INTRODUCTION The restaurant industry is one of the largest sectors in the United States economy and is projected to be among those with the largest growth by 2020. Companies in this industry own restaurants and other eating places in many levels, including full-service restaurants (FSR), quick-service restaurants (QSR), cafeterias and buffets, and snack bars. Levendary Café, founded by Howard Leventhal, was the multi-unit restaurant with a popular chain of 3,500 cafes that builds soup, salad, and sandwich into a $10 billion business. From 2011, Mia Foster has become the next CEO of Levendary Café for building a multi-national brand in a situation that Levendary’s domestic business was nearly tapped out. For helping her in management, Levendary Café organized by formal structure grouping by function (Exhibit 1). In 2008, as the slow growth in domestic, Levendary decided to enter China market after researching opportunities in China. And the new CEO Mia Foster found some problems with China operations. MAIN QUESTIONS Question 1. What is a Multi-unit Restaurant (MuR) Business? How big is it? Is it a consolidated or fragmented industry? What are its economics? Answer 1: Multi-unit Restaurant (MuR) might be known as a chain of the same brand restaurants that are located in many different locations include inside or outside the home country. It was generally categorized into these industry segments: • Specialty establishments: primarily served snacks and beverages under 5$ like Starbucks, Dunkin’ Donuts and Baskin-Robbins. • Quick service restaurants: was usually called “fast food”, provided counter or drive-through service with average tickets between $4 and $10 (McDonald’s, Taco Bell and Wendy’s). • Casual dining: offered table service for dinner entrees priced between $8 and $20 (Olive Garden, Applebee’s, and Outback). Within this group, the new fine dining concepts like Ruth’s Chris and Capital Grille featured entrees into the $40 range. • In addition, “Quick casual” is an emerging category. In 2010, the US restaurant and contract foodservice industry was a $600 billion industry with 960,000 locations. And MuR accounted for 30% of this industry by units, with independent operators as the balance. The industry was highly fragmented with a highly quantity and competition of multi-unit restaurants. But there was no brand that really leaded this intense market as such as McDonald’s, one of the biggest global businesses, just generated only 2% of total revenues. We can use Porter’s Five Forces model to understand more about the industry’s economics Force Assessment Rating Potential of new entrants - Low entry barriers - Capital requirements to start a new business are low but they will be increased for multi-unit restaurants - Although customer required more quality but the demand is increase much too so many entrepreneurs consider running into this industry High Substitutes - There are some particular restaurants such as luxurious, royal that provide special food with high quality, high taste, and elegant atmosphere - There are more and more cooking books, home cooking programs so the rate of home cook is increasing and people prefer family diner more in this modern life Moderate Threat of buyers - Since the economic crisis, buyer pay attention in price and quality of restaurant so much therefor the threat from buyers is quite low to MuRs because of MuRs’ cheap price and product variety. Low Threat of suppliers - Bargaining power of suppliers in this industry is weak, since each company accounts for the big part of the supplier’s sales - MuRs can choose suppliers easily even they can switch suppliers for lower cost and higher quality Low Rivalry - There is the big amount of multi-unit restaurants with good price, quality, and service. (McDonal’s, Burger King, KFC, Subway, Wendy’s, Starbucks, Dunkin Donuts, Olive Garden, Applebee’s, Outback...) - Each company is also trying to be the leader in the industry so they are not stopping to research and develop more different products for getting more customers and mar