Rainforest Cafe, Inc: Outline to Rainforest Cafe R

This essay Rainforest Cafe, Inc: Outline to Rainforest Cafe R has a total of 1346 words and 11 pages.

Rainforest Cafe , Inc: Outline to Rainforest Cafe Research Report

CORPORATE BACKGROUND

History

Formation

Rainforest Cafe, Inc. was incorporated in Minnesota on February 3, 1994 to own
and operate restaurant and retail facilities under the name of "Rainforest Cafe
- A Wild Place to Shop and Eat."

Chairman of the Board and Chief Executive Officer

Election. Lyle Berman was elected Chairman and CEO of Rainforest Cafe at its
inception in February 1994.

Background. Berman has been Chairman and CEO of Grand Casinos, Inc. and its
predecessor since October 1990. He is also CEO and a director of Stratosphere
Corporation, and a director of G-III Apparel Group Ltd., Innovative Gaming
Corporation of America and New Horizon Kids Quest, Inc. He previously was the
President and CEO of Berman Specialty Stores, Inc. ("Bermans") from 1978 until
November 1988 when Bermans was acquired by Wilson Suede and Leather, a
subsidiary of Melville Corporation.

President and Chief Operating Officer

Election. Martin J. O\'Dowd was elected in May of 1995. He is the first to hold
this position. As of November 18, 1996 O\'Dowd has taken a 30 day leave of
absence for personal reasons. Dennis Nielson, analyst for R. J. Steichen,
predicts that if the leave is only 30 days there should not be a lasting impact
on the company (Nielson, November 18, 1996).

Background. O\'Dowd is a director of Elephant and Castle Group, Inc. He was
previously the Corporate Director, Food & Beverage Services for Holiday Inn
Worldwide from July 1987 to May 1995. From August 1985 to July 1987, O\'Dowd was
Vice President and General Operations Manager for the Hard Rock Cafe in New York.

Management Philosophy. Berman and O\'Dowd stated that they are committed to
identifying and acquiring the resources that will allow them to continue their
high rate of growth.

Main Activities

Rainforest Cafe has two areas of each facility, the restaurant and the retail
area.

Restaurant

The company believes that its large menu selection is an important factor in the
appeal of its restaurants. The restaurant serves lunch and dinner entrees which
range in price from $7.95 to $15.95. The theme of the company is mirrored on
the menu with all food and beverage selections including a jungle reference
(Annual Report, 1995).

The restaurant derived approximately 74 percent of the companies total revenue
during the 52 week period ending December 31, 1995.

Retail Area

In order to enter the restaurant, all customers must pass through the retail
area. The inventory includes apparel and gifts with the Rainforest Cafe logo and
other items with a rainforest theme such as toys and educational games.

The retail area derived approximately 26 percent of the companies total revenue
during the 52 week period ending December 31, 1995.

Corporate Financial Results

Net Profits and Net Sales

The company incurred a net loss during its first year, February 3, 1994
(inception) through January 1, 1995. It did not have any revenues during the
period from the inception through October 3, 1994. At that point it had only
one operating unit, at the Mall of America, until October 20, 1995, when the
Woodfield Mall unit began operations. Much of the loss is attributed to
development expenses (Hoover\'s, August 25, 1996).

On April 7, 1995 the company converted $1,222,500 of promissory notes into share
of Common Stock at a conversion price of $4.00 per share. This conversion
resulted in a charge to earnings of $1,053,128, or $0.22 per share.

Year Net Profits (millions) Net Sales (millions)

1994 $(1,628) $ 2,066 1995
$ 112 $13,451

Net Sales By Segment

Locations

Headquarters

The executive offices of Rainforest Cafe, Inc. are located at 720 South Fifth
Street, Hopkins, Minnesota 55343. The telephone number is 612 945-5400.

Current Operating Units

Mall of America, Bloomington, MN. This unit, which opened October 3, 1994, is
14,900 square feet with a seating capacity of 295.

Woodfield Mall, Schaumburg, IL. This unit, which opened October 20, 1995, is
23,000 square feet with a seating capacity of 425.

Gurnee Mills , Gurnee, IL. This unit, which opened June 2, 1996, is 20,000
square feet with a seating capacity of 300.

Walt Disney World Marketplace, Lake Buena Vista, FL. This unit, which opened
July 25, 1996, is 29,000 square feet with a seating capacity of 550.

Tysons Corner Center I, McLean, VA. This unit, which opened October 3, 1996, is
17,400 square feet with a seating capacity of 375.

Sawgrass Mills, Fort Lauderdale, FL. This unit, which opened November 21, 1996,
is 19,800 square feet with a seating capacity of 400.

Future Operating Units

The company plans to open 10 new units in the US by fourth quarter 1998. In
addition it has two newly signed licensing agreements with two separate
companies.

The first agreement, with Empresas de comunicacion y Entretenimiento, a Mexican
based company,

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Theme restaurants, Restaurant franchises, Rainforest Cafe, Hard Rock Cafe, Corporate Average Fuel Economy, Gurnee Mills

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