Betty Wilson and her Christian Coffeehouse Business Law Case
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Betty Wilson, a mature Christian, is thinking of opening a Christian coffeehouse in Belmont, NC. Her husband John is open to making a contribution of capital to the business, but he has no interest in participating in its operation or management.
Betty's sister, Alice, a new Christian, has told Betty that she's been looking for an excuse to get out of the house and that she would love to be a part of the business. Alice's husband, a non-Christian, opposes his wife's involvement and has told her that he expects her to remain a stay-at-home mom to their 2 daughters, Ally and Lisa, ages 13 and 15.
Betty's neighbor, Erma, a non-Christian, has also expressed an interest in participating in the business as a way to earn some extra income. Erma thinks the "Christian thing" has potential with all the big churches in the area, including a Mormon temple and a large Kingdom Hall of Jehovah's Witnesses.
In researching the coffee business, Betty came across a few franchise opportunities, some of which would require her to adopt the franchise name and trade dress but others that would only require her to move into a turn-key facility and agree to purchase a certain volume of product every month for a period of no less than 10 years. Both types of franchises offered to provide training for her and any staff she might hire.
Betty has considered operating the business as a franchise, a sole proprietorship, a partnership of some sort, a corporation of some sort, as an LLC, or even as a joint venture. She is thinking of calling the business "The Gathering Place."
From both a legal and spiritual perspective:
1. Address the pluses and minuses of each of the various business forms that Betty might adopt and recommend one, giving clear reasons for your recommendation.
2. Address whom Betty should agree to take into the business with her and why? If she elects not to take in any interested party, what should she tell them is the reason or reasons, if anything?
3. Do a corporate name search at: http://www.secretary.state.nc.us/corporations/CSearch.aspx to determine if the name she is considering is available for use in the State of North Carolina.
4. Assess whether the name that she is considering is a good name choice for trademarking purposes and any other legitimate business reasons.
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Solution Summary
This solution explains the case of Betty Wilson, a mature Christian, and her coffeehouse in Belmont, NC. All case questions are thoroughly addressed and references are also included. Response also includes a Word-formatted attachment.
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-- Solution attached, and also copied below:
1. Address the pluses and minuses of each of the various business forms that Betty might adopt and recommend one, giving clear reasons for your recommendation.
Betty would want to start this business as a sole proprietorship. Although she came across opportunities for a few different franchises, this would not be a wise decision due to a few different factors. We know that there are big churches in the area, but we don't know that all of the congregations from the other churches would be patrons, or would even be supportive of the coffee shop. The condition of purchasing a minimum quantity for ten years of products is very risky - what if the coffee house has zero demand in that area? Betty would be left in a legally binding contract with no demand. Betty could always change the type of entity at a later date, after operations have been established and determined to be successful.
In this case, I would not recommend a partnership due to the conflicts with spiritual issues involved and the ...
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