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SITUATION-3 The Food Factory is a set up engaged in serving and home delivering Vegetarian Meals including Breakfast, Lunch and Dinner. It has got 32 outlets in and around Delhi and is known for reasonable priced, well cooked and clean food. It has also got Tiffin supply system. Most of its outlets being in the vicinity of educational institutions such as university, it caters to about 4000 students on regular basis. Its turnover at present is approximately ₹ 6 Crore per annum. Very recently, it has got an offer from an international chain - TacoMax - for franchise tie up at a License Fee of ₹ 4 Crore per annum. With TacoMax brand name, it will be able to cater to the corporate clients too for the regular Tiffin requirements and it will be able to charge a price premium of almost 10%. A rece survey indicated that its student population is likely to shift to another similar set up the moment the Food Factory becomes a franchise of TacoMax.
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