Question

978-1-305-08808

Ann’s New Center

Ann is considering opening a new child care and education center. She has access to just enough funding to obtain a facility, make the necessary renovations, and purchase some equipment. She doesn’t have much collateral, and she is not interested in teaming up with a partner to create the business. She figures that she will need a little extra capital to cover the costs of licensing, work permits, additional equipment, and initial staff salaries. She does not expect to see a profit in the first few years of operation. Her long-term goal is to create a successful model that she can franchise out into centers all over the state.

Which type of organization should Ann choose when she creates the business? Why?

Would Ann’s center qualify as a not-for-profit organization? Why or why not?

If her plans succeed as she hopes, what will Ann most likely do when she franchises the business?

What advice do you have for Ann as the begins this new venture?

If you had the same funding as Ann, how would you approach opening a new program? (Remember, you have the same funding, not necessarily the same ideas and/or future goals.)

Answer 1

1) The above case depicts that type of venture that Ann wants to open is classified as Non profit organisation, whose sole purpose is to work for welfare of people as they involve working on some social causes and these organisations are not entitled to distribute income to its shareholders and are also tax exempt and in this case it is classified as NPO as its for child care and educational center.

2) Yes Ann's center qualifies for non profit organisation as it is sole purpose is child care and education and also it is mentioned that it does not generate profits in initial years.

3) Franchising a Non profit organisation is a new concept so in doing this one should do the following

• Expand its reach to new geographical location
• selling franchise to independent NPO whose purpose should also be same.
• Should include people who believe in same purpose and are volunteering to work for its betterment and benefit.
• New franchise should also have same operational model
• Should contact those people or independent NPO who can be leaders.
• should comply legally to ensure trust and purpose.

4) I would like to advise Ann that instead of not going for partnership she should join hands with people who has same goal and purpose and those who work for social welfare and also can collaborate with NPO at small scale, attempt should be made to tell people that what different this organisation will offer and how far it is different from other organisations, and when it comes to funding money can be raised in form of donations or collaborating with people and companies who want to put there money for social welfare.

5)I would have collaborated with company or people who aims at social welfare and raise some money from donations .