CONCEPT
Our SVCS RENDERED project in North Park is the evolution of our highly successful SHELTER concept, and will blend together exceptional nightlife, entertainment, social dining, mixology and special event experiences in an elevated, stylish atmosphere.

In recent years we’ve seen a blurring of the lines that once separated restaurants and bars. Concepts like Beauty & Essex, Tao and Catch have all experienced tremendous success incorporating nightlife, entertainment and event-type experiences into their restaurants.

In our existing establishments, we’ve experienced the demand firsthand for an elevated, social dining experience to complement our nightlife/entertainment/event focused venues which lead to the development of our SVCS RENDERED concept.

It’s no secret that profit margins in alcohol service are substantial.

What differentiates SVCS RENDERED, is that our concept is firmly rooted in nightlife and entertainment, which carry significantly higher profit margins and dramatically lower labor costs,  setting the economic foundation for our business model and social dining platforms.

The restaurant industry is notorious for a high failure rate. One dimensional operations rely on a singular revenue stream to sustain operations leaving them vulnerable to market fluctuations, adverse economic factors and changing consumer trends.

Unlike the restaurant businesses, it is an extremely rare occurrence for a 2AM licenced bar with entertainment in a prime location to fail. These licences are very rarely issued, highly valuable, and often fetch prices well north of $1,000,000.

Our business model is comprised of multiple revenue generators, including nightlife, entertainment, special events, social dining, and mixology. This combination of revenue streams drive a diverse and profitable business platform. The result is a business model with the ability to leverage operational and economic efficiencies that ultimately enables us to create extraordinary experiences for our guests and significant returns for our investment partners.

The economic advantages of our business model are significant. The primary capital investment (licensing, buildout, startup costs) as well as fixed operational costs including rent, utilities, insurance, admin and G&A are covered by our nightlife business segment which is highly profitable by nature. The addition of our dining program carries a relatively minimal start up investment, and provides economic and employment diversity. The dining programs drive significant food and alcohol revenue during weekend brunch, evening happy hour, mid-evening dining, as well as special and private events. The result is a highly efficient business model with a diverse revenue stream and significant cost reductions per business segment.

The operational advantages are also significant. The diverse and relevant nature of our model affords us the ability to invest in the highest caliber management and retain the best mixologists, bar tenders, wait, kitchen and service staff. Additionally we are able to leverage economies of scale through multi-unit volume discounting for liquor, beer and wine, as well as marketing, advertising, executive management and event promotion synergies.

MARKET/DEMOGRAPHICS

North Park is booming. The area is one of San Diego’s oldest commercial districts and following $148,000,000 in state redevelopment funding culminating in 2013, the area has experienced a renaissance, and the dining and entertainment market is thriving.

We were able to secure the highly coveted NE corner of 30th St. & University Ave. which is the prime location within the North Park dining and entertainment district.

Amongst massive real estate development, an influx of new residents and businesses, our location is at the center of arguably the best demographic base of our target consumer within San Diego county, creating the perfect setting to execute our concept.

We have executed a 29-year submarket lease and secured a highly valuable, rare and unique to market 2:00AM liquor license with a 1:00AM provision to serve alcohol on approx. 1,000 sf of exterior elevated patio space fronting 30th & University. Our construction plans are complete and we are awaiting the issuance of building permits.

 
BACKSTORY
Our Encinitas property SHELTER is without exception an extraordinary experience. The ultra stylish design and buildout of the space is far beyond that of our competitors within the market. The venue exceeded $2m in annualized revenue at its peak with profit margins in excess of 25%. Although very profitable, it became apparent that we were leaving a significant amount of money on the table. We were only using the space to about 30% of its potential, operating primarily Thursday, Friday and Saturday nights as a high end nightlife and entertainment destination. We saw several other concepts in the market, such as Bier Garden who operates under a 12:00AM license, doing north of $4m in sales, primarily in the hours we weren’t even doing business; i.e. brunch, lunch, happy hour and early evening dining. This led to the obvious conclusion that we needed to expand our business model to meet changing consumer trends and market demand. Our experience, along with emerging trends we were seeing in New York and Los Angeles led to the development of our SVCS RENDERED concept. 

Investment Differentiators

FINANCIALS        
Financial Expectations
Cirque anticipates the property will generate roughly $4.87 million in revenue in its first year of operations and $1.23 million in EBITDA. Cirque has conservatively forecasted the financial performance based on our historical experience, market comps, and in-depth consultation with current management-level hospitality professionals within the North Park market.

	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	$4,873,295	$5,116,960	$5,372,808	$5,641,448	$5,923,521
Total COGS	$1,325,780	$1,392,069	$1,461,672	$1,534,756	$1,611,494
Gross Profit	$3,547,515	$3,724,891	$3,911,135	$4,106,692	$4,312,027
	72.79%	72.79%	72.79%	72.79%	72.79%

Total Operating Expense	$2,317,910	$2,414,297	$2,517,856	$2,698,152	$2,810,429
Earning Before Interest & Taxes	$1,229,605	$1,310,594	$1,393,279	$1,408,540	$1,401,598
EBITDA	$1,229,605	$1,310,594	$1,393,279	$1,408,540	$1,401,598
	25.23%	25.61%	25.93%	24.97%	23.66%

INVESTMENT
Investor Details
Cirque will raise $2.0 million in preferred equity that will be drawn from as needed. Raised capital will go towards acquisition, licensing, development and construction costs as well as helping cover initial start-up costs. We conservatively project $1.23 million in profit beginning the first 12 months of operation, with 5% growth thereafter through year five. We anticipate to return investor capital within 22 months of operation, deliver cash on cash returns in the 34%-37% range with an IRR in the 42%-48% range annually. Prefered investors will receive 90% of net cash flow until initial capital investment is recouped, and 50% thereafter for the duration of the investment. Additionally, an equity buyout option will be available following 36 months of operation.

	Year 1	Year 2	Year 3	Year 4	Year 5
EBITDA	$1,229,605	$1,310,594	$1,393,279	$1,408,540	$1,501,598
Cash on Hand	$100,000	$100,000	$100,000	$100,000	$100,000
50% of contingency capital return	$150,000
Enterprise Valuation	$4,611,019	$4,914,727	$5,224,796	$5,282,024	$5,630,993
Less: Remaining Perf Investment

Amount to be Distributed	$1,379,605	$1,310,594	$1,393,279	$1,408,540	$1,501,598
Preferred Investment	$1,229,605	$1,310,594	$1,393,279	$1,408,540	$1,401,598
Preferred Investors 90% / 50%	$1,241,645	$903,795	$696,640	$704,270	$750,799
Common Investors 10% / 50%	$137,961	$406,799	$696,640	$704,270	$750,799

Multiple on Investment	3.75	3.75	3.75	3.75	3.75
Preferred Cash on Cash Return	62.1%	45.2%	34.8%	35.2%	37.5%
Enterprise Value %	21.8%	7.5%	7.9%	8.3%	11.3%
IRR	83.9%	52.7%	42.7%	43.5%	48.8%