# Coffee Store Franchise Prices

### Tim Hortons V.S. Second Cup

## Whats the purpose?

## Variable Classification

**Tim Hortons**

> *y *represents total cost of renting a franchise.

*> x* represents # of years you are renting the franchise for.

> 100,000 represents rent per year. It is the slope of the line.

> 500,000 represents start up cost. It is the y-intercept of the graph.

**Second Cup**

> y represents total cost of renting a franchise.

*> x* represents # of years you are renting the franchise for.

> 150,000 represents rent per year. It is the slope of the line.

> There is no start up cost, hence there is no y-intercept.

## Lets compare the prices of both companies!

## How the graph works

The red line is Tim Hortons. It has a start up cost of $500,000 which is shown on the graph as the y-intercept. It is $100,000 to rent the franchise for the year, and this is represented as the slope of the line.

The blue line is Second Cup. It has no start up cost, therefore it will start at the origin (0,0). It is $150,000 to rent the franchise for a year, and this is represented as the slope of the line.

The P.O.I. (Point Of Intersection) shows under which circumstances you should rent a franchise. In this case, the point of intersection is 10 years. This tells us that if you want to rent for under ten years, you should rent a Second Cup franchise and if you plan to rent for more than ten years, then you should rent a Tim Hortons Franchise.

## Tim Hortons

## Second Cup

## So whats the result?

Tim Hortons and Second Cup will both charge the same amount of money to rent their franchise for 10 years. If you are renting for **less** time than ten years, then Second Cup is the better choice. If you are renting for **more** than 10 years, Tim Hortons is the better choice.

**Now which one would you like to rent?**