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The Gathering Place: coffeeshop

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 please:
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.

Solution Preview

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.

Franchise:
Pluses of a franchise are:
• That the business is generally already up and running and established.
• You can walk in and start doing business right away.
• You will have all the essentials supplied on day one, employee support, training, location, facility, marketing, etc.

Minuses of a Franchise are minimal, however the most common are:
• Risk of having the franchisor exercise their right of first refusal and cancel out or sell your individual franchise after all your hard work (have to work out a firm contract).
• Obtaining of financing to meet the cost expectations of the franchise could be difficult.
• Have to meet specific criteria of the franchise, therefore, you may not feel the freedoms expected from having your own business.

Sole Proprietorship:
Pluses:
• As a sole proprietor, you have complete control of the business and all decisions are yours.
• You can sell the business anytime you would like
• Zero corporate taxes required
• Very cheap to start up from a bureaucratic standpoint.

Minuses:
• As owner, you're liable for all debts and obligations of the business, including any lawsuits or other legal actions they may occur as a result of you or your employee's negligence or actions.
• Very hard to get investor capital as banks often frown on first time business owners who are working solo.

Partnerships:
Pluses:
• Having a partner usually helps raise more funds
• Bringing in a partner can often help add a specific skill set or energy to the business
• Having a partner helps distribute the workload and stress level and also adds morale support which is often seen as a relief compared to trying to do everything by oneself.

Minuses:
• Profits have to be shared which can become an issue if you're working much harder than your partners but they expect an equal share of the profit margins.
• Since ...

Solution Summary

The solution discusses the Gathering Place - Coffeeshop.

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