OHANA BROS. Business Summary Brief

Transcription

1 OHANA BROS. Business Summary Brief INTRODUCTION Ohana Bros. Island Style Chips & Popcorn is a unique mall impulse snack retail concept that features freshly made potato chips, gourmet popcorn, island fries and authentic Hawaiian shave ice all handmade from scratch, right in front of the customer using 100% all natural ingredients. Q: Why hasn t anyone innovated, combined and packaged the most popular snack food items; popcorn, chips and fries together under an exciting mall retail brand? Q: Why is, or should, the savory snack marketplace be primarily dominated by two soft pretzel players (Auntie Anne s / Wetzels Pretzels) to the tune of a combined $548 million per year in sales? Fact: Over 1,100 shopping malls in the U.S. alone present a First-To-Market opportunity for Ohana Bros. Fact: Each Ohana Bros. retail store is projected to generate a 30% profitability margin on annual sales of $500,000. Capitalization for each unit averages $300,000. Fact: This is the best tasting popcorn, chips, fries and Hawaiian shave ice you will ever taste! Q: Are you in? Then read on.

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3 THE BUSINESS OPPORTUNITY THE Impulse Snack MARKETPLACE High Growth in Impulse Snack Category: o Auntie Anne s Soft Pretzels - $441 million in sales 2012 with over 1,200 locations o Wetzels Pretzels - $107 million in sales in 2012 with over 250 stores o New York Fries - $65 million in sales with over 190 locations o Doc Popcorn - $7.2 million in sales with over 77 retail outlet locations, started just 3 years ago in 2009 with $1 million in sales. Revenue Generation: Annual gross revenue figures for Impulse Snack category retailers can average anywhere from $250,000 to $750,000. One Auntie Anne s Pretzel location in Hayward, CA averages $950,000 per year in sales. Franchiseable: The highly scalable Ohana Bros. business model meets or is positioned to meet the key franchisability criteria established by the IFranchise Group: o Credibility o Differentiation o Transferability of Knowledge o Adaptability o Refined and successful prototype operations - o Documented Systems o Affordability o Return on Investment o Market trends and conditions o Capital o Commitment to relationships o Strength of management

4 CONSUMER DEMAND / TRENDS Who doesn t like popcorn, potato chips or fries? According to Snack Foods: A Global Business Report, from Global Industry Analysts, the worldwide demand for snack foods is likely to hit US $334 billion by 2015, with a sales volume of almost 50,000 thousand tons. 1 Potato chips are the top pick in salty snacks among all age groups and remain the largest segment with $6.8 billion in sales in Popcorn was the fifth highest salty snack with $3.2 billion in sales in The most preferred foods by men, women, college kids, and children less than seven years old 2 : o Men: Hamburger, French Fries, Pizza o Women: French Fries, Hamburger, Pizza o Students: French Fries, Hamburger, Pizza o Kids: French Fries, Pizza, Hamburger French Fries are the food jewel in the more than 31,000 McDonalds restaurants I just got have it! (or Why Humans Love Popcorn and Chips) o Taste Hedonics (salt, sugar, and umami) o Dynamic Contrast (food arousal and surprise) o Evoked Qualities (when food sensory properties evoke past memories) o Food Pleasure Equation (Food Pleasure = sensation + macronutrients) o Caloric Density (humans like food with a CD of about 5.0) o Emulsion Theory (taste buds love foods in emulsified forms) One of the latest emerging movements in gourmet and specialty foods in the U.S. is currently found in the increased demand for more artisanal food items which are often high-quality, wholesome, often natural, created by hand, in small production environments. Consumers are more conscious of what goes into their foods as well as how it s made. 1 THE WORLD OF FOOD INGREDIENTS DECEMBER 2011 Article: A Snacking Snapshot by Rachel Zemser 2 Dr. Liz Sloan, Sloan Trends

5 OPPORTUNITIES Shopping Malls: There are currently over 1,100 shopping malls 3 in the U.S., more than 100 in California alone. The current consensus amongst mall ownership groups is that there is a void in new and exciting retail concepts, especially in the impulse savory snack category. Ohana Bros. Mgmt. Group has been courted (already!) by major mall ownership groups such as Westfield Shopping Centers, General Growth Properties (GGP), Taubman and Rouse Properties to be in their malls. First-Mover Advantage: Despite the fact that fries, chips and popcorn remain the most popular snack food items, there are currently no QSR concepts that have either innovated or combined all three of these snack items together under one retail brand. Ohana Bros. has the opportunity to be a First- Mover in this category to combine all three snack items. Additionally, Hawaiian shave ice has not been by and large introduced to the mainland yet. Merge Snack Offerings. Comparative single-item offering business models; New York Fries (NYF), Doc Popcorn, Wetzels Pretzels, Auntie Anne s Pretzels, Bahama Bucs Hawaiian Shave Ice, and Spudniks Potato Chips have proven that there is a high demand for impulse snack offerings as these retailers are prominent in malls and retail shopping centers. Ohana Bros. has merged four highly successful snack business models under one great brand: SHAVE ICE: Ulelani s Bahama Bucs Lanis Kukuis POPCORN: Doc Popcorn Garretts Cornology Kettlepop Cornucopia FRIES: New York Fries Heavenly Fries Boise Fry Company Potato Corner Pommes Frites CHIPS: Billy Goat Gourmet Chip Co. Spudniks Maui Chips 3 Shopping Centers defined as malls with greater than 400,000 gross leasable square footage.

6 Fragmented impulse snack Marketplace: Generally, aside from the snack food category soft pretzels retailers, the impulse snack marketplace is highly fragmented with only the popcorn retailer Doc Popcorn starting to establish a market presence in malls. Secondary Retail Channels: This highly scalable business model is perfectly positioned to expand to these possible retail distribution channels: Sports Venues Airports Popular tourists locations: Bourbon Street, LA, Pier 39 SF, Old Towne, S.D., etc. Amusement Parks and Attractions Mobile Carts: o State and County Fairs o Corporate Events o Farmers Markets FINANCIAL The Ohana Bros. business model is highly profitable average 25-30% profitability on projected average annual sales of $500,000, 15-20% COGS. Highly Scalable for Franchising and or company expansion ROI Each Ohana Bros. Island Style Chips& Popcorn retail unit can be capitalized for as little as $300,000. Low Break-Even Point ($736 Average Sales Per Day) Minimal waste as products are made to order Impulse savory snack items which at the average price point of $5-8 is not affected by the economy or falls into discretionary spending categories for the consumers. Retail stores can be operated by two to three individuals with minimal skill sets. FACT SHEET Business Type: Retail food serving impulse savory snacks items; freshly prepared seasoned chips and island fries with choice of delicious dipping sauces, freshly popped seasoned and candied popcorn and Hawaiian-style shave ice with over a dozen natural, homemade flavors to top. Average In-Line Store Size: 850 1,200 square feet +/- In-Line Average Unit Capitalization: $300,000 - $355,000 Projected Annual Sales: $450,000 to $500,000 per year Sales Break Even: $23,184 per month ($736 per day) Note: Does not include Corporate Overhead and Debt Service Profitability: Target 30% on EBITDA projection of $150,000 Performa: Gross Revenues: $500,000 COGS (217,000) Gross Profit $282,920 Operating Expenses (132,624) Net Operating Income $150,296 * *Does not include overhead or debt service

7 BUSINESS OVERVIEW Under Phase I of a 5-year strategic growth plan, Ohana Bros. Management Group, LLC will construct, develop and operate its prototype in-line retail store at the Sunvalley Mall which is located in the city of Concord in the San Francisco Bay Area commencing September The goal is once proven concept has been established its primary growth platform will include both company-owned units and a franchising development program Each in-line retail unit will be consists of approximately 850-1,000 +/- square feet. Each Ohana Bros. retail unit will be themed under the brand name which represents a fusion of California and Hawaiian culture; relaxed, casual, home-styled and crafted flavorings. Customers will be attracted to not only the great variety of snacks but the whole "'Ohana Bros. brand which is based on four founding pillars; quality products, exuding the aloha spirit, having a hell of a lot of fun with each other and the customers, and finally on the Ohana Bros., the two alter egos of the founders who are surfing globe trotters, searching the world over for the perfect spices and taste combinations to flavor their snacks. Revenue will be generated primarily from the sales of on-site, freshly prepared and seasoned chips fresh cut island fries, freshly popped seasoned and candied popcorn, and Hawaiian-style shave ice. Sales are anticipated to be approximately $450,000- $500,000 per retail store stabilized per year and to increase at an average annual rate of 5% per year in the first five years of operation. Secondary revenue will be generated through e-commerce of Ohana Bros. potato chips, popcorn, and Ohana Bros. branded merchandise. Our primary customers will be drawn from the center s primary trade area population (see trade areas per each mall location in Business section of business plan). Customers shopping each mall location will purchase Ohana Bros. chips, popcorn, island fries, shave ice and other products on an impulse basis during their shopping trip, or as a dessert treat upon completing a meal at one of many eatery options within the mall. Ownership also anticipates that many patrons will make the retail unit a favored destination due to name recognition and product quality. The Ohana Bros. retail brand is truly a first mover advantage concept with no direct competition which combines all three snack and treat categories; chips, island fries, popcorn, and shave ice. Similar savory snack alternatives such as soft pretzel retailers Auntie s Pretzels, Wetzels Pretzels, Potato Corner, Bahama Bucs (shave ice) and popcorn retailer, Doc Popcorn, do vie for market share, however, these types of savory snacks lack the overall taste appeal and addictive affects Ohana Bros. snack items offer. Competition for Hawaiian-style shave ice are limited as well as there are no direct food retailers selling these specific types of dessert items. Each retail store project costs are projected to be approximately $300,000 - $350,000 which includes tenant improvements, site prep, equipment, lease deposits, starting inventory, supplies, and working capital. Based on a preliminary timetable it is anticipated that from submission of prospective tenant improvement application to real estate ownership, it takes approximately 120 days before a store s grand opening.

8 THE OHANA BROS. DIFFERENCE Reason #1: Fresh Made We assure freshness by utilizing artisan techniques making every item fresh from scratch by hand right in front of the customer. Popcorn is popped hourly, potatoes washed, soaked, sliced, cut and fried to order and our shave ice is hand shaved, shaped, drizzled and topped right in front of your eyes. How can you get fresher than that? Bags of potatoes, jars of popcorn and blocks of ice are just waiting to be turned into awesome munchies.

9 Reason #2: Quality Ingredients Ohana Bros. uses only the finest ingredients. We work directly with trusted family farms, vendors and suppliers assuring only the highest quality ingredients. All our toppings, drizzles, dips and sauces are prepared on-site Our seasonings do not contain MSG, artificial flavoring Our potatoes are the highest quality Russet potato Our popcorn is non-gmo Our seasonings do not contain any MSG, chemical additives or preservatives Our shave ice is made from 100% purified water Our shave ice syrups are made of pure cane sugar, natural concentrates, extracts, fruit purees with no artificial flavorings or colorings (which also turn your tongue strange colors) Reason #3: Custom Crafted Orders Although we have great recommended combinations that are tried and true customers can choose from three snack options; popcorn, potato chips and fries then have the option of a variety of 6 seasonings plus numerous toppings and drizzles making their own special treat. Nothing is pre-packaged or waiting under heat lamps other than our fresh and seasoned potato chips. Reason #4: Value Gram for gram we pride ourselves in giving our customers the highest possible value by keeping our prices as low as possible while offering generous portions. We don t fill up chip bags with gasses or nitrogen which makes people feel ripped off nor do we charge exorbitant prices for just popcorn or just ice. Just the superior taste of our munchies alone makes people feel they received a great value. Reason #5: Better for You Ok, we realize that anything is excess is not good for you, but when you are going to treat yourself to life s indulgences, at Ohana Bros. you can be assured that we do our best to make sure your body will not be bombarded by bad stuff - artificial colorings, flavoring or additives. We use only use Rice Bran Oil for frying our chips and fries which contains no trans-fats and is hypoallergenic. Across the Board: Gluten Free No HFCS No Trans Fats No Artificial additives, colorings or flavorings No MSG

10 Reason #6: Innovation Our true innovation has everything to do with transforming these ordinary snack items into amazing munchies creations. We do this with our incredible seasonings, mouth -watering drizzles, toppings, and dipping sauces allowing the customer to experience a variety of unique taste combinations. Before Ohana Bros.: After Ohana Bros.:

11 Reason #7: The Retail Experience For our retail guest experience we created what we call Island Style hospitality which combines foodtheatre, cool décor, music and customer engagement by our employees who embrace an aloha style vibe which is fun, loving and sincere. Figure 1 - Hand sliced potato chips

12 OHANA BROS. MUNCHIES OFFERINGS Rocky Road To Hana Topped Popcorn Mango Chile Lime Chips Loaded Baked Potato Island Fries Combination Popcorn Tin Rio Habanero Seasoned Popcorn Caramel and Candied Popcorn

13 Hawaiian Shave Ice Hawaiian Shave Ice Thai Topped Chips Homemade Artisan Shaved Ice Syrups Ohana Bros. Travels Cone Liner Natural Sodas

14 Ohana Bros. Island Style Chips & Popcorn Brand Packaging

15 OHANA BROS. RETAIL STORE RENDERINGS SUNVALLEY Mall, Concord California

16 SALES COMPARABLES Mall Snack Retailers Gross revenue sales figures for similar savory snack or dessert types of offerings are usually not published and available. The sales figures below were obtained through extensive interviews with franchise representatives, leasing agents and any available data researched through Google searches over the internet. The main direct and indirect industry food retailers are listed below along with the estimated annual sales figures: Retailer Annual $ Monthly Daily $ $ Ohana Bros.(Pro forma) $500,000 $41,697 $1,300 Auntie Annes s Pretzels $516,409 $43,034 $1,415 (National average) Auntie Annes s Pretzels $650,000 $54,166 $1,805 (Westfield) Auntie Annes s Pretzels $550,000 $45,833 $1,527 Sunvalley Mall Wetzels Pretzels (Kiosk) $296,000 $24,666 $822 Sunvalley Mall Wetzels Pretzels (In-Line) $525,000 $43,750 $1,458 Sunvalley Mall Doc Popcorn (store avge) $350,000 $29,166 $959 Popcornopolis (Roseville) $500,000 $41,666 $1,388 Cinnabon Sunvalley Mall $470,000 $39,166 $1,305 Mrs. Fields Cookies $425,000 $35,417 $1,180 (Sunvalley Mall) Bahama Bucs (Shave Ice) $357,611 $29,800 $993 National store averages Rocky Mtn. Chocolate $300,000 $25,000 $833 (SVM) Haagan Dazs Ice Cream $600,000 $50,000 $1,644 THE INDUSTRY Savory Snacks The salty snack industry includes potato chips, corn chips, tortilla chips, ready-to-eat-popcorn (except candy-coated), pork rinds, and potato sticks. According to Snack Foods: A Global Business Report, from Global Industry Analysts, the worldwide demand for snack foods is likely to hit US $334 billion by 2015, with a sales volume of almost 50,000 thousand tons. 4 The dietary trend in the 2000 s toward healthier eating did not affect the snack category of foods as much as anticipated, as approximately one-third of the population regularly ate snacks in place of a meal. Single-serve and other on the go packaging was lifting sales by catering to the demands of a faster-paced lifestyle. Key Industry Points: Sales of salty snacks are at an all-time high, having actually peaked during the recession. Sales slowed in 2010 as the national focus shifted to health and nutrition, but the category is expected to pick up throughout Potato chips remain the largest segment with $6.8 billion in sales in 2010; this segment shows the most willingness to develop new flavors to impress the young market. Popcorn was the fifth highest salty snack with $3.2 billion in sales in Potato chips are the top pick in salty snacks among all age groups. Plantain chips are picking up, with popularity among the age group and low-income homes. Asian and Hispanic populations have been buying more salty snacks in the past year; this bodes well for the category, as these are some of the fastest growing ethnic populations, according to the U.S. Census Bureau. 4 THE WORLD OF FOOD INGREDIENTS DECEMBER 2011 Article: A Snacking Snapshot by Rachel Zemser

17 The Ohana Brothers COMPANY FOUNDERS AND FUND MANAGERS Cary E. Riter Business Development / Accounting & Finance Co-Founder Ohana Bros. Island Style Chips & Popcorn Founder / CEO City Beach, Inc A high-energy, visionary and goal-driven entrepreneur, Cary has spent the past ten years as the Chief Executive Officer and Chief Financial Officer of City Beach, Inc. as well as serving as Chairperson on the Board of Directors Cary holds a Bachelors of Business Administration (B.B.A.) degree from Loyola Marymount University, Los Angeles, California. He received an athletic scholarship to Loyola Marymount University as a member of the Division I Men s Volleyball team and was chosen team captain during his playing years. An important aspect of his life is family his wife and two daughters who keep him on his toes. When time allows, Cary enjoys golfing, SUP (Stand-Up-Paddling) and an occasional game of beach volleyball. Michael S. Riter Operations / Product R&D Co-Founder Ohana Bros. Island Style Chips & Popcorn Michael Riter is a 15-year veteran of the event and hospitality industry. His passion for service, operations, and leadership has served him in his pursuit and career of creating and operating unique group entertainment and recreation venues. As Chief Operations Officer at City Beach Inc., Michael co-developed, organized, and successfully managed a multi-faceted business model which included; a full-service restaurant and catering operation; an event, team building, and birthday program division, sales and marketing team, a rock climbing gym, and a sports programming division. Prior to his work with City Beach, Michael worked in the field of behavioral development serving adults with developmental and psychological disabilities. Michael is a family man as well with two girls and a boy and a psycho cat Taz

18 SOURCES & USES - SCHEDULE Phase I - 3 Sites Site #1 Site #2 Site #3 Total Sunvalley Mall TBD TBD Phase I Total Sources Equity / Crowdfunding $ 360, $ 200,000 $ 200,000 $ 760,000 Debt $ 100, $ 150,000 $ 150,000 $ 400,000 Total Sources: $ 460, $ 350,000 $ 350,000 $ 1,160,000 Site Capital Uses: Fabrication / Improvements $ 195,000 $ 195,000 $ 195,000 $ 585,000 Site Survey $ 1,500 $ 1,500 $ 1,500 $ 4,500 Engineering $ 4,250 $ 4,250 $ 4,250 $ 12,750 Architectural $ 14,000 $ 14,000 $ 14,000 $ 42,000 Special Inspections $ 1,000 $ 1,000 $ 1,000 $ 3,000 Permits & Fees $ 6,000 $ 6,000 $ 6,000 $ 18,000 Opening / Training $ 2,500 $ 2,500 $ 2,500 $ 7,500 Professional Fees (Legal / Acctg) $ 3,500 $ 3,500 $ 3,500 $ 10,500 Registrations (Trademarks, State, etc.) $ 500 $ 500 $ 500 $ 1,500 Pre-Paid Expenses (Insurance, Phone) $ 1,300 $ 1,300 $ 1,300 $ 3,900 Equipment $ 70,000 $ 70,000 $ 70,000 $ 210,000 Licenses - Business, health, etc. $ 150 $ 150 $ 150 $ 450 Working Capital $ 40,000 $ 40,000 $ 40,000 $ 120,000 Inventory - Starting Food / Packaging $ 5,800 $ 5,800 $ 5,800 $ 17,400 Mktg / Branding $ 4,500 $ 4,500 $ 4,500 $ 13,500 Total Site Capitalization $ 350,000 $ 350,000 $ 350,000 $ 1,050,000 Start-Up / Overhead Salaries: Managing Members $ 85,000 $ - $ - $ 85,000 Supervisor $ 4,000 $ - $ - $ 4,000 G&A - (software, supplies, printing, gas) $ 1,500 $ - $ - $ 1,500 Travel / Meals $ 2,000 $ - $ - $ 2,000 State Taxes (LLC) $ 800 $ - $ - $ 800 R&D $ 6,700 $ - $ - $ 6,700 Rent $ 10,000 $ - $ - $ 10,000 Total Start-Up / Overhead $ 110,000 $ - $ - $ 110,000 Projected Total Uses $ 460,000 $ 350,000 $ 350,000 $ 1,160,000

19 'Ohana Bros. "Island Style Chips & Popcorn" Site: Prototype Total Yr 1 Total Yr 2 Total Yr 3 Year 4 Year 5 Annual Annual Annual Annual Annual Gross Revenue: Chips: Seasoned - 1 dip $ 37,234 $ 39,096 $ 41,051 $ 43,103 $ 45,258 Seasoned - 2 dips $ 52,475 $ 55,098 $ 57,853 $ 60,746 $ 63,783 Popcorn: $ - $ - 1 lb $ 36,413 $ 38,233 $ 40,145 $ 42,152 $ 44,260 2 lb $ 73,008 $ 76,658 $ 80,491 $ 84,516 $ 88,742 5 lb $ 76,658 $ 80,491 $ 84,516 $ 88,742 $ 93,179 Island Fries $ - $ - Large $ 45,995 $ 48,295 $ 50,710 $ 53,245 $ 55,907 Shave Ice: $ - $ - 16 oz. $ 31,028 $ 32,580 $ 34,209 $ 35,919 $ 37,715 Drinks: $ - $ - Slurry $ 16,062 $ 16,865 $ 17,708 $ 18,593 $ 19,523 Soft Drink - Med $ 18,069 $ 18,973 $ 19,922 $ 20,918 $ 21,964 Soft Drink - Lg $ 29,203 $ 30,663 $ 32,197 $ 33,806 $ 35,497 H2O refills $ 2,190 $ 2,300 $ 2,415 $ - $ - Island Style: $ - $ - Chips $ 27,378 $ 28,747 $ 30,184 $ 31,693 $ 33,278 Popcorn $ 27,378 $ 28,747 $ 30,184 $ 31,693 $ 33,278 Island Fries $ 27,378 $ 28,747 $ 30,184 $ 31,693 $ 33,278 Dips: $ - $ - Cold $ - $ - Hot $ - $ - Miscellaneous: $ - $ - Sports Bottle $ - $ - Aloha Bracelets $ - $ - Total Revenue $ 500,470 $ 525,493 $ 551,768 $ 576,821 $ 605,662 COGS $ 41,706 $ 43,791 F&B Chips: Seasoned $ 5,169 $ 5,427 $ 5,699 $ 5,984 $ 6,283 Seasoned $ 9,491 $ 9,966 $ 10,464 $ 10,987 $ 11,536 Popcorn: $ - $ - 1 lb $ 5,289 $ 5,554 $ 5,832 $ 5,540 $ 5,817 2 lb $ 10,495 $ - 5 lb $ 10,075 $ 10,579 $ 11,108 $ 11,663 $ 12,246 Island Fries $ - $ - Large $ 7,009 $ 7,359 $ 7,727 $ 8,114 $ 8,519 Shave Ice: $ - $ - 16 oz. $ 4,125 $ 4,331 $ 4,548 $ 4,775 $ 5,014 Drinks: $ - $ - Slurry $ 2,475 $ 2,599 $ 2,729 $ 2,772 $ 2,911 Soft Drink - Med $ 2,694 $ 2,829 $ 2,970 $ 3,119 $ 3,275 Soft Drink - Lg $ 4,307 $ 4,523 $ 4,749 $ 4,986 $ 5,236 Island Style: $ - $ - Chips $ 5,388 $ 5,657 $ 5,940 $ 6,237 $ 6,549 Popcorn $ 5,388 $ 5,657 $ 5,940 $ 6,237 $ - Island Fries $ 5,388 $ 5,657 $ 5,940 $ 6,237 $ 6,549 Dips: $ - $ - Cold $ - $ - Hot $ - $ - Miscellaneous: $ - $ - Sampling $ 5,516 $ 5,792 $ 6,081 $ 6,385 $ 6,704 Waste $ 5,516 $ 5,792 $ 6,081 $ 6,385 $ 6,704 O'hana Bros Merchandise $ - $ - Total F&B $ 88,325 $ 81,722 $ 85,808 $ 89,422 $ 87,344 Credit Card Fees $ 8,758 $ 9,196 $ 9,656 $ 10,094 $ 10,599 Paper Supplies $ 5,005 $ 5,255 $ 5,518 $ 5,768 $ 6,057 Payroll: $ 99,450 $ 102,434 $ 105,507 $ 108,672 $ 111,932 Payroll Taxes $ 10,940 $ 11,268 $ 11,606 $ 12,186 $ 12,795 Workers Comp $ 4,609 $ 4,609 $ 4,609 $ 4,609 $ 4,609 Benefits $ - $ - Total Payroll $ 114,998 $ 118,310 $ 121,721 $ 125,467 $ 129,336 $ - $ - Total COGS $ 217,086 $ 214,483 $ 222,703 $ 230,751 $ 233,336 Gross Profit $ 283,383 $ 311,010 $ 329,065 $ 346,070 $ 372,326 Gross Margin 57% 59% 60% 60% 61% Operating Expenses Rent (includes electricity of $8.01/sq.ft./yr) $ 60,661 $ 61,369 $ 62,596 $ 63,848 $ 65,125 CAM $ 30,745 $ 32,282 $ 33,896 $ 35,591 $ 37,370 RE Taxes $ 3,906 $ 3,984 $ 4,064 $ 4,145 $ 4,228 Promotional Charge / year $ 4,936 $ 5,183 $ 5,442 $ 5,714 $ 6,000 Water / Sewer $ - $ - Insurance $ 4,018 $ 4,018 $ 4,018 $ 4,018 $ 4,018 $ - $ - Storage Repairs & Maintenance (includes cleaning supplies) $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 Liability Insurance $ 545 $ 561 $ 548 $ 564 $ 581 Personal Property Insurance $ 300 $ 309 $ 318 $ 328 $ 338 Supplemental Mgr $ 15,600 $ 16,068 $ 16,550 $ 17,047 $ 17,558 Payroll Load 15% $ 2,340 $ 2,410 $ 2,483 $ 2,483 $ 2,483 Utilities - Gas $ 4,800 $ 4,944 $ 5,092 $ 5,245 $ 5,402 Telephone AT&T - POS $ 600 $ 618 $ 637 $ 656 $ 675 Licenses & permits Health, Business, etc. $ 300 $ 306 $ 312 $ 318 $ 325 Equipment Leases POS $ 828 $ 828 $ 828 $ 828 $ 828 Uniforms $ 1,200 $ 1,203 $ 1,203 $ 1,239 $ 1,276 Total Expenses $ 133,778 $ 137,173 $ 141,169 $ 145,301 $ 149,583 Net Operating Income $ 149,605 $ 173,838 $ 187,897 $ 200,769 $ 222,743 30% 33% 34% 35% 37%

20 'Ohana Bros. "Island Style Chips and Popcorn" Fund I - Combined Total Yr 1 Total Yr 2 Year 3 Total Yr 4 Year 5 Year 6 Annual Annual Annual Annual Annual Annual Gross Revenue: Site #1 $ 500,470 $ 520,489 $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #2 $ 250,235 $ 520,489 $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #3 $ - $ 520,489 $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #4 $ - $ 346,992 $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #5 $ - $ 173,496 $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #6 $ - $ - $ 541,308 $ 562,961 $ 585,479 $ 608,898 Site #7 $ - $ - $ 360,872 $ 562,961 $ 585,479 $ 608,898 Site #8 $ - $ - $ 180,436 $ 562,961 $ 585,479 $ 608,898 Site #9 $ 562,961 $ 585,479 $ 608,898 Site #10 $ 375,307 $ 585,479 $ 608,898 Site #11 $ 187,654 $ 585,479 $ 608,898 Site #12 $ - $ 585,479 $ 608,898 Site #13 $ - $ 390,319 $ 608,898 Site #14 $ - $ 195,160 $ 608,898 Site #15 $ - $ 195,160 $ 608,898 Total Gross Revenue: $ 750,705 $ 2,081,955 $ 3,789,157 $ 5,629,605 $ 7,611,226 $ 8,524,573 Cost of Goods: Site #1 $ (217,086) $ (225,770) $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #2 $ (108,543) $ (225,770) $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #3 $ - $ (225,770) $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #4 $ - $ (150,513) $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #5 $ - $ (75,257) $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #6 $ - $ - $ (234,801) $ (244,193) $ (253,960) $ (264,119) Site #7 $ - $ - $ (156,534) $ (244,193) $ (253,960) $ (264,119) Site #8 $ - $ - $ (78,267) $ (244,193) $ (253,960) $ (264,119) Site #9 $ (244,193) $ (253,960) $ (264,119) Site #10 $ (162,795) $ (253,960) $ (264,119) Site #11 $ (81,398) $ (253,960) $ (264,119) Site #12 $ - $ (253,960) $ (264,119) Site #13 $ - $ (169,307) $ (264,119) Site #14 $ - $ (84,653) $ (264,119) Site #15 $ - $ (84,653) $ (264,119) Total COGS $ (325,630) $ (903,080) $ (1,643,605) $ (2,441,927) $ (3,301,486) $ (3,697,664) Gross Profit Site #1 $ 283,383 $ 746,259 $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #2 $ 141,692 $ 746,259 $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #3 $ - $ 746,259 $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #4 $ - $ 497,506 $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #5 $ - $ 248,753 $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #6 $ - $ - $ 306,507 $ 318,768 $ 331,518 $ 344,779 Site #7 $ - $ - $ 204,338 $ 318,768 $ 331,518 $ 344,779 Site #8 $ - $ - $ 102,169 $ 318,768 $ 331,518 $ 344,779 Site #9 $ 318,768 $ 331,518 $ 344,779 Site #10 $ 212,512 $ 331,518 $ 344,779 Site #11 $ 106,256 $ 331,518 $ 344,779 Site #12 $ - $ 331,518 $ 344,779 Site #13 $ - $ 221,012 $ 344,779 Site #14 $ - $ 110,506 $ 344,779 Site #15 $ - $ 110,506 $ 344,779 Total Gross Profit $ 425,075 $ 2,985,034 $ 2,145,552 $ 3,187,678 $ 4,309,740 $ 4,826,909 Operating Expenses Site #1 $ (132,627) $ (137,933) $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #2 $ (66,314) $ (137,933) $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #3 $ - $ (137,933) $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #4 $ - $ (91,955) $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #5 $ - $ (45,978) $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #6 $ - $ - $ (143,450) $ (149,188) $ (155,155) $ (161,362) Site #7 $ - $ - $ (95,633) $ (149,188) $ (155,155) $ (161,362) Site #8 $ - $ - $ (47,817) $ (149,188) $ (155,155) $ (161,362) Site #9 $ (149,188) $ (155,155) $ (161,362) Site #10 $ (99,459) $ (155,155) $ (161,362) Site #11 $ (49,729) $ (155,155) $ (161,362) Site #12 $ - $ (155,155) $ (161,362) Site #13 $ - $ (103,437) $ (161,362) Site #14 $ - $ (51,718) $ (161,362) Site #15 $ - $ (51,718) $ (161,362) Total Operating Expenses $ (198,941) $ (551,730) $ (1,004,149) $ (1,491,879) $ (2,017,020) $ (2,259,063) Net Operating Income Site #1 $ 150,756 $ 156,786 $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #2 $ 75,378 $ 156,786 $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #3 $ - $ 156,786 $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #4 $ - $ 104,524 $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #5 $ - $ 52,262 $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #6 $ - $ - $ 163,058 $ 169,580 $ 176,363 $ 183,418 Site #7 $ - $ - $ 108,705 $ 169,580 $ 176,363 $ 183,418 Site #8 $ - $ - $ 54,353 $ 169,580 $ 176,363 $ 183,418 Site #9 $ 169,580 $ 176,363 $ 183,418 Site #10 $ 113,053 $ 176,363 $ 183,418 Site #11 $ 56,527 $ 176,363 $ 183,418 Site #12 $ - $ 176,363 $ 183,418 Site #13 $ - $ 117,575 $ 183,418 Site #14 $ - $ 58,788 $ 183,418 Site #15 $ - $ 58,788 $ 183,418 Total Net Operating Income $ 226,134 $ 627,145 $ 1,141,403 $ 1,695,799 $ 2,351,508 $ 2,751,264

21 FUND TERMS - OHANA BROS. FUND I, LLC Phase I Funding Round Sunvalley Mall, Concord, CA Investment $360,000 Fund Vehicle Limited Liability Company with Manager-Managed Operating Agreement Investment Period 5-Years for Preferred Return terms Management Fee Asset Management Fee shall be 4% of gross revenues per annum commencing year three. Return Investment Members: Investment Members will contribute $360,000 to capitalization. Prior to any distributions to any Operating Members, Investment Members will receive 100% of cash distributions 5 until such time that the investor member receives two (2X) times their original investment. Afterwards, the cash distribution percentage will be allocated according to each member s percentage in this LLC. Operating Members: Once Investment Members received 2X their original investment, the cash distributions will be allocated to members according to each member s percentage interest in this LLC. Participation Investments are made through our subscription and operating agreements Individual investors minimum commitment is $10,000 5 Cash distributions are defined as cash remaining after debt service and reserves.