Irac essay

Selling food from mobile trucks is not a new concept. During the last several years, specialty food available for purchase from mobile food trucks has become increasingly popular in major urban areas. A growing number of restaurant chains now have trucks on the road or are exploring the concept. All of the chains with mobile trucks have earned net profits within two years of start-up. Zeja Corporation, which is publicly-held, owns and operates a nationwide chain of Mexican food restaurants throughout the United States. Zeja's board of directors recently decided to expand the business by selling some of its food items from mobile food trucks, which will be located in the downtown areas of various cities across the country. Before adopting the plan, the board reviewed a report prepared by its marketing division. The report indicated that start-up costs for mobile food trucks are low, but obtaining the proper operating and parking permits can be a time-consuming process, and the ovens used in such trucks require long heating and cooling periods. In addition, the specialized kitchen equipment needed for mobile trucks requires frequent repair and maintenance. Since none of the directors had any experience with mobile food trucks, the report was the main basis for the board's decision, though it did not contain any numerical projections of sales or long term profits. Even so, the report stated the mobile trucks are a promising opportunity to reach new customers who may then become patrons of Zeja's brick-and-mortar restaurants, thereby increasing overall sales and profits.

Note: the above facts apply to Parts A, B, C, and D of this essay question.

Essay Question - Part A:A number of disgruntled Zeja shareholders believe that expanding into sales from mobile food trucks is too costly and too risky without more extensive market studies and financial information.They have filed suit against the board to challenge its plan. What is the likely result?Explain fully.