Discussion post question that relates to the class subject of Hospitality Industry Law
Assume that you are responsible for approving commercial loans at a bank where you are the senior leading official. You are approached by two hospitality management college graduates with three years of management experience acquired after they completed their studies. They are seeking a loan slightly in excess of 1 million to establish a restaurant in the community. The funds will be used to lease land, facilities, and equipment, as well as for renovation, inventory, salaries, and other start-up costs.
1. Will the organizational structure selected by the partners have an impact on your decision to extend the loan?
2. Will the operating structure selected by the partners have an impact on your decision to extend the loan?
3. What other factors would influence your decision?
4. Would it make a difference to you if the partners were requesting the loan to complete a franchise agreement with an established franchisor?
5. What additional information might you request if the partners were seeking the loan to operate as an independent restaurant? Would it matter if the loan were for an existing restaurant as opposed to a start up?