Business Plan
Generated March 23, 2026
1. Business Overview
This plan presents a multi-concept entertainment venue combining a full-service restaurant, bar, arcade, and virtual golf within a single 10,200 square-foot space. The concept is designed to maximize dwell time and per-visit spend by giving guests multiple reasons to stay.
Restaurant & Bar — The food program features pizza, wings, and burgers served from a 1,200 SF commercial kitchen into a 1,700 SF dining room seating 80 guests. The 800 SF bar area serves craft cocktails, beer, and wine to both diners and walk-up guests. Food averages a $22 check with a 30.0% cost of goods; beverages carry a 22.0% pour cost.
Arcade — A 2,700 SF double-height game floor houses 45 machines across two ownership models. Vendor-shared (30 machines): high-value equipment — 16 pinball machines, 8 racing simulators, Killer Queen, DDR, NBA Hoops, and more — is placed and maintained by a third-party vendor under a 50.0% / 50.0% revenue split, eliminating $358,000 in upfront CapEx for the business. Business-owned (15 machines): classic cabinets, skee-ball lanes, and Guitar Hero are purchased outright ($68,000 capital outlay) and generate 100% revenue for the business with no vendor split. Machines occupy 1,634 SF; the remaining 1,066 SF provides aisles and seating.
Virtual Golf — 1 enclosed simulator bay (750 SF, including hitting area and lounge seating, second floor) offers full-swing golf simulation at $55/hour. Equipment is supplied by the vendor under a 50.0% / 50.0% revenue share. At 55.0% utilization across 10 operating hours, business share is roughly $4,588/month.
Party / Lounge Rooms — 2 private event rooms (1,950 SF total) are available for birthday parties, corporate events, and group gatherings throughout the week. Rooms are booked at a flat rate of $600 per event. At 3 bookings per week the rooms generate $7,800/month in rental income with no direct cost of goods. Party guests also drive incremental food, bar, and arcade revenue.
2. Space Plan — 10,200 SF
The venue allocates 11,500 SF (113%) to revenue-generating zones and 900 SF (9%) to back-of-house operations.
| Zone | Sq Ft | % of Total | Description |
|---|---|---|---|
| Restaurant Dining | 1,700 | 16.7% | Tables, booths, and casual dining area |
| Kitchen | 1,200 | 11.8% | Gas cook line, 4-stack gas pizza ovens, prep, walk-in cooler |
| Bar | 800 | 7.8% | Bar counter, stools, liquor storage, taps, back bar coolers |
| Arcade Floor (Double-Height) | 2,700 | 26.5% | 45 machines in double-height open space; pinball, racing, classic cabinets, bar games |
| Virtual Golf | 750 | 7.4% | 1 enclosed golf simulator bay with hitting area and lounge seating (second floor) |
| Private Lounges & Console Gaming | 1,950 | 19.1% | Two rentable private event/party lounges + console gaming balcony overlooking arcade floor (second floor) |
| Back of House | 900 | 8.8% | Restrooms (ground + 2nd floor), storage, mechanical, office, egress stair |
| Outdoor Games (Unconditioned) | 2,400 | 23.5% | Covered 40'x60' outdoor area; no HVAC — excluded from conditioned/lease SF. Includes outdoor games, outdoor dining tables, and a Summer Bar service station along the storefront wall |
| TOTAL | 12,400 | 100.0% |
Arcade Floor Layout — 2,700 SF
30 vendor-shared machines (50/50 rev split) + 15 business-owned machines (100% rev, $68,000 purchase cost).
Vendor-Shared Machines (50.0% to business)
| Machine Type | Count | SF Each | Total SF | Gross Rev/Wk | Vendor (50.0%) | Business (50.0%) |
|---|---|---|---|---|---|---|
| Pinball Machines | 16 | 22 | 352 | $1,920 | $960 | $960 |
| Motorcycle Racing Simulators | 4 | 70 | 280 | $1,000 | $500 | $500 |
| Mario Kart Arcade GP | 4 | 60 | 240 | $800 | $400 | $400 |
| NBA Hoops | 2 | 50 | 100 | $300 | $150 | $150 |
| Dance Dance Revolution | 1 | 60 | 60 | $200 | $100 | $100 |
| Killer Queen | 1 | 120 | 120 | $400 | $200 | $200 |
| Buck Hunter (Duo) | 1 | 40 | 40 | $150 | $75 | $75 |
| Golden Tee | 1 | 25 | 25 | $120 | $60 | $60 |
| SUBTOTAL — Vendor Shared | 30 | 1217 | $4,890 | $2,445 | $2,445 |
Business-Owned Machines (100% revenue retained)
| Machine Type | Count | SF Each | Total SF | Purchase Cost | Gross Rev/Wk | Business (100%) |
|---|---|---|---|---|---|---|
| Classic 2-Player Cabinets | 6 | 20 | 120 | $21,000 | $600 | $600 |
| Classic 4-Player Cabinets | 4 | 28 | 112 | $18,000 | $480 | $480 |
| Skee-Ball | 4 | 40 | 160 | $24,000 | $480 | $480 |
| Guitar Hero Arcade | 1 | 25 | 25 | $5,000 | $100 | $100 |
| SUBTOTAL — Business Owned | 15 | 417 | $68,000 | $1,660 | $1,660 |
Floor usage: 1,634 SF machines + 1,066 SF aisles/seating = 2,700 SF total arcade zone
Virtual Golf Layout (Vendor Revenue Share)
| Experience | Units | SF/Unit | Total SF | Equip Cost (Vendor) | Rate | Utilization | Gross Monthly | Business (50.0%) |
|---|---|---|---|---|---|---|---|---|
| Virtual Golf | 1 bays | 750 | 750 | $65,000 | $55/hr | 55.0% | $9,176 | $4,588 |
Restaurant & Bar Assumptions
| Parameter | Value | Parameter | Value | |
|---|---|---|---|---|
| Dining Seats | 80 | Avg Drink Price | $8 | |
| Avg Food Check | $22 | Drinks / Cover | 1.8 | |
| Table Turns / Day | 2.0 | Bar Walk-up Daily Rev | $550 | |
| Days Open / Week | 7 | Food COGS | 30.0% | |
| Drink Pour Cost | 22.0% |
3. Revenue
Revenue assumptions reflect stabilized, mature-venue performance. A ramp schedule is applied to all zones for Years 2–5 to model the soft-launch and word-of-mouth build-up arc: Yr 2: 55% | Yr 3: 72% | Yr 4: 87% | Yr 5: 95%. Full rate reached Year 6; 4.0%/yr growth compounds from there. Payroll and fixed costs are not ramped — they reflect the staffing needed to operate the venue from opening day.
Stabilized Revenue Build-Up by Zone
Revenue is driven by five distinct streams. Food and bar account for the majority of volume. Vendor-shared arcade machines and virtual golf operate under a third-party equipment lease (50.0% business / 50.0% vendor split); business-owned arcade machines retain 100% of revenue. Revenue shown for entertainment zones reflects the business’s share only.
| Source | Monthly | Annual | % Mix | Rev/SF |
|---|---|---|---|---|
| Restaurant (Food) | $106,773 | $1,281,280 | 46.9% | $442 |
| Bar (Drinks) | $90,939 | $1,091,272 | 39.9% | $1,364 |
| Arcade — shared (50.0%) + owned (100%) | $17,788 | $213,460 | 7.8% | $79 |
| Virtual Golf (50.0% share) | $4,588 | $55,055 | 2.0% | $73 |
| Party / Lounge Rooms | $7,800 | $93,600 | 3.4% | $48 |
| TOTAL | $227,889 | $2,734,667 | 100.0% | $268 |
10-Year Revenue by Zone
Years 2–5 reflect the ramp schedule above. From Year 6 onward all zones compound at 4.0%/yr, reflecting modest price increases and traffic growth.
| Year | Food | Bar | Arcade (Gross) | Arcade (Business) | V-Golf (Gross) | V-Golf (Business) | Party / Lounge | Business Total |
|---|---|---|---|---|---|---|---|---|
| 2026 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| 2027 | $732,892 | $624,208 | $194,823 | $122,099 | $62,983 | $31,491 | $53,539 | $1,564,230 |
| 2028 | $997,799 | $849,830 | $265,243 | $166,232 | $85,748 | $42,874 | $72,891 | $2,129,627 |
| 2029 | $1,253,901 | $1,067,953 | $333,322 | $208,899 | $107,757 | $53,879 | $91,600 | $2,676,232 |
| 2030 | $1,423,971 | $1,212,802 | $378,531 | $237,232 | $122,372 | $61,186 | $104,024 | $3,039,215 |
| 2031 | $1,558,873 | $1,327,699 | $414,392 | $259,707 | $133,966 | $66,983 | $113,879 | $3,327,141 |
| 2032 | $1,621,228 | $1,380,807 | $430,968 | $270,095 | $139,324 | $69,662 | $118,434 | $3,460,226 |
| 2033 | $1,686,077 | $1,436,040 | $448,206 | $280,899 | $144,897 | $72,449 | $123,171 | $3,598,635 |
| 2034 | $1,753,520 | $1,493,481 | $466,135 | $292,135 | $150,693 | $75,347 | $128,098 | $3,742,581 |
| 2035 | $1,823,661 | $1,553,220 | $484,780 | $303,820 | $156,721 | $78,360 | $133,222 | $3,892,284 |
4. Net Income
Net income is calculated as Revenue less COGS, payroll, other operating expenses, and total occupancy cost (base rent + NNN charges + TI loan payments). The table below shows the full 10-year P&L waterfall.
| Year | Revenue | COGS | Gross Profit | Payroll | Other OpEx | Oper. Income | Occupancy Cost | Net Income | Net Margin |
|---|---|---|---|---|---|---|---|---|---|
| 2026 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | 0.0% |
| 2027 | $1,564,230 | $357,193 | $1,207,036 | $667,489 | $148,320 | $391,227 | $338,318 | $52,909 | 3.4% |
| 2028 | $2,129,627 | $486,302 | $1,643,325 | $687,514 | $152,770 | $803,041 | $351,923 | $451,119 | 21.2% |
| 2029 | $2,676,232 | $611,120 | $2,065,112 | $708,140 | $157,353 | $1,199,619 | $382,453 | $817,166 | 30.5% |
| 2030 | $3,039,215 | $694,008 | $2,345,207 | $729,384 | $162,073 | $1,453,750 | $405,892 | $1,047,858 | 34.5% |
| 2031 | $3,327,141 | $759,756 | $2,567,385 | $751,265 | $166,935 | $1,649,184 | $379,068 | $1,270,116 | 38.2% |
| 2032 | $3,460,226 | $790,146 | $2,670,080 | $773,803 | $171,944 | $1,724,333 | $393,842 | $1,330,492 | 38.5% |
| 2033 | $3,598,635 | $821,752 | $2,776,883 | $797,017 | $177,102 | $1,802,764 | $409,105 | $1,393,659 | 38.7% |
| 2034 | $3,742,581 | $854,622 | $2,887,959 | $820,928 | $182,415 | $1,884,616 | $424,875 | $1,459,741 | 39.0% |
| 2035 | $3,892,284 | $888,807 | $3,003,477 | $845,556 | $187,887 | $1,970,034 | $441,169 | $1,528,865 | 39.3% |
5. Expense Detail
Expenses fall into three categories: Cost of Goods Sold (food and beverage only — all entertainment zones have zero business COGS since the vendor handles all equipment and maintenance), Operating Expenses (payroll at $648,048/yr and other OpEx at $144,000/yr, both growing at 3.0%/yr), and Occupancy Costs (base rent, NNN pass-throughs, and TI loan repayment).
Full Expense Breakdown
| Year | Food COGS | Bar COGS | Total COGS | Payroll | Other OpEx | Base Rent | NNN Charges | TI Loan Pmt | % Rent Kicker | Total Expenses |
|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | — | $0 |
| 2027 | $219,868 | $137,326 | $357,193 | $667,489 | $148,320 | $252,144 | $38,651 | $47,523 | — | $1,511,321 |
| 2028 | $299,340 | $186,963 | $486,302 | $687,514 | $152,770 | $259,708 | $39,506 | $47,523 | $5,185 | $1,678,509 |
| 2029 | $376,170 | $234,950 | $611,120 | $708,140 | $157,353 | $267,500 | $40,381 | $47,523 | $27,049 | $1,859,065 |
| 2030 | $427,191 | $266,816 | $694,008 | $729,384 | $162,073 | $275,525 | $41,276 | $47,523 | $41,569 | $1,991,357 |
| 2031 | $467,662 | $292,094 | $759,756 | $751,265 | $166,935 | $283,790 | $42,192 | $0 | $53,086 | $2,057,024 |
| 2032 | $486,368 | $303,778 | $790,146 | $773,803 | $171,944 | $292,304 | $43,129 | $0 | $58,409 | $2,129,734 |
| 2033 | $505,823 | $315,929 | $821,752 | $797,017 | $177,102 | $301,073 | $44,087 | $0 | $63,945 | $2,204,976 |
| 2034 | $526,056 | $328,566 | $854,622 | $820,928 | $182,415 | $310,105 | $45,067 | $0 | $69,703 | $2,282,840 |
| 2035 | $547,098 | $341,708 | $888,807 | $845,556 | $187,887 | $319,408 | $46,069 | $0 | $75,691 | $2,363,419 |
Staffing
The venue operates with 23 staff members across management, kitchen, restaurant, bar, and entertainment zones. Year 1 total payroll (including a 20.0% burden for payroll taxes, workers’ comp, and benefits) is $648,048 ($54,004/month). Payroll grows at 3.0% annually to account for wage inflation. Payroll represents 41.4% of Year 2 (opening) revenue.
Staffing Roster
| Position | Zone | Count | Rate | Hours | Base Annual | Burden (20.0%) | Loaded Annual | Notes |
|---|---|---|---|---|---|---|---|---|
| General Manager | Management | 1 | $65,000/yr | Salaried | $65,000 | $13,000 | $78,000 | |
| Assistant Manager | Management | 1 | $45,000/yr | Salaried | $45,000 | $9,000 | $54,000 | |
| Head Chef / Kitchen Mgr | Kitchen | 1 | $52,000/yr | Salaried | $52,000 | $10,400 | $62,400 | |
| Line Cooks | Kitchen | 4 | $16/hr | 35 hrs/wk | $116,480 | $23,296 | $139,776 | |
| Prep Cook / Dishwasher | Kitchen | 2 | $14/hr | 30 hrs/wk | $43,680 | $8,736 | $52,416 | |
| Bartenders | Bar | 3 | $12/hr | 30 hrs/wk | $56,160 | $11,232 | $67,392 | + tips |
| Servers | Restaurant | 6 | $6/hr | 28 hrs/wk | $48,048 | $9,610 | $57,658 | + tips |
| Host / Cashier | Restaurant | 2 | $14/hr | 30 hrs/wk | $43,680 | $8,736 | $52,416 | |
| Game Floor Attendant | Arcade / Entertainment | 2 | $14/hr | 32 hrs/wk | $46,592 | $9,318 | $55,910 | |
| Golf / Lounge Attendant | Arcade / Entertainment | 1 | $15/hr | 30 hrs/wk | $23,400 | $4,680 | $28,080 | |
| TOTAL | 23 | $540,040 | $108,008 | $648,048 |
Payroll by Zone
| Zone | Headcount | Loaded Annual Cost | % of Payroll |
|---|---|---|---|
| Management | 2 | $132,000 | 20.4% |
| Kitchen | 7 | $254,592 | 39.3% |
| Bar | 3 | $67,392 | 10.4% |
| Restaurant | 8 | $110,074 | 17.0% |
| Arcade / Entertainment | 3 | $83,990 | 13.0% |
| TOTAL | 23 | $648,048 | 100.0% |
| Payroll Metric | Value |
|---|---|
| Total Headcount | 23 |
| Base Wages (Year 1) | $540,040 |
| Burden (20.0%) | $108,008 |
| Total Loaded Payroll | $648,048 |
| Monthly Payroll | $54,004 |
| Payroll / Revenue (Yr 2) | 41.4% |
| Payroll / Employee | $28,176 |
| Revenue / Employee (Yr 2) | $68,010 |
Occupancy Cost & Rent Coverage
The rent coverage ratio measures operating income (before occupancy costs) divided by total occupancy cost. A ratio above 2.0x indicates the business comfortably supports its lease obligations.
| Year | Base Rent | NNN Charges | TI Loan Pmt | % Rent Kicker | Total Occ. Cost | Oper. Income | Coverage Ratio |
|---|---|---|---|---|---|---|---|
| 2026 | $0 | $0 | $0 | — | $0 | $0 | infx |
| 2027 | $252,144 | $38,651 | $47,523 | — | $338,318 | $391,227 | 1.16x |
| 2028 | $259,708 | $39,506 | $47,523 | $5,185 | $351,923 | $803,041 | 2.28x |
| 2029 | $267,500 | $40,381 | $47,523 | $27,049 | $382,453 | $1,199,619 | 3.14x |
| 2030 | $275,525 | $41,276 | $47,523 | $41,569 | $405,892 | $1,453,750 | 3.58x |
| 2031 | $283,790 | $42,192 | $0 | $53,086 | $379,068 | $1,649,184 | 4.35x |
| 2032 | $292,304 | $43,129 | $0 | $58,409 | $393,842 | $1,724,333 | 4.38x |
| 2033 | $301,073 | $44,087 | $0 | $63,945 | $409,105 | $1,802,764 | 4.41x |
| 2034 | $310,105 | $45,067 | $0 | $69,703 | $424,875 | $1,884,616 | 4.44x |
| 2035 | $319,408 | $46,069 | $0 | $75,691 | $441,169 | $1,970,034 | 4.47x |
6. Equipment Investment
Entertainment equipment uses a split model. Vendor-shared machines (30 arcade machines + golf simulator) are placed and maintained by a third-party vendor under a 50.0% / 50.0% revenue-share lease, eliminating $358,000 in CapEx and transferring maintenance risk to the vendor. Business-owned machines (15 classic cabinets, skee-ball, Guitar Hero) are purchased outright for $68,000 and generate 100% revenue for the business. Year 2 (opening) entertainment revenue (business share): $153,591. Kitchen and bar equipment is covered under the building interior buildout.
| Category | Units | Equip Cost | Who Bears Cost | Yr 1 Business Rev | Rev/SF | Notes |
|---|---|---|---|---|---|---|
| Arcade — Vendor Shared | 30 machines | $293,000 | Vendor | $0 | — | 50.0% rev share |
| Arcade — Business Owned | 15 machines | $68,000 | Business | $0 | — | 100% revenue retained |
| Virtual Golf Bays | 1 bays | $65,000 | Vendor | $31,491 | $73 | 50.0% rev share |
| TOTAL | $426,000 | Vendor: $358,000 / Biz: $68,000 | $153,591 |
7. Initial Capital Investment
The landlord’s $2,059,000 construction budget delivers the building fully built out: MEP systems, commercial kitchen equipment, bar millwork and counters, gaming projection infrastructure, building brand graphic, and site work are all landlord-funded and in place at occupancy. The tenant’s startup capital funds the operational layer on top of that: furniture, bar service equipment, owned games, technology systems, inventory, licenses, and working capital. Capital comes from two sources: equity contributions from three founding investors, and a Tenant Improvement (TI) loan of $200,000 extended by the landlord as part of the lease agreement. Together these provide $500,000 of opening capital against $372,000 in identified startup costs, leaving a $128,000 undeployed buffer.
Capital Sources
All three investors hold equal 33.3% initial ownership. Investor 3 contributes sweat equity ($0 cash); Investors 1 and 2 each contribute $150,000 cash. The TI loan is a landlord-funded debt instrument at 7.0% over 5 years, already reflected as an occupancy cost in the P&L above. Investor 1 is subject to a vesting schedule; see below.
| Investor | Capital Contribution | Ownership % | Source Type | Notes |
|---|---|---|---|---|
| Investor 1 | $150,000 | 33.3% | Equity | Serves as General Manager; subject to vesting schedule — grows to 50% by Year 10 |
| Investor 2 | $150,000 | 33.3% | Equity | Common equity; diluted by Investor 1 vesting from Year 3–10 (25% at full vesting) |
| Investor 3 | $0 | 33.3% | Equity | Sweat equity; $0 cash contribution; diluted by Investor 1 vesting from Year 3–10 (25% at full vesting) |
| TI Loan — Landlord | $200,000 | — | Debt | 7.0% interest, 5-yr term |
| TOTAL | $500,000 | 100.0% |
Investor equity: $300,000 | TI Loan (debt): $200,000 | Total capital: $500,000
Investor 1 Vesting Schedule
All three investors hold equal 33.3% initial ownership at opening. Investor 1 serves as General Manager and is eligible to acquire additional ownership beginning in Year 3, vesting approximately 2.1% per year (drawn equally from Investors 2 and 3 at 1.0% each per year). By Year 10, Investor 1 reaches 50% total ownership, with Investors 2 and 3 each retaining 25%. This structure rewards long-term operational commitment and aligns Investor 1’s incentives with business performance.
| Year | Calendar Year | Investor 1 | Investor 2 | Investor 3 | Notes |
|---|---|---|---|---|---|
| Year 1 | 2026 | 33.3% | 33.3% | 33.3% | Locked — pre-vesting |
| Year 2 | 2027 | 33.3% | 33.3% | 33.3% | Locked — pre-vesting |
| Year 3 | 2028 | 35.4% | 32.3% | 32.3% | +2.1% vested this year |
| Year 4 | 2029 | 37.5% | 31.2% | 31.2% | +2.1% vested this year |
| Year 5 | 2030 | 39.6% | 30.2% | 30.2% | +2.1% vested this year |
| Year 6 | 2031 | 41.7% | 29.2% | 29.2% | +2.1% vested this year |
| Year 7 | 2032 | 43.8% | 28.1% | 28.1% | +2.1% vested this year |
| Year 8 | 2033 | 45.8% | 27.1% | 27.1% | +2.1% vested this year |
| Year 9 | 2034 | 47.9% | 26.0% | 26.0% | +2.1% vested this year |
| Year 10 | 2035 | 50.0% | 25.0% | 25.0% | +2.1% vested this year |
Vesting increment: 2.1%/yr to Investor 1 (sourced equally from Investors 2 & 3). Full vesting reached Year 10: Investor 1 = 50%, Investors 2 & 3 = 25% each.
Startup Cost Uses — Building Shell to Operational Venue
The table below itemizes the tenant’s costs to layer operational equipment, furniture, and opening activities onto the landlord-delivered space. Buildout & Equipment covers furniture, service equipment, and owned games not provided by the landlord. Technology covers operational systems (POS, A/V TVs, PA, security) distinct from the gaming projection infrastructure already built in. Pre-Opening covers inventory, marketing, and licensing. Working Capital ensures the business can operate through the revenue ramp-up period without a cash shortfall. Note: vendor-shared arcade machines and golf simulator are vendor-supplied at no cost to the business; business-owned classic/skee-ball/Guitar Hero machines ($68,000) are included in Buildout & Equipment.
| Item | Category | Amount | Notes |
|---|---|---|---|
| Owned Electronic Arcade Machines | Buildout & Equipment | $68,000 | Business-owned machines (classic 2-player ×6, classic 4-player ×4, skee-ball ×4, Guitar Hero ×1) per cost PDF. No revenue share — business keeps 100% of gross. See ARCADE_MACHINES_OWNED for spec. |
| Owned Bar & Outdoor Games | Buildout & Equipment | $17,000 | Non-electronic venue-owned games per floor plan outdoor area: shuffleboard tables, dart boards, foosball tables, cornhole sets, and other outdoor bar game equipment. |
| Bar Equipment & Fixtures | Buildout & Equipment | $35,000 | Draft beer system, back-bar coolers, glassware, bar rails, sinks. Bar counter structure/millwork is landlord-installed under Interior Fit-Out. |
| Dining Room Furniture | Buildout & Equipment | $40,000 | Tables, chairs, and booth seating for 80-seat dining room. |
| Bar & Lounge Furniture | Buildout & Equipment | $15,000 | Bar stools, high-top tables, lounge and waiting area seating (second-floor private lounges and console gaming area). |
| Outdoor Furniture & Summer Bar Setup | Buildout & Equipment | $12,000 | Patio furniture for 40'x60' outdoor area per floor plan: picnic tables, high-top tables, bar stools, summer bar service station setup. Outdoor games equipment is tracked separately above. |
| Signage & Branding | Buildout & Equipment | $20,000 | Exterior monument/blade sign at street entrance, interior menu boards and branding elements. Exterior building brand mural is landlord-installed under Core & Shell. |
| POS & Technology Systems | Technology | $25,000 | POS terminals, reservations platform, loyalty program, network infrastructure. |
| Audio/Visual & Sound System | Technology | $18,000 | Commercial TVs (bar/dining), PA/speaker system, sound bars. Gaming projection screens and projectors are landlord-installed under Interior Fit-Out; this covers operational A/V only. |
| Security & Surveillance | Technology | $8,000 | IP camera system, access control, alarm monitoring subscription. |
| Initial F&B Inventory | Pre-Opening | $20,000 | Opening food stock, beverages, full bar spirits and beer inventory. |
| Pre-Opening Marketing | Pre-Opening | $25,000 | Social media launch campaign, local advertising, grand opening event. |
| Permits, Licenses & Legal | Pre-Opening | $14,000 | Liquor license, business license, health permit, entity formation, lease review. |
| Working Capital Reserve | Working Capital | $40,000 | ~3-month buffer for payroll and fixed expenses during ramp-up. |
| Contingency | Working Capital | $15,000 | ~4% reserve on buildout and pre-opening line items. |
| TOTAL | $372,000 |
8. Investor Distributions
The table below shows projected annual distributions to each investor based on net income and their vesting-adjusted ownership percentage. Distributions reflect the residual after all operating expenses, occupancy costs, and the TI loan payment — the net income figure from Section 4. Investor 1 receives additional compensation as General Manager ($65,000/yr base salary, already deducted as a payroll expense before net income is computed). The Inv 1 Total column combines both. Negative distribution values in a given year indicate losses absorbed pro-rata by each investor; no cash is distributed in loss years.
| Year | Cal Yr | Net Income | Inv 1 Own% | Inv 1 Dist. | Inv 1 GM Comp | Inv 1 Total | Inv 2 Own% | Inv 2 Dist. | Inv 3 Own% | Inv 3 Dist. |
|---|---|---|---|---|---|---|---|---|---|---|
| Year 1 | 2026 | $0 | 33.3% | $0 | — | $0 | 33.3% | $0 | 33.3% | $0 |
| Year 2 | 2027 | $52,909 | 33.3% | $17,636 | $65,000 | $82,636 | 33.3% | $17,636 | 33.3% | $17,636 |
| Year 3 | 2028 | $451,119 | 35.4% | $159,771 | $65,000 | $224,771 | 32.3% | $145,674 | 32.3% | $145,674 |
| Year 4 | 2029 | $817,166 | 37.5% | $306,437 | $65,000 | $371,437 | 31.2% | $255,365 | 31.2% | $255,365 |
| Year 5 | 2030 | $1,047,858 | 39.6% | $414,777 | $65,000 | $479,777 | 30.2% | $316,540 | 30.2% | $316,540 |
| Year 6 | 2031 | $1,270,116 | 41.7% | $529,215 | $65,000 | $594,215 | 29.2% | $370,451 | 29.2% | $370,451 |
| Year 7 | 2032 | $1,330,492 | 43.8% | $582,090 | $65,000 | $647,090 | 28.1% | $374,201 | 28.1% | $374,201 |
| Year 8 | 2033 | $1,393,659 | 45.8% | $638,760 | $65,000 | $703,760 | 27.1% | $377,449 | 27.1% | $377,449 |
| Year 9 | 2034 | $1,459,741 | 47.9% | $699,459 | $65,000 | $764,459 | 26.0% | $380,141 | 26.0% | $380,141 |
| Year 10 | 2035 | $1,528,865 | 50.0% | $764,432 | $65,000 | $829,432 | 25.0% | $382,216 | 25.0% | $382,216 |
| 10-YR TOTAL | $9,351,925 | — | $4,112,579 | $585,000 | $4,697,579 | — | $2,619,673 | — | $2,619,673 |
GM compensation is Investor 1’s base salary ($65,000/yr), expensed through payroll before net income is calculated — it is not drawn from the distribution pool. Distributions are pro-rata to ownership % each year; vesting schedule per Section 7. Loss years: no cash distributed; losses absorbed per ownership %.