Case Study: Business Protection
Danny decided to open a new business, Cactus Café, in Chatswood. Danny has never owned a Café before, nor does he have any experience working in the hospitality industry, nevertheless, it was always his dream to run his own Cafe one day. Danny has not done any research in relation to setting up the business and is unaware of the requirements pertaining to aspects such as registering a business name and business domain, registering a trademark, design rights, and protecting intelectual property.
Danny's brother Matt owns a Media company 'Cactus Can' providing filming and photography services. Matt's company has grown into a very successful business in a relatively short period of time. Danny has been inspired by his brother's success and decided to emulate certain aspects of the company's concept when establishing his café. The overall look of Danny's Café as well as all his promotional material resembles the styling used by his brother's business. The Cafe is filled with cactus plants, décor, books, and even photography-related items such as film cameras.
Danny asked Matt if he could build a website for the café. Matt said he was too busy but he can get one of his interns, John, to do the job and help Danny out. As it was a very busy period and John was also occupied working on other projects, Danny told John to just copy a Mexican restaurant's webpage, including the menu, and to also copy and use some of the images from Matt's website. When it came to registering a name for the Café, Danny used a similar name to the one to his brothers', 'CactusCan' and copied the logo.
Danny also has not done proper research in relation to protecting his business and is unaware of what insurance policies he should get. Someone advised Danny that he should have Public Liability insurance but Danny does not know what that actually means.
An international student, Gemma, was hired by Danny to work as a waitress in the Cafe. Gemma has never worked in the hospitality industry before and has never received any barista training. Danny told Gemma that she would be paid $16 per hour, cash in hand. On her first day of work, a quiet Tuesday morning, a customer asked for a coffee, which she did not know how to make. There was no other staff member around to make the coffee. Attempting to use the machine she gave herself a terrible steam burn which required her to go to the hospital. An inspector came to visit the Café as Gemma contacted SafeWork NSW and reported her work-related injury to the authorities after Danny told her he did not have a worker's compensation insurance policy that would cover her.
Just a week after this incident, a staff member forgot the salamander overnight and the kitchen caught fire. Most of the business burnt down. Danny lost everything; there was almost nothing left that could be salvaged.
Questions (according to Australian Laws):
Q1. Should Danny register his business name? If so, explain why and how can he do it. (What steps does he need to follow?)
Q2. Do you think there is any problem with Danny's business name 'CactusCan'? Explain your answer.
Q3. Has Danny done anything wrong while building his business website? Explain your answer and outline any respective consequences related to Danny's actions.
Q4. Are there any concerns related to the arrangements Danny made when employing Gemma?
Q5. What is Public Liability Insurance and why is it important?
Q6. What is Workers Compensation Insurance and why is it important?
Q7. What are the ramifications of Danny not having an insurance policy for Workers Compensation?
Q8. If Danny approached you and asked you for advice regarding insurance for his Cafe, what type of insurance would you recommend he should get for his business?