Our hope for Soup and Bread is to double down on not franchising. In particular we will explore

• Focusing on expanding in urban oregon
• Focusing on building loyalty programs that keep customers coming back

Size of TAM

The US fast casual dining industry is $81.5 billion. 

Guesstimate of SAM

Soup and Bread is currently only an Oregon coastal restaurant, and we know that the current annual revenue is 2.5 million. If we calculate Soup and Bread revenue / US fast casual dining interesting we find that Soup and Bread has about 

• $2.5 million / $81.5 billion = 3.06748466 × 10-5 = 0.003% of the market

SOM

Focusing on expanding in urban oregon

We know from before that there is a $81.5 billion in fast casual dining industry. We also know that the US population is 348 million people. If we calculate how much each person spend on fast casual dining we get

• • 81.5 billion / 348 million people = $234 per person in US

We then also know that 2.7 million people live in urban Oregon areas

• • 2.7 million people * $234 per person = $631,800,000 spend on fast casual dining per year in all of urban Oregon

Say we are opening 5 urban stores:

• • We know that Soup and Bread’s current coastal annual revenue per location is $14.50 / day * 100 customers / day * 365 days = $500k (we have 5 locations), which matches their cash reserves. 
  • About 33% of Oregon is rural, so we could estimate 2x as many people would visit an urban location (since urban population is 66%)
    • 500k x 2 = $1 million dollars per location
    • 5 urban locations means $5 million per year from all locations
      • $5,000,000 /  $631,800,000 = about 0.7% of urban Oregon market annually

Increasing revenue from loyal customers

Currently 65% of current Soup and Bread revenue comes from loyal customers → $2.5 million * 0.65 = $1.625 million dollars. We found that creating a loyalty program boosts spending by 18-30%. 

• 1.625 million * 1.25 (middle estimate) = $2.062 million