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Restaurant Development

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Restaurant Development Group’s Winston-Salem Project

Paul E. Juras The Wayne Calloway School of Business and Accountancy Wake Forest University P.O. Box 7285 Reynolda Station Winston-Salem, NC 27109-7285 E-Mail: JURAS@WFU.EDU James F. Cotter The Wayne Calloway School of Business and Accountancy Wake Forest University P.O. Box 7285 Reynolda Station Winston-Salem, NC 27109-7285

Restaurant Development Group

Memo
To: Date: Re: Registered Students March 1st 2006 Restaurant Development Group’s Winston-Salem Project From: Mr. Bobbie Filet

Introduction Restaurant Development Group (RDG) is considering opening a new restaurant in conjunction with the “Winston-Salem Partnership” group that is attempting develop a center of entertainment in downtown Winston-Salem, NC. As part of the project, the company plans to renovate an existing restaurant space in the downtown area and begin operations in six months. RDG has decided to hire several teams of professionals to handle various facets of the project. One team will work closely with city and county government officials to insure the project has strong support from all relevant government agencies. Another team will be responsible for developing the marketing plan and handling media and public relations to insure the project has a positive reception within the media. Finally, the finance and accounting team has responsibility for examining the financial viability of renovating the restaurant and developing a cash flow budget to determine how much cash will be needed open and operate the restaurant. You are part of this last team and are charged with preparing the necessary analyses. In addition to the “go or no-go” decision, RDG management wants to know whether the restaurant should be open for dinner only or open for lunch and dinner. The purpose of this memo is to ask you to examine the financial viability of

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