A multinational company, Fines Cosmetics Itd (FC) is considering awarding a franchise to a Zambian company...

   

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A multinational company, Fines Cosmetics Itd (FC) is considering awarding a franchise to a Zambian company to be a sole distributor of all its beauty products in Zambia. Fines has been one of major players in the cosmetic industry with a trading history of over 50 years. They are currently looking at entering the Zambian markets through franchising. Applications have been received from three (3) Zambian companies that meet the requirements. MBS ltd is a large Lusaka based distribution company that has been in business for many years. Yinu ltd is a small niche player in the Zambian distribution market formed about 5 years ago. Miguel Itd has been trading for a long time but is only a fraction of the size of MBS ltd. All the three businesses have shown logistical and operational capacity to the handle the FC franchise. Therefore, the board of directors of Fines Coltd have indicated that the successful applicant will be based on the relative financial strength of the three firms. Below are the key financial figures on each of the three companies vying for the franchise. INCOME STATEMENTS 2022 K'000 26,500 18,200 Revenue Cost of sales Operating profits/(loss) 250 MBS ltd 2021 K'000 15,900 12,100 280 Yinu ltd 2022 K'000 450 340 20 2021 K'000 400 300 15 Miguel Itd 2022 2021 K'000 K'000 2,100 1,600 1,500 1,305 40 30 A multinational company, Fines Cosmetics Itd (FC) is considering awarding a franchise to a Zambian company to be a sole distributor of all its beauty products in Zambia. Fines has been one of major players in the cosmetic industry with a trading history of over 50 years. They are currently looking at entering the Zambian markets through franchising. Applications have been received from three (3) Zambian companies that meet the requirements. MBS ltd is a large Lusaka based distribution company that has been in business for many years. Yinu ltd is a small niche player in the Zambian distribution market formed about 5 years ago. Miguel Itd has been trading for a long time but is only a fraction of the size of MBS ltd. All the three businesses have shown logistical and operational capacity to the handle the FC franchise. Therefore, the board of directors of Fines Coltd have indicated that the successful applicant will be based on the relative financial strength of the three firms. Below are the key financial figures on each of the three companies vying for the franchise. INCOME STATEMENTS 2022 K'000 26,500 18,200 Revenue Cost of sales Operating profits/(loss) 250 MBS ltd 2021 K'000 15,900 12,100 280 Yinu ltd 2022 K'000 450 340 20 2021 K'000 400 300 15 Miguel Itd 2022 2021 K'000 K'000 2,100 1,600 1,500 1,305 40 30

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Report to the Directors of Fines Co Ltd Subject Analysis of Potential Franchise Candidates in Zambia Date Insert Date Introduction Fines Co Ltd is considering awarding a franchise for the distribution ... View the full answer