Reference no: EM133035855

Problem:

Shawna Phiri's life is becoming more complicated. Two years ago, Shawna graduated from a large hospitality school with a diploma in restaurant management. Even before graduating Shawna had a long-term plan of eventually owning a string of sandwich shops. Her vision was pretty complete: high quality, fresh, nutritious fast food, with each meal controlled for calories, fat content, vitamins, minerals, proteins, fibre and with a minimum of additives.

Not long ago, Shawna turned down a low-cash opportunity to buy the cafe where she was working. She is now relieved to have made that decision, since she recently came into an inheritance that has given her the finances to start her own place. She has been looking for a downtown location with a high-traffic site, close to lot of the traditional junk food take-out places. Here, she feels that she would be able to offer a clear alternative.

Even though she now has the money, she is starting to feel a little discouraged by the huge amount of work needed to research and plan her business. She is especially worried about risking her inheritance knowing that with a bad site, she could lose everything. And matters have become even more complicated since Shawna's recent visit to a local Franchise Show.

She spent some time talking to the rep for the "Wicked Witch Sandwich" chain. Of all of the fast food places, Shawna knows that this one has the healthiest menu and is growing quickly because of that. It offers a variety of whole grain breads and lean meat and veggie combinations. Unfortunately it also has potato chips and sugared soft drinks on the menu.

The Wicked Witch franchise rep pointed out to Shawna that their in-depth site research reduces the risk for her investment. He also said that she would be able to grow her own business by purchasing additional franchises in the future. Her inheritance would give her enough for the franchise fee and some of the other costs and the company would help her arrange financing for the rest. The rep assured Shawna that Wicked Witch protects its great reputation by making sure that all franchisees strictly adhere to the company's standards.

1. What are the advantages of buying the Wicked Witch franchise?

2. What are the disadvantages to Shawna?

3. What course would you recommend that Shawna take? Why? What other information would Shawna need before making a decision?