# RUGD Assessment Report

**Engagement:** startup_feasibility  
**Business:** Hypothetical Restaurant — verified demand demonstration  
**Date:** 2026-11-09  
**Model Version:** 0.1-pilot

## Executive Summary

Draft recommendation: conditional. Blocking flags: none. Gap flags: FINANCIAL_INPUTS_NOT_MEASURED, UNEVALUATED_OPERATOR_CAPACITY, UNEVALUATED_REGULATORY_OR_LIABILITY, UNEVALUATED_STEWARDSHIP. Review status: pending. This paragraph is assembled by scoring/rules.py from those flags. It is not a final recommendation and it is not a verified fact (Methodology § Core Principles; Methodology § Output Requirements).

**Recommendation:** conditional (go / conditional / do-not-proceed)  
*Human approval required before this recommendation is final.*  
**Review status:** pending — draft only, not a final recommendation

## Evidence Base and Assumptions

### Verified Data

- revenue_trailing_12m: not supplied
- current_cash: not supplied
- headcount: not supplied
- evidence_notes: Verified demand record, source verified. Demonstration of the documented rule: boolean demand_evidence true with source verified and a rationale. Not market research and not a real customer file.
Verified fields are copied from the intake. Missing fields were left empty.

### Assumptions

#### Intake assumptions
Each item keeps the source stored on the intake (Methodology § Core Principles — evidence hierarchy).
- `demand_evidence` = True (source: verified). Demonstration of the documented rule: boolean demand_evidence true with source verified and a rationale. Not market research and not a real customer file.
#### Method assumptions used by this run
- Marginal cash flow means monthly cash flow rounded half-even to cents is less than or equal to zero. No other marginal band is approved.
- NEGATIVE_OR_MARGINAL_CASH_FLOW is raised only when both the base case and the downside case meet that test.
- Any flag in the approved recommend-against set drafts do-not-proceed. No per-flag split between do-not-proceed and conditional-only is approved.
- A criterion with no user or verified input stays unevaluated. Unevaluated criteria draft conditional when no recommend-against flag fired, so a silent intake cannot draft go.
- Assumptions with source ai_interpretation are listed. They do not raise or clear recommend-against flags.
- demand_evidence true with source verified, or verified trailing revenue greater than zero, clears insufficient demand. Trailing revenue of zero does not. Trailing revenue is not a market-size score.
- demand_evidence true with source user leaves DEMAND_EVIDENCE_UNVERIFIED. That gap drafts conditional when no recommend-against flag fired. It does not draft do-not-proceed by itself.
- If demand support conflicts with demand_evidence false from a user or verified source, the insufficient-demand flag stays on.
- If operator capacity, regulatory exposure, or extraction has both true and false from user or verified sources, the recommend-against flag stays on.
- When financial_inputs is present and inputs_are_measured is omitted, the inputs are treated as measured. When the field is false, or financial_inputs is absent, the cash-flow criterion is not evaluated.
- months_to_break_even_base is months to recover initial capital at the base cash-flow rate. Break-even revenue is break_even_monthly_revenue.
- The overall feasibility score and the 1–5 dimension scores are not computed.
- No currency unit is defined on the intake. Amounts stay in the unit of the inputs.
- This module cannot record human approval. is_final stays false and human_review_status stays pending.
#### AI interpretations (listed, not used to raise or clear recommend-against flags)
- None on this intake.

## Financial Summary

* Base monthly contribution: 24360.00 (arithmetic on unmeasured inputs; not a cash-flow finding)
* Base monthly cash flow: 6360.00 (arithmetic on unmeasured inputs; not a cash-flow finding)
* Downside monthly cash flow: -3384.00 (arithmetic on unmeasured inputs; not a cash-flow finding)
* Break-even monthly revenue: 31034.48 (arithmetic on unmeasured inputs; not a cash-flow finding)
* Months to recover initial capital at base cash flow: 28.3 (arithmetic on unmeasured inputs; not a finding)
* Engine flags: none
* Overall feasibility score: Not computed. Methodology § Scoring Approach defines the overall feasibility score as a weighted average and says weights are adjustable by engagement type. No weights are approved, and no 1–5 rubric is approved, so none of these dimensions received a score: Market & Demand Reality; Competitive Position & Differentiation; Financial Feasibility & Capital Requirements; Operational Readiness & Capacity; Risk Profile (market, execution, financial, regulatory); Stewardship Indicators (reinvestment capacity, resilience, continuity potential); Implementation Feasibility (for AI or operational improvements).

Definitions from the deterministic engine (Methodology § Output Requirements):
- base_monthly_contribution: projected_monthly_revenue_base × gross_margin_pct
- base_monthly_cash_flow: base_monthly_contribution − monthly_fixed_costs, rounded half-even to cents
- downside_monthly_cash_flow: (projected_monthly_revenue_base × downside_revenue_multiplier × gross_margin_pct) − monthly_fixed_costs, rounded half-even to cents
- break_even_monthly_revenue: monthly_fixed_costs / gross_margin_pct when gross margin is positive; otherwise undefined (Methodology § Output Requirements)
- months_to_break_even_base: initial_capital / unrounded base monthly cash flow when the rounded base cash flow is positive. This is months to recover initial capital at the base cash-flow rate, not a revenue-ramp forecast. Methodology § Output Requirements asks for break-even; that amount is break_even_monthly_revenue.
No currency unit is defined on the intake. Amounts stay in the unit of the inputs.
inputs_are_measured is false, or financial inputs were absent. The figures are arithmetic on the supplied numbers. Scoring did not treat them as a measured base case or downside case.

### Reasonableness check

Secondary industry benchmark. National Restaurant Association, 2025 Restaurant Operations Data Abstract, 2024 full-service medians. This comparison is not a scoring input.
- Labor %: not calculated, so it was not compared with the secondary industry benchmark (NRA median 36.5% of sales).
- Occupancy %: not calculated, so it was not compared with the secondary industry benchmark (NRA median 5.7% of sales).
- Pre-tax margin: not calculated, so it was not compared with the secondary industry benchmark (NRA median 2.8% of sales).

## Startup Capital and Projection

Methodology § Core Principles — deterministic calculations, and human approval before a final recommendation.
Methodology § Investor Readiness Gate — this path does not mark the assessment investor-ready.
human_review_approved: false
is_final: false
investor_ready: false

### Sources and uses
Uses
- construction_cost: 100000.00 (user-supplied assumption)
- equipment: 35000.00 (user-supplied assumption)
- soft_costs: 15000.00 (user-supplied assumption)
- preopening_working_capital: 20000.00 (user-supplied assumption)
- contingency: 17000.00 (calculated by the deterministic engine)
- total_project_cost: 187000.00 (calculated by the deterministic engine)
Sources
- debt: 130900.00 (calculated by the deterministic engine)
- equity: 56100.00 (calculated by the deterministic engine)
- total_sources: 187000.00 (calculated by the deterministic engine)
- annual_debt_service: 13138.80

### Assumption list
- construction_cost = 100000.0 (user-supplied assumption)
- equipment = 35000.0 (user-supplied assumption)
- soft_costs = 15000.0 (user-supplied assumption)
- preopening_working_capital = 20000.0 (user-supplied assumption)
- contingency_pct = 0.1 (user-supplied assumption)
- debt_share = 0.7 (user-supplied assumption)
- annual_interest_rate = 0.08 (user-supplied assumption)
- amortization_years = 20.0 (user-supplied assumption)
- seats = 48.0 (user-supplied assumption)
- average_ticket = 28.0 (user-supplied assumption)
- weekday_occupancy = 0.45 (user-supplied assumption)
- weekend_occupancy = 0.7 (user-supplied assumption)
- operating_days = 312.0 (user-supplied assumption)
- annual_fixed_costs = 240000.0 (user-supplied assumption)
- contribution_margin = 0.35 (user-supplied assumption)
- downside_multiplier = 0.6 (user-supplied assumption)
- Contingency equals contingency_pct times (construction + equipment + soft costs + pre-opening working capital). = None (model assumption)
- Total project cost equals that subtotal plus contingency. = None (model assumption)
- Debt equals debt_share times total project cost. Equity is the residual after debt is rounded to cents. = None (model assumption)
- Annual debt service is twelve monthly level payments. Each monthly payment is rounded half-even to cents, then multiplied by 12. A zero interest rate sets the monthly payment to debt divided by the number of months. = None (model assumption)
- Base revenue is seats × occupancy × average ticket × operating days, from engine.financial.seat_occupancy_revenue. = None (model assumption)
- The downside view multiplies weekday occupancy and weekend occupancy by downside_multiplier, then recomputes that revenue. The default multiplier is 0.6. = None (model assumption)
- Cash flow before debt service equals revenue × contribution_margin − annual fixed costs. = None (model assumption)
- Break-even revenue equals (annual fixed costs + annual debt service) / contribution_margin when the margin is positive. = None (model assumption)
- DSCR equals cash flow before debt service divided by annual debt service. DSCR is undefined when rounded annual debt service is zero. = None (model assumption)
- Debt share 0.70, interest 0.08, and 20-year amortization are the coded terms already used by the startup calculator. They are not a market study. = None (model assumption)

### Base case
- Revenue: 218649.60
- Cash flow before debt service: -163472.64
- DSCR: -12.4420

### Downside case
- downside_multiplier 0.6 applied to occupancy.
- Revenue: 131189.76
- Cash flow before debt service: -194083.58
- DSCR: -14.7718

### Break-even
- Revenue needed to cover fixed costs plus debt service: 723253.71

## Key Risks and Mitigations

Assembled from scoring flags by scoring/rules.py. This is not an independent qualitative risk essay.
- **FINANCIAL_INPUTS_NOT_MEASURED** (gap). Methodology § Scoring Approach — negative or marginal cash-flow under base and downside cases. Methodology § Core Principles — verified data and assumptions stay distinct. Unmeasured financial inputs are not a base case or a downside case. Engine flags on these inputs: none. Those flags were not applied as a recommend-against finding because the inputs are not a measured base case and downside case. Base monthly cash flow 6360.0. Downside monthly cash flow -3384.0. Mitigation: Replace unmeasured financial inputs with measured figures, set inputs_are_measured to true, and re-run.
- **UNEVALUATED_OPERATOR_CAPACITY** (gap). Methodology § Scoring Approach — founder/operator capacity inadequate for the proposed scope. No user or verified value for operator_capacity_adequate. Mitigation: Record operator_capacity_adequate as true or false with source user or verified.
- **UNEVALUATED_REGULATORY_OR_LIABILITY** (gap). Methodology § Scoring Approach — material unresolved regulatory or liability issues. No user or verified value for unresolved_regulatory_or_liability. Mitigation: Record unresolved_regulatory_or_liability as true or false with source user or verified.
- **UNEVALUATED_STEWARDSHIP** (gap). Methodology § Scoring Approach — stewardship indicators show extraction without reinvestment capacity. No user or verified value for extraction_without_reinvestment. Mitigation: Record extraction_without_reinvestment as true or false with source user or verified.

## Stewardship Observations

Methodology § Scoring Approach — stewardship indicators show extraction without reinvestment capacity.

Status: gap.

No user or verified value for extraction_without_reinvestment.

Methodology § Core Principles sets a stewardship orientation for every assessment: long-term enterprise strength over short-term extraction. That principle is the standard being applied. It is not evidence that this venture reinvests.

The intake has no additional stewardship narrative beyond the extraction criterion above.

## Recommended Next Actions

- Human reviewer must approve or reject this draft before it is used as a recommendation. This runner cannot record that approval.
- Keep this draft conditional until every unevaluated criterion is recorded and a human reviewer approves the result.
- Replace unmeasured financial inputs with measured figures, set inputs_are_measured to true, and re-run.
- Record operator_capacity_adequate as true or false with source user or verified.
- Record unresolved_regulatory_or_liability as true or false with source user or verified.
- Record extraction_without_reinvestment as true or false with source user or verified.

## Investor Readiness

**Status:** conditional (internal / conditional / investor-ready)  
**human_review_approved:** false

- **Human review complete and release explicitly approved:** failed. Investor-ready requires human review complete, release explicitly approved, and human_review_approved true.
- **No recommend-against flags are active:** passed. No recommend-against flags are active.
- **Conditional flags have accepted mitigations:** failed. Open conditional flags: FINANCIAL_INPUTS_NOT_MEASURED, UNEVALUATED_OPERATOR_CAPACITY, UNEVALUATED_REGULATORY_OR_LIABILITY, UNEVALUATED_STEWARDSHIP.
- **Base-case cash flow is non-negative:** failed. Base-case cash flow was not supplied as a measured engine result.
- **Downside DSCR meets the engagement minimum:** failed. Downside DSCR was not supplied by the deterministic engine. The engagement minimum is 1.00x.
- **Demand evidence is verified or has a verification plan:** passed. Demand evidence is verified.
- **Regulatory or liability issues are resolved or disclosed with mitigations:** failed. Material regulatory or liability issues are not resolved or disclosed with mitigations.
- **Stewardship does not show extraction without reinvestment capacity:** passed. Stewardship indicators do not show extraction without reinvestment capacity.

Release for investors still requires explicit human approval. This report does not grant that approval.

---

*Generated under RUGD Methodology v1.0. All financial figures from deterministic engine. Draft only until a person approves it.*

## Demand evidence status

**Status:** cleared

Verified demand support: demand_evidence is true with source verified.

## Assessment view

**Recommendation:** conditional

**INSUFFICIENT_DEMAND_EVIDENCE:** not present

**Demand evidence status:** cleared

**Investor readiness:** conditional

**Human review status:** pending

**human_review_approved:** false

**Demand evidence provenance:**

- revenue_trailing_12m: placeholder
- demand_evidence: verified (source: verified)

This status comes from the 0.1 demand rule. human_review_approved remains false. This report does not mark the assessment investor-ready.


HTML audit view: /assessments/hypothetical-restaurant-verified-demand/audit/html