Mark and Anthony, brothers, want to open and operate an Italian Bakery to be located at 924 Water Street, San Diego, CA 92101. The location is south of the convention center and nearly adjacent to the Hilton San Diego Bay near Petco Park.
Currently the lot is used to store cargo trucks.
While still in the planning stages, they envision an Italian bakery with gourmet coffees, pastries, cookies and paninis and a water front dining area along San Diego Bay.
The bakery will be called Nonnina's after their Italian Grandmother who made what they hope will become known as their world famous PignoliCookies made with Nonnina's secret ingredients. The interior will be painted to give patrons the feeling of being on a gondola in Venice.
One day they hope to open other Nonnina's in other locations using other people's money.In addition to retail sales from their shop they will market to nearby Gaslamp restaurants offering daily delivery of fresh pastries, bread and cookies. They will also offer pick up services for restaurants from other areas.
Both Mark and Anthony currently have other full time employment, but once their bakery opens Mark intends to quit his fulltime job to devote allhis efforts to the bakery. Anthony, who has a wife and three kids has not yet committed to the project full time and has concerns about Mark's lack of history with successful businesses. Nonetheless, he agreed to put up the capital needed and will work nights and weekends until the bakery can pay both men a good salary.
To keep costs low, they plan to contract with manufacturers in Tijuana to purchase flour, eggs, and sugar, even though its well known that eggs imported from Mexico have a higher incidence of salmonella. All other supplies will be purchased in the United States. The following tentative budget has been agreed to by both men:
In addition to themselves they want to employ a baker from Italy with expertise in Italian foods; a delivery driver with an Italian accent and 4 ladies of Italian descent who look "hot" in daisy dukes and bikini tops as waitresses for the outdoor dining area.They come to your office. What advice will you give to them on each of the following topics.
Please make sure you explain WHY you are giving that advice.
1) What is the appropriate business structure for Nonnina's (they want to protect other assets and minimize taxes)
2) Should they get any types of insurance and what bailment arrangements are appropriate to cover which risks?
3) What must they do to determine if the parcel at 924 Water is suitable for a bakery and water front dining and who should own the land and how should title be held?
4)Which, if any of the activities they will engage in require written contracts and who bears the risk of loss on each contract?
5) What concerns do you have about the torts Nonnina could potentially be sued for?
6) What forms of payment should Nonnina's accept in their business and how should they pay their creditors?
7) How should they prepare for their potential employees and are there any problems with the qualification they identified for their employees?
8) What venture capital options would most likely suit the needs of Nonnina's and its expansion?
9) Do they have any intellectual property to protect and if so which property and how would it be protected?
10) What necessary expenses have NOT been identified in the budget?
11) If they have to sue the suppliers of materials, which courts will have jurisdiction?