The Mandate
An owner-operator chef with prior management experience at two regional concepts engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a SBA 7(a) financing request for a project located in Orleans Parish, Louisiana. Total project capitalization fell within the $1M-$3M band. The capital provider, a regional bank participating in SBA 7(a), required documentation consistent with current program review standards. The analytical question put to the team: Did French Quarter and Warehouse District daypart traffic support $3.1M projected stabilized revenue at the proposed average ticket.
Engagement Scope
- Primary market area defined as a 1-mile drive-time
- Comparable supply set of 12 properties
- Demand model framework: daypart traffic and average-ticket capture analysis
- Financial projection horizon: 5 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 1-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of restaurant assets in Louisiana. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 12 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a daypart traffic and average-ticket capture analysis approach over a 5 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.7 across the projection window, with a stabilized capture rate of 4.1%.
Exhibit 1: Comparable Supply Set, Louisiana PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 5 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- French Quarter daytime visitor density supported a captured-traffic pool of 18,400 daily potential covers.
- Comparable full-service concepts cleared $58 to $74 average ticket with 84 to 112 nightly covers.
- Subject's projected 96 stabilized nightly covers at $68 average ticket was supported by the comp-set range.
- Year-three DSCR of 1.32x cleared the SBA 7(a) program threshold.
Deliverable
The delivered report ran 98 pages with 22 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the regional bank participating in SBA 7(a). The corresponding SBA 7(a) review framework guided exhibit selection and supporting documentation.