1. Considering Eddy’s personal situation concerning the opening of his restaurant “Fast Eddy’s”, the best legal form of ownership he could use is a sole proprietorship. This would be the best form of...


1. Considering Eddy’s personal situation concerning the opening of his restaurant “Fast Eddy’s”, the best legal form of ownership he could use is a sole proprietorship. This would be the best form of ownership because it is a simple structure that allows him to run the business by himself and given the fact that he is starting the business with his own finances and personal recipe. In fact, a sole proprietorship would be easy and inexpensive to star since he would only need to get the necessary licenses and register his restaurant’s name to begin performing. He would also have complete control over the business given the fact that he is the one investing and that he owns the idea. Also, he would not have to depend on anyone but himself to make decisions. All in all, since he has the money to start the business there is no better way than to do it by himself because it is his personal and unique recipe.


However, there are downsides to going as a sole proprietor. For example, he will have to sustain unlimited liability. He will be held responsible if the business crashes, has debts or obligations, and if anything happens to the employees. In other words, everything falls on him and he is responsible for the success and failures of the business. Another downfall of sole proprietorships is that it is hard to have the money to start the business but in Eddy’s case he has sufficient funds.




Maria Ponce de Leon June 3, 2020 Assignment 2 1. Considering Eddy’s personal situation concerning the opening of his restaurant “Fast Eddy’s”, the best legal form of ownership he could use is a sole proprietorship. This would be the best form of ownership because it is a simple structure that allows him to run the business by himself and given the fact that he is starting the business with his own finances and personal recipe. In fact, a sole proprietorship would be easy and inexpensive to star since he would only need to get the necessary licenses and register his restaurant’s name to begin performing. He would also have complete control over the business given the fact that he is the one investing and that he owns the idea. Also, he would not have to depend on anyone but himself to make decisions. All in all, since he has the money to start the business there is no better way than to do it by himself because it is his personal and unique recipe. However, there are downsides to going as a sole proprietor. For example, he will have to sustain unlimited liability. He will be held responsible if the business crashes, has debts or obligations, and if anything happens to the employees. In other words, everything falls on him and he is responsible for the success and failures of the business. Another downfall of sole proprietorships is that it is hard to have the money to start the business but in Eddy’s case he has sufficient funds. 2. Eddy should start by using a functional structure for his restaurant. This structure divides the business into groups according the area of specialty. Each one is responsible for performing their own and unique tasks and they are detached from one another. Furthermore, decisions and communication are based on each department and it is carried to other departments by a main representative. This type of structure is efficient because employees that have common skills are together to fulfill a task. Everyone in the business has their place and they are located in the area they dominate fully. However, the biggest flaw of this type of organization is that there is a lack of communication which can lead to confusion and misunderstanding. 3. Eddy can achieve the well-being of his employees by making sure that the employee’s surroundings are in a good state so that they perform their tasks better. This relates to the Hawthorne effect because it stated that the employee’s socio-psychological aspect is an important factor for the employee to be motivated to complete his or her job. In fact, it stated that the environment in which someone works is just as important as their skill. It showed that employees are more responsive and productive when their social environment and workplace is pleasant, clean, joyful, etc. Also, Eddy has to make sure the employees feel rewarded for their job and that they are recognized by the major authorities, to make sure they keep a good self-esteem and push themselves to work harder. 4. Franchises exists when the owner of the business licenses trademarks to someone that wants to start their own business using the brand registered. Even though this would be a great way for Eddy to expand his business and to make his brand recognizable worldwide, he has to consider that making his business a franchise brings certain disadvantages for him. First of all, considering the good aspects, converting his restaurant in a franchise will bring him income from various sources in form of royalties. Secondly, his brand will be advertised, and this could bring more people to his business. Lastly, if he is successful, people will want to invest on his business, and he could put in less of his own income. On the other hand, if he converts his business into a franchise, he will lose the control of quality in all locations which can make him lose costumers for not sticking to the same standards. Also, if the franchise expands too much, it will become less attractive to people. Owner General Manager Floor Manager Kitchen Manager Kitchen staff: Cooks, Preps, Dishwasher. Floor staff: Servers, Cashiers, Host. Accountant
Jun 13, 2022
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