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the future of green business strategy
A SIDE OF SAVINGS
BETTER BUILDINGS CASE COMPETITION
2BBCC: A SIDE OF SAVINGS| March 14, 2014
Contents
GOOD BURGER CASE 2
THE REAL ISSUES 3
STRATEGY & SOLUTIONS 4
ENERGY MANAGEMENT ARRANGEMENT 5
WASTE MANAGEMENT 10
CONCLUSION 12
3BBCC: A SIDE OF SAVINGS| March 14, 2014
Project Background
The Good Burger portfolio totals 8,000 limited locations in the continental United States and is about 90%
franchised and 10% corporate-owned
The nature of the quick-service franchise restaurant business is to rapidly process food to meet consumer
demand
Many restaurants keep energy intensive cooking equipment running in anticipation of customer orders. In
addition, many quick-service restaurants are moving to 24-hour operation, where lights, HVAC, and
equipment are rarely turned off at all
Complicated ownership, investment, and management structures present obstacles to instituting
standardized energy conservation measures (ECMs) across franchise locations
Furthermore, while company-owned restaurants can be wholly integrated into corporate energy efficiency
programs, franchised stores must voluntarily opt in
Team Proteus proposes a viable solution to this technical and business problem
The Good Burger portfolio totals 8,000 limited locations in the continental United States and is about 90%
franchised and 10% corporate-owned
The nature of the quick-service franchise restaurant business is to rapidly process food to meet consumer
demand
Many restaurants keep energy intensive cooking equipment running in anticipation of customer orders. In
addition, many quick-service restaurants are moving to 24-hour operation, where lights, HVAC, and
equipment are rarely turned off at all
Complicated ownership, investment, and management structures present obstacles to instituting
standardized energy conservation measures (ECMs) across franchise locations
Furthermore, while company-owned restaurants can be wholly integrated into corporate energy efficiency
programs, franchised stores must voluntarily opt in
Team Proteus proposes a viable solution to this technical and business problem
4BBCC: A SIDE OF SAVINGS| March 14, 2014
Incentives for Energy Efficiency? (or lack there of)
FRANCHISOR
90% of Portfolio is Franchisee Owned
Energy Savings of Franchisee
Restaurant Not Realized by
Good Burger Corporate
Energy Data of Franchisees Not
Shared with Good Burger
90% of Portfolio is Franchisee Owned
Energy Savings of Franchisee
Restaurant Not Realized by
Good Burger Corporate
Energy Data of Franchisees Not
Shared with Good Burger
FRANCHISEES
Franchisor Controls All Equipment the
Franchisee Uses
Low Profit Margins
Energy Costs Are Only 3-4% of Overall
Costs
Energy Efficiency Improvements
Require Equipment Upgrades
Upgrades are Expensive!
Have High Payback Periods
Equipment is Complicated
Training Employees About Energy
Efficiency is Expensive
High Employee Turnover
Franchisor Controls All Equipment the
Franchisee Uses
Low Profit Margins
Energy Costs Are Only 3-4% of Overall
Costs
Energy Efficiency Improvements
Require Equipment Upgrades
Upgrades are Expensive!
Have High Payback Periods
Equipment is Complicated
Training Employees About Energy
Efficiency is Expensive
High Employee Turnover
EMPLOYEES
Temporary Job
Not Provided Training on Energy
Efficiency
Pay not Linked to Energy Savings
No Incentive to Participate
Ignorant about Energy Efficiency Best
Practices
Temporary Job
Not Provided Training on Energy
Efficiency
Pay not Linked to Energy Savings
No Incentive to Participate
Ignorant about Energy Efficiency Best
Practices
5BBCC: A SIDE OF SAVINGS| March 14, 2014
Our Solution
Energy Management
Agreement (EMA)Food Waste Management
+ Centralized Third Party Energy
Management Service Provider
+ No costs to Franchisor or
Franchisee
+ No Employee Involvement
+ Crowd Collection of all
Restaurant Food Waste in
Region
+ Localized Third Party Waste
Management Service Provider
+ No Employee Involvement
6BBCC: A SIDE OF SAVINGS| March 14, 2014
What is EMATM ?
Power Purchase Agreement
(PPA)
+ Project Financing Arrangement for Distributed Electricity
+ Percentage of $ Savings to Buyer Goes to Seller
+ Everyone Wins
Energy Management
Agreement (PPA)
+ Third Party Energy Management Expert Service Provider
+ Bears All Upfront Financing and Ongoing Overhead Costs
+ Percentage of Restaurant Energy Savings Goes to Provider
7BBCC: A SIDE OF SAVINGS| March 14, 2014
What Will EMATM Provider Provide?
Voltage Stabilization
Power Sines
ComEC
Load Type Estimated
Savings
Discharge lighting systems: fluorescent and HID with electromagnetic ballast
18%–21%
Time-based or continuously working heating equipment
10%–16%
Refrigerators, freezers and cooling appliances, compressors
8%–18%
Kitchen appliances, coffee machines, tea kettles, toasters, microwaves
8%–15%
Split air conditioner units and ventilation
5%–15%
Electronic & computer equipment, including lighting systems with electronic ballasts
1%–5%
Join the Smart Grid!
+ Discounted Electricity Pricing by
Time of Use (varies by utility)
+ Compensation for Demand
Response Participation
+ More Reliable Power
+ Efficient Renewable Power
+ Cloud Based Monitoring
Threshold Management
+ Centralized Electronic Limits on
Temperature by Weather Forecast
+ Lighting Output Controls by
Proximity to Natural Light
+ Limits on Cooking Heat
+ Refrigeration Ambient Sensing
+ Ventilation Monitoring
8BBCC: A SIDE OF SAVINGS| March 14, 2014
Energy Management arrangement will be based on the principle of a 75-25 split between Good Burger and the service provider
ENERGY MANAGEMENT ARRANGEMENT
Savings
Effective Savings
Service Provider Revenue
75% 25%
Performance based revenue sharing model
Contract length: 5-10 years
Continuous monitoring
Centralized cloud based management
Remote software upgrades
9BBCC: A SIDE OF SAVINGS| March 14, 2014
Savings generated annually to the scale of millions of dollars
ENERGY MANAGEMENT ARRANGEMENT
Annual Savings Example: Typical Good Burger Restaurant
Revenue Costs Energy Costs Energy SavingsRevenue for
Service Provider
Effective
Savings
750,000 @ 10% @ 4% @ 10% @ 75% @ 25%
675,000 27,000 2,700 2,025 625
Across the Good Burger Chain (X 8,000) $ 5.4 million
10BBCC: A SIDE OF SAVINGS| March 14, 2014
Service provider will have a short payback period and can translate into a global billion dollar industry
ENERGY MANAGEMENT ARRANGEMENT
Revenue Generation for Service Provider
Revenue /
RestaurantTotal Revenue Profit
2,025X 8,000 @ 20%
16.2 million 3.24 million
3 X Good Burger Savings
Initial Capex 10 million
Break-even period 3.1 years
$$$ BN
$100+ MN
$16.2 MN
11BBCC: A SIDE OF SAVINGS| March 14, 2014
Waste Management: generating Bio-gas from waste
WASTE MANAGEMENT
Current
Situation
Current
Situation
America’s per capita food waste has increased to 50 percent since 1974*
It is approximated that 40% of the food in a restaurant goes to waste*
135 million tons of green house gases are released into atmosphere
because of gases produced from food waste*
SolutionsSolutions
Anaerobic digestion
wastewater treatment plants (WWTPs), dairy digesters, or dedicated
digesters for the organic portion of municipal solid waste
Biogas can be used for electricity generation, as a natural gas substitute,
or for vehicle fueling.
*Source:foodwastestats.com
12BBCC: A SIDE OF SAVINGS| March 14, 2014
Common waste handling system and power generation
WASTE MANAGEMENT
How ?How ?
Common food waste handling system to collect waste across all the fast
food franchises and restaurants in a locality.
If 50% of the food waste is anaerobically digested it would generate
enough electricity to power 2.5 million homes every year*
Feasible ?Feasible ?
Avonmouth - first food waste anaerobic digestion plant opened in UK and
can treat 40,000 tonnes food waste from homes, supermarkets and
businesses.
The plant can produce 10 GWh of energy a year from biogas generated.
AlternativesAlternatives Relief organizations – if the quality is good and pig feed
*Source:foodwastestats.com
TEAM MEMBERS
Vinu Varghese
Parit Yadav
Sharath Chandra Matturu
THANKS
QUESTIONS?
end
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