Law dis6 Essay Example | Topics and Well Written Essays - 250 words

Law dis6 - Essay Example It is these decisions that lead to success or failure of the business hence its ability to offset the loan. The organization structure is therefore an important factor to consider when deciding about the loan. A Pre-bureaucratic structure would be best as the business is medium-sized, requires limited specialization and the structures allows for quicker decisions which are imperative in a restaurant business. How realistic and achievable the business plan is, the borrowing history of the partners, the values of the collateral provided by the partners, the ability of the partners to offset the loan in the period provided should the business fail and the ability of the guarantors, if any, to offset the loan should the partners fail to do so. The nature of the business would make a considerable difference. In a franchise, there are less teething problems as the brand name is already established. The business model is already tested as the franchisor is successful. However on the considerations, one must appreciate that the decision making of the entrepreneurs is limited as the franchisor has a significant say in the operation of the business hence their growth may be limited to a certain level. The amount of fees to be paid to the franchisor as royalty as well as what the franchisee is to pay as training and advisory fees. The fees should not be too large as to hinder leave too little money for the daily operations of the business. Another factor to consider is the role in decision making of the franchisor which should not be too large and the duration of time that the franchise is supposed to take place. The creditor ought also to consider the business format- whether trade name franchising or business format franchising The Franchise Disclosure Document (FDD) which should be made available to the franchisee by the franchisor, two weeks before payment of any fees. The document contains