Fourpenny House investor book

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Legal Notice .................................................................... 2

Brand Voice ..................................................................... 4

How Business will Operate ..........................................10

Sources of Income ........................................................11

Personnel .......................................................................12

Analysis of Industry & location ...................................14

Competition ..................................................................16

Marketing Plan .............................................................19

Menu ..............................................................................20

Annual Operating Projection ......................................22

Contact Information ....................................................25

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WELCOME

Welcome to the neighborhood

place where brewers, bankers

and bricklayers can all come

together. There’s a place for you

at Fourpenny House. This is why you work. Leave your 9-5 at the

door, and let’s raise a glass.

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A TOAST

Toast to heritage and the many crafty

ways we know how to use a simple

grain. Drinking, cooking, baking.

Cheers to the simplest pleasure of

bread, the foundation of every meal.

Hearty, earthy, fresh from the fire,

made with tradition and elevated to a

craft through passion.

Real, fresh ingredients, from picking

to plating, grown locally, under the

San Diego sun. Crisp, handcrafted beer

and smooth artisanal spirits let conver-

sation flow and suddenly, we’re

making memories.

THE STALKS IN THE

FOURPENNY CREST REPRESENT

GRAIN’S THREE BEST USES:

BREAD, BEER, AND SPIRITS.

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LEAVE YOUR

9-5 AT THE

DOOR, AND

LET’S RAISE

A GL ASS.

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805

163

125

125 15

94

805

8 5

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GET COZY

Here’s to that first cold sip and no empty

glasses. To hour after happy hour, work

nights, weekends and why-nots.

Get cozy. Settle in. Tell that story again,

you know the one. Let me have a bite of

that. Let’s have another round.

8323 L A MESA BLVD L A MESA, CA 91942 FOURPENNYHOUSE.COM

FOURPENNY’S

LOGOMARK DRAWS

INSPIRATION FROM

TRADITIONAL

SCOT TISH FAMILY

CL AN CRESTS

SAN DIEGO

L A MESA

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Fourpenny House: we are Heritage, Harvest, and Heart.

A premium gastropub highlighting local and seasonal

ingredients Fourpenny House brings together bread, beer,

and spirits under one roof, offering all the wonderful things

grain can provide us. Producing as much as possible in-

house, from beer to bread to charcuterie, means high- level

craftsmanship is evident in the flavors and presentation of

our food and drink.

Fourpenny House will operate as a quick-service restaurant,

with a first-rate chef managing the artisanal menu. A wide

beer and spirits selection will offer a unique tasting and

flight experience for our customers, comparing in- house

brews with local and national favorites from the craft brew-

ery and distillery market.

HOW BUSINESS WILL OPERATE

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SOURCES OF INCOME

Fourpenny House will blend owner financ-

ing with investor capital for the startup

funding. Estimated startup costs are

$450,000 with owner financing and seed

money constituting $50,000, and $400,000

necessary in investor funding. Per the P&L

statement the projected profit over the first

six years of operation will provide a healthy

return to investors while allowing for the

continued growth of the business. Investor

shares of 1% ownership are $20,000, with

fractional and multiple shares available.

ESTIMATED STARTUP COST

$450,000

OWNER FINANCING & SEED MONEY

$50,000

INVESTOR FUNDING NECESSARY

$400,000

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OWNER/MASTER BREWER

Peter Soutowood has been baking

and brewing his entire life. With

twenty years of project manage-

ment experience he is well- versed

in managing large projects and

teams to meet schedule and budget

requirements. His experience as

a licensed architect will ensure

Fourpenny House’s thoughtful and

efficient design, and his passion for

food and spirits will show in the

selection and creation of curated

experiences for every customer.

BREWERY CONSULTANT

Mike Hess is the Chief Brewing

Officer and Founder of Mike Hess

Brewing in San Diego, which has

won gold medals for its Habitus

and Claritas beers. Growing from a

small nano-brewery to a 90-barrel

facility in just 2 ½ years represents

a 542% growth rate, making him a

national expert on the growth and

operation of a successful brewery.

PERSONNEL

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HERE’S TO

THAT FIRST

COLD SIP AND

NO EMPT Y

GL ASSES.

CHEF

Joshua Soth is an industry veteran

known for his distinct ability to

create innovative riffs on traditional

dishes, who came to San Diego with

more than two decades of restau-

rant experience. His progressive

approach in the kitchen has allowed

Soth to garner numerous awards

including a feature in Celebrated

Chefs Chicago and multiple awards

for his role at one of Chicago’s Top

New Restaurants in 2007. After

successfully heading two res-

taurants, Soth transitioned into

catering as the executive chef/chef

consultant at Catered By Design, an

award winning company voted Chi-

cago’s #1 Wedding Caterer by The

Knot magazine and Chicago’s Best

Caterer by Wedding Wire. He strives

to introduce a local and seasonal

cuisine while challenging the pal-

ates of guests. Soth looks forward to

his next challenge as the Executive

Chef of Fourpenny House destined

to open in 2016.

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The San Diego brewing industry is

swelling, with over 100 breweries,

$300 million in annual revenue, and

50% of existing brewing licenses is-

sued in the last year. The restaurant

industry is more modest, with a 3%

growth in new independent restau-

rants. By combining the strength and

growth potential of micro- brewing and

the stability and continued popular-

ity of restaurants, Fourpenny House is

well- balanced and situated to capital-

ize on both industries without being

over-leveraged in either.

La Mesa’s Downtown Village is cur-

rently undergoing a renaissance. The

City of La Mesa just completed an

over $5 million Streetscape Improve-

ment Project which involves sidewalk,

street, landscape, and lighting im-

provements. The draw to this quaint

town just 15 minutes from downtown

San Diego has increased, with three

new restaurants scheduled to join

the existing nine already on La Mesa

Boulevard. Tellingly, the Cohn Restau-

rant Group (CRG) opened BoBeau, a

large full-service restaurant, in 2013

ANALYSIS OF INDUSTRY & LOCATION

8323 L A MESA BLVD L A M E S A , C A 9 1 9 4 2

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at the top end of La Mesa Blvd. CRG

currently operates 26 restaurants in

Southern California with over 1000

employees. With such a prominent

anchor, the Downtown Village will

continue to grow as a culinary destina-

tion for San Diegans.

La Mesa has a population of 57,000

with a compound annual growth rate

of 0.42%. As housing is continuing to

fill out, growth is forecast to be 34%

through 2050. By drawing in custom-

ers from neighboring El Cajon, Santee,

and Lemon Grove, the potential mar-

ket is upward of 175,000 people. In-

cluding San Diego swells that number

to almost 1.5 million. Average income

from those areas ranges from $55-

70,000/year. With a desirable year-

round climate and millions of tourists

per year, the San Diego area supports a

healthy restaurant industry that Four-

penny House will contribute to.

AVERAGE AREA INCOME

$55–70,000/yr.

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COMPETITION

The beer and food scene in San Diego is robust and, citing an MIT study,

Clusters and Entrepreneurship, the benefits of the stability granted by

being part of a large cluster is slightly offset by more modest growth for

Fourpenny House. Because of our position as a specialty gastropub we will

be gaining from the growth in both breweries and higher- end restaurants

without suffering the saturation of each market.

The bakery/brewpub idea has not been developed yet in San Diego but

similar concepts include Pizza Port, Ballast Point’s Tasting Room &

Kitchen, and Jayne’s Gastropub. Of the restaurants in La Mesa’s Village,

only BoBeau is similar, with pricier menu items and full service which fo-

cuses more on mixed drinks and wine than beer. Depot Springs is opening

a brewery in La Mesa and a second location in the Village serving noodles

and their own house beers. This is positive as it for Fourpenny House as it

is a complimentary rather than competitive restaurant.

TOAST TO

HERITAGE AND

THE MANY

CRAFT Y WAYS

WE KNOW

HOW TO USE A

SIMPLE GRAIN.

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Two breweries have opened in

La Mesa in the last two years:

Bolt Brewery and Helix Brew-

ing Company. Both are located

in an industrial section of town

across the highway and focus

on beer sales, with limited food

or snacks. Despite the loca-

tion both are growing in double

digits and Bolt opened a second

location in Little Italy in San

Diego less than a year after

opening their La Mesa brewery.

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COMPETITIVE ADVANTAGE

In -house creation of charcuterie, meats, beer,

and baked goods. The competitors listed

above outsource some or all of these items.

Fourpenny House’s constantly rotating and

seasonal menu will have more in common

with high-end Bay Area restaurants than run-

of-the-mill pubs. Our competitors’ menus are

mostly uniform throughout the year, trading

flavor for convenience.

Our locally-sourced ingredients will provide

better freshness and flavor and lower cost by

saving on shipping and storage of unripe or

frozen items.

Our facility will provide for more ambience

and acoustic variety, allowing for a more com-

fortable dining experience for all customers.

With the architecture background of the

owner and careful design and planning,

the facility itself will be a standout in the

local market.

IN-HOUSE CHARCUTERIE, MEATS, BEER & BAKED GOODS

ROTATING SEASONAL MENU

LOCALLY-SOURCED INGREDIENTS

AMBIENCE & ACOUSTIC VARIET Y

STANDOUT DESIGN

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MARKETING PL AN

Fourpenny House will be developing rela-

tionships between us and our customers,

farmers, and food producers. With the firm

belief that our customers value the quality

and provenance of their food, we will regu-

larly be inviting guest food producers into the

restaurant for private craftsman tastings and

presentations.

Using social media and our website to pro-

mote these events, with coverage in publica-

tions like Edible, we will be forging a strong

relationship with our customer base. By con-

tinuing to rotate our menu we will be con-

stantly inviting regular customers back to try

something new. We will continue to utilize

the expertise of our branding and marketing

company, Bex Brands to reach our customers

through the San Diego area.

TELL THAT

STORY AGAIN.

YOU KNOW

THE ONE.

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MENU

Fourpenny House’s menu will focus on three main areas:

bread, beer, and spirits. From this core we will expand to offer

items to complete any meal, from charcuterie and cheeses to

savory foods and desserts. The bread core will focus on breads,

pizzas, and sandwiches. The beer menu will include in- house

brews as well as a selection of local and national world- class beers.

The selection of spirits will include more rare and specialized

craft and high-quality whiskies, bourbons, and other spirits. Our

rotating seasonal menu will feature fresh ingredients at the

prime of their flavor, and offered as appetizers and small finger

foods to delight and satiate our customers while addressing

the needs of those with dietary restrictions and allergies.

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THERE’S A PL ACE FOR YOU

AT FOURPENNY HOUSE.

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MONTHLY AVG. ANNUAL YEAR TWO YEAR THREE YEAR FOUR YEAR FIVE YEAR SIX

SALES

Food 70,895 850,739 893,276 937,939 984,836 1,034,078 1,085,782

Spirits 11,382 136,580 143,409 150,579 158,108 166,013 174,314

Beer 33,386 400,633 420,665 441,698 463,783 486,972 511,321

TOTAL SALES 115,663 1,387,952 1,457,349 1,530,217 1,606,727 1,687,064 1,771,417

COST OF SALES

Food 23,732 284,785 296,176 308,023 320,344 333,158 346,484

Spirits 3,810 45,720 47,549 49,451 51,429 53,486 55,625

Beer 9,313 111,760 116,230 120,880 125,715 130,743 135,973

TOTAL COST OF SALES 36,855 442,265 459,955 478,351 497,488 517,387 538,083

GROSS PROFIT 78,807 945,687 997,394 1,051,863 1,109,240 1,169,677 1,233,334

PAYROLL

Management - Salaries 12,250 147,000 152,880 158,995 165,355 171,969 178,848

Hourly Employees 38,203 458,432 476,769 495,840 515,674 536,301 557,753

TOTAL SAL ARIES & WAGES 50,453 605,432 629,649 654,835 681,029 708,720 736,601

OPERATING EXPENSES

Cleaning Supplies 750 9,000 9,360 9,734 10,124 10,529 10,950

Kitchen Utensils 200 2,400 2,496 2,596 2,700 2,808 2,920

Laundry & Linen 1,120 13,440 13,978 14,537 15,118 15,723 16,352

Licenses & Permits 50 600 624 649 675 702 730

Menus & Wine Lists 500 6,000 6,240 6,490 6,749 7,019 7,300

Miscellaneous 500 6,000 6,240 6,490 6,749 7,019 7,300

Paper Supplies 1,200 14,400 14,976 15,575 16,198 16,846 17,520

Tableware & Smallwares 600 7,200 7,488 7,788 8,099 8,423 8,760

Uniforms 200 2,400 2,496 2,596 2,700 2,808 2,920

TOTAL OPERATING EXPENSES 5,120 61,440 63,898 66,454 69,112 71,876 74,751

ANNUAL OPERATING PROJECTION

COST ESCAL ATOR: 0.04 RENT ESCAL ATION: 0.03

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MUSIC & ENTERTAINMENT

Sound Sytem 30 360 374 389 405 421 438

TOTAL MUSIC 30 360 374 389 405 421 438

MARKETING

Selling & Promotion 1,500 18,000 18,720 19,469 20,248 21,057 21,900

Advertising 1,000 12,000 12,480 12,979 13,498 14,038 14,600

TOTAL MARKETING 2,500 30,000 31,200 32,448 33,746 35,096 36,500

UTILITIES

Electricity 2,500 30,000 31,200 32,448 33,746 35,096 36,500

Gas 750 9,000 9,360 9,734 10,124 10,529 10,950

Water 1,350 16,200 16,848 17,522 18,223 18,952 19,710

Trash Removal 100 1,200 1,248 1,298 1,350 1,404 1,460

TOTAL UTILITIES 4,700 56,400 58,656 61,002 63,442 65,980 68,619

GENERAL ADMINISTRATIVE

Accounting Services 200 2,400 2,496 2,596 2,700 2,808 2,920

Bank Charges 250 3,000 3,120 3,245 3,375 3,510 3,650

Cash (Over) / Short 150 1,800 1,872 1,947 2,025 2,106 2,190

Credit Card Charges 2,255 27,065 28,148 29,274 30,445 31,662 32,929

Miscellaneous 1,000 12,000 12,480 12,979 13,498 14,038 14,600

Office Supplies 457 5,487 5,707 5,935 6,172 6,419 6,676

Postage 457 939 976 1,015 1,056 1,098 1,142

Professional Fees - - - - - - -

Telephone 200 2,400 2,496 2,596 2,700 2,808 2,920

TOTAL GENERAL ADMIN 4,591 55,091 57,295 59,586 61,970 64,449 67,027

ANNUAL OPERATING PROJECTION - CONTINUED

INVESTOR REPAYMENT

PROFIT DIVIDEND: 20% of profits assuming 20% ownership of shares by investors

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REPAIRS & MAINTENANCE

Building Repairs & Maintenance

450 5,400 5,616 5,841 6,074 6,317 6,570

Equipment Repairs & Maintenance

500 6,000 6,240 6,490 6,749 7,019 7,300

TOTAL MAINTENANCE 950 11,400 11,856 12,330 12,823 13,336 13,870

OCCUPANCY COSTS

Rent 5,000 59,940 61,738 63,590 65,498 67,463 69,487

Common Area Maint. 450 5,400 5,616 5,841 6,074 6,317 6,570

Insurance 83 1,000 1,000 1,000 1,000 1,000 1,000

Liquor Liability 120 1,440 1,440 1,440 1,440 1,440 1,440

TOTAL OCCUPANCY 5,653 67,780 67,780 67,780 67,780 67,780 67,780

TOTAL COSTS BEFORE TAXES & INVESTOR PAYMENTS

110,852 1,330,168 1,380,663 1,433,179 1,487,795 1,544,595 1,603,668

GROSS PROFIT 4,810 57,784 76,685 97,038 118,933 142,469 167,749

INVESTOR DIVIDENDS

Profit Dividend 11,557 15,337 19,408 23,787 28,494 33,550

TOTAL INVESTOR DIVIDENTS 11,557 15,337 19,408 23,787 28,494 33,550

NET INCOME AFTER INVESTOR PAYMENTS 46,227 61,349 77,630 95,146 113,975 134,199

NET INCOME AFTER TAXES (1.5% OF PROFIT) 45,360 60,198 76,175 93,362 111,838 131,683

ANNUAL OPERATING PROJECTION - CONTINUED

HERITAGE.

HARVEST.

HEART.

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CONTACT INFORMATION

Peter Soutowood | [email protected] | 619.606.2028

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LEGAL NOTICE

THE SECURITIES ARE BEING OFFERED ONLY TO PERSONS WHO HAVE SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS TO BE ABLE TO MAKE AN INFORMED DECISION REGARDING AN INVESTMENT IN THE SECURITIES. POTENTIAL INVESTORS MUST REPRESENT THAT THEY ARE CAPABLE OF EVALUATING THE MERITS AND RISKS OF THIS INVESTMENT. INVESTORS MUST BE ACQUIRING THE SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO ANY RESALE OR DISTRIBUTION. THE SECURITIES ARE SUITABLE ONLY FOR PERSONS WHO HAVE NO NEED FOR LIQUIDITY IN THIS IN-VESTMENT. THE SECURITIES BEING DESCRIBED HEREIN SHALL AT ALL TIMES BE SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUSIVE OF OR IN ADDITION TO A SUBSCRIPTION OR JOINDER AGREEMENT, IF PRESENTED.

THE SECURITIES ISSUED UNDER THIS AGREEMENT ARE SPECULATIVE AND INVESTMENT IN THE SECURITIES INVOLVES A HIGH DEGREE OF RISK. THIS OFFERING INVOLVES SUBSTANTIAL RISKS, INCLUDING, BUT NOT LIMITED TO THE FOLLOWING RISK FACTORS: (1) GENERAL RISKS OF THE RESTAURANT BUSINESS, INCLUDING BUT NOT LIMITED TO, CUSTOMER ADOPTION OF THE CONCEPT AND POTENTIAL FOR NO OR LOW LEVELS OF PROFITABILITY; (2) LACK OF OPERATING HISTORY AND EXPERIENCE OF THE MANAGER AND THE COMPANY; (3) LACK OF OP-ERATING FINANCING FOR THE COMPANY; (4) RELIANCE ON THE SKILL, EXPERIENCE AND WELL-BEING OF THE MANAGER; (5) TREMENDOUS COMPETITION IN THE RESTAURANT FOOD AND BEVERAGE BUSINESS;

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(6) ILLIQUIDITY OF THE INVESTMENT IN THE LIMITED LIABILITY COM-PANY; (7) LACK OF TRANSFERABILITY AND LONG-TERM NATURE OF THE INVESTMENT; (8) INDEMNIFICATION OF THE MANAGER OF THE COMPANY; (9) LACK OF DIVERSIFICATION; (10) MATERIAL TAX RISKS ASSOCIATED WITH THE ENTITY BEING TAXED AS A PARTNERSHIP AND A PASS-THROUGH ENTITY; AND (11) COMPLIANCE WITH FEDERAL, STATE AND LOCAL SECURITIES, PERMITTING, ZONING, BUILDING, HEALTH AND SAFETY, LABOR AND ALCOHOL LAWS, CODES AND REGU-LATIONS. THERE ARE NO TAX BENEFITS ASSOCIATED WITH AN IN-VESTMENT IN THE LIMITED LIABILITY COMPANY AND THIS OFFERING IS NOT INTENDED AS A TAX SHELTER VEHICLE. INVESTORS MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD AND BE ABLE TO WITHSTAND A TOTAL LOSS OF THEIR INVESTMENT.

THIS AGREEMENT, IN CONJUNCTION WITH THE COMPANY SUBSCRIP-TION AGREEMENT, CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THESE SECURITIES. NO PERSON REPRESENT-ING THE COMPANY OR PURPORTING TO DO SO IS AUTHORIZED TO MAKE ANY ORAL REPRESENTATIONS OR WARRANTIES, NOR SHALL ANY PERSON ON BEHALF OF THE COMPANY MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE STATEMENTS CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY IN-FORMATION NOT EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE COMPANY SUBSCRIPTION AGREEMENT.

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Fourpenny House investor book