Peter Piper Pizza Properties, Inc. is in the limited-service family dining segment of the hospitality industry doing business as Peter Piper Pizza and currently owns 48 Peter Piper Pizza stores throughout Texas and New Mexico. The Company is a franchise that is based in El Paso, Texas and has been in business for over 35 years.

The company is planning to expand its business in different regions of Texas. They decided to segment the location of their stores into two regions - the Southwest and Northwest Region. This is for them to have a clear comparison between the opportunities in both regions. The manager of each region wants to know the investment turnover, profit margin, return on investment, and residual income for each division assuming a 10% hurdle rate in order for them to understand the current state of each store.

Each region has an average invested assets of $6,000,000.00. However, the Northwest region has a higher sales revenue of $18,000,000.00 compared to the $9,000,000.00 of the Southwest region. In terms of Operating Expense, Southwest region has $8,100,000.00 which is lower than the Northwest region with $17,460,000.00.

Since the net operating income of Southwest Region is higher than Northwest Region, the management gave the Manager of Southwest Region the opportunity to invest an additional $2,000,000 in a project expected to generate additional operating income of $220, 000 per year.

Background of the study, statement of the problem, SWOT Analysis and Strategic planning