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I-95 Corridor Restaurant Incentive Program Application PDF Free Download

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Memorandum

To: Economic Development Authority

From: Kelly Franke

Date: October 10, 2024

Case Type: I-95 Corridor Restaurant Incentive Program

Applicant: Zaxby’s - 709 England Street Property Number: 7880-11-0154

OVERVIEW:

On September 25, 2024, Travis Kelley, Member/Manager for G & K Ashland, LLC and

franchisee for Zaxby’s applied for the I-95 Corridor Restaurant Incentive Program through

the Economic Development Authority. As the franchise owner of 3+ Zaxby’s, Mr. Kelley

and his partner, Mr. Josh Gattis are looking to secure a ground lease of 709 England Street,

demolish the current structure, build a new building and open a Zaxby’s in Ashland. This

property has been vacant since 2020. Mr. Kelley is expected to begin construction as soon

as possible and be fully operational by the 4th quarter of 2025.

I-95 CORRIDOR RESTAURANT INCENTIVE PROGRAM:

The Economic Development Authority of the Town of Ashland desires to improve

economic viability and the overall appearance of properties in and around the I-95

interchange in Town. There is an increased cost associated with the redevelopment of

some properties in this area. Therefore, the EDA seeks to encourage the demolition of

and replacement of dilapidated and underutilized restaurant buildings that will improve

both district appearance and revenue.

ANALYSIS:

This proposed project fits the parameters set out in the I-95 Corridor Restaurant

Incentive Program and represents a significant step towards achieving a strategic goal

for the Economic Development Authority, namely the removal of blighted structures

and the improvement of restaurant choices along the I-95 interchange area.

This application, if approved, would be for the I-95 Corridor Restaurant Incentive

Program as set out in our policy. The EDA offers a rebate of up to fifty percent of meals

taxes paid to the Town, over a period not to exceed six years with a capped rebate of

$550,000. Mr. Kelley submitted their proforma committing to hiring 30-35 new

employees and meeting the annual $1.8 million in sales bringing in a minimum of

$100,000 in meals tax revenue for this quarterly reimbursement program. In addition,

Mr. Kelley and Mr. Garris will be contributing $400,000 of personal equity to the

project and have a 10-year lease, with four 5-year options to extend, for a total of 30

years. Mr. Kelley has projected a total financial requirement of $2,206,314.00. Mr.

Kelley has not yet submitted a letter of credit. G & K Ashland, LLC had a Pre-App

meeting to discuss their plans to demolish the current structure and replace it with a

new outfitted Zaxby’s location including new signage, parking, and landscaping.

COMMITTEE RECOMMENDATION

On October 8, an Economic Development Grant Review Subcommittee made up of Randy

Lewis, Shawn O’Brien, and Jonathan Farmer met to discuss the I-95 Corridor Restaurant

Incentive Program application by Travis Kelley, Zaxby’s franchisee submitted on

September 25, 2024. The committee recognizes the demolition and building of this

restaurant will improve the appearance of 709 England Street and will contribute

significant revenue for the Town of Ashland. This building has been vacant since 2020.

The committee recommends approval for the I-95 Corridor Restaurant Incentive Program

with a total investment by the applicant of $2,200,000 and the requirement of Zaxby’s

generating $1.8 million in sales annually. The financial rebate will be capped at $550,000

over six years.

MOTIONS (Samples)

Approve – I move to approve the I-95 Corridor Restaurant Incentive Program

application request to Travis Kelley, Zaxby’s franchisee at 709 England Street, with a

financial rebate capped at $550,000 according to the terms set out by the EDA attorney

and in accordance with program guidelines.

Deny – I move to deny the I-95 Corridor Restaurant Incentive Program application

request from Travis Kelley, Zaxby’s franchisee at 709 England Street.

Defer – I move to defer action on the I-95 Corridor Restaurant Incentive Program

application request from Travis Kelley, Zaxby’s franchisee at 709 England Street.

709 England Street Property Number: 7880-11-0154

Rev. 08/2021

APPLICATION FORM

ASHLAND ECONOMIC DEVELOPMENT AUTHORITY

I-95 Corridor Restaurant Incentive Program

Ashland Town Hall

Attn: Bobbie Carey

121 Thompson Street, P.O. Box 1600

Ashland, VA 23005

804.798.1073

Email: bcarey@ashlandva.gov

*************************************************************************************

Date: ___________________

I. Applicant Contact Information

Applicant’s Name _____________________________________________________________________

Address______________________________________________________________________________

_____________________________________________________________________________________

Phone _______________________________________

Email _______________________________________________________________________________

II. Property Information

Property Address ______________________________________________________________________

_____________________________________________________________________________________

Real Estate Tax Parcel Number ___________________________________________________________

Current property owner _________________________________________________________________

If not owned by applicant, please specify current status (such as under contract, signed LOI, or verbal

agreement)

_____________________________________________________________________________________

9/25/2024

Travis Kelley, Member/Manager, G&K Ashland, LLC

2500 Regency Parkway, Suite 125, Cary, NC 27518

919-561-2322

travis@athlonmanagement.com

709 England Street, Ashland, VA 23005

Marketplace Development, LLC

Executed ground lease

Rev. 08/2021

III. Applicant Background

A. Previous Restaurant Projects Completed

Please list up to three recent restaurant projects (name, address, and year) in which the applicant has

been involved (financially or otherwise).

1. _______________________________________________________________________________

2. _______________________________________________________________________________

3. _______________________________________________________________________________

B. References

Please list three references who have worked on at least one of the projects listed above.

1. Name/Title_____________________________________________________________________

Email ___________________________________________ Phone _______________________

2. Name/Title_____________________________________________________________________

Email ___________________________________________ Phone _______________________

3. Name/Title_____________________________________________________________________

Email ___________________________________________ Phone _______________________

C. Project Description

1. Name of Franchisor _____________________________________________________________

2. Name of proposed restaurant_______________________________________________________

3. Name of proposed restaurant operator _______________________________________________

4. Timeline of construction of new restaurant

______________________________________________________________________________

5. Total investment _______________________________________________________________

6. Amount requested ______________________________________________________________

7. Term length requested___________________________________________________________

Zaxbys, 2520 W. Hundred Road, Chester, VA

Zaxbys, 911 Walmart Way, Midlothian, VA

Zaxbys, 1171 Pine Plaza Dr, Apex, NC

Stuart Little, Civil Engineer

slittle@sekivsolutions.com

Ken Dalton, Architect

kdalton@mrpdesign.com

Kati Lohsen, Franchise Development Manager at Zaxbys

klohsen@zaxbys.com

762-316-9237

804-955-5572

770-917-9172 x104

Zaxbys Franchising LLC

Zaxbys

G&K Ashland, LLC

$1,850,391

$550,000

6 years

It is our hope to commence construction on or around April 2025 and be open by or around

September 2025.

Rev. 08/2021

IV. Proposed Restaurant

Please attach a description of the proposed restaurant project to be constructed, along with any

work that needs to be done to make the site ready. In addition, please include the following:

1. Any estimates of site work or demolition necessary

2. Any available pro forma and/or business plan

3. Surety or a letter of credit supporting the project

I-95 Corridor Restaurant Incentive Program Guidelines Agreement:

I, the undersigned, agree that should this application be approved I will adhere to the Program Guidelines

and meet all requirements set forth by the Ashland Economic Development Authority.

Name & Title__________________________________________________ Date ______________

Please submit to:

Town of Ashland

Economic Development

P.O. Box 1600

Ashland, Virginia 23005

For more information, please contact Bobbie Carey, Business Development Manager,

804.798.1073 or bcarey@ashlandva.gov

Member, Manager

9/25/2024

A Business Plan for

A Licensed Franchisee for

Located at

709 England Street

Ashland, VA

Prepared by:

Page 2

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Athlon Management, Inc. in

this business plan is confidential; therefore, reader agrees not to disclose it without the express written

permission of Athlon Management, Inc or G&K Foods, LLC.

It is acknowledged by reader that information to be furnished in this business plan is in all respects

confidential in nature, other than information which is in the public domain through other means and

that any disclosure or use of same by reader, may cause serious harm or damage to Athlon

Management, Inc. or G&K Foods, LLC.

Upon request, this document is to be immediately returned to Athlon Management, Inc. or G&K Foods,

LLC.

___________________

Signature

___________________

Name (typed or printed)

___________________

Date

This is a business plan. It does not imply an offering of securities.

 
Page 3 
 
 
1.0 Executive Summary ........................................................................................................... 1 
Chart: Highlights ................................................................................................................ 2 
1.1 Objectives ....................................................................................................................... 2 
1.2 Mission .............................................................................................................................. 2 
1.3 Keys to Success ............................................................................................................... 2 
2.0 Company Summary........................................................................................................... 3 
2.1 Company Ownership ..................................................................................................... 3 
2.2 Start-up Summary ........................................................................................................... 4 
Table: Start-up ................................................................................................................... 5 
Chart: Start-up ................................................................................................................... 5 
3.0 Products .............................................................................................................................. 6 
4.0 Market Analysis Summary .................................................................................................. 6 
4.1 Market Segmentation .................................................................................................... 6 
4.3 Industry Analysis .............................................................................................................. 7 
5.0 Strategy and Implementation Summary ......................................................................... 7 
5.1 Competitive Edge .......................................................................................................... 7 
5.2 Marketing Strategy ......................................................................................................... 7 
5.3 Sales Strategy .................................................................................................................. 8 
5.3.1 Sales Forecast ........................................................................................................... 8 
6.0 Management Summary .................................................................................................... 8 
6.1 Personnel Plan............................................................................................................... 10 
Table: Personnel .............................................................................................................. 10 
7.0 Financial Plan ................................................................................................................... 10 
7.1 Start-up Funding ........................................................................................................... 11 
Table: Start-up Funding .................................................................................................. 11 
7.2 Important Assumptions ................................................................................................ 12 
7.3 Break-even Analysis ...................................................................................................... 12 
Table: Break-even Analysis ............................................................................................ 12 
Table: Profit and Loss ...................................................................................................... 13 
Table: Cash Flow ............................................................................................................. 13 
Table: Balance Sheet ..................................................................................................... 14 
Table: Sales Forecast ............................................................................................................... 1 

Page 4

Table: Personnel ....................................................................................................................... 2

Table: Profit and Loss ............................................................................................................... 3

Table: Cash Flow ...................................................................................................................... 4

Table: Balance Sheet .............................................................................................................. 6

GK Ashland, LLC

Page 1

1.0 Executive Summary

G&K Foods, LLC is excited for the opportunity to open its first Zaxby's franchise in Ashland, VA. We

look forward to providing the customer base an excellent and diverse menu offering that will be

hard to beat. Zaxby's is a very fast-growing concept with a loyal customer base that originated in

Statesboro, GA in 1990.

This purpose of this business plan is to inform all interested parties of backgrounds of the individuals

who comprise the ownership of G&K, our firm's experience in restaurant operations, background on

Zaxby's Franchising Inc., our financial forecasts for our restaurant, and what conditions we feel will

allow our group to meet and hopefully exceed these fiscal expectations.

GK Ashland, LLC is the operating entity for the planned Zaxby's and has a long-term ground lease

with Marketplace Development, LLC.

We look forward to taking you on a brief journey into our vision for our Zaxby's located in Ashland,

VA.

Thank you.

Travis E. Kelley,

President, Chief Executive Officer

Athlon Management, Inc.

GK Ashland, LLC

Page 2

Chart: Highlights

1.1 Objectives

GK's objectives for the first three years of operation include:

• Average sales of $2.5M in our first year of operations, or $48,000 per week.

• With our current check average is $16.75, this amounts to just under 2,900 guests per week

• Keeping food cost at or below 33.0% of net sales, or $5.53 per guest.

• Keeping employee labor cost at or below 24% of net sales, or $4.02 per guest.

• Maintaining tight controls on costs and operations by employing a minimum of 4

seasoned managers, an enterprise management firm to provide direct management support

and oversight, and automated computer/internet control.

1.2 Mission

Our firm's mission is to be the restaurant of choice for those consumers looking for quick casual

dining featuring a modernized menu of prepared-to-order meals. We look to combine menu

variety, an inviting atmosphere, timely speed of service for our to-go and drive-thru customers, high

quality food at a fair price, and friendly, knowledgeable staff to achieve our goal of creating an

encore experience that enriches our customers' lives with every visit.

1.3 Keys to Success

The keys to the success for our Zaxby's restaurant are:

1. The creation of an encore dining experience that will differentiate us from the competition.

2. Execution of our primary goal to serve nothing but the highest quality food at reasonable prices

in a hospitable environment. We must deliver on this pledge 100% of the time, without exception.

3. Controlling costs at all times, in all areas.

GK Ashland, LLC

Page 3

4. Hiring the best people, training, motivating and encouraging them, and thereby retaining the

friendliest, most efficient staff possible.

2.0 Company Summary

The first Zaxby's was opened in March 1990 by company founders Zachary W. McLeroy and Tony D.

Townley in Statesboro, Georgia and was originally named "Zax." These two entrepreneurs wanted to

offer people an alternative to what they thought were reluctantly-accepted, poor-quality products

found at most fast food chains. Now there are over 900 units throughout 17 states. In November of

2020 Goldeman Sachs announced their aquisition of a controlling interest in Zaxby's, stating that

Zaxby’s is “a fantastic company with a founder-led culture, loyal customers and talented

employees.”, while Zaxby's executives called for the new marriage to assist the brand expansion into

new sales channels and further increase its growth into new markets.

Ashland serves as the site for one of our two planned Zaxby's units in the Virginia market, both

planned for 2025 openings. While this is the first Zaxby's for G&K Foods, it will be the 7th Zaxby's

resturant developed and managed by Travis Kelley and his firm Athlon Management, Inc. (formery

Prodigioius Ventures, Inc.). Prior to embarking on his own Zaxby's frachises, Mr. Kelley assisted

another licenssee, 1st & Goal Hospitality, with the opening and operation of 3 successful Zaxby's in

North Carolina and another 3 successful units in Virginia. In 2021, 1st & Goal had two stores

receive the Zaxby’s Zeggy Award, a prestigious honor given each year to recognize top performers

across the Brand that exemplify Zaxby’s Operational Core Values for developing talent. Only 15 of

these awards are given out each year, and 1st & Goal was the only licensee who had more than

one store to receive the award.

2.1 Company Ownership

GK Ashland, LLC will be the operating company for the planned Zaxby's in Ashland, VA. The

company is owned by Travis Kelley of Cary, NC and Josh Gattis or Bowie, MD.

Mr. Kelley grew up in Apex, NC and attended the University of North Carolina Chapel Hill, where he

earned his bachelor’s degree in Business Management from the Kenan-Flagler School of Business

while also playing football for the Tarheels. In 2003 Kelley founded The Providence Group Sports &

Entertainment LLC, a financial planning and literacy firm devoted to assisting individuals in the

professional sports and entertainment industry. In 2005 Kelley founded Prodigious Ventures, a

business consulting and management firm headquartered in Cary, NC. In 2023, with the same

mission of assisting business executives and entrepreneurs with vast solutions to guide their enterprise,

Prodigious was rebranded as Athlon Management, Inc.

Mr. Gattis, from Durham, NC, graduated from Wake Forest University in 2006 with a degree in

Sociology. Gattis, who also played football collegiately, was a 5th round draft pick of the

Jacksonville Jaguars in 2007. Upon retiring from the NFL Gattis pursued a career in coaching. He

began his coaching career as a Graduate Assistant at UNC Chapel Hill and then as a wide receiver

coach for Western Michigan in 2011. Gattis would go on to serve as Wide Receiver Coach and

Offensive Coordinator at Penn State, Alabama, the University of Michigan, the University of Miami,

and, presently, the University of Maryland. Gattis was the recipient of the Broyles Award in 2022- an

honor given to recognize the best assistant coach in college football.

Gattis was a client of Kelley’s firm, The Providence Group, during his tenure in the NFL and the two

remained extremely close after his playing days ended. Today, not only do Gattis and Kelley

consider one another best friends, but also business partners with their formation of G&K Foods, LLC.

GK Ashland, LLC

Page 4

2.2 Start-up Summary

GK's start-up expenses cover a wide range of items as shown in the following chart and table. Below

is brief description of some of these expenses:

Initial Franchise Fee: Zaxby's charges a franchise fee of $35,000 that must be paid upon signing of

the franchise agreement.

Initial Marketing: Leading up to and during the first few weeks of opening we will conduct a local

advertising campaign to build consumer awareness of the restaurant's location and menu offering.

Professional Fees: Professional fees include fees paid to attorneys and development consultants, as

well as fees paid to architects, civil engineer, environmental and geotechnical firm, and surveyor.

Training: With this being a new location, we plan to hire one full-time general manager eight (8)

weeks prior to our opening who will train at a Zaxby's training restaurant, to be later determined. In

addition, approximately six (6) weeks prior to opening, we plan to hire an additional full-time

assistant general manager who shall commence his/her training at the same training

store. Approximately four (4) weeks prior to opening we plan to hire two (2) additional hourly

managers who also will be trained at a nearby training store.

Payroll: In addition to the training expenses mentioned above, we will be paying wages to our

managers and crew while they are training in preparation for the new store opening. We expect

training to begin approximately 10 prior to the grand opening. Since there will be no revenue

coming from the restaurant we will need to include this expense in our start-up funding.

Required Cash: As with any business, we will need liquidity to fund operations (payroll, inventory,

etc.) during our first two weeks of operations due to unusually high operating expenses associated

with a new store opening. We believe $50,000 will provide the liquidity cushion we will need to

support business activities during the first two weeks of opening.

Other Current Assets: This represents costs associated with our FF&E package, as well as smallwares,

our POS system, and store security system.

Long Term Assets: This category is comprised of our land improvements of $1,497,891 as well as

expenses for Furniture, Fixtures and Equipment (FF&E).

GK Ashland, LLC

Page 5

Table: Start-up

Start-up

Requirements

Start-up Expenses

Franchise Fee

$35,000

Professional Fees (legal, engineering, etc)

$67,290

Deposits (utilites, rent, etc)

$14,833

Beginning Inventory

$23,000

Marketing

$10,000

Uniforms

$1,500

Insurance Premiums

$5,000

Permits & Licensing

$52,000

Employee Training & Lodging

$2,300

Payroll

$65,000

Hiring Costs (Snag-A-Job, etc)

$5,000

Cost Overruns

$25,000

Total Start-up Expenses

$305,923

Start-up Assets

Cash Required

$50,000

Other Current Assets

Long-term Assets

$1,850,391

Total Assets

$1,900,391

Total Requirements

$2,206,314

Chart: Start-up

GK Ashland, LLC

Page 6

3.0 Products

Zaxby's is considered a fast-casual dining restaurant that features an upscale menu consisting

primarily of chicken fingers and wings, along with an assortment of salads and sandwichs, in a

clean, family-friendly environment. Our restaurants will be open 7 days a week with the following

hours of operation:

SUN

MON

TUES

WED

THUR

FRI

SAT

OPEN

10:30 AM

9:00 PM

4.0 Market Analysis Summary

G&K is delighted to have the opportunity to build on the strong reputation and culture Zaxby's has

spent the past 35 years developing. Recognizing the desire for an alternative for what they

considered to be reluctantly-accepted, poor-quality products found at most fast food chains,

Zaxby's has brought forward fresh, hot, prepared-to-order real chicken in a clean, friendly and

inviting environment that accommodates guest choosing to dine in, carry out, call in, or drive

through. We believe that the consistent popularity of chicken meals, combined with a fast, friendly

service will prove to be a winning concept in Ashland, VA.

In looking at our market analysis, we have defined the following groups as targeted segments.

Median Age: 22 to 45

Minimum Average Household Income: $42,000 and above

Gender: We will equally target both sexes with a slight skew for males due to their heavy

consumption of meat.

Occupation -- We will target the blue-collar worker, working class families, as well as young

professionals and most of mid-America.

Education -- High school graduates or individuals with some college.

By our definition, we will have very broad appeal for our concept. It is our goal to be the fast-casual

restaurant of choice for the largest dining audience in Hanover County.

4.1 Market Segmentation

Ashland, located in Hanover County, is the northern most submarket of the Richmond MSA. Ashland

serves as a major retail market for Hanover, with a large number of shops and restaurants, as well as

a hub for lodging. Ashland is also the home of Randolph Macon College, with an enrollment of

1500 students, and is minutes south of Kings Dominion- the largest theme park in the state of Virginia,

with an average of over 2 million visitors per year. Ashland is surrounded by two large commerce

markets, Winding Brook and Northlake, and is flanked by the Hanover Industrial Park with over 500

businesses. Ashland is very much a historic town- with its Main Street and train tracks- and proudly

boasts itself as the birthplace of Secretariat.

GK Ashland, LLC

Page 7

Our proposed site is located west of Interstate 95 along the retail corridor of England Street. More

specifically, the site is on the SW corner of the signalized intersection of England Street and S.

Cottage Green Drive allowing convenient access to local and highway traffic. The site includes a

former 3,533 square foot Pizza Hut, which we plan to demolish, resting on .97 acres.

A broad portion of the northern Richmond MSA is not served by Zaxby’s; the closest Zaxby’s is

located 15 miles southeast in Mechanicsville. Our restaurant will serve North Richmond local

population as well as the Interstate 95 commuter market which has 117,000 vehicles per day. The

hard corner lighted signal provides maximum visibility for all commuters, whether they be local

residents, daytime workers, or interstate travelers stopping for a bite to eat along their trek.

The following chicken QSR's are currently located in the submarket: Chick-fil-a, Wendy’s, KFC, and

Popeye's.

4.2 Industry Analysis

Fast casual dining has been one of the fastest growing concepts of the restaurant industry,

especially over the past 10 to 15 years. A concept somewhere between fast food and casual

dining, fast casual represents a smaller part of the overall restaurant market, but is gaining popularity

at a tremendous rate. The average ticket price in fast casual concepts is between $9 and $16, with

customer bases with slightly higher levels of disposable income than those found with traditional fast-

food. Unlike fast-food restaurants, the market for fast casual is far less saturated, creating many

more franchising opportunities for the entrepreneur. These restaurants are known for being upscale,

quick service formats that offer more service along with higher quality food than their traditional

fast-food counterparts, yet do not provide the full table-side service associated with casual dining.

5.0 Strategy and Implementation Summary

Our strategy is based on adequately serving our niche markets, which for us just so happens to be

most of mid-America. A growing trend among consumers has been the desire for a comfortable

blend between casual dining and fast food. Many of today's consumers are looking for greater

customer service and healthier dining options, both of which are very difficult to find at most fast-

food restaurants. We plan to play to this need by offering fast-casual dining experience that offers

an array of menu choices centered on fresh chicken.

5.1 Competitive Edge

Zaxby's has established itself as a strong competitor in the fast-casual dining space and has a sizable

market share in the southeastern United States. They have a developing brand awareness that we

feel will further grow over the years as they expand into new frontiers and reach a new audience via

their digital advertising initiatives and recent partnership with Goldman Sachs.

5.2 Marketing Strategy

A combination of local and national advertising will be utilized for our restaurant. Zaxby's Inc. uses

national cable advertising and 1.35% of our net sales will be devoted to supporting this marketing

campaign. In addition to the mandated 1.35% advertising fee, we are also required to spend 1.5% in

local marketing through the use of an established co-op group.

We believe, however, that the best form of advertising will be "word-of-mouth." By providing a

hospitable environment, with unbeatable quality at a good price in a clean and family-

GK Ashland, LLC

Page 8

friendly atmosphere, we will be the talk of the town. Therefore, the execution of our brand strategy is

the most critical element of our plan.

5.3 Sales Strategy

Our strategy to build and hold sales is not very complex, nor is it overly sophisticated. It comes down

to providing our customers with high quality food, in a clean environment, by a well-trained,

customer-friendly staff. We firmly stand behind the Zaxby's mission statement to "Consistently create

encore experiences that enrich lives one person at a time".

5.3.1 Sales Forecast

We anticipate opening our Ashland restaurant by 4th quarter of 2025.

The following chart and table show our present sales forecast. We project sales to experience

modest growth of 4.0% from year 1 to year 2 due to the "newness" of the restaurant wearing off as

well as a moderate 5.5% growth from Year 2 to Year 3. Our sales assumptions are very conservative

based on recent growth trends we have experienced at our other locations of over 6%

annually. For comparison purposes, Zaxby's experienced system wide same-store sales increases of

over 6% from 2022 to 2023. Thus we believe our forecast of annual sales increases of 4.0% and 5.5%

are very reasonable.

Table: Sales Forecast

Sales Forecast

Year 1

Year 2

Year 3

Sales

Net Sales

$2,499,996

$2,599,996

$2,742,996

Other

Total Sales

$2,499,996

$2,599,996

$2,742,996

Direct Cost of Sales

Year 1

Year 2

Year 3

Food Costs

$875,420

$883,999

$932,619

Other

Subtotal Direct Cost of Sales

$875,420

$883,999

$932,619

6.0 Management Summary

Our management team consists of Athlon Management, Inc., our operations personnel who will be

working directly within the restaurant, and outside legal and tax professionals who assist our group

with ongoing concerns of the business.

Athlon Management specializes in the identification, analysis, selection, and management of

various businesses for high-net worth individuals, particularly those in the professional sports industry.

Athlon Management has been entrusted with the tremendous task of establishing our restaurant in

Ashland as well as the selection and oversight of a strong operations team to administer the day-to-

day operations of the unit. Athlon Management offers a wealth of knowledge and experience

through their team of professionals in real estate, legal, accounting, operational management, and

hospitality service.

The Athlon Management professional team includes:

GK Ashland, LLC

Page 9

Travis E. Kelley, President & Chief Executive Officer

Mr. Kelley has extensive experience in the development and management of multiple business units,

some of which he is a principle of. A graduate of the Keenan-Flagler School of Business in Chapel

Hill, NC, Mr. Kelley has worked extensively in the professional sports and entertainment industry since

2002.

John Copley, Vice President of Restaurant Operations

Mr. Copley has managed, supervised, and overseen operations within the restaurant industry for

over 25 years. Mr. Copley's current responsibility is to maximize food and beverage profit centers for

hospitality ventures owned by our clients by providing general managers with resources, tools and

brand support to meet and exceed our financial goals.

Dawn Brock, Director of Human Resources

Ms. Brock has extensive experience in the retail industry, having served in managerial posts at Nike,

Sams Club, and GAP.

Ms. Brock is responsible for planning, leading, directing, developing, and coordinating company

policies as they relate to our personnel resources.

Melissa Wood, Director of Marketing & Catering

Mrs. Wood is a seasoned professional in the hospitality industry where she has made a reputation as

an expert of driving revenue through catering, marketing, and local community involvement. Prior

to joining Athlon, Melissa served as Regional Catering Director of the Greater Richmond area for

Panera Bread.

Our outside professional team consists of:

John Heroux, President, Heroux & Company, LLP

Mr. Heroux has over 20 years of accounting experience. Mr. Heroux is also a member of the AICPA

(American Institute of Certified Public Accountants) and the NCACPA (North Carolina Association of

Certified Public Accountants). Mr. Heroux assists in the area of strategic tax planning and

preparation.

Sid Aldridge, Principle, Nicholls & Crampton, P.A.

Mr. Aldridge's practice areas include business and corporate law, small business planning,

commercial litigation, and contracts. Mr. Aldridge provides guidance in the legal areas of

operations for our clients. Mr. Aldridge is a graduate of the University of North Carolina School of

Law, Chapel Hill, North Carolina, where he earned his J.D. with honors in 1977.

David DuVal, Shareholder, Spotts Fain, PC

The focus of David DuVal's practice includes all areas of commercial real estate with a focus on the

representation of national retailers in the acquisition and leasing of store locations throughout the

United States. Mr. DuVal provides our company with guidance on land acquisition, ground lease

GK Ashland, LLC

Page 10

negotiations, build to suit, and sale leaseback transactions. Mr. DuVal is a graduate of James

Madison University and earned his J.D. from the University of Richmond T.C. Williams School of Law.

6.1 Personnel Plan

The table below shows our initial staffing estimates. While we fully expect compensation levels for our

personnel to increase in proportion to the costs of living, we do not anticipate our staffing levels to

abnormally increase or decrease within the first 3 years.

Our goal is to maintain a staffing level of 30 to 35 employees. Our staffing approach will be to find

hard-working, friendly, devoted employees that can contribute to the overall success of the

store. Our plan is to keep our turnover rate below 110%, saving us time and money by not having to

train new employees. We realize that efficiency is key to any successful operation; by maintaining a

consistent staff our efficiency will improve, improving our bottom line.

Our management team will consist of a General Manager, one Assistant General Manager,

and two hourly assistant managers.

Table: Personnel

Personnel Plan

Year 1

Year 2

Year 3

General Manager

$65,000

$68,250

$71,663

Assistant General Manager

$45,000

$47,250

$49,613

Hourly Team Members

$403,250

$415,348

$436,542

Bonuses

$15,000

Total People

Total Payroll

$528,250

$545,848

$572,817

7.0 Financial Plan

Sales -- We are basing our projected sales on the assumption that our restaurant will open on or

before January 1, 2026. We have projected initial annual sales of $2.5 million. We factored in a

modest annual growth rate of 4.0% for Year 2 and a 5.5% in Year 3.

Cost of Goods Sold -- The cost of goods sold was determined by taking actual Profit and Loss

statements from similar size restaurants in similar markets, including other Zaxby's restaurants

managed by Athlon Management in North Chesterfield, Virginia and Apex, NC.

Management Payroll -- Figures are based upon one General Manager and one salaried Assistant

General Manager. We will have two hourly assistant managers; however, their wages are included

in Hourly Team Members.

Fixed and Variable Expenses -- The various fixed and variable expenses were determined by taking

actual numbers from several comparable Zaxby's stores in similar markets.

GK Ashland, LLC

Page 11

Advertising & Marketing Fees -- These funds will be used for the support of various marketing

campaigns. Zaxby's requires all franchisees to devote 1.35% of their net sales to National Advertising

and another 1.5% to our local Co-Op marketing fund.

7.1 Start-up Funding

We will be securing long-term debt to assist with the land improvements and construction of our

Zaxby's restaurant in Ashland. Our funding chart is based on our ability to secure a LTV of 85%, which

we feel is possible.

In addition to the long-term debt, Mr. Kelley & Mr. Gattis will be contributing $400,000 of equity

injection into the project. This injection, along with funding provided by our lender, will provide the

necessary capital our business will need to successfully develop, construct, and open our Zaxby's

restaurant by the 4th quarter of 2025.

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund

$305,923

Start-up Assets to Fund

$1,900,391

Total Funding Required

$2,206,314

Assets

Non-cash Assets from Start-up

$1,850,391

Cash Requirements from Start-up

$50,000

Additional Cash Raised

$69,053

Cash Balance on Starting Date

$119,053

Total Assets

$1,969,444

Liabilities and Capital

Liabilities

Current Borrowing

Long-term Liabilities

$1,875,367

Accounts Payable (Outstanding Bills)

Other Current Liabilities (interest-free)

Total Liabilities

$1,875,367

Capital

Planned Investment

Owner

$400,000

Investor

Additional Investment Requirement

Total Planned Investment

$400,000

Loss at Start-up (Start-up Expenses)

($305,923)

Total Capital

$94,077

GK Ashland, LLC

Page 12

Total Capital and Liabilities

$1,969,444

Total Funding

$2,275,367

7.2 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following

table as annual assumptions. The monthly assumptions are included in the appendix. Interest rates,

tax rates, and personnel costs are based on conservative assumptions. Some of the more important

underlying assumptions are:

• Continued economic stability of the Hanover County, VA MSA trade area.

• No unforeseen changes to existing commuter traffic infrastructure in and around England Street,

between US 1 and I-95.

• No unforeseen changes to the student population of Randolf Macon College.

• No unforeseen changes in consumer tastes or interests to make our concept less competitive.

• Stable, consistent growth in the population of Hanover County and surrounding areas.

7.3 Break-even Analysis

The break-even analysis shows that GK Ashland has sufficient sales strength to be and remain

profitable. Our break-even point is $134,580 in monthly net sales, or $31,056 per week. Our average

monthly net sales for our first year of operation are conservatively forecasted at $208,333. Projections

are detailed in the following table.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even

$134,580

Assumptions:

Average Percent Variable Cost

37%

Estimated Monthly Fixed Cost

$85,458

7.4 Projected Profit and Loss

Projected Profit and Loss Income Statement for the company for years 1 through 3 are below.

Estimates for each month of the first year are in the appendix tables.

GK Ashland, LLC

Page 13

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

$2,499,996

$2,599,996

$2,742,996

Direct Cost of Sales

$875,420

$883,999

$932,619

Other Costs of Sales

Total Cost of Sales

$875,420

$883,999

$932,619

Gross Margin

$1,624,576

$1,715,997

$1,810,377

Gross Margin %

64.98%

66.00%

Expenses

Payroll

$528,250

$545,848

$572,817

Advertising & Marketing

$75,000

$78,000

$82,290

Depreciation

$42,000

Other Controllables

$61,250

$63,700

$67,203

Location Expenses

$22,000

General Expenses

$297,000

$310,000

$322,000

Total Operating Expenses

$1,025,500

$1,061,547

$1,108,311

Profit Before Interest and Taxes

$599,076

$654,450

$702,066

EBITDA

$641,076

$696,450

$744,066

Interest Expense

$127,948

$122,060

$115,916

Taxes Incurred

$141,339

$159,717

$175,845

Net Profit

$329,790

$372,673

$410,305

Net Profit/Sales

13.19%

14.33%

14.96%

7.5 Projected Cash Flow

The chart and table below show our cash flow projections. Monthly figures are in the appendix

tables.

Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received

Cash from Operations

Cash Sales

$2,499,996

$2,599,996

$2,742,996

Subtotal Cash from Operations

$2,499,996

$2,599,996

$2,742,996

Additional Cash Received

Sales Tax, VAT, HST/GST Received

$250,000

$260,000

$274,300

New Current Borrowing

New Other Liabilities (interest-free)

GK Ashland, LLC

Page 14

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received

$2,749,996

$2,859,995

$3,017,295

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

$528,250

$545,848

$572,817

Bill Payments

$1,471,230

$1,633,451

$1,711,429

Subtotal Spent on Operations

$1,999,480

$2,179,298

$2,284,247

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$250,000

$260,000

$274,300

Principal Repayment of Current Borrowing

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment

$87,768

Purchase Other Current Assets

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

$2,337,247

$2,527,066

$2,646,314

Net Cash Flow

$412,749

$332,930

$370,981

Cash Balance

$531,802

$864,731

$1,235,712

7.6 Projected Balance Sheet

The accompanying table represents our year-end balance sheet estimates for years 1 through

3. Year 1 monthly information is included in the appendix tables for your review.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

$531,802

$864,731

$1,235,712

Other Current Assets

Total Current Assets

$531,802

$864,731

$1,235,712

Long-term Assets

$1,850,391

Accumulated Depreciation

$42,000

$84,000

$126,000

Total Long-term Assets

$1,808,391

$1,766,391

$1,724,391

Total Assets

$2,340,193

$2,631,122

$2,960,103

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

$128,727

$134,751

$141,195

GK Ashland, LLC

Page 15

Current Borrowing

Other Current Liabilities

Subtotal Current Liabilities

$128,727

$134,751

$141,195

Long-term Liabilities

$1,787,599

$1,699,831

$1,612,063

Total Liabilities

$1,916,326

$1,834,583

$1,753,258

Paid-in Capital

$400,000

Retained Earnings

($305,923)

$23,867

$396,540

Earnings

$329,790

$372,673

$410,305

Total Capital

$423,867

$796,540

$1,206,845

Total Liabilities and Capital

$2,340,193

$2,631,122

$2,960,103

Net Worth

$423,867

$796,540

$1,206,845

Appendix

Appendix Page 1

Table: Sales Forecast

Sales Forecast

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

Net Sales

$208,333

Other

Total Sales

$208,333

Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Food Costs

$72,952

Other

Subtotal Direct Cost of Sales

$72,952

Appendix

Appendix Page 2

Table: Personnel

Personnel Plan

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

General Manager

$5,417

Assistant General Manager

$3,750

Hourly Team Members

$33,604

Bonuses

$1,250

Total People

Total Payroll

$44,021

Appendix

Appendix Page 3

Table: Profit and Loss

Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$208,333

Direct Cost of Sales

$72,952

Other Costs of Sales

Total Cost of Sales

$72,952

Gross Margin

$135,381

Gross Margin %

64.98%

Expenses

Payroll

$44,021

Advertising & Marketing

$6,250

Depreciation

$3,500

Other Controllables

$5,104

Location Expenses

15%

$1,833

General Expenses

$24,750

Total Operating Expenses

$85,458

Profit Before Interest and

Taxes

$49,923

EBITDA

$53,423

Interest Expense

$10,897

$10,854

$10,812

$10,769

$10,726

$10,684

$10,641

$10,598

$10,556

$10,513

$10,470

$10,428

Taxes Incurred

$11,708

$11,721

$11,733

$11,746

$11,759

$11,772

$11,785

$11,797

$11,810

$11,823

$11,836

$11,849

Net Profit

$27,318

$27,348

$27,378

$27,408

$27,438

$27,468

$27,497

$27,527

$27,557

$27,587

$27,617

$27,647

Net Profit/Sales

13.11%

13.13%

13.14%

13.16%

13.17%

13.18%

13.20%

13.21%

13.23%

13.24%

13.26%

13.27%

Appendix

Appendix Page 4

Table: Cash Flow

Pro Forma Cash Flow

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Received

Cash from Operations

Cash Sales

$208,333

Subtotal Cash from Operations

$208,333

Additional Cash Received

Sales Tax, VAT, HST/GST Received

10.00%

$20,833

New Current Borrowing

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Sales of Long-term Assets

New Investment Received

Subtotal Cash Received

$229,166

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditures from Operations

Cash Spending

$44,021

Bill Payments

$4,450

$133,493

$133,463

$133,433

$133,403

$133,373

$133,344

$133,314

$133,284

$133,254

$133,224

$133,194

Subtotal Spent on Operations

$48,471

$177,514

$177,484

$177,454

$177,424

$177,394

$177,364

$177,335

$177,305

$177,275

$177,245

$177,215

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$20,833

Principal Repayment of Current

Borrowing

Other Liabilities Principal Repayment

Long-term Liabilities Principal

Repayment

$7,314

Purchase Other Current Assets

Appendix

Appendix Page 5

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

$76,618

$205,661

$205,631

$205,601

$205,571

$205,542

$205,512

$205,482

$205,452

$205,422

$205,392

$205,362

Net Cash Flow

$152,549

$23,505

$23,535

$23,565

$23,595

$23,625

$23,655

$23,684

$23,714

$23,744

$23,774

$23,804

Cash Balance

$271,602

$295,107

$318,642

$342,207

$365,802

$389,426

$413,081

$436,765

$460,480

$484,224

$507,998

$531,802

Appendix

Appendix Page 6

Table: Balance Sheet

Pro Forma Balance Sheet

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Assets

Starting Balances

Current Assets

Cash

$119,053

$271,602

$295,107

$318,642

$342,207

$365,802

$389,426

$413,081

$436,765

$460,480

$484,224

$507,998

$531,802

Other Current Assets

Total Current Assets

$119,053

$271,602

$295,107

$318,642

$342,207

$365,802

$389,426

$413,081

$436,765

$460,480

$484,224

$507,998

$531,802

Long-term Assets

$1,850,391

Accumulated Depreciation

$3,500

$7,000

$10,500

$14,000

$17,500

$21,000

$24,500

$28,000

$31,500

$35,000

$38,500

$42,000

Total Long-term Assets

$1,850,391

$1,846,891

$1,843,391

$1,839,891

$1,836,391

$1,832,891

$1,829,391

$1,825,891

$1,822,391

$1,818,891

$1,815,391

$1,811,891

$1,808,391

Total Assets

$1,969,444

$2,118,493

$2,138,498

$2,158,533

$2,178,598

$2,198,693

$2,218,817

$2,238,972

$2,259,156

$2,279,371

$2,299,615

$2,319,889

$2,340,193

Liabilities and Capital

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Current Liabilities

Accounts Payable

$129,044

$129,015

$128,986

$128,958

$128,929

$128,900

$128,871

$128,842

$128,813

$128,784

$128,755

$128,727

Current Borrowing

Other Current Liabilities

Subtotal Current Liabilities

$129,044

$129,015

$128,986

$128,958

$128,929

$128,900

$128,871

$128,842

$128,813

$128,784

$128,755

$128,727

Long-term Liabilities

$1,875,367

$1,868,053

$1,860,739

$1,853,425

$1,846,111

$1,838,797

$1,831,483

$1,824,169

$1,816,855

$1,809,541

$1,802,227

$1,794,913

$1,787,599

Total Liabilities

$1,875,367

$1,997,097

$1,989,755

$1,982,412

$1,975,069

$1,967,726

$1,960,383

$1,953,040

$1,945,697

$1,938,354

$1,931,012

$1,923,669

$1,916,326

Paid-in Capital

$400,000

Retained Earnings

($305,923)

Earnings

$27,318

$54,666

$82,044

$109,452

$136,890

$164,357

$191,855

$219,382

$246,939

$274,526

$302,143

$329,790

Total Capital

$94,077

$121,395

$148,743

$176,121

$203,529

$230,967

$258,434

$285,932

$313,459

$341,016

$368,603

$396,220

$423,867

Total Liabilities and Capital

$1,969,444

$2,118,493

$2,138,498

$2,158,533

$2,178,598

$2,198,693

$2,218,817

$2,238,972

$2,259,156

$2,279,371

$2,299,615

$2,319,889

$2,340,193

Net Worth

$94,077

$121,395

$148,743

$176,121

$203,529

$230,967

$258,434

$285,932

$313,459

$341,016

$368,603

$396,220

$423,867

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I-95 Corridor Restaurant Incentive Program Application PDF Free Download

I-95 Corridor Restaurant Incentive Program Application PDF free Download. Think more deeply and widely.

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