To: Paul Livoria and Sam Livoria
From: Dev Das
Livoria Sandwiches needs to achieve growth in sales to reach $1.1 million in Net Income by 2015 while paying off its litigation payment of $500,000 by May 2015 and back taxes of $22,500 by Q1 2013. This report will analyze the two options available namely diversifying the menu or converting the business to a franchise and identify the alternative that will achieve growth targets and meet payment obligations.
Livoria Sandwiches has a good underlying business model and financial performance in 2012 except for the litigation charge (See Appendix 4). Contribution margin % was 53% compared to the industry’s 45%. This means Livoria’s costs of …show more content…