Should Tensek Consider Franchising Over Organic Growth
San Francisco Coffee House Case
1. Should Tensek and Pacek consider franchising over organic growth? Do a qualitative cost-benefit
Analysis. (4 Points)
In regards to whether Tensek and Pacek should consider franchising over growing additional business locations organically, there are many factors that the couple must take into account. Whether they choose to expand using a franchising or organic approach, there are major costs and benefits that will dramatically affect San Fransisco Coffee House.
First, the company must take into account the costs associated with expanding the company organically.
Opening and starting virtually any business requires an individual to risk a substantial amount of capital. Although the first location was a success and gained regional notoriety, the couple would have to risk their own money to fund the venture. This particular investment includes financing the purchases of equipment, initial supplies, and furnishing the location. The …show more content…
The country's economic and political landscapes have continued to evolve over the past few decades; however, the country is still developing. Due to the developing state of the country, no true franchising legal system has been put into place. If SFCH chooses to begin franchising, the company might be subject to legislative changes which could potentially negatively impact the financial situation of the company.
SFCH must also take into account the public view of franchising in Croatia. Due to the smaller population and limited number of franchises in the country, franchising is not a well known practice in Croatia. Not only is the general public misinformed about franchising, local banks have virtually no understanding of the practice. This situation limits the number of people who might be interested in potentially purchasing a franchise of SFCH and also decreases the likelihood of a Croatian bank providing a franchisee with a
1. Should Tensek and Pacek consider franchising over organic growth? Do a qualitative cost-benefit
Analysis. (4 Points)
In regards to whether Tensek and Pacek should consider franchising over growing additional business locations organically, there are many factors that the couple must take into account. Whether they choose to expand using a franchising or organic approach, there are major costs and benefits that will dramatically affect San Fransisco Coffee House.
First, the company must take into account the costs associated with expanding the company organically.
Opening and starting virtually any business requires an individual to risk a substantial amount of capital. Although the first location was a success and gained regional notoriety, the couple would have to risk their own money to fund the venture. This particular investment includes financing the purchases of equipment, initial supplies, and furnishing the location. The …show more content…
The country's economic and political landscapes have continued to evolve over the past few decades; however, the country is still developing. Due to the developing state of the country, no true franchising legal system has been put into place. If SFCH chooses to begin franchising, the company might be subject to legislative changes which could potentially negatively impact the financial situation of the company.
SFCH must also take into account the public view of franchising in Croatia. Due to the smaller population and limited number of franchises in the country, franchising is not a well known practice in Croatia. Not only is the general public misinformed about franchising, local banks have virtually no understanding of the practice. This situation limits the number of people who might be interested in potentially purchasing a franchise of SFCH and also decreases the likelihood of a Croatian bank providing a franchisee with a