Assignment 3
S C EN ARIO :
T hre e f rie n ds f ro m h ig h s c h ool w ith a c o m mon p assio n f o r c ars d ecid ed t o p urs u e t h eir i n te re st a n d f o rm ed T hre e G uys G ara g e ( T G G). T he t e am p oole d t h eir s a v in gs a n d a cq uir e d a n S B A l o an f o r $ 300,0 00 t o o pen t h eir s h op i n 2 008. T he b usin ess h as e v olv ed i n to a s u ccessfu l b usin ess i n a P hila d elp hia s u burb . S ale s h av e g ro w n t o $ 2.3 M i n 2 014 a n d a re o n p ace t o e x ceed $ 2.5 M b y t h e e n d o f t h e y ear. T he b usin ess o ff e rs f u ll s e rv ic e a u to r e p air a s w ell a s c la ssic c ar r e sto ra tio n s e rv ic es a n d c o ord in atio n. J e rry , J o se a n d M an uel h av e b een s o f o cu se d o n e sta b lis h in g t h e b usin ess a n d g ro w in g i t t o a s u sta in ab le l e v el t h at l ittle t h ough h as b een g iv en t o a “ g ofo rw ard ” p la n . J e rry , w ho s e rv es a s c o m pan y p re sid en t c o m men te d , “ W e n eed t o c o ntin ue g ro w in g T G G u nders ta n din g t h at e ach o f u s h as d if f e re n t p ers o nal g oals .” J e rry w an ts t o s e e t h e b ra n d g ro w i n to a n atio nal c h ain . J o se i s c o ncern ed a b out l o ss o f c o ntr o l o n t h e q uality o f t h e o pera tio n f ro m a n a g gre ssiv e g ro w th p la n . M an uel i s n ot s u re t h e b usin ess m odel i s f u lly t r a n sfe ra b le a n d t h at t h ey h av e t o k eep v ery t ig ht c o ntr o ls o n t h eir c o sts t o m ain ta in a r e aso nab le p ro fit m arg in .
T he t e am s ta rte d w ork in g w ith a b usin ess c o ach t o b eg in w ork in g o n a n u pdate d b usin ess p la n a n d a s tr a te g y f o r e x pan sio n. F ro m t h e a n aly sis , i t w as c le ar t h at t h e b usin ess m odel t h ey h ad c o uld b e s u ccessfu l i n m ultip le l o catio ns. O ver t h e l a st f e w y ears t h ey h ad b een a p pro ach ed b y s e v era l c u sto m ers a sk in g i f t h ey o ff e re d a f ra n ch is e o r w ould b e i n te re ste d i n e x pan din g, b ut t h e t e am h as n o k now le d ge o r u nders ta n din g o f i f o r h ow t h at m ig ht w ork . T hey h av e a ls o b een a p pro ach ed b y a n i n vesto r w ho h as o ff e re d t o f u nd t h eir e x pan sio n b ut t h e t e am d id n’t k now h ow t o r e sp ond, t e llin g t h e i n vesto r t h ey w ould k eep h is i n fo rm atio n i n c ase i t w as o f i n te re st i n t h e f u tu re . A ls o , e ach o f t h e p artn ers h as a s a la ry t h ey a re t a k in g f ro m t h e b usin ess b ut n ow t h ere i s a ls o s o m e i n te re st i n t a k in g s o m e o f t h e r e ta in ed e arn in gs o ut a s p ro fit d is tr ib utio ns. J e rry a n d J o se w an t t o r e in vest t h ose p ro fits i n to e x pan sio n b ut M an uel w an ts t o m ak e s o m e p ers o nal i n vestm en ts . T he t e am i s a ls o f a cin g s o m e n ecessa ry i n vestm en ts i n n ew t e ch nolo gy t h at i s r e q uir e d t o s e rv ic e t h e n ew er c ars t h at a re s ta rtin g t o c o m e o ut o f w arra n ty . A lth ough t h e b usin ess c an c o ntin ue w ith out t h ose t e ch nolo gy i n vestm en ts i t m ig ht l im it t h e g ro w th p ote n tia l a n d o ptio ns. F in ally , J e rry ’s s o n d ecid ed n ot t o g o t o c o lle g e b ut w ork s i n t h e b usin ess a n d h as p ro gre sse d t o a s e n io r m ech an ic . H e h as i n dic atin g t o t h e t e am t h at h e m ig ht w an t t o g o b ack t o c o lle g e f o r a b usin ess d eg re e t o b e b ette r p re p are d t o s u pport t h e b usin ess. J o se ’s w if e i s t h e c o m pan y’s b ookkeep er a n d M an uel’s d au ghte r h an dle s t h e m ark etin g.
A s t h e t e am c o ntin ues t h eir m eetin gs w ith t h e b usin ess c o ach t h ey a re s tr u gglin g t o r e co ncile t h ese i s su es a n d c re ate a “ g ofo rw ard ” b usin ess p la n t h ey c an a ll a g re e t o .
T EM PL A TE C O M PA NYO W NED F R A NCH IS E J O IN T V EN TU RE P R O S: 1 . – 2 .– P R O S:
1 . – 2 . – P R O S:
1 . – 2 . – 3 . 3 . 3 . C O NS:
1 .– 2 .– 3 . C O NS:
1 . – 2 . – 3 . C O NS:
1 . – 2 . – 3 .