The Café Meteor Bistro: Manage or Sell?

Ron Mulholland; Stéphane Lauzon

Product #:9B20A045_P

Supplier:Ivey

Discipline:Entrepreneurship, Marketing

Setting:Canada, 2019

Details:Case (PDF) • 10 pages • 2020-05-27

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Café Meteor Bistro was a newly opened bistro-style restaurant in Haileybury, Ontario. The owners of a nearby lodging business for up to 60 guests had developed Café Meteor Bistro to serve the local market, tourists, and their guests. In January 2019, the owners were each working 80 hours per week, and although their first year of operation had seen sales grow, they were behind their projections and not yet breaking even. Understanding that the situation was not sustainable, they were considering options. Should they sell the restaurant or hire an operations manager? If they planned to sell, they needed to come up with a valuation.

Learning Objectives

The case is suitable for undergraduate- and graduate-level courses on marketing or small-business. It provides data for quantitative analysis and allows for break-even point calculations, as well as for the evaluation of expense ratios that are standard in the food service business. After working through the case and assignment questions, students will be able to do the following:

Conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis and examine the implications of the analysis.
Evaluate the business potential of a bistro-style restaurant.
Evaluate the business’s revenue and expenses and compare them to industry norms.
Consider ways to increase revenue through promotion.
Calculate the value of the business.
Analyze the alternatives of hiring a manager or selling the business.
Recommend whether to sell or hire a manager.