Reference no: EM133080819

QUESTION

Tony has developed a hot new teen fashion line called Aristotle. He has identi?ed locations in high end shopping malls to open stores to sell the product. Entities that want to be an Aristotle Store franchisee are required to pay Tony a onetime franchise fee of $100,000. Tony supplies the merchandise and pays for marketing. Tony receives 75% of the net income from a store [clothing sales revenues minus the cost of renting space in the mall} and the franchisee receives 25% of the net Income. Brenda and Jodie are interested in purchasing the franchise rights for a store to be opened in Boca Raton Florida. They have similar credentials, education and experience in retail. Jodie is backed by three investors that will contribute the funds required to cover the franchise fee. The franchise will be owned by a partnership Aristotle-Jodie LLC with the three investors and Jodie each owning 25% of the partnership. Brenda will use her personal savings to pay the franchise fee. Which woman would you recommend that Tony sell the franchise to? Explain your logic.