Restaurant investor structure - FNF

I have a good business background and have a decent understanding of financial deals... private equity, expected rates of return, valuation, etc. What I do not have is any perspective on how it relates to a restaurant startup or specifically the Friends and Family deal I am considering investing in. My two friends (cook and banker) have a good business plan and I know they are shrewd business people... one of the reasons I would consider this in the first place. I value the intangible reasons for getting involved, but I would appreciate specific feedback on the FINANCIAL structure that they are proposing. All of this is scaled for a total of $1MM startup costs to keep it simple (and not violate my confidentiality agreement).

Entrepreneur equity - $350K
Landlord improvements as incentive (yay, recession) - $150K
Phase I investor equity - $350K ($25K shares)
Phase II investor equity - $150K (4 months into build out and just before opening if necessary)

Planning for 80-100% of net income to be distributed at year end with 80%/20% split between investors and entrepreneurs until investors principle is repaid. Then distributions switch to 20%/80% for investors and entrepreneurs respectively.

Net income for distribution is projected to be:
Y1 - $250K
Y2 - $450K
Y3 - $550K
Y4 - $600K
Y5 - $600K
Discounting those cash flows at 10% [20%] to Y0 gives a NPV of ~$1.8MM [~$1.4MM]. If you keep those distributions going for 15 years, the NPV is ~4MM [~2.4MM]. The investors' principle would be paid back at about Y1.5.

They are also considering a buy-out clause where they would value the business at 3-4 times EBITDA and pay out the investors of their 20% stake. Presumably this would only be possible after some period of time has elapsed.

Thanks in advance for any feedback!