DNNC Analysis, based on my research
ASSUMPTIONS
1. Revenues: Average Pizza Franchise is 400K to 800K
2. Profit: Average of 20% per Franchise
3. Net Income: 80K to 160K
APPLIED TO THE EXISTING OUTLETS:
1. At 400K x 10 Existing Restaurants = 4M or at 800K =8M
2. At 20% profits that would be net income of 800K to 1.6M
REASONS FOR WHY REVENUES AND NET INCOME WILL BE ON THE HIGHER END:
1. Spending a $1M to upgrading existing facilities for the modern look
2. Extensive Marketing of their Menu to focus on their most profitable items
3. Closed all un-profitable units
INCLUDE EXPANSION EFFORTS INTO THE EQUATION
1. 50 new food outlets over the next 5 years, so 10 new units each year
2. 2010: 8M to 16M in revenues with 20 outlets, and 1.6M to 3.2M in net income
3. 2011: 12M to 24M in revenues with 30 outlets, and 2.4M to 4.8M in net income
4. 2012: 16M to 32M in revenues with 40 outlets, and 3.2M to 6.4M in net income
5. 2013: 20M to 40M in revenues with 50 outlets, and 4M to 7.2M in net income
6. 2014: 24M to 48M in revenues with 60 outlets, and 4.8M to 8M in net income
INCLUDE ACQUISITION EFFORTS INTO THE EQUATION
1. Your guess is as good as mine
2. As mentioned in a previous PR, acquiring private food chains ranging in size from 5 to 35 units.
3. Applying same metrics as above: This could add 2M to 28M in additional revenues and corresponding 20% net income partially in 2010 and completely in 2011.
OH AND WE CAN'T FORGET ABOUT THE X FACTORS
1. Revenues through pizza offering for room service in a 400 room Montreal Hotel that is part of large Canadian hotel chain for additional expansion
2. Going to partner with a major marketing player to get the Donini frozen pizzas into Wal-Mart and the major grocery store chains in Canada.
3. Coming out with a Donini Sauce that will be bottled and sold in the major grocery stores. An Italian sauce for pasta, etc
4. Several investors lined up for Franchises in the States and then a partner to take Donini International.
WHAT ABOUT THE SHARE STRUCTURE
1. A/S will not be increased. Locked at 100M.
2. O/S is in the latest filing and only around 3 million shy of the A/S.
3. 20M Float
