit strategy for one or all of the investors.