7501LAW: International Negotiation Case Study Assignment Solutions

 

7501LAW International Negotiation

Case Study Scenario

 

Cynthia Anderson has approached you to provide advice and represent her interests in relation to a set of possible business opportunities. She has told you she is ‘fairly wealthy’ and has access to several million dollars. She wants to join an Australian franchise system and to export that system to at least one other country. She has approached you because of your reputation as an effective negotiator.

 

Cynthia is in her forties and has worked mainly in event management. She held a senior position with a well-known international events company until late-2016 when she was offered and accepted a redundancy package. She recently came back from an extended holiday, visiting friends and relatives in various countries. Cynthia’s travels have motivated her to look at taking up this franchising business opportunity and so she wants your advice, particularly about how she should approach the range of negotiations that will be involved.

 

 

Cynthia is an enthusiastic scuba diver and wants to join the emerging ‘B&B Adventure Tours’ franchise. ‘B&B Adventure Tours’ currently has 16 franchises around Australia. As the name suggests, ‘B&B Adventure Tours’ provides accommodation and related services to adventurous people who enjoy outdoor sports and recreation. The system was started in 2014 by Marie and Mark Walters, a couple of professional athletes who each decided they wanted to get out of competition sports and enjoy a more relaxing lifestyle. They opened their first ‘B&B Adventure Tours’ along the coast of Cairns in Northern Queensland and there are now franchised operations in most Australian states.

 

‘B&B Adventure Tours’ has developed a comprehensive network of contacts and providers for their system. The services provided are at the top end of the local and international tourism markets. The customers tend to be prepared to pay premium prices for great experiences. Cynthia happened upon ‘B&B Adventure Tours’ earlier this year when she was part of a small group that did a two week ‘live aboard’ diving cruise from Brisbane to Cairns. Towards the finish of the trip, Cynthia met Marie and Mark Walters and they got on very well. Cynthia spent quite a lot of time thinking about the possibilities of ‘B&B Adventure Tours’ when she was recently overseas.

 

Cynthia is interested in becoming a multi-unit franchisee for ‘B&B Adventure Tours’ in Australia. The franchise system is not yet well established in coasts off Western Australia and Cynthia would like to operate B & B’s in Ningaloo Reef, Navy Pier and Coral Bay focusing on scuba diving, kayaking and sky diving. Shannon Stuart is already a ‘B&B Adventure Tours’ franchisee in Perth and has territory rights for Coral Bay and it would be necessary to negotiate some agreement with him.

 

Cynthia is thinking of going into ‘B&B Adventure Tours’ in partnership with her long-time friend, Lyndal Craig. Lyndal was with Cynthia on the diving cruise from Brisbane to Cairns and has said she is very interested in them working together, either as partners or as an employee. Lyndal doesn’t have the same financial resources available to pursue this idea but she would be happy to leave her current job teaching tourism and hospitality at the Gold Coast University.

 

Cynthia also wants to explore the possibilities for taking ‘B&B Adventure Tours’ to other countries. She is looking at opportunities in various countries, notably Egypt, The Maldives, Hawaii, South Africa and the USA. Cynthia developed contacts with small business operators in these countries when she visited them on her recent grand tour. She talked with various people about her ideas for exporting the franchise system. She is now responding to overtures from these various contacts in relation to ‘working together’.

 

The Advice Cynthia is seeking from you

Cynthia wants to make sure she understands the range of negotiations that would be involved in pursuing her ideas for ‘B&B Adventure Tours’. She wants to be sure that she is taking an appropriate approach to each of the sets of negotiations that would be involved in taking these ideas further.

 

Multiple negotiations

Cynthia appreciates that there will be multiple levels of negotiation involved here. Some of the issues are common while others will be specific to particular negotiations. There is also the issue of the order in which the negotiations should be approached.

 

Cynthia’s particular questions relate to:

• How should she approach these various negotiations? Some advisors say that you need to focus on the contracts whereas others say that you should focus on building the How should she decide what is the best approach?

 

• What issues need to be addressed in each contract? Is it best to present a draft contract at the start of negotiations or to talk about them first to understand what the other parties are interested in?

 

• How can Cynthia best maintain standards for her operations both in Australia and elsewhere?

 

Local opportunities

• How should Cynthia approach discussions and negotiations with her friend, Lyndal Craig? What agreements should be made  in  relation  to matters such as respective shares of proceeds and investment, the length of their agreement and dispute resolution arrangements? Should she include some sort of probationary period? How should this negotiation be approached?

 

• How should Cynthia approach the negotiations with Mark and Marie Walters as the ‘B&B Adventure Tours’ franchisors? What agreements need to be made in relation to matters such as territory rights, IP rights, fees, term of the contract, dispute resolution, training and support as well as issues around implementation? How can she best approach the possibility of being a master franchisee with multiple units?

 

• How should Cynthia approach negotiations with Shannon Stuart, the existing Coral Bay franchisee for ‘B&B Adventure Tours’? She sees the Coral Bay operation as important to the series of B & B’s she plans to establish.

 

International opportunities

• How should Cynthia approach negotiations with parties in whichever country or countries she chooses to export the ‘B&B Adventure Tours’ franchise to? What regulators will need to give approval? How should she approach negotiations in relation to the term of the agreement, the training and support to be provided and the arrangements relating to dispute resolution?

 

• What countries are likely to provide the best options for international expansion of this Australian franchise system? How can we negotiate to limit risks from political and economic issues in the other country?

 

• What is the best time to expand an Australian-based franchise system? Do you move overseas quickly or is it best to get your structures and processes sorted at home first and prove that your product works? How might this impact on the negotiation process?

 

• How many units should be involved at the start of the international system? Is one country at a time the best approach?

 

• What mode of entry is likely to work best? Should Cynthia have a local or locals involved or should she send people across from Australia?

 

• Where to locate the head office? Australia or other country? How should negotiations be conducted in relation to managing issues around geographic distance and cultural differences?

 

• Whether to make this a joint venture or a master franchise arrangement is a key What sort of due diligence should she conduct in relation to possible business partners? How should the due diligence process be addressed in the negotiation?

 

• Where in government can Cynthia go for advice and support? How should she approach the process of negotiations related to compliance with all the relevant regulatory requirements?

 

• Territory rights – how should Cynthia approach negotiations related to ensuring that her international business partners relinquish their rights if they don’t actually develop the business in the other country?

 

Your Case Study Report

 

Please refer to the Guide to the Case Study Assessment Item for instructions of 7501LAW: International Negotiation Assessment.

 

This is in large part a research project that requires you to do research to understand what would be required to shape these business opportunities and enable Cynthia Anderson to take them further. There is an element of uncertainty to this task and this is in keeping with seeking to make it as relevant to your studies as possible. The answers to negotiation issues aren’t provided on a piece of paper. You have to find them.

 

A set of articles and conference papers relevant to this case study have been loaded in the relevant assessment folder on the course website.

 

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