The Trois Fois: Louise Duchamp

Abstract

This is a two-party negotiation over the sale of a restaurant. On the surface, it appears distributive with a very small zone of agreement. However, there are several ways to create value by transforming the relationship. For instance, the Seller can also become a Customer. The Seller can become a Supplier. And they can arrange to share resources. Each of these reframings of the relationship results in the creation of mutual value and a wider zone of agreement. Note, both sides are able to differentially value the deal in dollars. This case must be used in conjunction with "The Trois Fois: Matt Jungen" UVA-QA-0586.

Excerpt

UVA-QA-0585

Version 1.25

THE TROIS FOIS: LOUISE DUCHAMP

Louise DuChamp boarded the plane that would take her from New Orleans, Louisiana, to Albuquerque, New Mexico, with a touch of trepidation. DuChamp, a professional chef, hated to take time away from the restaurant where she currently worked. This trip, however, could lead to the major career step that she had been looking for. She was traveling to Santa Fe, New Mexico, to look at a restaurant and, if possible, to negotiate a deal to buy it.

DuChamp had looked at restaurants closer to home, but finding the right place in New Orleans had proved difficult. She wanted an intimate, upscale venue where she could work on simple, high-quality, country-French cooking. Unfortunately, prices for established restaurants in New Orleans were outrageous, and the market, especially for French dining, was too entrenched for her to launch her first restaurant there.

A friend in the business tipped her off to an opportunity in Santa Fe—a small, two-year-old French restaurant called Trois Fois. The owner, Matt Jungen, had a good reputation, and the Trois Fois had already garnered high praise in several well-respected publications. Jungen operated a second restaurant, Il Trattoria, right next door to the Trois Fois, and over a period of eight years it too had proven itself a highly successful business. Her understanding of the situation was that Jungen had found running both restaurants too time consuming, and had decided to reduce his work hours by selling the Trois Fois. While the Trois Fois sounded ideal, DuChamp was concerned that Jungen would be in such close proximity. This would be DuChamp's first ownership venture, and the last thing she wanted was Jungen giving her “friendly” advice or reminding her how he ran the restaurant. If she bought Trois Fois, DuChamp would have to make it very clear to Jungen that his continuing advice would not be needed.

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Keywords: bargaining/bidding, negotiation, value creation, UVA-QA-0585