Location: Meriden, CT
Tutti Frutti is a small frozen yogurt shop in Meriden, CT that is run inside of a local mall. For the sake of our forecast, we will assume that they own their own building as well as the land. They have very few employees due to the fact that not many are needed to perform the daily tasks of a frozen yogurt store.
According to BizBuySell, Tutti Frutti is currently for sale for $160,000 and has a gross income around $218,000. We think that this is a good deal because our forecasted weighted average cost of capital is around 5.51%, while the initial rate of return is 11%. This makes for a great bargain because the potential for return on investment is substantial.
Tutti Frutti’s hours of operation remain constant throughout the season and don’t change due to outside forces or increases in demand. We estimated that it would cost around $.60 per ounce of frozen yogurt and that each customer would average around 10 ounces per visit. We also assumed that Tutti Frutti currently averages around 105 customers per workday.
For the financing portion of our financial statements, we looked at other various frozen yogurt stores financing rates and estimated a rate that we felt would be accurate. For more information, refer to the “mortgage” tab in our spreadsheet to see our rates and calculations.
In conclusion, Tutti Frutti has a great internal rate of return on investment. An 11% rate of return is stellar, especially when compared to a weighted average cost of capital around 5.51%. The potential for growth of this company is endless and as a result, we have concluded that Tutti Frutti would be a great business to buy. For more information about this conclusion, refer to the spreadsheet attached to this brief synopsis.