FEASIBILITY AND BUSINESS PLAN

DENTON EASY: MAKING DENTON EASY TO ENJOY

LEADERSHIP DENTON DENTON, TEXAS 76201

APRIL 12, 2012

TABLE OF CONTENTS
EXECUTIVE SUMMARY ..................................................................................................................... 1 DESCRIPTION OF PRODUCTS AND SERVICES ..................................................................................... 2 PRODUCT & SERVICE MARKETPLACE .............................................................................................. 4 MARKETING STRATEGY ................................................................................................................... 5 SALES ANALYSIS ............................................................................................................................. 6 TECHNOLOGY CONSIDERATIONS ...................................................................................................... 7 MANAGEMENT STRUCTURE ............................................................................................................. 8 MILESTONES AND TIMELINE ............................................................................................................ 8 CAPITAL AND FINANCIAL PLAN ....................................................................................................... 9 FINDINGS AND RECOMMENDATIONS .............................................................................................. 10 APPENDIX 1: BENCHMARKING ANALYSIS ..................................................................................... 11 APPENDIX 2: STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ANALYSIS .... 28 APPENDIX 3: TARGET AUDIENCE ANALYSIS ................................................................................. 30 APPENDIX 4: CAPITAL AND FINANCIAL MODELS .......................................................................... 31

EXECUTIVE SUMMARY
The Leadership Denton Class of 2012 was tasked with preparing a feasibility analysis and business plan to establish a visitors center to better promote Denton to visitors and local residentsin other words, how to make Denton easy for visitors and residents to enjoy. The project sponsor was the Denton Convention and Visitors Bureau (CVB), with oversight provided by the Leadership Denton Committee. The effort began with a series of meetings with local leaders to garner their input, a benchmarking analysis of other visitor centers across the state to determine what worked well and what did not, and lastly a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Dentons tourism industry from both a regional and local perspective. Based upon these studies, the team conducted a demographic analysis to identify what types of locations (e.g. I-35 corridor versus downtown) would provide the best location for a visitor center. This information, combined with the other analyses, formed the basis for a marketing strategy, recommended retail product mix, sales forecast, management structure and implementation plan, and financial plan including capital requirements. One of the key issues identified from the start was whether hotel occupancy tax (HOT) funds would be needed to cover some expenses for the visitors center to be viable. As a result, financials were analyzed both with and without the use of HOT funds to supplement revenue. Key features of the proposed business plan for the visitors center include: Product and service mix focuses on seven categories of retail items: Denton-themed, Texasthemed, local-themed, books, convenience items, local attraction and event ticket sales, and information on local merchants using a flat-rate paid by the businesses. Maximum retail price is $25, with viable profit margin of 50 percent on most items. Marketing would be tailored to four major groups: people passing through Denton, university families, local residents, and festival fans. Staffing would consist of one full-time visitor center manager and one part-time volunteer coordinator to run the store supplemented by community volunteers. Location must balance ease of access for travelers with being close to areas of interest (i.e., downtown, universities, shopping, hotels and restaurants). Minimum of 1,000 square feet of lease space needed to support a viable visitor center. Leasehold improvements estimated to cost $$35 to $40 per square foot. Timeframe from project initiation to doors open is a minimum of ten months. In summary, the project team concluded that a dedicated visitors center is feasible if the hotel occupancy tax (HOT) is used to cover salary, leasing, and marketing (approximately $6K per month). A reduced level of HOT funding could still keep the project viable, but extends the time to reach break-even. Without the use of HOT funds, the project never reaches a breakeven point because the projected sales revenue is insufficient to cover the costs to open the doors. Our study of other visitors centers revealed they also rely on HOT funds to support some costs of operation. The combination of low volume and low margins makes supporting a visitors center, strictly on the revenue it generates, unfeasible. While there are visitors centers that cover the costs of operation solely on store-generated revenue, those locations are the exception rather than the rule. In every case, the centers are located at major attractions, like San Antonios being next to the Alamo, and operate rent free. Even in the case of San Antonio, the stores management staff is funded out of the city budget from HOT-generated revenue.
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DESCRIPTION OF PRODUCTS AND SERVICES

Based on the findings from the benchmarking research (Appendix 1) of successful visitor stores in Texas, the Visitor Center would concentrate on products with a retail cost of $25 or less with a 50% or higher profit margin. The follow table summarizes the recommended types of merchandise, percent of inventory, cost of goods, retail price range, profit margin and merchandise type: Merchandise Categories Denton-themed Items Percent of Inventory 30% Cost of Goods Range $1-$12.50 Retail Price Range $2-$25 Profit Margin Merchandise Types 50% Clothing: shirts, sweats, hoodies Souvenirs: mugs, glassware, caps, postcards, bottle openers, koozies, magnets, ornaments, totes/backpacks, plush toys, pens, seasonal items 50% Clothing: shirts, sweats, hoodies Souvenirs: mugs, glassware, caps, postcards, bottle openers, koozies, magnets, ornaments, totes/backpacks, plush toys, pens, seasonal items 25% Music CD by Local Musicians Artwork by Local Artisans Books by Local Authors Merchandise from Sleeping Lizards Ornaments from 1st Peoples Jewelry Books from Recycle Books Candy from Candy Haven Western themed gifts from Weldons & Fosters 50% Local Authors Denton Specific Texas Specific

Texas-themed Items

40%

$1-$12.50

$2-$25

Local-themed Items

20%

$1-$20

$1.50-$30

Books

4%

$12.50 or under

$25 or under

Merchandise Categories Commissary & Convenience Items

Percent of Inventory 5%

Wholesale Cost Range $1-$5

Retail Price Range $2-$10

Tickets

0.5%

Event Driven Cost

Cost+

Local Merchants Brochure Placement (Hoteliers receive complimentary coverage)

0.5%

$0

$250 annually

Profit Margin Types of Merchandise 50% Bottle Water Sodas Candy Bars Disposable Cameras ATM 10-25% Denton events: Arts and Jazz; Music/Musical Instruments; Horse Country; UNT; TWU; Arts, Antiques and Automobiles; Dog Days of Denton; Twilight Tunes; 35 Denton; North Texas State Fair & Rodeo; Thin Line Film Festival; NX35; Tejas Storytelling Festival; Redbud Festival; Courthouse on the Square Museum; Texas Motor Speedway; Holiday Lighting; I heart Denton Texas events: State Fair; Dallas Cowboys; Texas Rangers; Dallas Mavericks $250 Opportunity to highlight business with rack brochures or special business section in the store.

The store would provide the following types of services: visitor information, maps, music sampling by local musicians wine tasting, relocation guides, meet an animal, photo opportunities, meet a UNT or TWU athlete, cooking demonstrations by local chefs, and experiential opportunities.

PRODUCT & SERVICE MARKETPLACE

In order to have the greatest reach, the Visitor Center should target an audience of all ages and coming from everywhere including local residents. Given Denton has two universities that hold many events and attract both local and tourist audiences, the DVC should connect with each of the universities and their different departments to maintain a list of events every year. Some of the standing events are sports activities, student orientation, homecoming, and parent weekends. The CVB already offers tours of downtown and of the horse country which can be marketed to the organizers of the university events. Denton also has events that attract locals and outsiders, such as the Denton Arts & Jazz Festival, the Denton Community Theatre Playwriting Festival, the 35 Conferrette or equivalent. As Denton adds more events and promotes them to outside communities then the CVB can tag along with targeting their activities in conjunction with these events. Examples of target audiences are: adults aged 50 years and more who have disposable income, Denton residents, university parents, Texas Motor Speedway fans, horse enthusiasts, audiences and participants for sporting events (colleges, high schools, rodeos, and endurance sports), festivals, the North Texas State Fair, and the arts. In light of the varied audience, the project team concluded the best location for a visitor center would be along the I-35 corridor. This location would be accessible to passers-by as well as residents and visitors to Denton and the universities. The challenge of finding a location in the corridor is balancing ease of access for people traveling through Denton with the need to be close to major hotels, shopping areas, and main thoroughfares to downtown Denton. Based on the benchmarking analysis, the team concluded a 1,000 square foot visitor center would be appropriate for Denton. Lease costs (triple net) along the I-35 corridor range from $9 to $16.25 per square foot. Based on the financial analysis, the team concluded $15 per square foot was a reasonable price point to use in looking for potential locations. As an example, one possible location that meets the above criteria is a building on the I-35 access road at Meadows Street. This location is on the north bound service road of I-35 approximately mile south of the Fort Worth Drive exit that conveniently leads to downtown. Lease cost (triple net) is $14.50 per square foot. There are two suites available, each being 1,028 square feet in size with plenty of parking. In addition, there is a 10 foot by 20 foot pole sign at 30 feet above grade available for lease. The benchmarking analysis revealed a sign along the interstate as a very desirable marketing tool for traffic passing through town. An estimated cost for build out of a facility like this ranged from $35 to $40 per square foot. For the purposes of the financial analysis, the team used $40,000 to be conservative. Area residents should be targeted, especially in terms of uniquely Denton merchandise. If we come up with the equivalent of Keep Austin Weird, locals would be a great market for that merchandise, especially if it is proprietary. Otherwise, the CVB should focus efforts towards marketing (Denton Live, Discover Denton, Dentoneer, Main Street Denton, etc. all do a good job, but there may be a need to develop a site like Austin 360). With respect to the people accessing Denton via the A-Train, the team recommends establishing a professional looking kiosk at the downtown train station that would be open on days and hours targeted for tourismtypically Friday and Saturday afternoons and on Sundays during major events like the Arts & Jazz Festival. This kiosk could have a smaller selection of items for sale as well as
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information focused on Downtown to include menus for restaurants in the area, detailed maps for people walking, and transportation options beyond the immediate area (e.g., pedicabs, DTCA buses, share-a-ride).

MARKETING STRATEGY
The marketing strategy focuses on four key customer groups. These four groups are characterized as: 1) Road Warrior; 2) University Family; 3) Local Residents, 4) Festival Fan. While there will exist overlapping of individuals between these groups, such as a local resident also being a festival fan, the team believed these grouping provided a useful construct on how to best market to people in or traveling to Denton. The basis for these groupings was the synthesis of three types of analysis: Stakeholder Analysis, Strength, Weakness, Opportunities, and Threats (SWOT) Analysis (Appendix 2), and a Target Audience Analysis (Appendix 3). The following discussion focuses specifically on the unique characteristics of each group and how to best market the visitor center to them. The Road Warrior These veterans of vacations are accustomed to finding great information and merchandise at visitors centers across the country. As a group, they have the spare time and income to spend when a compelling opportunity presents itself. Whether travelling in alone or in groups on charter busses, the Denton Visitors Center will cater to this group by offering a variety of Texas and Denton themed merchandise, priced for impulse shopping. Traditional outdoor media such as billboards along I-35 and TXDOT signs will help guide this group to the DVC. The University Family Denton isnt just home to over 50,000 college students. Its also a second home to thousands of university families. The DVC can appeal to these families as they visit Denton by offering UNT and TWU themed clothing and merchandise. It can also offer something that book stores dont doa personalized guide to all the great things going on and off campus. Opportunities for reaching this group include advertisements placed inside dormitories, at the A Train transit center, Facebook advertising targeted at family members of UNT and TWU students, and through coupons distributed in new student orientation packages. The Local What do we have to offer the person that already knows and loves Denton? How about a website and a brick and mortar location, both of which have dates, locations, and even tickets for all the great events happening in Denton? Itll also be the one place to get the official 35 Denton compilation of local music. For those who fondly remember concerts past, well have a curated section of gig posters from local artists. We plan to reach the community by holding ticket giveaways through local radio station KXT and engaging them through social media. The Festival Fan Events like Arts and Jazz Fest, Holiday Lighting, and 35 Denton draw huge crowds. It will be important for the DCV to convert those festival fans into customers. One effective way to do so will be by setting up pop-up visitors centers at major events in town. Utilizing booth space within the festival, the visitors center can get guaranteed foot traffic, while offering a selection of merchandise chosen especially for each festival. These pop-up centers will also give us the opportunity to direct traffic back to the main location as well as to the website.

Each of these groups represents an existing market in Denton. Marketing strategy for the DVC is to tailor our efforts to each group to increase the stores revenue while promoting Denton.

SALES ANALYSIS
The sales analysis is based on projections from data provide by visitor centers analyzed in the benchmarking study. This analysis looks a produce and service distribution in Figure X, and sales forecast for by month for the first year of operation in Figure Y. The sales forecast assumes a monthly growth of 5 percent. While arguably it could be expected to be more seasonal, the project team concluded that with the variety of events going on throughout the year that no single factor would drive a seasonal spike or dip in sales. For example, San Antonio sees a significant increase in the spring due to spring break (March) tourism and Fiesta (April). Otherwise, sales are relatively consistent. Since Denton is not a spring break destination and does not have a single event as big as Fiesta, a constant growth rate was used. Figure 1 Sales Forecast By Product/Service 1% 4% 5% 30%

Denton-themed Items Texas-themed Items

20%

Locally-made Items Books Convenience Items Ticket Commission 40%

Figure 2 Sales Forecast By Month, Year 1 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

The project team did consider a market share analysis, but decided it would be problematic to perform one with much relevance to the Denton area. There are no other visitor centers in the immediate area. While both UNT and TWU offer some products that are similar, the majority of their sales include items like school supplies, and university specific items which did not lend itself to good apples-toapples comparison. In consulting with other visitor centers across the state, they did not have detailed detail on sales by customer group (e.g. seniors, locals, etc.), but what they almost all said universally is that items $25 and below sell, items over $25 do not sell. Furthermore, Texas-themed items (specifically cattle, oil, and cowboys) sell better than local items. Thus, the product mix gave higher percentage of sales to Texas items, and no item over $25 would be placed in the store. One of the key components to improving sales is to leverage information technology to expand the stores reach beyond the physical location.

TECHNOLOGY CONSIDERATIONS
A single, comprehensive, easy-to-navigate website, which complements the functions of the Visitors Center, will be essential. This site will provide virtual visitors easy access to all things Denton: (annual events, current events, food, movies, music, hotels, retail items, exhibits, tours, history, etc.). Kiosks within the Visitors Center will allow for self-help visitor assistance, and serve as a central database which Visitors Center staff can use to present information, print directions, and event dates/times. The foundation for such a website currently exists (e.g., Discover Denton/Denton Live), but there is a need by the Visitors Center to: Provide online access to retail products/event tickets. Improve ease of navigation to existing web sites. Increase awareness of web sites to target constituent groups--especially local residents. Strive to collect and publish all upcoming events including UNT and TWU. Maintain an up-to-date directory of area websites. An additional consideration is developing a sustainability plan for IT support and development. It is imperative this one-stop shop be as current and complete as the brick and mortar shop. Resources will

be needed to provide ongoing maintenance of the stores web presence making the presentation of the products appealing to the masses.

MANAGEMENT STRUCTURE
The Visitor Center would work under the direction of the Denton Convention and Visitors Bureau (CVB) and would initially be staffed with one (1) full-time Visitor Center Manager (VCM) and one (1) part-time Volunteer Coordinator. Figure 3 DVC Management Structure

*Fill position when supported by revenue

The VCM position would require someone with experience as a retail manager to include purchasing, store management, merchandising as well as knowledge of the tourism industry. These skills are based on findings of the benchmark analysis. The salary range for this position would be between $30,000 and $35,000 including benefits, and is commensurate with other stores studied in the benchmarking analysis. The VCM would have the following responsibilities: Organize the store and its staff to include purchasing, and inventory control. Help recruit, train and manage the staff which would primarily be volunteers. Build relationships with area businesses, event coordinators, and UNT and TWU staff. Keep the website updated with upcoming events and advertise merchandise available. Develop Denton merchants to want to advertise at the visitor center for a fee. Build relationships with UNT and TWU to secure interns interested in learning about merchandising and marketing to develop a merchandise profile and assist in marketing for the DVC. The Volunteer Coordinator would be responsible for recruiting, training and scheduling volunteers. Ideally, this position would be filled by a volunteer; however, realistically, a paid part-time is included at an annual cost of $12,000. Volunteers would be recruited with a good knowledge of Dentons history, landmarks, and features. They would be trained on what there is to do around Denton and the businesses in town. As the Visitor Center grows then a Retail Coordinator position would be added and take over responsibility for purchasing, and work in expanding the merchandise selection so the VCM could focus on marketing and securing advertisers to raise revenue. This position would be added when retail sales reach $150,000 per year.

MILESTONES AND TIMELINE

The proposed implementation schedule is: Phase 1: Initiation & Site Selection (Months 1 3) Announce initiative at major event, like a Chamber luncheon, to share proposal with community Establish a sponsor team with representatives from the Chamber of Commerce and City of Denton to provide oversight. Establish project management team to develop project management plan, and then execute that plan under the supervision of the Sponsor Team. Explore site options along I-35 corridor Develop proposal with lease for Chamber board Phase 2: Location Development (Months 4 8) Board approve and sign lease Design build out Contract for build out Obtain building permit Phase 3: Store Development (Month 5 8) Post position for visitor center manager (VCM) Interview candidates Select VCM VCM starts working 6 weeks before build out completion VCM starts planning store merchandise and interior organization VCM begins purchasing merchandise to be available for store opening Recruit volunteers and set up training program Phase 4: Store Start-up (Months 8-9) Obtain certificate of occupancy VCM, volunteers and visitor set up store CVB move into administrative space CVB board organize grand opening Soft opening one week before Grand Opening Phase 5: Grand Opening (Month 10)

CAPITAL AND FINANCIAL PLAN

The Capital and Financial Plan (Appendix 4) looked at the feasibility to establish and operate the Visitor Center using two options: 1) no use of hotel occupancy tax (HOT) funds; and 2) with use of HOT funds for marketing, lease space, and salary as allowed by Texas Law. The plan looks at both options on a monthly basis through the first three years of operation. The assumptions rely substantively on the Austin visitors center actual financials. Therefore, some expenses are included as fixed recurring costs, and variable costs are a function of revenue. The model is driven by the revenue in Month 1, and fixed allocation of the different types of products and services discussed in the marketing section. Lease costs and leasehold improvements reflect the market research previously
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discussed. Salary and benefits are commensurate with the positions discussed in the Management Structure section, and are inflated at 3 percent annually. A comparison of these two options results in a stark conclusion. Without HOT funding, the Visitor Center requires $175,177 in working capital and does not become profitable in three years with an estimated gross loss of $158,055 by month 36. In comparison, with HOT funding ($5,944 per month) and $90,651 in working capital, the Visitor Center starts earning a profit in month 22, and by month 36 has earned a gross profit of $49,485.

FINDINGS AND RECOMMENDATIONS

Marketing: Product and service mix focuses on seven categories: Denton-theme, Texas-theme, Local-themed, Books, convenience, tickets, and local merchant items. Maximum price point for products is $25, minimum profit margin of 50 percent. Marketing should be tailored to four major groups: Road Warriors, University Families, Locals, and Festival Fans. Organizational: One full-time visitor center manager and one part-time volunteer coordinator are required to run the store supplemented by community volunteers from organizations like RSVP. Location must balance ease of access with being close to areas of interest (downtown, universities, shopping, hotels and restaurants) Minimum of 1,000 square feet of lease space at $15 per square foot needed to support a viable visitor center. Leasehold improvements estimated to cost $40,000. A realistic timeframe from project initiation to doors open is ten months. Financial: With HOT funds, break-even point occurs the fourth quarter of the second year of operation. Without HOT funds, the visitor center never breaks-even. Revenue from sales alone cannot support the visitor center. Based on these findings, the project team concluded a dedicated Visitors Center is feasible if the hotel occupancy tax (HOT) is used to cover salary, leasing, and marketing. A reduced level of HOT funding could still keep the project viable, but extends the time to reach break-even. The team recommends the Chamber of Commerce and City of Denton approve the plan and form a project team to implement it.

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APPENDIX 1: BENCHMARKING ANALYSIS

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Data 1. Convent ion and Visitors Bureau a. Point of Contact b. Email c. Phone

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins pete@arli ngton.org 817 2657721 1905 E. Randol Mill Rd. Arlington 76011

Elizabeth Eddins eeddins@ci.be aumont.tx.us 409 880-3168 505 Willow St. Beaumont, TX 77701

Randy Sisson rsisson@ gptx.org 972 5955401 2170 N. Beltline Rd. GP, 75050

Sally Schepps

Jamie Matthews jmatthews@hu ntsvilletx.gov 936 291-9726 7600 Hwy. 75 South Huntsville, 77340

Bryan Lang, Director of VIC http://partners.visitsan antonio.com/about (210) 207-6700 203 S. St. Mary's Street, Suite 200 San Antonio, TX 78205 317 Alamo Plaza, SA, 78205 Open seven days a week, 9am5pm.

Cheri Winterrond cwinterrond@a ustintexas.org 512-583-7255 209 E. 6th Street Austin, TX

Susan Morton susanm@ci. waco.tx.us 254-7508610 106 Texas Ranger Trail, Waco, TX 76706

vicstaff@grapevin etexasusa.com 817 410-3185 705 Main Street/CVB housed separately

d. Address

2. Environ mental Analysis

Next to Sam Houston National Forest in the Piney Woods Region

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Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson Very close to attraction s; Ripleys/ Wax Museum, AirHogs Baseball, Lone Star Park, Verizon Theatre

Sally Schepps

Jamie Matthews Location of the visitor center is located next to the statue on Hwy 45 and can be seen from miles away. The statue has a great draw which gives them the opportunity to give the visitors information on Huntsville. Huntsville does not have a convention center or a full service hotel able to accommodate conventions.

Bryan Lang, Director of VIC Location-across the street from the Alamo Passionate staff, Retail, strong branding reflected in $250K renovation

Cheri Winterrond Location on Sixth Street in heart of arts and entertainment area of Austin

Susan Morton Near I-35, next to Texas Rangers Hall of Fame. Near Baylor University, Dr Pepper Museum, Brazos River, info center signage on exits Space--very small retail area

a. Strength s?

Many attractions nearby: Next to Vintage Railroad, Grapevine Lake, Gaylord, Great Wolf Lodge, LegoLand, Sea Life Aquarium, Main Street, Local Vineyards and wine tasting, annual festivals, Grapevine Opry

b. Weakne sses?

Not able to sell Ranger, Cowboy and Six Flags since that competes with local Walmart

Close to attraction s, not so close to hotels and attraction s

No interpreters, shortage of staff, PT employees to 1000 hours/yr

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Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Training of the Volunteers

Elizabeth Eddins

Randy Sisson Highway signage; small from TXDOT, billboards too expensiv e. Seasonal traffic from baseball, Lone Star Park and Verizon Theatre. Opportun ity to get our Grand Prairie brand out to more, even those that are just passing through

Sally Schepps

Jamie Matthews Difficult to bring conferences to Huntsville

Bryan Lang, Director of VIC City council serving their constituents,

Cheri Winterrond Have outgrown space to expand new revenue ideas

Susan Morton Lack of storage-must seek out items that can be purchased in smaller quantities. Must be creative with product placement and merchandisi ng

Space limitations, storage in another building

c. Challen ges?

d. Opportu nities?

Attracting more visitors to the informatio n center

Visitor Center away from train station

Growth into new facility, caf serving local foods, partnering with Culinary Institute of American, Digital screens for ads

To develop high-tech social media marketing

Find ways to further increase revenue and profit margins. Continue to look for companies who will sell custom products in small

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Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson the DFW area

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton quantities

e. Aspirati ons? Growth goals? 3. Financia l Info

Weve already doubled in size once already.

New space combining the CVB and Visitor Center

Gaining a full service hotel and convention center

Become front door for community, Create hub and spoke system-market square, NW San Antonio

To become a music venue, and have a caf

Increase online sales, sell attraction and event tickets

Not able to share at time, Supervisor position is vacant.

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Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins HOT Funds

Elizabeth Eddins

Randy Sisson Hotel/Mot el tax only, no general fund. Gift Shop revenue simply pays for itself. Revenue is used to increase inventory. Drivethru Chase Bank ATM (approx $500 mo)

Sally Schepps

Jamie Matthews occupancy funds, store revenue

Bryan Lang, Director of VIC Retail is 50%..pays overhead Hot Funds other 50% for salaries, etc.

Cheri Winterrond Bureau receives 1.1% of HOT and private funding from Visitor center gift shop and tour tickets

Susan Morton Funded through the city budget with some contingency funding based on inventory fluctuations

Grapevine CVB is funded by occuapancy tax

a. What are their sources of funding? (store revenue , grants, occupan cy tax, city budget)

b. Can we obtain copies of Income stateme nts and balance

Closed Gift Shop in 2009

Budget provided

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Data 1. Convent ion and Visitors Bureau a. Point of Contact sheets going back three years?

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton

c. Annual revenue ?

Approx $1 million Hotel tax, $5,000 gift shop, $6,000 ATM fees

2009-2010 Annual sales $124,146 2008-2009 Annual sales $148,330

$350 to $400 K

$830K for Visitor Center in 2010

2008 $13,212 2009 $26,038 2010 $24,551 2011 $28,670+L1 2

4. Location Next to the Ranger Ballpark Downtown on one of the Main Streets Beltline Road @ Interstate 30, in front of Lone Star Park. Located there for convenie nce and because they donated On Main St. The Visitor Center, Train Depot and the Historical Museum all share the same space. Service road of I-45, land was donated to the City for the statue Across from the Alamo, heart of tourism districts On Austin's famous 6th Street Near I-35, next to Texas Rangers Hall of Fame. Near Baylor University, Dr Pepper Museum, Brazos River, info center signage on

a. Where is it located? Why that location ?

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Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson the land for the bldg.

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton exits

b. Physical structur e? (store front, stand alone building, part of attractio n) c. Zoning?

Stand alone, visitor center on the bottom floor and CVB offices on the top floor

Stand alone building

Stand alone building

Stand alone/shared building

Stand alone building sits behind the statue.

Store front, historic building, Problem of renovations-strict standards

In historic building, store front

Stand alone building which shares parking with TROF

Commerci al

Entertain ment district

Commercial

Commercial and historic district

Commercial

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Data 1. Convent ion and Visitors Bureau a. Point of Contact d. Owning v. renting?

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Rent from the City

Elizabeth Eddins

Randy Sisson Nicer building, custom designed and built.

Sally Schepps

Jamie Matthews Building is paid for. Grounds, statue and building maintained by the City of Huntsville. House with center breezeway. Visitor Center on one side and store on the other side. Approx. 500 sq. ft.

Bryan Lang, Director of VIC On 25 year lease for $1 per year

Cheri Winterrond Renting, $4200 per month

Susan Morton City owned

own

e. Size in square feet?

VIC alone is 500 sq ft. The entire building to approxima tely 5,000 sq. ft. CVB Offices

5,000

700 sq. ft.

2600 sq. ft.

1500 SF

Gift shop 400 SF

f. Any other function s, offices at same location ? 5. How is it organize d--profit/no nprofit,

Non-profit, departmen t of the CVB

Small conferen ce room available to communit y and hotels Part of city governm ent Marketin g

museum and train depot

NO

NA

Tourist Information Centerhome for tourism sales and service Part of the city-revenue goes to city's general fund

nonprofit/city

Part of the City

City department

Non-profit

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Data 1. Convent ion and Visitors Bureau a. Point of Contact part of city, type of entity? Partners hips?

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson Departm ent

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton

6. What types of workers ? Paid and voluntee rs, salary ranges

Paid and Volunteers $8.50 to $9.50 plus Manager's salary

CVB 10 employees plus they utilize volunteers

2 full time, 1 part-time weekend employee , 37 volunteer s

Both paid and volunteers

1 full time in visitor center and 1 full time in gift shop. 4 part timers that work both visitor center and gift shop. Full timers $50,000 ---Part timers $8.75 per hous

Staff all paid. 4 FT, 4 PT, plus Director, Coordinator, Purchaser

Paid and volunteers (8)

2 FT hourly employees 2 PT hourly employees 1 salaried-also works toursim sales Wages based on City tiers. Hourly wages start at $10.35

20

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson Texas souvenirs . Unfortun ately the best margins are anything made in China. Most popular is anything with Texas on it.

Sally Schepps

Jamie Matthews Texas themed items sell the best or statue items. Shot glasses, mugs, t-shirts and wind chimes sell well.

Bryan Lang, Director of VIC Only convenience item is disposable cameras. Products are 30% generic, 35% San Antonio Flavor and 35% Texas. All products must have 52% or higher profit margin. Products with the highest margins and best sellers are: Post Cards, T-shirts, Ball caps, Shotglass, bottled water, Police and Fire Dept. t-shirts, Oil and Longhorn items. $25 price points....all items below. Day of the Dead popular to Hispanics.

Cheri Winterrond Gifts, apparel, food, toys, paper. Sodas, water, tour tickets. See handout on distribution

Susan Morton Tees 25% of total profit Books 11%, Jewelry 8%, Dr Pepper jerky 6.5%, Magnets 6%, Mugs 5%, Postcards 4%

They only sell a few toy items related to the train.

7. What is the product mix? What products have the best margins ? Most popular ?

21

Data 1. Convent ion and Visitors Bureau a. Point of Contact 8. What are the demogr aphics? Target audienc e? Visitors?

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Visitorsmainly families

Elizabeth Eddins Population 115,570

Randy Sisson Gift shop visitors are 90% women, 40-70 years old. 50% visitors, 50% local shoppers

Sally Schepps

Jamie Matthews 60 miles north of Houston and 180 miles south of Denton. Daily there are visitors traveling between the two cities.

Bryan Lang, Director of VIC Out of towners, Uses traffic counters to identify peaks during day

Cheri Winterrond

Susan Morton Visitors, IH35 traffic Demographi cs: Greater Waco 4.5%, Texas 55%, US 37.5%, Foreign 3%

convention traffic and locals from surrounding towns

22

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Maps and relocation info

Elizabeth Eddins Provide links to online special events in Beaumont

Randy Sisson Maps, visitor guides, restauran t guides, directions , city relocation guides, racing forms, souvenirs .

Sally Schepps

Jamie Matthews Local brochures, maps, restaurant guides, brochures from around the state. They offer guided tours through Historical Huntsville.

Bryan Lang, Director of VIC Trip planning services and assistance The San Antonio Visitor Information Center offers a wide variety of services and personal assistance to make your vacation experience a memorable one while youre in San Antonio. While visiting the Visitor Center take advantage of the following services and products. Maps Free, user friendly, downtown, San Antonio metro area, Mission Trail, and River Walk access maps. Guides and Brochuresheavily marketed The Visitor Information Center carries close to 200 brochures from San Antonios major points of interest and the Texas Hill Country, such as theme parks, museums, family activities, cultural events, tour

Cheri Winterrond Maps, coupons, attraction information, directions, souvenirs, relocation information

Susan Morton Maps, coupons, attraction information, directions, souvenirs, relocation information

Maps and can produce tickets for LegoLand, Sealife and train.

23

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Six Flags, Rangers, Cowboys

Elizabeth Eddins Lamar University Football, South Texas State Fair, Beaumont Jazz and Blues Fest

Randy Sisson

Sally Schepps

Jamie Matthews General Sam Houston Folk Festival, Walker County Fair and Rodeo, Huntsville for the Holiday/Winter in the park and Huntville Music Festival Sam Houston Memorial Museum, Sam Houston burial site, Texas Prison Museum, Hearts Veterans Military Museum, Wynne Home Art Center, Huntsville State Park.

Bryan Lang, Director of VIC Fiesta in April, Spring Break, Christmas

Cheri Winterrond SXSW, ACL Fest, Fun Fun Fun Fest, Rot Rally, Pecan Street Festival

Susan Morton Spring break is busiest time fo year. Memorial Dat through Labor Day consistently busy

Grapefest and Main Street Days

10. What are the big events through out the year?

Same 11. What are the major attractio ns in the area? What are the busiest times of year, day?

Crockett Street entertainment center located in downtown area. Town is within driving distance to Louisiana Casinos, close to beaches and the Port of Beaumont.

Lone Star Park, Verizon Theatre, AirHogs Baseball, Louis Tussaud s Palace of Wax & Ripleys Believe It or Not!, Traders Village. Busiest from May through

SeaLife, LegoLand, Gaylord, Great Wolf

Capitol, Lady Bird Lake, Zilker Park

Next door to Texas Ranger Hall of Fame and Museum. Within 2 miles of the Dr Pepper Museum, Texas Sports Hall of Fame, Mayborn Museum Complex, Cameron Park Zoo, Armstrong

24

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson Septemb er

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton Browning Library, Historic Homes, Cameron Park

UTA

12. What are the linkages to major universit ies?

Lamar University is within 10 minutes of downtown. Enrollment, 15K

Planetari um at UTA Arlington, any college sporting events, theatre at SMU

None

Sam Houston State University

None yet. Looking to building on athletic program at UTSA (held first football game at Alamodome say day I was there). Working with UTSA to do intercept study.

Sell UT memorabilia, no license relationship

Located just off the Baylor University Campus. Not directly linked to them but do trade printed information. Baylor has its own center and sells Baylor specific souvenirs at their book

25

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins

Elizabeth Eddins

Randy Sisson

Sally Schepps

Jamie Matthews

Bryan Lang, Director of VIC

Cheri Winterrond

Susan Morton store

Trolley 13. What are the connecti ons to other types of transpor tation?

Trolley service offered in the Crockett Street area. Municipal Transit, Major transportation Amtrak, Southeast Texas Regional Airport.

No public transport ation here

City offers 4 shuttle busses that take the tourist to and from the hotels, to Main Street, Grapvine Mills Mall and DFW Airport

Houston's Intercontinental Airport is 45 minutes

Via (local bus service), Double decker busesworking well, trolley

Bus and train system

None

26

Data 1. Convent ion and Visitors Bureau a. Point of Contact

Arlington

Beaumont

Grand Prairie

Grapevine

Huntsville Sam Houston Statue Visitor Center

San Antonio

Austin

Waco

Pete Hutchins Arlington Trolley used around town only

Elizabeth Eddins Beaumont is "Texas with a Little Something Extra"

Randy Sisson Teri Jackson Tourist Informati on Center, named after past City Councilw oman that was instrume ntal in getting this building built.

Sally Schepps

Jamie Matthews Huntsville Where a Warm Welcome Awaits (Sam Quote)

Bryan Lang, Director of VIC Brand: Deep in the Heart. Have to pay royalty to use, uses Brand: Deep in the Heart. Have to pay royalty to use Uses quadrilfoilon everything from signage to t-shirts quadrilfoil-on everything from signage to

Cheri Winterrond Austin Visitor Information Center--"Live Music Capital of the World"

Susan Morton Waco Tourist Information Center and Gift Shop. No paid advertising in the past; however, trying to insert a water bill flier to boost local holiday shopping this year

14. What do they call it? Any catch phrases ? Any paid media placeme nt advertisi ng?

Grapevine, Texas "Where Dallas & Fort Worth Meet"

15. Take photos inside and out

27

APPENDIX 2: STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ANALYSIS

The SWOT analysis is used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. For Denton Easy, the SWOT was conducted at a regional level and at a project level. Furthermore, we examined the two primary alternatives. Regional: The following SWOT analysis is relative to the area/region in which the Visitor Bureau / Store will operate. These attributes will define Strengths, Weaknesses, Opportunities and Threats from the immediate and surrounding areas. Strengths * Western Heritage * Horse Country * Universities * Apogee Stadium * Sporting Events * Festivals and Fairs * Independent Music Scene * Lower Cost of Living * A-Train (Commuter Transit) Weaknesses * No Visitor Information Center * No Convention Center * Weak Name Recognition * Non-User Friendly Website * Outdated Mall / Limited Shopping * Few Publicly Accessible Golf Courses * I35 Traffic / Poor Road Conditions * Lack of Public Transportation (Taxis / Busses) * Climate * Air Quality Threats * DFW Cities - Uptown Dallas - Roanoke - Grapevine - Arlington - Cowboys Stadium - Rangers Ball Park * Winstar * Surrounding Malls / Shopping Centers * Surrounding Hotels / Meeting Spaces * Doctors / Medical Personnel live outside the city

Opportunities * Visitor Information Center * Convention Center * Revamp Website * Razor Ranch * Mall Remodel * Billboards * Downtown Parking * In-town Shuttles * A-Train

28

Project : The following chart illustrates the SWOT analysis as it relates more to the subject project. These attributes will be narrowed down to capture more project specific Strengths, Weaknesses, Opportunities and Threats. Strengths * Ability to direct flow of traffic/visitors * Advertising opportunities * Promotion, Incentive and Discounts to local business and attractions * Strong support from local businesses * Uniqueness Weaknesses * Competition with local stores selling similar merchandise * No direct attraction or draw to the store * Limited parking * Navigation on local roads * Sourcing quality merchandise * Capital expenditures * Managing daily expenses versus generated revenue * Funding restrictions Threats * Outside competition other visitor/tourists attractions * Other vendors selling more specific, name recognition merchandise * Apathy or lack of interest from local supporters * Ability to obtain similar information or merchandise from other outlets - Media - Internet / Websites

Opportunities * Participation with other local businesses * Provide advertising for area stores and attractions * Ability to offer services beyond retail merchandise * Support from local organizations - Main Street Association - Industrial Street Guild - Denton Chamber * Growth opportunities for multiple locations or kiosks

29

APPENDIX 3: TARGET AUDIENCE ANALYSIS

Target Audience Adults 50+ years old Denton Residents University parents Texas Motor Speedway fans Horse enthusiasts A-Train riders Sporting events (UNT, high school, triathlons, cycling, rodeos) Families with disposable income Festivals North Texas State Fair Arts (GDAC, DCT, UNT, TWU, etc.) Most Relevant Location I-35 I-35 and Downtown (depends on where they are coming from) I-35 I-35 I-35 and Downtown Downtown I-35 I-35 I-35 and Downtown I-35 I-35 and Downtown

30

APPENDIX 4: CAPITAL AND FINANCIAL MODELS

31

ALL FIGURES ROUNDED TO NEAREST DOLLAR

Month 1 REVENUE Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD 1,500 2,000 1,000 200 250 208 25 5,183

Month 2 5.00% 1,575 2,100 1,050 210 263 208 26 5,432

Month 3 5.00% 1,654 2,205 1,103 221 276 208 28 5,693

Month 4 5.00% 1,736 2,315 1,158 232 289 208 29 5,968

Month 5 5.00% 1,823 2,431 1,216 243 304 208 30 6,255

Month 6 5.00% 1,914 2,553 1,276 255 319 208 32 6,558

Month 7 4.00% 1,991 2,655 1,327 265 332 208 33 6,812

Month 8 4.00% 2,071 2,761 1,380 276 345 208 35 7,076

Month 9 4.00% 2,153 2,871 1,436 287 359 208 36 7,351

Month 10 4.00% 2,240 2,986 1,493 299 373 208 37 7,636

Month 11 4.00% 2,329 3,106 1,553 311 388 208 39 7,933

Month 12 4.00% 2,422 3,230 1,615 323 404 208 40 8,242

TOTAL 23,409 31,212 15,606 3,121 3,902 2,500 390 80,140

% of Total Revenue 29.21% 38.95% 19.47% 3.89% 4.87% 3.12% 0.49% 100.00%

Retail: Denton Themed

750

788

827

868

912

957

995

1,035

1,077

1,120

1,165

1,211

11,705

14.61%

Retail: Texas Themed

1,000

1,050

1,103

1,158

1,216

1,276

1,327

1,380

1,436

1,493

1,553

1,615

15,606

19.47%

Retail: Locally Made Retail: Books

750 100

788 105

827 110

868 116

912 122

957 128

995 133

1,035 138

1,077 144

1,120 149

1,165 155

1,211 161

11,705 1,561

14.61% 1.95%

Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES

125 2,725 875 42 47 208 40,000 100 29 17 189 263 1,250 3,500 319 250 200 500 47,788

131 2,861 875 47 208 100 29 17 189 263 1,250 3,500 319

138 3,004 875 47 208 100 29 17 189 263 1,250 60 3,500 319

145 3,155 875 42 47 208 100 29 17 189 263 1,250 3,500 319 200 500 7,538

152 3,312 875 47 208 100 29 17 189 263 1,250 3,500 319

160 3,478 875 47 208 100 29 17 189 263 1,250 60 3,500 319

166 3,617 875 42 47 208 100 29 17 189 263 1,250 3,500 319 250 200 500 7,788

173 3,762 875 47 208 100 29 17 189 263 1,250 3,500 319

179 3,912 875 47 208 100 29 17 189 263 1,250 60 3,500 319

187 4,069 875 42 47 208 100 29 17 189 263 1,250 3,500 319 200 500 7,538

194 4,231 875 47 208 100 29 17 189 263 1,250 3,500 319

202 4,401 875 47 208 100 29 17 189 263 1,250 60 3,500 319

1,951 42,527 10,500 167 563 2,500 40,000 1,200 348 200 2,274 3,150 15,000 240 42,000 3,822 500 800 6,000 129,264

2.43% 53.07% 13.10% 0.21% 0.70% 3.12% 49.91% 1.50% 0.43% 0.25% 2.84% 3.93% 18.72% 0.30% 52.41% 4.77% 0.62% 1.00% 7.49% 161.30%

500 7,296

500 7,357

500 7,296

500 7,357

500 7,296

500 7,357

500 7,296

500 7,357

GROSS PROFIT

-45,330

-4,726

-4,668

-4,725

-4,353

-4,277

-4,593

-3,982

-3,918

-3,970

-3,594

-3,515

-91,651

-1

GROSS PROFIT LIFE TO DATE

-45,330

-50,055

-54,723

-59,448

-63,801

-68,078

-72,671

-76,653

-80,571

-84,542

-88,136

-91,651

FIRST MONTH RETAIL SALES FORECAST Qty of Items Avg. Price Ttl Price $ % of Sales # Items Sold

Retail: Denton Themed

100

15

1,500

30.00%

1,561

Retail: Texas Themed

133

15

2,000

40.00%

2,081

Retail: Locally Made Retail: Books

67 33

15 6

1,000 200

20.00% 4.00%

1,040 520

Retail: Commissary / Convenience

100

250

5.00%

1,561

Rack Brochure Placement

250

10

Ticket Commission

10

25 5,000

0.50%

156

REVENUE Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD

Month 13 3% 2,495 3,327 1,663 333 416 229 42 8,504

Month 14 3% 2,570 3,427 1,713 343 428 229 43 8,753

Month 15 3% 2,647 3,529 1,765 353 441 229 44 9,008

Month 16 3% 2,726 3,635 1,818 364 454 229 45 9,272

Month 17 3% 2,808 3,744 1,872 374 468 229 47 9,543

Month 18 3% 2,892 3,857 1,928 386 482 229 48 9,822

Month 19 2% 2,950 3,934 1,967 393 492 229 49 10,014

Month 20 2% 3,009 4,012 2,006 401 502 229 50 10,210

Month 21 2% 3,069 4,093 2,046 409 512 229 51 10,410

Month 22 2% 3,131 4,174 2,087 417 522 229 52 10,613

Month 23 2% 3,193 4,258 2,129 426 532 229 53 10,821

Month 24 2% 3,257 4,343 2,172 434 543 229 54 11,033

TOTAL 34,749 46,333 23,166 4,633 5,792 2,750 579 118,002

% of Total Revenue 29.45% 39.26% 19.63% 3.93% 4.91% 2.33% 0.49% 100.00%

1,248 Retail: Denton Themed

1,285

1,323

1,363

1,404

1,446

1,475

1,505

1,535

1,565

1,597

1,629

17,375

14.72%

1,663 Retail: Texas Themed 1,248 Retail: Locally Made Retail: Books 166

1,713

1,765

1,818

1,872

1,928

1,967

2,006

2,046

2,087

2,129

2,172

23,166

19.63%

1,285

1,323

1,363

1,404

1,446

1,475

1,505

1,535

1,565

1,597

1,629

17,375

14.72%

171

176

182

187

193

197

201

205

209

213

217

2,317

1.96%

208 Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES

214

221

227

234

241

246

251

256

261

266

271

2,896

2.45%

4,533 875 61 69 208 100 43 25 279 263 1,250 3,605 328 250 200 500 8,056

4,669 875 69 208 100 43 25 279 263 1,250 3,605 328

4,809 875 69 208 100 43 25 279 263 1,250 89 3,605 328

4,953 875 61 69 208 100 43 25 279 263 1,250 3,605 328 200 500 7,806

5,102 875 69 208 100 43 25 279 263 1,250 3,605 328

5,255 875 69 208 100 43 25 279 263 1,250 89 3,605 328

5,360 875 61 69 208 100 43 25 279 263 1,250 3,605 328 250 200 500 8,056

5,467 875 69 208 100 43 25 279 263 1,250 3,605 328

5,576 875 69 208 100 43 25 279 263 1,250 89 3,605 328

5,688 875 61 69 208 100 43 25 279 263 1,250 3,605 328 200 500 7,806

5,801 875 69 208 100 43 25 279 263 1,250 3,605 328

5,917 875 69 208 100 43 25 279 263 1,250 89 3,605 328

63,128 10,500 246 830 2,500 0 1,200 512 295 3,348 3,150 15,000 354 43,260 3,937 500 800 6,000 92,431

53.50% 8.90% 0.21% 0.70% 2.12% 0.00% 1.02% 0.43% 0.25% 2.84% 2.67% 12.71% 0.30% 36.66% 3.34% 0.42% 0.68% 5.08% 78.33%

500 7,544

500 7,633

500 7,544

500 7,633

500 7,544

500 7,633

500 7,544

500 7,633

GROSS PROFIT

(4,084)

(3,460)

(3,433)

(3,487)

(3,103)

(3,065)

(3,401)

(2,801)

(2,799)

(2,880)

(2,525)

(2,518)

(37,557)

-31.83%

(95,735) GROSS PROFIT LIFE TO DATE

(99,195)

(102,628)

(106,115)

(109,218)

(112,283)

(115,684)

(118,485)

(121,285)

(124,165)

(126,690)

(129,207)

# Items Sold 2317 Retail: Denton Themed 3089 Retail: Texas Themed

1544 Retail: Locally Made Retail: Books 772

2317 Retail: Commissary / Convenience

11 Rack Brochure Placement 232 Ticket Commission

REVENUE Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance

Month 25 1% 3,290 4,387 2,193 439 548 252 55 11,164 $1,645 $2,193 $1,645 $219 $274 $5,977 875 74 83 208 100 51 29 334 263 1,250

Month 26 1% 3,323 4,430 2,215 443 554 252 55 11,273 $1,661 $2,215 $1,661 $222 $277 $6,036 875 83 208 100 51 29 334 263 1,250

Month 27 1% 3,356 4,475 2,237 447 559 252 56 11,383 $1,678 $2,237 $1,678 $224 $280 $6,097 875 83 208 100 51 29 334 263 1,250 106

Month 28 1% 3,390 4,519 2,260 452 565 252 56 11,494 $1,695 $2,260 $1,695 $226 $282 $6,158 875 74 83 208 100 51 29 334 263 1,250

Month 29 1% 3,423 4,565 2,282 456 571 252 57 11,607 $1,712 $2,282 $1,712 $228 $285 $6,219 875 83 208 100 51 29 334 263 1,250

Month 30 1% 3,458 4,610 2,305 461 576 252 58 11,720 $1,729 $2,305 $1,729 $231 $288 $6,282 875 83 208 100 51 29 334 263 1,250 106

Month 31 1% 3,492 4,656 2,328 466 582 252 58 11,835 $1,746 $2,328 $1,746 $233 $291 $6,344 875 74 83 208 100 51 29 334 263 1,250

Month 32 1% 3,527 4,703 2,351 470 588 252 59 11,951 $1,764 $2,351 $1,764 $235 $294 $6,408 875 83 208 100 51 29 334 263 1,250

Month 33 1% 3,562 4,750 2,375 475 594 252 59 12,068 $1,781 $2,375 $1,781 $237 $297 $6,472 875 83 208 100 51 29 334 263 1,250 106

Month 34 1% 3,598 4,797 2,399 480 600 252 60 12,186 $1,799 $2,399 $1,799 $240 $300 $6,537 875 74 83 208 100 51 29 334 263 1,250

Month 35 1% 3,634 4,845 2,423 485 606 252 61 12,305 $1,817 $2,423 $1,817 $242 $303 $6,602 875 83 208 100 51 29 334 263 1,250

Month 36 1% 3,670 4,894 2,447 489 612 252 61 12,426 $1,835 $2,447 $1,835 $245 $306 $6,668 875 83 208 100 51 29 334 263 1,250 106

TOTAL 41,724 55,632 27,816 5,563 6,954 3,025 695 141,410 $20,862 $27,816 $20,862 $2,782 $3,477 $75,799 10,500 294 994 2,500 0 1,200 613 354 4,012 3,150 15,000 424

% of Total Revenue

29.51% 39.34% 19.67% 3.93% 4.92% 2.14% 0.49% 100.00% 14.75% 19.67% 14.75% 1.97% 2.46% 53.60% 7.43% 0.21% 0.70% 1.77% 0.00% 0.85% 0.43% 0.25% 2.84% 2.23% 10.61% 0.30%

Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES GROSS PROFIT GROSS PROFIT LIFE TO DATE

3,713 338 250 200 500 $8,268 $(3,081) $(132,289)

3,713 338

3,713 338

3,713 338 200 500 $8,018 $(2,682) $(140,043)

3,713 338

3,713 338

500 $7,745 $(2,508) $(134,797)

500 $7,851 $(2,565) $(137,361)

500 $7,745 $(2,357) $(142,401)

500 $7,851 $(2,412) $(144,813)

3,713 338 250 200 500 $8,268 $(2,778) $(147,590)

3,713 338

3,713 338

3,713 338 200 500 $8,018 $(2,369) $(154,416)

3,713 338

3,713 338

500 $7,745 $(2,202) $(149,792)

500 $7,851 $(2,255) $(152,047)

500 $7,745 $(2,041) $(156,457)

500 $7,851 $(2,093) $(158,550)

44,558 4,055 500 800 6,000 $94,954 $(29,343)

31.51% 5.35% 0.66% 0.57% 7.92% 73.61% -20.75%

# Items Sold Retail: Denton Themed 2782 Retail: Texas Themed 3709 Retail: Locally Made Retail: Books 1854

927 Retail: Commissary / Convenience

2782 Rack Brochure Placement 12 Ticket Commission 278

ALL FIGURES ROUNDED TO NEAREST DOLLAR

Month 1 REVENUE HOT Revenues Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD 4,853 1,500 2,000 1,000 200 250 208 25 10,036

Month 2 5.00% 4,853 1,575 2,100 1,050 210 263 208 26 10,285

Month 3 5.00% 5,047 1,654 2,205 1,103 221 276 208 28 10,740

Month 4 5.00% 4,853 1,736 2,315 1,158 232 289 208 29 10,820

Month 5 5.00% 4,853 1,823 2,431 1,216 243 304 208 30 11,108

Month 6 5.00% 4,853 1,914 2,553 1,276 255 319 208 32 11,410

Month 7 4.00% 4,853 1,991 2,655 1,327 265 332 208 33 11,664

Month 8 4.00% 4,853 2,071 2,761 1,380 276 345 208 35 11,928

Month 9 4.00% 4,853 2,153 2,871 1,436 287 359 208 36 12,203

Month 10 4.00% 4,853 2,240 2,986 1,493 299 373 208 37 12,489

Month 11 4.00% 4,853 2,329 3,106 1,553 311 388 208 39 12,786

Month 12 4.00% 4,853 2,422 3,230 1,615 323 404 208 40 13,095

TOTAL 58,424 23,409 31,212 15,606 3,121 3,902 2,500 390 138,564

% of Total Revenue 42.16% 16.89% 22.53% 11.26% 2.25% 2.82% 1.80% 0.28% 100.00%

Retail: Denton Themed

750

788

827

868

912

957

995

1,035

1,077

1,120

1,165

1,211

11,705

8.45%

Retail: Texas Themed

1,000

1,050

1,103

1,158

1,216

1,276

1,327

1,380

1,436

1,493

1,553

1,615

15,606

11.26%

Retail: Locally Made Retail: Books

750 100

788 105

827 110

868 116

912 122

957 128

995 133

1,035 138

1,077 144

1,120 149

1,165 155

1,211 161

11,705 1,561

8.45% 1.13%

Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES

125 2,725 875 72 81 208 40,000 100 50 29 328 263 1,250 2,500 228 250 200 500 46,933

131 2,861 875 81 208 100 50 29 328 263 1,250 2,500 228

138 3,004 875 81 208 100 50 29 328 263 1,250 104 2,500 228

145 3,155 875 72 81 208 100 50 29 328 263 1,250 2,500 228 200 500 6,683

152 3,312 875 81 208 100 50 29 328 263 1,250 2,500 228

160 3,478 875 81 208 100 50 29 328 263 1,250 104 2,500 228

166 3,617 875 72 81 208 100 50 29 328 263 1,250 2,500 228 250 200 500 6,933

173 3,762 875 81 208 100 50 29 328 263 1,250 2,500 228

179 3,912 875 81 208 100 50 29 328 263 1,250 104 2,500 228

187 4,069 875 72 81 208 100 50 29 328 263 1,250 2,500 228 200 500 6,683

194 4,231 875 81 208 100 50 29 328 263 1,250 2,500 228

202 4,401 875 81 208 100 50 29 328 263 1,250 104 2,500 228

1,951 42,527 10,500 288 974 2,500 40,000 1,200 601 346 3,931 3,150 15,000 416 30,000 2,730 500 800 6,000 118,937

1.41% 30.69% 7.58% 0.21% 0.70% 1.80% 28.87% 0.87% 0.43% 0.25% 2.84% 2.27% 10.83% 0.30% 21.65% 1.97% 0.36% 0.58% 4.33% 85.84%

500 6,411

500 6,515

500 6,411

500 6,515

500 6,411

500 6,515

500 6,411

500 6,515

GROSS PROFIT

-39,622

1,012

1,221

982

1,385

1,417

1,114

1,756

1,776

1,737

2,144

2,179

-22,899

GROSS PROFIT LIFE TO DATE

-39,622

-38,610

-37,390

-36,407

-35,023

-33,605

-32,491

-30,735

-28,959

-27,222

-25,079

-22,899

FIRST MONTH RETAIL SALES FORECAST Qty of Items Avg. Price Ttl Price $ % of Sales # Items Sold

Retail: Denton Themed

100

15

1,500

30.00%

1,561

Retail: Texas Themed

133

15

2,000

40.00%

2,081

Retail: Locally Made Retail: Books

67 33

15 6

1,000 200

20.00% 4.00%

1,040 520

Retail: Commissary / Convenience

100

250

5.00%

1,561

Rack Brochure Placement

250

10

Ticket Commission

10

25 5,000

0.50%

156

REVENUE HOT Revenues Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD

Month 13 3% 4,934 2,495 3,327 1,663 333 416 229 42 13,439

Month 14 3% 4,934 2,570 3,427 1,713 343 428 229 43 13,687

Month 15 3% 4,934 2,647 3,529 1,765 353 441 229 44 13,943

Month 16 3% 4,934 2,726 3,635 1,818 364 454 229 45 14,206

Month 17 3% 4,934 2,808 3,744 1,872 374 468 229 47 14,477

Month 18 3% 4,934 2,892 3,857 1,928 386 482 229 48 14,757

Month 19 2% 4,934 2,950 3,934 1,967 393 492 229 49 14,949

Month 20 2% 4,934 3,009 4,012 2,006 401 502 229 50 15,144

Month 21 2% 4,934 3,069 4,093 2,046 409 512 229 51 15,344

Month 22 2% 4,934 3,131 4,174 2,087 417 522 229 52 15,547

Month 23 2% 4,934 3,193 4,258 2,129 426 532 229 53 15,755

Month 24 2% 4,934 3,257 4,343 2,172 434 543 229 54 15,967

TOTAL 59,212 34,749 46,333 23,166 4,633 5,792 2,750 579 177,214

% of Total Revenue 33.41% 19.61% 26.14% 13.07% 2.61% 3.27% 1.55% 0.33% 100.00%

1,248 Retail: Denton Themed 1,663 Retail: Texas Themed 1,248 Retail: Locally Made Retail: Books 166

1,285

1,323

1,363

1,404

1,446

1,475

1,505

1,535

1,565

1,597

1,629

17,375

9.80%

1,713

1,765

1,818

1,872

1,928

1,967

2,006

2,046

2,087

2,129

2,172

23,166

13.07%

1,285

1,323

1,363

1,404

1,446

1,475

1,505

1,535

1,565

1,597

1,629

17,375

9.80%

171

176

182

187

193

197

201

205

209

213

217

2,317

1.31%

208 Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES

214

221

227

234

241

246

251

256

261

266

271

2,896

1.63%

4,533 875 92 104 208 100 64 37 419 263 1,250 2,575 234 250 200 500 7,171

4,669 875 104 208 100 64 37 419 263 1,250 2,575 234

4,809 875 104 208 100 64 37 419 263 1,250 133 2,575 234

4,953 875 92 104 208 100 64 37 419 263 1,250 2,575 234 200 500 6,921

5,102 875 104 208 100 64 37 419 263 1,250 2,575 234

5,255 875 104 208 100 64 37 419 263 1,250 133 2,575 234

5,360 875 92 104 208 100 64 37 419 263 1,250 2,575 234 250 200 500 7,171

5,467 875 104 208 100 64 37 419 263 1,250 2,575 234

5,576 875 104 208 100 64 37 419 263 1,250 133 2,575 234

5,688 875 92 104 208 100 64 37 419 263 1,250 2,575 234 200 500 6,921

5,801 875 104 208 100 64 37 419 263 1,250 2,575 234

5,917 875 104 208 100 64 37 419 263 1,250 133 2,575 234

63,128 10,500 369 1,246 2,500 0 1,200 769 443 5,028 3,150 15,000 532 30,900 2,812 500 800 6,000 81,748

35.62% 5.93% 0.21% 0.70% 1.41% 0.00% 0.68% 0.43% 0.25% 2.84% 1.78% 8.46% 0.30% 17.44% 1.59% 0.28% 0.45% 3.39% 46.13%

500 6,629

500 6,762

500 6,629

500 6,762

500 6,629

500 6,762

500 6,629

500 6,762

GROSS PROFIT

1,735

2,389

2,372

2,332

2,747

2,740

2,418

3,048

3,006

2,939

3,325

3,288

32,338

18.25%

(21,165) GROSS PROFIT LIFE TO DATE

(18,775)

(16,403)

(14,071)

(11,324)

(8,584)

(6,166)

(3,118)

(112)

2,826

6,151

9,439

# Items Sold 2317 Retail: Denton Themed

3089 Retail: Texas Themed 1544 Retail: Locally Made Retail: Books 772

2317 Retail: Commissary / Convenience

11 Rack Brochure Placement 232 Ticket Commission

REVENUE HOT Revenue Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience Rack Brochure Placement Ticket Commission TOTAL REVENUE COST OF GOODS SOLD Retail: Denton Themed Retail: Texas Themed Retail: Locally Made Retail: Books Retail: Commissary / Convenience TOTAL COST OF GOODS EXPENSES Advertising, Sales, and Promotions Education and Training Information Technology Insurance: General Liability Leasehold Improvements Miscellaneous Office Supplies Postage and Delivery

Month 25 1% 5,019 3,290 4,387 2,193 439 548 252 55 16,182 $1,645 $2,193 $1,645 $219 $274 $5,977 875 105 118 208 100 73 42

Month 26 1% 5,019 3,323 4,430 2,215 443 554 252 55 16,291 $1,661 $2,215 $1,661 $222 $277 $6,036 875 118 208 100 73 42

Month 27 1% 5,019 3,356 4,475 2,237 447 559 252 56 16,402 $1,678 $2,237 $1,678 $224 $280 $6,097 875 118 208 100 73 42

Month 28 1% 5,019 3,390 4,519 2,260 452 565 252 56 16,513 $1,695 $2,260 $1,695 $226 $282 $6,158 875 105 118 208 100 73 42

Month 29 1% 5,019 3,423 4,565 2,282 456 571 252 57 16,625 $1,712 $2,282 $1,712 $228 $285 $6,219 875 118 208 100 73 42

Month 30 1% 5,019 3,458 4,610 2,305 461 576 252 58 16,739 $1,729 $2,305 $1,729 $231 $288 $6,282 875 118 208 100 73 42

Month 31 1% 5,019 3,492 4,656 2,328 466 582 252 58 16,853 $1,746 $2,328 $1,746 $233 $291 $6,344 875 105 118 208 100 73 42

Month 32 1% 5,019 3,527 4,703 2,351 470 588 252 59 16,969 $1,764 $2,351 $1,764 $235 $294 $6,408 875 118 208 100 73 42

Month 33 1% 5,019 3,562 4,750 2,375 475 594 252 59 17,086 $1,781 $2,375 $1,781 $237 $297 $6,472 875 118 208 100 73 42

Month 34 1% 5,019 3,598 4,797 2,399 480 600 252 60 17,204 $1,799 $2,399 $1,799 $240 $300 $6,537 875 105 118 208 100 73 42

Month 35 1% 5,019 3,634 4,845 2,423 485 606 252 61 17,324 $1,817 $2,423 $1,817 $242 $303 $6,602 875 118 208 100 73 42

Month 36 1% 5,019 3,670 4,894 2,447 489 612 252 61 17,444 $1,835 $2,447 $1,835 $245 $306 $6,668 875 118 208 100 73 42

TOTAL 60,223 41,724 55,632 27,816 5,563 6,954 3,025 695 201,634 $20,862 $27,816 $20,862 $2,782 $3,477 $75,799 10,500 420 1,418 2,500 0 1,200 875 504

% of Total Revenue

29.87% 20.69% 27.59% 13.80% 2.76% 3.45% 1.50% 0.34% 100.00% 10.35% 13.80% 10.35% 1.38% 1.72% 37.59% 5.21% 0.21% 0.70% 1.24% 0.00% 0.60% 0.43% 0.25%

Professional Fees Triple Net (NNN) Rent Expense Repair & Maintenance Salaries and Benefits Salaries and Benefits: Taxes Subscriptions and Dues Travel & Entertainment Utilities TOTAL EXPENSES GROSS PROFIT GROSS PROFIT LIFE TO DATE

477 263 1,250 2,652 241 250 200 500 $7,354 $2,851 $12,290

477 263 1,250 2,652 241

477 263 1,250 151 2,652 241

477 263 1,250 2,652 241 200 500 $7,104 $3,251 $22,351

477 263 1,250 2,652 241

477 263 1,250 151 2,652 241

477 263 1,250 2,652 241 250 200 500 $7,354 $3,155 $32,620

477 263 1,250 2,652 241

477 263 1,250 151 2,652 241

477 263 1,250 2,652 241 200 500 $7,104 $3,564 $43,610

477 263 1,250 2,652 241

477 263 1,250 151 2,652 241

500 $6,799 $3,456 $15,746

500 $6,950 $3,354 $19,100

500 $6,799 $3,607 $25,958

500 $6,950 $3,507 $29,465

500 $6,799 $3,762 $36,382

500 $6,950 $3,664 $40,046

500 $6,799 $3,923 $47,532

500 $6,950 $3,826 $51,358

5,721 3,150 15,000 605 31,827 2,896 500 800 6,000 $83,915 $41,920

2.84% 1.56% 7.44% 0.30% 15.78% 3.82% 0.66% 0.40% 7.92% 49.35% 20.79%

# Items Sold Retail: Denton Themed 2782 Retail: Texas Themed 3709 Retail: Locally Made Retail: Books 1854

927 Retail: Commissary / Convenience

2782 Rack Brochure Placement 12 Ticket Commission 278