Motor City Restaurant Dilemma: Decision of IPO or Not?
This restaurant company was growing at a rapid speed with over 20 locations and was contemplating going national. There are private investors who received preferred stock in exchange for their investments for this company's continued growth. The investors received an 8% return on this preferred stock in exchange for ownership. The Motor City Restaurant Company (MCR) knew they wanted to grow the concept and scale it, and they were faced with the decision of whether or not to go public. Most companies in the industry have gone public to maintain their long-term value. These companies were only proving short-term, not long-term growth. The other option was to continue with private investors and remain "dark" or private. This case examined how entrepreneurial leaders need to consider inflation of prices, minimum wage, economic conditions, and volatility of earnings to help with the decision of going public or remaining private. The circumstances and position described in the case were based on actual occurrences. The names of the restaurants, parties involved and locations have been altered to preserve anonymity.
"Motor City Restaurant Dilemma: Decision of IPO or Not?,"
Journal of Business & Entrepreneurship: Vol. 30:
2, Article 5.
Available at: https://repository.ulm.edu/jbe/vol30/iss2/5