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Now coming out of the pandemic your business still has some restrictions in place. The following six (6) points offer options that need to identified and discussed.

You are only going to write the last one (Lawsuit)

 Identify and discuss what must be addressed to maximize profits, what must change, in order to remain in operation? (Examples: food and beverage, limitation of products/ goods, hiring and retaining employees, contracts with vendors, etc.)

 Given the current situation and government regulations, identify and discuss changes to be developed in your operation to limit contact with guests? (safety and sanitation, food exchange, money exchange etc..)

 Identify and discuss what plans in the future must be taken into account, such as, (employee training, menu redevelopment, marketing mix, distribution advertising methods?)

 Explain how your restaurant concept, will capture more of the market segment than previously (use of technologies)?

 Identify and discuss how your restaurant can remain an active part of the community through personal and social responsibility? (Examples: donations, sponsorships and fundraising causes).

 Identify and discuss potential lawsuits your restaurant may encounter and how the team will overcome any related difficulties.

 

Sample Solution

Market segment

Owning a business certainly comes with a number of risks. Truthfully, restaurant ownership is a legally vulnerable position. Some restaurants see tens-of-thousands of customers each year. Unfortunately, it takes one accident to file a lawsuit. One of the more obvious liabilities for restaurant owners relates to food and drink contaminates. Hundreds of restaurant owners are taken to court each year because of food or drink-borne illnesses allegedly stemming from their establishments. Now coming out of the pandemic, your restaurant still has some restrictions in place. It is wise to have menu items clearly labeled (for instance, with allergen information or warnings regarding raw/uncooked meat), and to ensure you are in compliance with healthy-safety regulations.

Forward and futures contracts can be used for speculative purposes, just like any other item that can be bought and sold at different times and at different prices.

For example, suppose a speculator believes that gold is going to rise from its current price of $400 per ounce to $450 per ounce. The speculator could buy the gold outright by purchasing $450 ounces (the size of one contract) for $40,000 in the spot market. If the price does increase to $450 per ounce, a profit of $5,000 is earned. This represents a return of 12.5% on the investment:

Alternatively. the speculator could enter into a 9-month futures contract for 100 ounces of gold. If this contract were priced at $415 and the spot price of gold were to rise quickly to $450 per ounce. the contract might rise to a price of $465. By “buying” the futures contract at $415 and closing it out at $465. the same $5,000 profit is obtained:

If only a $2,500 margin deposit were needed to enter into this contract, the $5,000 profit would represent a 200% return on this cash deposit in the minds of some speculators.

However, this exaggerates the true rate of return; because of the daily settlement requirements of a futures contract, the speculator actually has much more at risk than the initial margin requirement. The ratio of the profit to the amount of funds that were potentially at risk, rather than the ratio of the profit to the cash that was put up as a “security deposit,” is the correct way to measure his or her return on investment.

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