EBITDA 15%, BEP 16 days, 6 months capital recovery if done well, not an important core point of BBB.
Actually, CASH (Cash Flow) is the strong key of BBB.
Open quickly + replicate quickly in the FnB industry with a cash conversion cycle of (27) days.
That means collecting fresh cash every day, inventory is short 1 – 1.5 days; NCC debt is 30 days.
Calculating the CCC (Cash Conversion Cycle) is negative 27 days, which means the more it expands, the more effective the profit per point is, the more money is left over to open more money, no need for additional contributions from any comrades.
BBB’s ideal quick valuation of 7 points is probably 40% effective of Xemesis = 10 – 12 billion.
FnB Vietnam has a few problems:
– From being a skilled chef to becoming an owner is often a failure; The owner’s mindset and the worker’s mindset are two different mindsets; There are countless kitchen workers who tried doing business and then returned to their old owners; The owner is also generous and tolerant to accept all hi hi hi
– Inadequate calculation of costs and capital prices, leading to non-standard prices
– There is a taste for culture, branding and lifestyle; Many concepts are still a bit boring
– Customer experience and operations
– Capital structure and M&A
BBB’s biggest risk that I can’t predict:
Purchasing power will decrease or the percentage point of full table in 2024 will decrease due to brothers’ restrictions on spending.
This requires a strong financial accounting team to continuously control and analyze indicators:
– Cumulative equity health (presented in real time)
– Calculate operational efficiency on each point
– Optimize expenses cost and cost margin per point
– Cash flow
– Point opening strategy
– Price strategy consistent with value, so customers are happy to return
To decide at what pace to expand, defend or attack with what intensity?
BBB, I think it’s time for Finance & Accounting to step in.
Back office is about to be built:
– 1 – 2 purchase accountants
– Warehouse accountant (At central kitchen and branches)
– General accountant, sales accountant & receivables accountant
– Accounts payable accountant
– Tax accountant
– Chief accountant
– HR at least 4 people: Recruitment, C&B, process & policy + software.
– Professional training for stores: 2 people
– Marketing: 1 – 4 people (Ads, PR, Planner, outsources design)
– Supply, warehouse, trucks: 2 – 4 people.
– Tech: Just use available software for cheap
Potential risks:
– Other brands in the same price range compete with prices, reducing bills/person.
– What USP keeps customers coming back? I don’t know yet, let’s eat again after Tet.
Anyway, still a case study worth learning and many perspectives for you.
Please don’t ask for a franchise, if it’s good, they won’t give it to you. If it’s not very good, then they’ll give it to you. ;))
Being a self-owner creates better models.
Ps: This valuation will be good if BBB has a strategy to liquidate shares for shareholders.
Liquidity – Liquidity is the key to a strong Board of Directors and team of founders.
Above is an article shared by Mr. Phung Le Lam Hai (Lucas) – Founder and General Director of Equitix Investing.
See more at equitixinvesting.com