You Decide
Week 5 Project
PM598 – May/June 2012 Session

It is always difficult to terminate a business, especially after you have invested so much time, effort and money in the company. What makes it even more complex is going into business with others whom you expected to help the business succeed, yet it does not end up that way. For this case scenario, Chris and Pat Smith, and the two chefs, J. P. Martin and L. L. Miller, need to get together to make some tough decisions on potentially dissolving the business At Your Service.
Chris and Pat Smith want to dissolve the business, but Miller is asking to have the business transferred to her and Martin. Assuming Chris and Pat Smith agree to transfer At Your Service to Martin and Miller, and Martin and Miller continue to run the catering business the following issues would need to be resolved:
· How the $15,000 left in the investment would be split.
· How to handle the lease on the rented space, which has 18 months more to run.
· How to handle the lease for the van, which has 18 months more to run.
· How to handle the lease on for the kitchen equipment, which as six months more to run.

Chris and Pat Smith, and Martin and Miller decided it was best to have a termination contact set in place to secure all partakers in their final decisions. They noted it was best for all to have precise, clear explanations all of all essential fundamentals for the termination of their business partnership. An acknowledgement of the effective termination date would need to be set, and all potential risks, if any, should be stated for all parties.
The owners and the chefs would meet for a period of 30 minutes and try to dissolve their partnership. The owners and the chefs blame each other for the failure of At Your Service; however, all partakers should act as responsible, mature adults during the meeting. It would speed up the termination process; especially if all partakers can comprehend they all had a part to play and it is not one single persons fault for the failure of the business.
A resolution has since been decided for the above listed issues:
The remaining $15,000 left in the investment should be split 72% for the owners and 28% for the Chefs. This decision was made since the owners contributed 72% of the initial investment and the Chefs contributed 28% of the $35,000. However, if the owners decide to have At Your Service transferred to Martin and Miller, they (Martin and Miller) should be willing to pay Chris and Pat Smith a bit more money for the company name, as At Your Service has been in business for 18 months and has made somewhat of a name for itself. Therefore it is concluded that the remaining profits should be split as follows: $12,000 for Chris and Pat Smith and $3,000 for Martin and Miller. It should also be taken into consideration that Chris and Pat Smith would not mind taking over the leased space for their new venture as well as taking over the lease on the van. This will save Martin and Miller money as their working capital has diminished tremendously. Martin and Miller should look for a more suitable location, which could be smaller in size, and less expensive to keep At Your Service in business.
It has also been decided that Chris and Pat will be paying for the current rented space. This will work out for Chris and Pat since they will be able to use this space for their new endeavor and neither partaker will have to a pay the termination fee on the leased space. It is also an advantage to Martin and Miller, as previously stated, in that they will be able to find a space that is more suited to their budget.
The lease on the van will be paid for by Chris and Pat as well. They will be able to use this vehicle to deliver flowers and neither partaker will have to a pay the termination fee on the leased vehicle.
As far as the cooking equipment goes, Martin and Miller will take over the lease as they will continue the operating At Your Service. Martin and Miller can use the equipment, and neither partaker will have to pay a termination fee or a fee for amending the lease agreement.
It was decided that the termination would take place within 5 business days of signing the agreement. This would give all partakers a sufficient amount of time to gather necessary materials for separation. In addition, Chris and Pat agreed to allow Martin and Miller to store their leased kitchen equipment in rented space kitchen area for up to 4 weeks after termination giving them sufficient time to find a permanent location to move At Your Service to.
It was difficult to conclude to the above decisions; however, the Smith’s, Martin, and Miller all felt it was best to listen to each others reasoning’s while in the negotiation process. The termination contract was a success. Both parties looked for positives that benefit themselves and each other in every area; leading to a fair and equitable deal to be achieved. This termination contract will benefit both parties to provide a firm foundation for their future.
Proper termination planning and contracting is critical to ensuring a successful process transition for all parties involved. The partnership does not necessarily terminate when the business dissolves. If the business still requires winding up, it is the responsibility of Chris and Pat to assist with this until At Your Service is directly under the names of Martin and Miller. Regardless of how ugly the relationship between all partakers got, the Smith’s, Martin and Miller should maintain their integrity by being honest with each other, and treating each other with respect.