BUSINESS MODEL

Sunflower Cafe is an eating establishment focusing on heathy, nutritious, and fast food to the local downtown area. The Sunflower Cafe will be an upscale deli specializing in a combination of fast hot or cold sandwiches. Based on this distinct menu, Sunflower Cafe will follow a differentiation strategy that will provide unique, or hard to find choices to deli patrons.

The company will be a LLC owned by Ms. Jane Smith. Ms. Smith will be providing $20,000 capital investment and there will be an additional $30,000 raised in short-term loan.

Non-Franchise Vs. Franchise

When deciding on the business model we looked at the pros and cons of both the franchise vs. non-franchise method.
Pros of the franchise model include the following:
Franchising is a great way to find talented people to manage your locations and give them an incentive to work hard. The most qualified and hardest working people generally prefer to invest in running a business in return for profits rather than taking a salary as an employee. So by franchising, you are going to get better talent that will work harder to build the business than you would by hiring someone to work for you.
Franchising is a good way to obtain expansion capital. Because your franchisees pay to buy outlets in your chain, you can grow the number of locations without tapping much of your own capital or needing to request financing from banks or investors.
Franchising can generate high financial returns for relatively little risk. Unlike adding company-owned outlets, when you franchise, you put relatively little money into adding each location. If you have a good business model, you can earn high royalties from sales at those outlets. The percentage returns you earn can be many times what you would have earned if you opened and ran the outlets yourself.
Cons of the franchise model include the following: