BUSI 64 Foothill College Buying a Coffee Shop Memorandum

Buying a Coffee Shop

Learning Objectives

• Understanding the process that goes into buying a business;
• Understanding the process that goes into a creating a purchase contract;
• Analyzing issues raised when buying a business;
• Creating a purchase contract that addresses your needs and concerns.

Guidelines

Make a list using sequential numbering, starting with the number 1, 2, 3, ….

Identify the source of all information that you use.

Submission to be posted in the Canvas message box.

Use

Business Memo Format

.

Readings and Research

Chapter 49 (Landlord-Tenant Law); Internet research on issues to consider when buying a coffee shop and sample contract for the purchase of a coffee shop.

Assignment [total point value 100 points]

You are thinking about going into business for yourself and want to buy a coffee or tea shop in Silicon Valley where you and your friends can hangout, study, relax and have a cup of brew. You have found the perfect location and it so happens there is an existing coffee/tea business for sale at that location. The business is in the 4th year of a 5 year lease with an option to extend for an additional 5 years. The purchase price for the business is $600,000 and you only have $200,000, so you will need financing. You really want to buy the business. What do you need to do to make it happen. Where or how are you going to get the remaining $400,000? How are you going to protect your investment.

This assignment consist of three (3) parts or sections:

Part 1 – Identify key issues to consider when buying a business. [20 points]

Research, using the Internet, to identify important issues that you should consider when buying a coffee/tea shop.

Make alist of all the things that you need to consider (List #1) when buying a coffee shop, such as price, location, historical sales revenue, personnel, business loan, etc. (this can be a running list in bullet form, no need for complete sentences).

Part 2 – Identify key issues/terms to include in your purchase contract. [30 points]

From the list that you created for Part 1 of this assignment, identify the key issues that need to included in your purchase contract. You can research, using the Internet, to identify key terms used in the purchase contract for a coffee/tea shop.

Part 3 – Write a Purchase Contract. [50 points]

Prepare a complete purchase contract to buy a coffee/tea shop with you as the buyer. Make sure all the key terms identified in Part 2 of your assignment are incorporated into the agreement.

Make sure the purchase agreement allows you to back out of the deal if you can’t get a business loan or if you can’t get the landlord to extend the lease under your own name.

Additional Instructions

Make sure you submit your assignment in a business memo format. This makes it easier for me to grade when I download your assignment. 5 points will be deducted for failure to submit using the business memo format. Please see the instructions for how to submit your papers in business memo format.

Make sure you use Business Memo Format.