PM598 YouDecide Week 5
4 Pages

PM598 YouDecide Week 5

Course: PM 598, Winter 2012

School: Keller Graduate School...

Word Count: 739

Rating:

Document Preview

You Decide _ Contract and Procurement Management You Decide February 5, 2012 You Decide Chris and Pat Smith, two entrepreneurs, began a restaurant and catering business with two successful chefs, J.P. Martin and L.L. Miller. The restaurant and catering business was an informal arrangement between the entrepreneurs and the chefs in their responsibilities. The entrepreneurs invested $25,000 and the chefs invested...

Unformatted Document Excerpt
Coursehero >> Illinois >> Keller Graduate School of Management >> PM 598

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Decide You _ Contract and Procurement Management You Decide February 5, 2012 You Decide Chris and Pat Smith, two entrepreneurs, began a restaurant and catering business with two successful chefs, J.P. Martin and L.L. Miller. The restaurant and catering business was an informal arrangement between the entrepreneurs and the chefs in their responsibilities. The entrepreneurs invested $25,000 and the chefs invested $10,000 into the business. After the second year of losing money in the business, the entrepreneurs decided to close the business. The entrepreneurs have some decisions on how to approach the chefs in how to hand the leasing agreements as well as how to split the remaining money left in the business. The entrepreneurs are already planning to open a floral business and some of the existing equipment can be used in their next business venture. The equipment that can be used in the next business venture is the van for floral deliveries and the storefront for the floral shop. The entrepreneurs also need to recoup as much of the left over investment to start their floral business. The entrepreneurs will be meeting with the chefs to discuss how to dissolve the partnership. The following will need to be considered: How will the remaining $15,000 of the investment be split? How will the lease be handled with the kitchen space with 18 months remaining on the lease? How will the lease be handled on the van with 18 months remaining on the lease? How will the lease be handled on the kitchen equipment with six months remaining on the lease? The items that with the most potential for negotiation is the van lease, the storefront lease, and the remaining investment money. The kitchen equipment is not an interest for the entrepreneurs to keep therefore the lease will need to be terminated. The best route is to terminate the lease and with the remaining investment money pay the You Decide _ fee to terminate the lease agreement of the kitchen equipment. The fee will be split between the two parties with their investment portions that are negotiated. The entrepreneurs will need to negotiate the storefront lease. The entrepreneurs will propose to take over the lease. This will ensure that the lease agreement is fulfilled as promised without any doubt the that chefs are making the payments on the remainder of the lease. The cost of $500 will be paid by the entrepreneurs. The lease will amended to only have the entrepreneurs on the lease and the chefs will be removed from the lease altogether. The entrepreneurs will also need to negotiate the van lease. The entrepreneurs will take the same approach and propose to take over the lease of the van. The cost of amending the van agreement will be $500 which will also be paid by the entrepreneurs. The amendment will remove the chefs from the van agreement and only the entrepreneurs will remain on the lease. Taking over the van lease will continue to be used for delivers but for the floral business. The remaining investment money will be $15,000. The entrepreneurs will need to recoup the maximum amount of money so they can start up their new floral business. Taking a look at the original amount invested in the business, the chefs only contributed about 28%, while the entrepreneurs contributed 72%. Taking 28% of the $15,000 is approximately $4,200. The entrepreneurs will propose that the chefs take $5,000 of the remaining investment while the entrepreneurs take $10,000 of the remaining investment money. The split of the money is closely aligned with what each party contributed up front to start the business. The negotiation of the remaining investment money, the van lease, the storefront lease and kitchen equipment will allow the chefs to walk away from the business with no ties to the leases and still have some remaining money from their initial investment. The entrepreneurs will also have their start-up money to invest in their new business venture while utilizing the van and storefront lease for the new floral business. The You Decide assignment is based on gaining at least 100 points to gain agreement with the chefs. The termination of the lease was worth 25 points. The van lease agreement for entrepreneurs to take over the lease was worth 65 points. The storefront lease agreement for entrepreneurs to take over the lease was worth 55 points. The negotiation on how to split the remaining investment money so that the chefs take $5,000 and the entrepreneurs take $10,000 is worth 45 points. The total number of points earned was 190 points.
MOST POPULAR MATERIALS FROM PM
MOST POPULAR MATERIALS FROM Keller Graduate School of Management