INVESTOR PACKET

OPPORTUNITY

Chinese restaurant food is most often underachieving, overproduced, greasy and unhealthy. It has become “ethnic fast food,” sacrificing taste and experience for very low cost. The only way these restaurants have continued to meet ever-growing price constraints has been to resort to the cheapest ingredients and shortcut cooking methods, resulting in a sub-par dining experience. 

San Francisco has become the flagship city for innovative and stimulating food ventures. The local culture and appetite drive the market to create exceptional food at the leading edge of American cuisine – making a space for chef driven restaurants, gastrotourism, pop ups, food trucks and other eclectic eating venues.

The standards for the quality of produce are always high, and the availability of ingredients are beyond compare in the United States. Despite all of this, Chinese food is still underrepresented in the current movement of nose to tail sustainable food. Mister Jiu’s aims to be the first restaurant of its kind in the area.

Chef Brandon Jew’s experience growing
up in a Chinese-American family in San Francisco gave him a much different perspective on how fresh Chinese food can really be. 


The Space
Mister Jiu’s is designed to be a calm but lively and comfortable environment, optimizing natural light and sustainable materials. The interior space is being designed by renowned architecture firm Boor Bridges [Sightglass, Trou Normand, The Mill] in collaboration with Method, a leading design firm specializing in brand experience and customer service touch- points. The combination of architectural expertise and a customer-centric approach to design will lead to a unique and well-curated dining experience not offered by our competitors.

The Lease
Mister Jiu’s LLC has leased an approximately 10,000 sq. foot space
at 731 Grant Avenue. The lease expires October 2019 with three 5 year options (total of 20 years). The terms of the lease are favorable and exceedingly below market rate. The length of the lease also gives Mister Jiu’s LLC an asset which, given the rapid growth of the neighborhood, might ultimately have significant value on its own.

Parklet
San Francisco boasts more than 40 of these mini public parks housed in former parking spaces around the city. While many parklets are hosted and maintained by nearby cafes, these public spaces are open to everyone. Having designed 3 parklets in the city, Boor Bridges will design a parklet
for Mister Jiu’s that will bolster the restaurant’s visual presence on Waverly Lane. Mister Jiu’s will host the first parklet in Chinatown, providing a space on premise where customers can wait for their reservation or casually eat take out food from the bar. As a public space, the parklet will serve as a resting place for tourists navigating the steep streets of San Francisco, or a meeting place for neighbors to share a pot of tea or
a game of mahjong.


Investor Benefits

Fifty units are available for investment at $50,000/unit (units can be broken into smaller fractions at Management discretion). Investors will be given priority reservations and table requests, priority invitations to all Mister Jiu’s special events, and priority access to rent out the dining room or the private dining booths.  Mister Jiu’s sees its investors not only as the source of capital utilized to fully create the business, but also as key partners in an overarching marketing/public relations strategy. 

Mister Jiu’s expects investors to frequent and enjoy its food and libations as often as possible, inviting friends and co-workers, generating word of mouth buzz and advocating on behalf of the business. To this end, we expect the overwhelming majority of investors to be locals; soliciting investment from those outside San Francisco is highly unlikely. Management and staff will be trained to know every investor and be fully aware of their importance.

 

 


Mister Jiu’s Hypothetical Return of $50,000 Investment

Payback period: 36 months internal rate of return (IRR): 29%
Key deal points underlying IRR:

1. Capitalization is all equity, equal to $2,500,000
2. Preferred Shareholders receive 90% of proceeds until return of capital and 40% thereafter
3. Approximately $150,000 of working capital is maintained until return of capital, after distributions at all times
4. Although lease term may be longer than 10 years, including options, IRR calculation is based on 10 year life. There is no terminal value factored into the IRR, which would increase the IRR.
5. After Year 5, cash flow from operations is projected to increase 3.5% per year, through year 10


INCOME STATEMENTS

Sales are derived from check average and customer- count assumptions by “meal period”, which include lunch and dinner sales. The Restaurant will open for lunch and dinner five days a week and for brunch one day. Dinner sales are defined as sales occurring after 5 pm until closing. While not included in the financial projections, the restaurant will also generate revenue from take-out, catering and Jiu’s Ho Ho.
The restaurant is presumed to seat 125 patrons inside with 90 seats in the dining room and 25 seats at the bar.
Food, beer, wine and liquor sales are computed by meal period each month. Check average assumptions are based on menu pricing. Guest count assumptions rely on the Manager’s research focused on similar concepts in comparable Bar Area restaurants.

 

CHECK AVERAGE
 

                               YEAR 1                2                3                4                5
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Lunch                      $24                  $XX
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Dinner