A SIDE OF SAVINGS BETTER BUILDINGS CASE COMPETITION

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


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


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


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


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


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


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


Savings generated annually to the scale of millions of dollars


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


Service provider will have a short payback period and can translate into a global billion dollar industry


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


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


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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A SIDE OF SAVINGS BETTER BUILDINGS CASE COMPETITION