La Salsa Fresh Mexican Grill
The parent company claims that,
“La Salsa is one of the fastest growing fresh Mexican chains nationwide. The hallmark to our fresh style is our unique open-display kitchen, where customers can enjoy seeing their food prepared right in front of their eyes.
We are also famous for our one-of-a-kind fresh Salsa Bar, where we encourage guests to customize their salsa…selecting a range of flavors from hot and wild to robust, yet mild. We never use microwaves, can openers, or lard. And signature to La Salsa’s superior taste is charbroiled cooking with skinless, all white-meat chicken, tender steak, big succulent shrimp and flavorful Mahi Mahi. Popular menu items include gourmet burritos, handcrafted tacos and veggie specialties. It’s a high-quality menu with a fresh attitude that’s made La Salsa a West Coast favorite since 1979.”
2.1 Company Ownership
A Limited Liability Corporation (LLC) will be formed to limit personal liability of the owner and investors in La Salsa. Once the LLC is formed its first holding will be in franchising La Salsa. It is Benjamin D. Strock’s intention to offer limited outside ownership in the LLC on an equity, debt, or combination basis in order to facilitate a more rapid expansion of the La Salsa concept. A 12% priority return will be offered to all shareholders on their investment. Benjamin D. Strock will be the managing shareholder of the corporation.
2.2 Start-up Summary
The Santa Barbara Restaurant Group, owners of the La Salsa chain, have estimated overall start-up costs between $300,000 to $400,000. The numbers in the start-up cost table are meant to reflect these estimates. The allocation into each category may not be exact, but the approximate costs have been estimated slightly higher than those of the Santa Barbara Restaurant Group. Overestimated costs will leave room for miscalculations, so that funding will be available and will ensure that everything runs smoothly.
|Total Start-up Expenses||$161,000|
|Other Current Assets||$0|
|Start-up Expenses to Fund||$161,000|
|Start-up Assets to Fund||$439,000|
|Total Funding Required||$600,000|
|Non-cash Assets from Start-up||$337,000|
|Cash Requirements from Start-up||$102,000|
|Additional Cash Raised||$0|
|Cash Balance on Starting Date||$102,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Richard & Ginny Strock||$100,000|
|Benjamin D. Strock||$20,000|
|Additional Investment Requirement||$0|
|Total Planned Investment||$300,000|
|Loss at Start-up (Start-up Expenses)||($161,000)|
|Total Capital and Liabilities||$439,000|
2.3 Company Locations and Facilities
The first option for location is close to Sacred Heart Hospital on 13th Avenue in Eugene, Oregon. This location will be important because the University of Oregon campus is close, as is the hospital. Students and hospital employees will have a new lunch spot which is much needed. The best location currently available is next to the Napoli Restaurant & Bakery, but it is only 800 square feet. In order to make this location feasible a partial/full buyout of Napoli Bakery is desirable. The bakery is not overly successful and will hopefully be cooperative in this process.
If the first restaurant is not located on 13th Ave. there are a few high traffic strip mall locations available. Located on the corner of 18th Ave. and Willamette Street, next to a mini-mall, Blockbuster Video, Little Caesar’s Pizza, and Hong Kong Chinese restaurant. South Eugene High School (open campus) is also very close by. There are 1367 square feet available, plenty of parking, high traffic and high visibility. This location rents for $970 a month, and appears to have excellent profit potential. Traffic counts from 1997 were approximately 15,000 for each direction on 18th Ave., and 11,000 one way on Willamette St. Overall revenues would most likely stay consistent with 13th Ave. location, but it is conceivable that without the effect of demand decline during the summer months next to University of Oregon, overall revenues could be substantially higher in this location.
As the company gains community recognition La Salsa will expand to one or both of the neighboring shopping malls (Valley River Center or Gateway). Once the Eugene/ Springfield market is developed expansion to other Oregon cities-on-the-rise such as Corvallis, Bend, Medford, or Ashland is anticipated. Portland is not a strong candidate considering competition is already fierce in that region.