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Political, Legal and Regulatory Risks

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Political, legal, and regulatory risks The Rules on the Regulation of Franchise (Italian Senate) in articles 2-3 under the Scope of Law demands that any third party business relations must be in writing or will be considered null in void. A distinct plan of organization will be key in handling all written documentation as well as third party witnessing. The Rules on the Regulation of Franchise also states that all documentation must by law, must coincide with the original agreement made by franchisor and cannot be changed without further consent. Any misleading or false information can be due to lack of accurate translation and is punishable by annulment of agreement. To avoid this risk any form of communication, as well as product journalism and financial documents, should be translated into Italian by a professional, and preferably followed with an e-mail or telephone call. Also, there are business schools that can offer placements to aid with the subject of translation. Furthermore, using the Italian language in documents, such as invoices, will aid in the clarification of all intentions and eliminate confusion or misunderstanding. Market Risks (four Ps)

PRICE The average cost of a cup of coffee in Italy (4.92 EU or $7 USD) is doubled the price of an average sized breakfast (2.35 EU or $3 USD). The

subject of price must be paid close attention as to not be deemed as “overpriced” in a country filled with locals who know the value of a good cup of coffee. The price must be strategically set to be competitive without the potential loss of quality. PRODUCT The risk of opening a Starbucks in Italy is that Italians are big coffee drinkers. Italy has 110,000 coffee bars and the quality would have to improve %100 in order to make an impact and divert the consumer from their favorite family owned business. Solution: the product itself would have to be revamped by focusing more on the coffee and not the brand as well as the types of coffee as well as the time...

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