The Cloister

Project: Acquisition of real property at 472 Delaware Avenue, Buffalo, New York (“Project Property”); renovation of Project Property; equipping and decorating the Project Property as a fine dining restaurant modeled after and to be marked and operated as The Cloister Restaurant (“the Project”).

Entities: The Project Property will be owned by a New York limited liability company to be named “Cloister Group, LLC” (CG”);
The restaurant will be owned by a separate New York limited liability company to be named “The Cloister Restaurant” (CR”);
CR will lease the Project Property from CG under a lease to be approved by a majority of the members.

Ownership: CG and CR initially will be owned by a group of investors (“Investors”). Additional or substitute investors will require the approval of sixty percent (60%) of the members.

Costs: Acquisition, renovation, development, equipping and inventory combined with initial working capital and reserves are project to be $2,000,000.00 (“the Costs”).

Further details regarding itemized project costs, capitalization, management, shared percentages and distributions will be provided upon receipt of a serious inquiry by an investor, defined as an inquiry from an individual or group who is in a position to supply a Letter of Credit or other substantial documentation, prior to any further disclosure about the Project other than that contained herein from The Wickwire Group, that should negotiations commence with regard to investment by the individual or group, that they would be in a position to fulfill the terms of such an agreement in a timely manner. Limited preliminary information is provided below.

In building The Cloister business model it is anticipated that four of the five general partners will have independent sources of income that will not require that the Cloister investment be part of their standard of living.

As is necessary for all investment decisions it must be determined that for the $400,000 investment (20%) that a reasonable rate of return (5-6-7-8-9-10%) can be anticipated over a reasonable period of time.

Presuming that the restaurant operation is not feasible at eight years and one day it would easily be marketed for both building and land improvements in its present location for a conservative sale price approximating $800,000 to $1M. All of those proceeds would have zero debt structure and would result in distribution of “forced sale” on an eight year hypothetical and would result in an additional $200,000 to $250,000 per General Partner. Such an exit plan is not anticipated mathematically, however, it must be given consideration.

Therefore, the shelf life of The Cloister Restaurant must be anticipated to be a minimum of eight years if the General Partners are to have any faith in a “prudent” risk venture, and a ten year model would provide a return of investment and a reasonable rate of return on the investment.

All of these “exit strategy” positions do not take into consideration any gross sales increase over the period of longevity (and the increase in net profit) but use a “flat model” as a basis.

The Pro Forma Income and Expense statement does not omit the expense for real property taxes inasmuch as it cannot be ascertained at this time. The waiver of City and County taxes will be for a minimum of ten years upon the Empire Zone certification by New York State.

The Pro Forma Income and Expense Statement will be revised prior to final determination by the General Partners to commit to The Cloister project as additional information is analyzed from the New York State/County/City taxing agencies.

Also, the major utility companies will provide service at a discounted rate to be ascertained upon certification.

It is anticipated the “certification process” can be accelerated from the 3-4 months to significantly less time by utilizing assistance from various sources.

Subject to further review and refinement based on actual menu items to be featured by The Cloister, cost of goods for the restaurant operation and projected payroll expenses to be “line itemized” it is not possible to have additional analysis of the projections provided for the Pro Forma Income and Expenses Statements.

Using a “general” cost of goods sold for food and wine and spirits of 30.23%, the “prime costs” equals 58%.

The net operating profit of 10.3% is slightly lower than the national average sought to be achieved by chain restaurants which is believed to be 11%.

Projections for advertising and promotion have been estimated at 4.0%, to provide for the early advertising and marketing programs tentatively in place.

Gross Operating Profit (G.O.P.) of 20.77% is well within the margins of national chain restaurants.

Debt service is also within the projected margin based on the business model at this time.

This information is intended for discussion purposes only and
should NOT in any way be considered any form of “offer” or “prospectus” for the Cloister Restaurant Project.

We strongly recommend that you confer with legal counsel and an accountant prior to investing in this or any other business. None of the information contained herein may be copied or distributed in any manner whatsoever without the express written consent of Peter J. Fiorella, Jr., Managing Partner of The Wickwire Group, LLC. The information is based upon projections made as a result of data mined from local restaurant operators, consultants and other professionals familiar with the operation of a business such as that being proposed herein. The preliminary proposal anticipates that the General Partners will retain 80% and The Wickwire Group, LLP will retain 20% for services indicated in the proposal. This Summary has been prepared so as to allow the potential General Partners and investors to carefully analyze and scrutinize not only the Business Model but also the projected Income and Expenses.