Your neighbour is investigating the operation of a coffee shop. She has $200,000 cash and is able to borrow another $50,000 if required. Her options are;

1. Purchase of a 'Coffee Break' franchise at $300,000 plus 7.5% royalties.
2. Purchase of an independent coffee shop that has been operating successfully for 5 years at a purchase price of $180,000.
3. Start her own new coffee shop.

a) What are 3 advantages and disadvantages for each option.

b) What other factors must she consider when investigating in operating a business?

c) Which option would you recommend? why?