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Final Recommendation on Subway Franchise Opportunity

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Develop a final recommendation on Subway franchise opportunity. The recommendation should include the following:

- An executive summary
- A decision objective regarding selection of franchise opportunity
- Forecasts of franchise profits and cash flows(Included in attached document)
- An estimated internal rate of return on investment
- An investment decision recommendation

The attached Subway Franchise Opportunity document has information needed to make recommendation.

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Solution Summary

The final recommendations on subway franchise opportunities are examined. The investment decision recommendations are determined.

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Executive Summary

An opportunity to invest in Subway is offered by this company in form of franchise and for accepting or rejecting it, an investor should consider investment objectives. It is quite suitable for risk taker and risk adverse investors as it is risky in short run and profitable in long run. In addition, profit and cash flow projection of Subway franchise also seems to be positive in next five years from investment. IRR of this investment option also indicates potential growth. An investor should consider other aspects that beside profitability.

Objectives to Investment in Subway Franchise

The main objective behind to make investment in Subway franchise is to achieve long-term profit and to create value accordingly. The long run perspective will be considered to determine feasibility of this business opportunity. In this way, selection of Subway franchise as an investment option will be based over the profit, it is expected to generate on the basis of its current profit statement. In order to analyze this investment option in terms of above objective, initial cost with their opportunity price will be also compared to its expected profits. This will help to determine feasibility of this business in offering profits and creating values in long run over the investment (Fabozzi & CFA, 2001). Profit and value both objectives will include quantitative and qualitative factors of a business respectively, ...

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