SECTION 1

GENERAL INFORMATION

I. Executive Summary

By combining affordable cost and indulgence in an iced coffee, Don

Macchiatos has created a place for itself in the coffee shop industry. They are
Cebu’s first 39ers coffee, and is now available in various location in Visayas
and Mindanao.

Don Macchiatos has shown through their various menu list that price need not
mean sacrificing innovation or quality. They are a is a representation of
breaking down barriers and embracing innovation even as it continues to
change.

In this study, feasibility and success of establishing a new Don Macchiatos

franchise will be reviewed by evaluating their Market Feasibility, Operational
Management, Technical, and Financial Studies. Possible roadblocks are
carefully identified through careful analysis of contributing factors of success.
Mitigations and solutions are also examined, and after comparison and
analysis, recommendations are made using the most viable solutions.

II. Rationale

Currently, coffee is the second most consumed beverage, the second most
traded commodity, and the fifth most important agricultural product.

Practically everybody drinks coffee, though some might like it more than most.
Without exception, everybody knows another person who’s an absolute coffee
enthusiast.

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Coffee demand among younger generations can be actively observed both in
the community and in social media platforms. People from this generation
tend to drink coffee anywhere and anytime of the day. Some even drink more
than 3 cups of coffee a day. It has become a need for some.

People may have differing reasons for coffee consumption — they sometimes
need to kick-start their day. Some need energy for a tiring day at work or a
long day at school, or some just want to have something to aesthetically post
on their social media accounts. Regardless of their reasons, people just can’t
resist the impulse of buying a cup of coffee when the thirst kicks in.

Other than coffee and its worldwide consumption, coffee shops are also
gaining popularity. Coffee shops and places have now become a necessity in
the community. These small businesses an important role in the social
development and the growth of a community.

Coffee shops provide a setting for social interaction. They serve as a

gathering spot for close friends, coworkers, and even total strangers. They
also give people a place to conduct remote work. Many people are looking for
places to work outside of their homes due to the growth of the gig economy
and remote work. With free Wi-Fi, access to coffee and food, and a cozy and
reasonable office, coffee shops are a great option.

Coffee shops are relaxing spaces. A cup of coffee and a cozy chair can
provide you the much-needed break you need whether you are taking a break
from work or running errands.

Today, there are many popular and niche brick-and-mortar coffee places that
people can go to around town. However, not all of them are easy to locate,
especially if you live in the province or other rural towns.

In the Philippines, one of the most sought-after businesses an aspiring

entrepreneur may start today in the Philippines is a coffee shop. With more
than 2,752 cafés and coffee shops (PSA, 2020), it is a thriving industry.

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 Philippines is a nation of coffee enthusiasts. Nine out of ten Filipino
households frequently drink coffee. Additionally, the Philippines consumed
roughly 3.3 million 60-kilogram bags of coffee in total in 2020.

In Davao City, there is also an increasing demand for coffee products.

According to Department of Agriculture – Region 11 High Value Crops
Development Program coordinator Melani Provido, the demand for coffee is
increasing by 2.4 percent every year and is expected to rise in the coming
years. More and more people drink coffee every day. There’s also an
increasing consumption of coffee among the younger generations.

The preceding texts and information are powerful testaments to the immense
potential of opening a coffee shop. The increasing demands of coffee and
coffee shops are a perfect opportunity for entrepreneurs and people who may
want to start a business to jump into.

Don Macchiatos has taken advantage of this opportunity and built their very
first thirty-niners shop that caters most of their customers with affordable yet
innovative and indulgent coffee.

III. Project Description

Title
The name of the Business is “Don Macchiatos”.

Type and Category

Don Macchiatos is in the coffee shop industry that offers a variety of coffee
and non-coffee drinks. They offer an affordable cup of coffee that everyone
can enjoy for only thirty nine (39) pesos.

Location and Coverage

The new Don Macchiatos franchise will be situated in (place)

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Objectives
The study aims to assess the feasibility of establishing a new franchise of Don
Macchiatos in Davao City. The new shop will serve as a venue for people who
want to grab an affordable cup of coffee on the go. We want to be available
and affordable for everyone because we believe that coffee should be made
affordable for all.

Furthermore we want:

● To be able to provide our customers with the best quality coffee

● To the price of coffee affordable for our customers, especially

students

● To ensure that our customers get the best service from us

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 SECTION 2

MARKETING FEASIBILITY

I. Market Description

Coffee is the second largest commodity market next to oil, and growth is
expected to continue at a strong pace for the foreseeable future. The
specialty beverage industry is growing at an equally strong pace, with
sales growth in some categories projected to grow at rates of 40% per
year.

This growth offers excellent opportunities for new companies to enter this
market. We are excited about all the possibilities of what out new franchise
of Don Macchiatos can accomplish and offer in Davao City.

II. Target Market

Don Macchiatos' major customers are students. Since we are located in

the heart of Davao, we will always have a constant flow of customers in
our shop. Students are also in quite a tight budget considering that they
have obligations in their school, so Don Macchiatos will be able to provide
their need for a cup of coffee when the need for caffeine kicks in.

Of course, we are not limited to serving students. We also want to equally

serve other types of customers who to have a coffee drink. Our customers
also include office workers, non-office workers, passersby, and everyone
in the community.

III. Industry Analysis

The coffee and specialty beverage industry is pulverized, with hundreds of

manufacturers, brokers, suppliers and retailers. Unlike the beer/soda

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 industry, with large companies such as San Miguel, Pepsi, and Coca Cola
controlling most of the market, the coffee and specialty beverage industry
does not have large national chains with market control.

In an open industry growing at such a strong rate, Don Macchiatos is in

position to capitalize on the customer’s need for quality product,
exceptional service, and an effective partner to success.

IV. Competition

Even if there are just a few coffee and specialty beverage vendors in our
industry, there is still a ton of room for new ventures. Most significantly,
there is potential for new companies who recognize the need of providing
competitively priced goods along with excellent customer service and
sales support.

Customers choose their suppliers in this sector based on the products,

prices, and services offered. While one supplier may have the product at a
reasonable price, they fall short of the kind of service that the client
expects. Although their costs are too high, the following source might
provide the appropriate level of service.

We are certain that by establishing ourselves in the market with an in-

demand, high-quality product at affordable rates and a continuous high
level of customer care, we will continue to witness a growth in clients and
their business.

V. Marketing Strategy
To ensure that each customer’s supply demands are satisfied, our
fundamental marketing strategy involves working one-on-one with each
customer and assist create customized marketing campaigns for each of
them. We want to give customer service top priority and integrate it into all
of our marketing initiatives. We think that the secret to consumer loyalty

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 and effective word-of-mouth marketing is to give them what they want,
when and how they want it. We strive to establish accounts in a friendly
manner because we want to build strong working ties with our clients. This
is why we will heavily prioritize in-person sales calls to develop clientele.

To present a consistent picture of our organization and a consistent

positioning of our goods and services, we will closely integrate all of our
marketing and sales operations. We will create an impression of ourselves
centered on our brand “Don Macchiatoa” and emphasize to clients the
superior service that is associated with this name.

We will go to as many local conventions and trade fairs as we can to

promote our marketing activities and product expertise and make sure we
are providing the most recent market trend information.

VI. Promotional Strategy

Don Macchiatos will promote our brand using different platforms to reach
their consumers and be more known in the city. We will first start with
making our branch known through social media platforms like Facebook,
Instagram, Twitter, and TikTok. These are the platforms where people
nowadays spend their casual time for entertainment, leisure, or even
research. We want to penetrate and take advantage of these platforms
because they are highly saturated with people who love to share their
coffee experiences.

Don Macchiatos will also make our brand and their products known by
posting entertaining contents, educational video or posts, tutorials, and
even memes on our social media accounts to engage with our customers.
We want to make sure that we target their interests with our posts.

We will also take advantage of local content creators, vloggers, and social
media influencers to feature our business and brand in their respective

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 pages and posts. Some of these are Davao Food Guide, When In Davao,
and others. Collaborations will be done before launching day, during the
opening day, and every now and then during the ongoing lifetime of the
business.

During our soft opening, we will offer discounts for our products. Our first
50 customers will get a 50 peso discount on their purchase. Prior to
opening day, contents and social media posts will be utilized to advertise
and market this promo.

VII. Pricing

Don Macchiatos is well known for its variety of coffee drinks at a very
affordable price. Since we are a franchise business, our prices are set to
thirty nine (39) pesos per cup. This is one of the reasons that Don
Macchiatos was well-known for. We intend to keep this for our brand and
our branch.

Lower price does not mean compromising the quality of our products or
service. Don Macchiatos will serve the best quality coffee at an affordable
price, with an outstanding quality of service for our customers.

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 SECTION 3

OPERATION AND MANAGEMENT

I. Operation and Business Form

Don Macchiatos will be a franchise type of business. A franchise is a type

of license that grants a franchisee access to a franchisor’s proprietary
business knowledge, processes, and trademarks, thus allowing the
franchisee to sell a product or service under the franchisor’s business
name. In exchange for acquiring a franchise, the franchisee usually pays
the franchisor an initial start-up fee and annual licensing fees.

II. Organizational Structure

Since we are a franchise, we are managed by our franchisor. We follow

their rules, regulations, operational procedure, and their business
processes. In exchange, we get their license to operate their business and
use the name and brand of Don Macchiatos.

Don Macchiatos is a small type of business, so there is no need for a well-

structured organizational management. We, the franchisee, will act as the
managers of our branch. We will oversee the branch’s operation and will
manage day-to-day business. We will be the one to also manage finances,
human resource, and accounting.

Next to us, the franchisee, follows our staffs and crews. We will employ
three (3) baristas for our branch and a cashier.

III. Employment Skills

Don Macchiatos’ franchisees are well-versed in business operations and in

entrepreneurial ventures. This was ensured even before coming up with

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this plan. Making sure that we are best in managing business was of
utmost importance to guarantee the business’ success. This includes
forecasting, mitigation, operational and financial management, and even in
marketing management.

Don Macchiatos will also ensure that we employ skillful baristas for our
branch. An organized and honest cashier will also be ensured. On top of
their hard and technical skills, we will also evaluate their soft skills. We
want to make sure that our frontliners are customer-focused individuals
who value the best quality of services for our customers. Basic
communication skills, interpersonal skills, integrity, honesty, and being a
team player will also be our requisites for our staff.

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 SECTION 4

TECHNICAL STUDY

I. Location

As mentioned in the preceding sections, the new franchise of Don Macchiatos

shop will be situated along Bonifacio Avenue, Poblacion District, Davao City,
Philippines. This location is perfect since it is close to two of the biggest
universities in the city. Being close to these universities will ensure that our
target markets are served and a constant flow of customers will flock the
shop.

II. Building/Land Ownership

Don Macchiatos is a small coffee business that does not require a big facility
to operate the business. A small area will suffice for its operation. It can even
run in a mobile cart.

In our franchise, a part of Jaltan building in Bonifacio Street will be leased for
our operation. We will enter into a lease agreement for 1 year and will
annually renew the contract to occupy the space.

III. Technical Requirements

Unlike the typical coffee shop businesses, Don Macchiatos does not need
expensive coffee machines and equipment. A coffee press will be the main
our main equipment to brew and prepare our coffee.

In terms of a cash register, a small portable register will be used to issue

invoice and process payments.

IV. Furnitures and Equipment

Don Macchiatos is very practical when it comes to furniture and equipment

utilization. Since our shop is significantly small and we only serve coffee on
the go, furnitures and large equipment are not necessary. The only important

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 furniture we need is a chair and a table to process orders. Pitchers,water
kettles, ice box, containers, and other small kitchenwares will also be needed.

V. Packaging

Don Macchiatos coffee will be packed and served in a cup with a plastic
cover. Plastic straws will also be used to sip the coffee. These packaging will
be issued and provided along with the franchise license. Plastic cellophanes
will be provided also for customers who will place multiple orders on the go.

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 SECTION 5

FINANCIAL STUDY

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