Bob’s Burgers is in the fast-food restaurant business. One compo

Bob’s Burgers is in the fast-food restaurant business. One component of its marketing strategy is to increase sales by expending in foreign markets. It uses both financial and nonfinancial quantitative and qualitative information when deciding whether to open restaurants abroad. Bob’s decided to open a restaurant in Prague (Czench Republic) five years ago. The following information helped the managers in making that decision:

Financial Quantitative Information

Operating information 

Estimated food, labor, and other operating costs (e.g., taxes, insurance, utilities, and supplies)

Estimated selling price for each food item 

Capital investment information

Cost of land, building, equipment, and furniture

Financing options and amounts

Nonfinancial Quantitative Information 

Estimated daily number of customers, hamburgers to be sold, employees to work 

High-traffic time periods 

Income of people living in the area 

Ratio of population to number of restaurants in the market area 

Traffic counts in front of similar restaurants in the area

Qualitative Information

Government regulations, taxes, duties, tariffs, political involvement in business operations 

Property ownership restrictions 

Site visibility 

Accessibility of store location 

Training process for local managers Hiring process for employees 

Local customs and practices 

Bob’s Burgers has hired you as a consultant and given you an income statement comparing the operating incomes of its five restaurants in Eastern Europe. You have noticed that the Prague location is operating at a loss (including unallocated fixed costs) and must decide whether to recommend closing that restaurant.

Review the information used in making the decision to open the restaurant. Identify the types of information that would also be relevant in deciding whether to close the restaurant. What period or periods of time should be reviewed in making your decision? What additional information would be relevant in making your decision? 


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