Coleman 2011 Underwriting Guide for Full Service Restaurants

Would you like to hear today's specials? The chef has prepared Restaurant Valuation, served on a bed of Expertise accompanied by a side of fresh Industry-Specific Analysis. For desert, we are featuring a trio of "Conversation Starters", "Rules of Thumb" and "Transaction Data".

Coleman's Underwriting Guide for Full Service Restaurants offers a menu of options for evaluating the financial stability and operational viablity of restaurants seeking small business loans.

Coleman's Underwriting Guide Series makes it easy for you to become an expert in a variety of industries in a short amount of time -- ensuring that you can identify well-run businesses and good loan risks using just a few key metrics. Bankers are experts in reading financial statments, but underwriters may not have the breadth of knowledge to accurately assess ALL the factors that might impact credit-worthiness. Our industry-specific Underwriting Guides are an excellent way to bring you and your staff up to speed and thoroughly understand a specific industry, its current economic condition and potential future trends.

The 478 page Full Service Restaurant Guide has over 300 pages of recent transaction data derived from ACTUAL RESTAURANT SALES across the nation and independent, third-party data in addtion to 18 pages of financial analysis and benchmarks for valuation PLUS survey responses from owners and industry experts on a variety of restaurant-specific challenges.

Financial data elements are extrapolated from US Census Reports including: Quarterly Financial Reports, County Business Patterns Report, and the Quarterly Services Survey as well as corporate income tax returns and a variety of credit reporting agency reports.

Coleman 2011 Industry Guide for Small Business Lenders

Industry Synopsis - RESTAURANTS: The U.S. industry includes about 480,000 restaurants with a combined annual revenue of about $375 billion. The industry is highly fragmented with 50 of the largest companies holding just 20% of the market. The industry consists of Full Service Restaurants (FSR's) and limited service eating establishments which includes quick serve restaurants (QSR's), cafeterias, buffets, snack bars and non-alcoholic beverage bars. Most QSR's are fast food chains but QSR's also include "fast casual" which offer higher quality, more expensive food without table service. FSR's include casual dining, family dining and fine dining. FSR's rely heavily on high-margin menu items and effective marketing. Profitability of QSR's relies on efficient operations and high volume sales. The industry includes national and regional chains, franchises and independent operators. The majority of restaurants are independently owned and operated. Annual sales average $866,000 for FSR's and $717,000 for QSR's. Alchoholic beverages are important contributors to total sales, particularly for FSR's. Restaurants appeal to a broad demographic, sales are slightly seasonal and cash flow is not a problem. Cost accounting is important in tracking the profitability of specific menu items. Gross margins are approximately 60% of sales. For FSR's, food/beverage and payroll costs are each 1/3 of sales with credit card fees at 2% of sales. Due to a slowed economy, consumers are eating out less frequently but restaurant sales growth grew modestly between 2008 and 2010 due to an average restaurant pricing increase of 9%.

The 2011 Underwriting Guide offers small business lenders 478 pages of simple and easy-to-understand data and industry-wide analysis on the FULL SERVICE RESTAURANT sector including:

-Economic trends and indicators
-Cash flow and solvency
-Industry performance benchmarks
-Consumer price trends
-Valuation multiples
-Industry forecast and growth ratings
-Industry compliance requirements and costs necessary to achieve compliance:
-Profitability
-Efficiency/Debt/Risk
-Turnover
-Industry employment growth
-Actual transaction data and comps

*PLUS - "Conversation Starters" -- a special section in our guides that suggest industry-specific questions you should ask loan applicants to better understand their business model and their credit-worthiness. For example:

"How have changes in food and beverage costs affected the company's profitability?"

"What kind of relationship do you have with your suppliers?"

"How are inventory write-offs minimized?"

"What percentage of sales come from gift cards, if at all?"

"If the company is a franchise, what does the franchise agreement cover?"

"How effective are local marketing initiatives? Customer loyalty programs?"

Coleman Publishing, the recognized leader in small business lending has partnered with BVR, the leader in business valuation to bring you the 2011 Underwriting Guide Series. The entire library consists of 30 volumes, representing industries such as: hotels/motels, daycare centers, auto dealers, law firms, architecture and engineering firms, quick serve restaurants and casual dining restaurants, just to name a few.

Individual volumes are sold for $395 and the entire 30 volume library is available for $8950.