Owner Yang Wong is considering franchising her Noodle Time restaurant concept. She believes people will pay $6.50 for a large bowl of noodles. Variable costs are $1.95 a bowl. Wong estimates monthly fixed costs for franchisees at $8,400.
Requirements
1. Find a franchisee's breakeven sales in dollars.
2. Is franchising a good idea for Wong if franchisees want a minimum monthly operating income of $7,000 and Wong believes that most locations could generate $26,000 in monthly sales?