Description
Q1 ) i. Write the SWOT analysis of a fast-food restaurant business.
ii. Identify key success factors and perform the competitive analysis.
Q2) i. Evaluate which business legal structure (partnership, sole trader, private limited, public limited, etc.) would suit Sarah best to establish her business. Justify your choice.
ii. Make sure to list the pros and cons about your choice.
Q3)a) Compare the pros and cons of the new franchise Cinnaholic and the established franchise Brioche Doree.
b) Based on comparison, from the perspective of the franchisees, what is the best offer and why?
Q4)a) Calculate earnings on tangible assets.
b) Calculate the value of the business using the excess earnings method (EEM).
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College of Computing and Informatics
Assignment 1
Deadline: Wednesday 6/3/2024 @ 23:59
[Total Mark for this Assignment is 8]
Student Details:
Name: ###
ID: ###
CRN: ###
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Question One
Pg. 01
Learning
Outcome(s):
State a solid
understanding of
the potential of
entrepreneur in
today’s
competitive
business world.
Question One
2 Marks
Consider that you would like to start a fast-food restaurant near your living area.
Launching a fast-food restaurant requires a lot of resources in the beginning. When you
approach the bank or any financial institution, then they would ask to conduct a SWOT
analysis of your fast-food restaurant and provide them the report. Prepare the following
by considering the restaurant locate near your living area,
i.
ii.
Write the SWOT analysis of a fast-food restaurant business.
Identify key success factors and perform the competitive analysis.
Question Two
Pg. 02
Learning
Outcome(s):
Question Two
2 Marks
Sarah had a lot of experience in making dresses. She was eager to start her own company
Measure the
even though she had worked for two of the largest dress shops in the area. Her father
potential of
decided to contribute 20,000 SAR to her business venture; however, she would need to
different forms of
secure a bank loan and use her savings to cover the remaining funds, perhaps 80,000
ownership as a
SAR, she estimated. She wasn’t sure what kind of legal structure to utilize while forming
growth strategy.
her company.
Her father liked the idea of being in a partnership with her; but Sarah believed that being
a sole trader would be more advantageous. She investigated the prices of shop premises,
and was shocked at how expensive city centre locations were. Her father suggested a
cheaper, but less busy, out-of-town location.
She contacted an accountant who offered to look after the financial side of the business,
but she would charge at least 8000 SAR per year. Sarah wondered if she could learn to
keep the accounts herself if she attended accounts classes. She wanted to make her shop
very different from all the competitors in the city and planned to offer lessons in dress
making as well as selling finished dresses.
Answer the following:
i.
Evaluate which business legal structure (partnership, sole trader, private
limited, public limited, etc.) would suit Sarah best to establish her business.
Justify your choice.
ii.
Make sure to list the pros and cons about your choice.
Question Three
Pg. 03
Learning
Outcome(s):
State a solid
understanding of
the potential of
entrepreneur in
today’s
competitive
business world
Question Three
2 Marks
Brioche Doree is an urban cafe bakery built on the simple idea that it is possible to offer,
in a fast service style, French-inspired products of exceptional quality and freshness.
Brioche Dorée is a highly adaptable and flexible brand, which can be expressed in as
little as 600 and up to 2500 square feet. Menus and operational models are flexible to
both meet the needs of the operational environment and the distinctive attributes of the
client base. Our team delivers support at each critical level from site selection, lease
negotiations, store design and construction, training, operations support, product
development, and logistics and distribution. We strive to provide franchisees a high level
of support every step of the way.
Founded in: 1976, Franchising since: 2000,Franchise units: 523,Initial investment: from
$250,000, Royalty Fees: 5%.
CINNAHOLIC
We’re not your typical dessert shop. Cinnaholic exploded onto the scene in 2010 with
our award-winning, gourmet cinnamon rolls. We believe in serving fresh, scratch-made
cinnamon rolls and other bakery products that meet the growing consumer demand for
non-traditional, plant-based food alternatives. When you open a Cinnaholic franchise,
you become part of the Cinnaholic family. Our franchise partners benefit from a flexible
business model, relatively low operating costs and high-quality, delicious products that
consumers come back for time and time again.
Founded in: 2010, Franchising since: 2010, Franchise units: 87 ,Initial investment: from
$195,000, Royalty Fees: 6%.
a) Compare the pros and cons of the new franchise Cinnaholic and the established
franchise Brioche Doree.
b) Based on comparison, from the perspective of the franchisees, what is the best
offer and why?
Question Four
Pg. 04
Learning
Outcome(s):
Evaluate an
existing business
Question Four
2 Marks
Consider a company with net tangible assets valued at $500,000. The company
determines the fair rate of return on these assets to be 8%. The company’s total
normalized earnings are estimated to be $80,000. Assuming an appropriate
capitalization rate of 10%.
that is for sale by
gathering data
a) Calculate earnings on tangible assets.
scientifically and
b) Calculate the value of the business using the excess earnings method (EEM).
exercise critical
thinking to
analyze and
synthesize
information.
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