Mark has developed a popular new fashion line called Zeus. He has identified locations in high-end shopping malls for launching new stores to sell the product. Entities that want to be a Zeus store franchisee must pay Mark a one-time franchise fee of $100,000. In return, Mark will supply the merchandise and pays for marketing. Mark receives 75% of the net income from a store (clothing sales revenues minus the cost of renting space in the mall) and the franchisee receives 25% of the net income.

Brenda and Jody are interested in purchasing the franchise rights for astoretobeopenedinOcala,Florida.Theyhavesimilar credentials, education and experience in retail.

Jodyisbackedbythreeinvestorsthatwillcontributethefunds needed to cover the franchise fee. The franchise will be owned by a partnership Zeus-Jody LLC with the three investors and Jody each owning 25% of the partnership.

Brenda will use her personal savings to pay the franchise fee.

Which of the two women would you recommend that Mark sell the franchise to? Explain your logic.

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