Capinan, Angelica M.

BSTM 321

Case: Martha Soriano, a Baguio City-based retailer and caterer, noted the severe shortage of hotel
accommodations in the city, especially during the annual Panagbenga Flower Festival. She invited some
foreign friends, Arthur Hewitt, an American retiree, and Rose Ann Grundt, a German hotelier, to join and
invest in her new business venture - the Mayflower Hotel. Based on the business plan prepared, the total
capitalization needed for the 50-room standard hotel is Php20 million. Martha is only capable of raising
half of the total investment needed. What advice would you give Ms. Soriano as she forms a partnership
with two (2) foreign partners?

Answer:

When forming a partnership with her foreign friends, Arthur Hewitt and Rose Ann Grundt, for the
Mayflower Hotel venture in Baguio City, Martha Soriano should consider key factors. Clearly define each
partner's roles and responsibilities based on their expertise. Determine the capital contributions and
ownership shares in a fair and transparent manner. Leverage the foreign partners' expertise to enhance
the hotel's success. Establish a framework for sharing financial risks and rewards. Foster cultural
understanding and effective communication. Draft a comprehensive partnership agreement to ensure
legal protection and clarity. By following these guidelines, Martha can form a strong partnership that
addresses the shortage of hotel accommodations in Baguio City, particularly during the Panagbenga
Flower Festival.