Paprika Pizza is a corporation, having been incorporated in february of 2006, primarily

for the purpose of selling pizza, sandwiches, and various other food products, as a
licensed franchisee under the franchise name of "Paprika Foods." The company
presently maintains an office in Banjarahills, Hyderabad. The president and principal
shareholder of the company is Madhu Sudan Rao.

The company intends to open, over the course of the next three years, several
franchised retail pizza establishments in the hyderabad, with its first store scheduled to
open in January of 1997. The company's primary thrust will be to locate each of its stores
in newly developing, high density, residential areas, with little pre-existing competition.
The company also will maintain high quality control standards, strictly adhering to the
Mama's Pizza "formula," which has, to date, proven successful (Mama's Pizza has
previously been voted the number 1 best tasting pizza in Pennsylvania). The company
also will utilize mid-level pricing.

The name of the franchisor is Mama's Pizza Franchising, Inc., a Pennsylvania corporation
formed in 1996 for the purpose of offering and selling Mama's Pizza franchises, and
servicing, supporting, and administering all functions inherent in operating the franchise
system. William A. Becker is the president, treasurer, director, and 50% shareholder of
Mama's Pizza Franchising, Inc.

The names of Mama's Pizza predecessors are William A. Becker, Inc. and the Becker
Group, Inc., both Pennsylvania corporations. William A. Becker, Inc. and Mama's Pizza
Franchising, Inc. maintain their principal business address in Pittsburgh, Pennsylvania.
Since its inception in 1990, William A. Becker, Inc. has been engaged in the ownership
and operation of Mama's Pizza stores that specialize in the sale of pizza and other food
products in the metropolitan Pittsburgh area. Over the last three years William A. Becker,
Inc. has owned and operated two Mama's Pizza stores, located in nearby suburbs. There
are presently eight additional franchised Mama's Pizza establishments in the metropolitan
Pittsburgh area. Negotiations are pending for additional stores. Another company store is
expected to open in January of 1997.

THE FRANCHISE AGREEMENT

On November 12, 1996 the company did execute with Mama's Pizza Franchising, Inc. the
Franchisor's standard franchise agreement with numerous amendments, deletions, and
additions. Under the agreement, the company has a protected territory defined as a five-
mile radius from each of its stores. Under the agreement, no other Mama's Pizza franchise
or company store can be opened within this five-mile radius protected area. Furthermore,
the company has negotiated and the agreement provides that the company has a 30-day
right of first refusal anywhere within Washington and Westmoreland counties. This right
of first refusal will allow the company, if it chooses, to "lock-in" these counties, thereby
becoming and remaining the sole Mama's Pizza franchisee in such counties.
Finally, under the agreement, the company is required to pay an ongoing franchise
royalty equal to 3% of gross revenues during the first year of operations and 4%
thereafter. An industry wide review of franchise fees and royalties reveals that the
Mama's Pizza royalty is substantially less than those found with competing pizza
franchises.

PURPOSE OF FINANCING
The company is seeking financing for the express purpose of providing cash funding to
allow (1) the acquisition of various machinery, equipment, and supplies and (2) the
construction of its first retail pizza establishment.

1. The Equipment: Schedule A, is a pro-forma list of the equipment and supplies

anticipated to be required for the operation of the company's first pizza store,
together with a projected aggregate cost of such items. It is important to note that
the company has decided to acquire wherever possible used equipment and
supplies, recognizing that quality used equipment is readily available in the
marketplace at substantial savings. The purchase of high quality, well maintained
used equipment will allow the company to reduce its capital outlays to
approximately 30% of what would otherwise be expected as a result of purchasing
new equipment. This will obviously preserve working capital, reduce ongoing
interest costs, and increase net profitability.
2. The Build-Out: Schedule B is a list of the items associated with the "Build-out,"
which is capable of being financed together with their anticipated cost.

The total cash financing sought for both the equipment and the "Build-out" is $90,000.

THE INITIAL STORE

The company's initial store will consist of 1,600 square feet of retail space. Indeed, the
company has executed a five-year lease with a five-year renewal option at an annual rent
of $12.00 per square foot. This results in a monthly rent charge of $1,600, plus common
area charges which are anticipated to approximate $300 monthly. The initial store will be
located in a plaza consisting of 7 retail establishments. The plaza includes two other retail
food establishments an Outback Steak House which can be described as an "anchor" and
Bagel Factory. Neither the Outback Steak House nor Bagel Factory are considered to be
direct competitors. Each of their product lines are substantially different and their
markets are likewise different. The company is a takeout retail pizza franchise, while
both Outback Steak House and Bagel Factory are essentially sit-down restaurants with
different product lines. The remaining retail outlets in the plaza include Delta Florist,
Century Cellunet, Airway Oxygen, and Benjamin Moore.
THE COMPETITION
The company has examined in detail the geographic area consisting of a two-mile radius
from the initial store to determine the extent of competition. It is apparent that little
competition exists. The nearest retail pizza establishment west of the initial store is
located in a town which is approximately five miles further west. In this town one will
find a wide array of pizza establishments, including Little Caesars, Dominos, Pizza Hut,
and Hungry Howies. The nearest competing business is approximately one quarter mile
to the east and is a nonfranchised, independent pizza establishment known as Jack's
Pizza. Approximately two miles to the east are Little Caesars and Papa Mario's.
Approximately one and one half miles to the south is a Whatta Pizza. There are no
competing pizza establishments within three miles to the north of the initial store.

MARKETING PLAN
The company's marketing thrust will be twofold. First, the company will be participating
in and benefiting from the franchise wide marketing fund. Under the "agreement," each
franchisee pays to the franchisor a marketing fee equal to $.10 per pizza box purchased.
This amount is then forwarded to the franchisor by the box manufacturer and utilized for
the benefit of the franchise. The advertising is not store specific and is geared toward
promoting the franchise name and the franchise's product line as a whole. Second, under
the "agreement," the company is obligated to expend 1% of its gross revenues on local
advertising. However, the company fully expects to exceed the 1% requirement. Indeed,
the company's marketing thrust will consist of fliers, discount coupons, and inserts as
well as direct mail promotions.

With respect to packaging, it is important to understand that as a franchisee, the company

will be licensed to utilize each and every one of the Mama's Pizza trademarks. Indeed, the
"agreement" specifically requires that each of the franchisees strictly adheres to
trademark packaging. This is common industry practice.

Editor's note: this plan also includes a Schedule C reflecting the probable pricing
structure of each of the company's proposed products. This pricing is mid-tier and
represents, in the opinion of the company, good value, when compared to the quality of
the company's product line.

PRO-FORMA FINANCIAL STATEMENTS

Schedule C is a pro-forma income statement, before depreciation charges, reflecting the
company's anticipated cash flow generated by the initial store during the calendar year
ending December 31, 1997.
SCHEDULE A

DESCRIPTION COST
MIDDLYBY MARSHALL
350 DOUBLE OVENS 15,000
ACME SHEETER 1,600
VCM MIXER 3,000
3 DOOR PIZZA PREP TABLE 1,800
3 DOOR SALAD PREP TABLE 1,500
THREE COMPARTMENT SINK 675
TWO HAND SINKS (125ea.) 250
FREEZER 400
THREE 8' SS TABLES (275ea.) 825
ONE 6' SS TABLE 125
SMALLWARES 6,000
EXTERIOR SIGNS 4,000
INTERIOR SIGNS 600
UNDERCOUNTER COOLER 900
PROOFER 1,100
PHONE SYSTEM 2,600
DESCRIPTION COST
CAR TOP SIGNS 850
FAX MACHINE & CASH REGISTER 600
PIZZA BAGS 265
8' X 12' WALK-IN COOLER (INSTALLED) 5,300
TOTAL 47,390
TAX 2,843
DELIVERY AND SET-UP 750
TOTAL $50,983

SCHEDULE B

DESCRIPTION COST
FLOORING $3,680
CEALING 840
WALLS 4,100
COUNTERS & CABINETS 2,000
HVAC 1,000
MAKEUP AIR 5,000
HOOD FOR MAKEUP AIR 2,000
ELECTRICAL 2,600
PLUMBING 4,400
MISC. LABOR & RELATED SERVICES 7,200
MISC. EXTRAS 1,200
TOTAL $34,020

SCHEDULE C
Pro-Forma Income Statement

Net Income Before Depreciation & Taxes

First Year-3% Per Month Growth

 Jan Feb Mar April May
INCOME
Sales-Food 36,000 37,080 38,192 39,338 40,518
Sales-Pop & Bottles 1,800 1,854 1,910 1,967 2,026
Sales-Deliv. 2,600 2,678 2,758 2,841 2,926
Total Gross Income 40,400 41,612 42,860 44,146 45,471
COST OF GOODS SOLD
Purchases 10,100 10,403 10,715 11,037 11,368
Delivery Expense 1,620 1,669 1,719 1,770 1,823
Operating Supplies 121 124 128 132 136
Total C.O.G. Sold 11,841 12,196 12,562 12,939 13,327
Gross Profit 28,559 29,416 30,298 31,207 32,144
EXPENSES
Franchise Fee 1,212 1,248 1,286 1,324 1,364
Insurance 350 350 350 350 350
Maintenance & Repair 400 400 400 400 400
Office Supplies 40 42 43 44 45
Advertising 3,500 2,000 1,000 1,000 1,000
Bank Charges 40 42 43 44 45
Laundry 121 125 129 132 136
 Jan Feb Mar April May
Rent - Office 1,900 1,900 1,900 1,900 1,900
Equipment Lease 1,500 1,500 1,500 1,500 1,500
Rubbish Removal 40 40 40 40 40
Telephone 300 300 300 300 300
Utilities 525 541 557 574 591
Sales Tax 2,160 2,225 2,292 2,360 2,431
Wages 9,898 10,195 10,501 10,816 11,140
Total Expenses 21,987 20,907 20,340 20,785 21,244
Net Operating Income 6,572 8,509 9,959 10,422 10,900
Cumulative Net Operating Income 15,081 25,040 35,462 46,361

June July Aug Sept Oct Nov Dec

41,734 42,986 44,275 45,604 46,972 48,381 49,832
2,087 2,149 2,214 2,280 2,349 2,419 2,492
3,014 3,105 3,198 3,294 3,392 3,494 3,599
46,835 48,240 49,687 51,178 52,713 54,294 55,923

11,709 12,060 12,422 12,794 13,178 13,574 13,981

1,878 1,934 1,992 2,052 2,114 2,177 2,243
140 144 149 153 158 162 167
June July Aug Sept Oct Nov Dec
13,727 14,139 14,563 15,000 15,450 15,913 16,391
33,108 34,101 35,124 36,178 37,263 38,381 39,533

1,405 1,447 1,491 1,535 1,581 1,629 1,678

350 350 350 350 350 350 350
400 400 400 400 400 400 400
47 48 50 51 53 54 56
1,000 1,000 1,000 1,024 1,054 1,086 1,118
47 48 50 51 53 54 56
141 145 149 154 158 163 168
1,900 1,900 1,900 1,900 1,900 1,900 1,900
1,500 1,500 1,500 1,500 1,500 1,500 1,500
40 40 40 40 40 40 40
300 300 300 300 300 300 300
609 627 646 665 685 706 727
2,504 2,579 2,657 2,736 2,818 2,903 2,990
11,474 11,819 12,173 12,538 12,915 13,302 13,701
21,717 22,203 22,705 23,245 23,807 24,387 24,984
11,391 11,898 12,419 12,933 13,456 13,994 14,549
57,753 69,650 82,070 95,003 108,459 122,453 137,001

Cash Flow
 01/31 02/07 02/14 02/21 02/28
BEGINNING BALANCE
Checking 14,154 12,337 14,534 13,216 15,111
SALES
Food 0 2,900 3,335 3,835 4,411
Pop 0 100 110 121 133
Deliveries 0 200 220 242 266
Total 0 3,200 3,665 4,198 4,810
COSTS
Drivers 30 102 117 134 154
Food 0 598 992 1,099 1,259
Total 30 700 1,109 1,234 1,413
Subtotal 14,124 14,837 17,090 16,180 18,507
EXPENSE
Franchise Fee 217
Insurance
Maintenance & Repair
Office Supplies 50
Advertising 590 460
Bank Charges
 01/31 02/07 02/14 02/21 02/28
Laundry 34 34 34
Rent - Office 0 1,975
Equipment Lease 0 0 0 0 0
Rubbish Removal 129 128
Telephone 354 354
Utilities 79 350
Wages - Gross 1,354 3,000 3,000
Taxes 0 174 200 230 265
Total Expenses 1,787 303 3,874 1,069 5,978
Ending Balance 12,337 14,534 13,216 15,111 12,530
Labor 38.2%

03/07 03/14 03/21 03/28 04/07 04/14 04/21 04/28

12,530 14,799 15,286 19,479 17,342 23,030 24,685 29,903

5,072 5,833 6,708 7,714 8,871 8,871 8,871 8,871

146 161 177 195 214 214 214 214
293 322 354 390 429 429 429 429
5,511 6,316 7,239 8,299 9,514 9,514 9,514 9,514
03/07 03/14 03/21 03/28 04/07 04/14 04/21 04/28

176 202 232 266 304 304 304 304

1,443 1,653 1,895 2,172 2,490 2,854 2,854 2,854
1,619 1,856 2,126 2,437 2,794 3,159 3,159 3,159
16,422 19,260 20,399 25,341 24,063 29,386 31,040 36,259

270 0 355 0 466 0 571 0

336 0 336 0 0 0 336
50 50 0 0 0 50
500 590
34 34 34 34 34 34 34 34
1,975 0 0 0 1,975
0 0 0 1,149 0 0 0 1,149
128 128
354 0 0 0 354
500 0 0 0 500
3,000 3,137 0 4,135 0 4,412
304 350 402 463 532 532 532 532
1,623 3,974 919 7,998 1,032 4,701 1,137 9,343
14,799 15,286 19,479 17,342 23,030 24,685 29,903 26,916
29.1% 23.1% 23.2% 23.2%

Read more: Pizzeria Business Plan Business Plan - Introduction, Strategic plan, Strategic
plan, The franchise agreement, Purpose of financing
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