A management action research for addressing Net Loss in my food cart franchise

• Main Author: Cabuslay, Raphael Paolo M.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4818
• Institution: De La Salle University

Owning and managing a business is a common goal for most Filipinos. There are two simple ways to go about doing this. One is to identify a unique product or opportunity, develop it from the ground up and profit from it. This would require good entrepreneurial skills and lots of time and patience. There is a significant amount of risk in this type of approach, and only very few succeed. A less risky approach would be to purchase a franchise and operate it. This gives most people a chance to be their own boss and manage a business. A very common type of franchise is the food cart business, wherein the deciding factor for profit would be a good location. However, it is quite difficult to determine a good location until one has spent a good time operating in it. The quickest way to determine this would the monthly net income or net loss of the food cart. A common problem for most beginning entrepreneurs is how to properly address net loss. The quickest reaction would be to stop operations to prevent further loss. Most people enter businesses primarily to profit. This was the situation the new food cart owners of La Frutta and Hong Kong noodle factory were experiencing. They were able to determine the root cause of the net loss to be location. Upon further analysis, they were also able to determine that they were not properly equipped to determine a good location for the food cart. They decided to reduce the impact of the net loss while seeking professional help in looking for a better location. They implemented a set of interventions with the goal of increasing sales and reducing expenses. For increasing sales they modified their combo meals and offered new beverages. For reducing expenses they cut down manpower to 1 person per shift. They also implemented a data-gathering intervention of having their employees count footfall of people passing by the food cart. The result of the Sales and Expense interventions was a decrease of Net Loss by 53%. The result of the data-gathering intervention was getting the information that an average of 4.71% of all people passing by the food cart will be converted to customers. This information is required to make proper decisions that would lead to the success of the business.