Reyes Hardware Store: challenges in the family business

Learning outcomes Case overview/synopsis Reyes Hardware Store, a family-owned business in Guadalajara, Mexico, faces governance and family challenges that threaten its sustainability. Founded by Antonio and Carolina Reyes, the company grew during the COVID-19 pandemic, expanding to three branches and a distribution center. However, this growth occurred without formal structures, defined salaries, or financial transparency. Key issues include discretionary resource use, informal accounting by the owners’ son, high staff turnover and no succession plan. Tensions escalated when Antonio’s affair led to his separation from Carolina, destabilizing both family and business dynamics.This case immerses students in the complexities of managing a growing family business in an emerging market. It highlights tensions between emotional family ties and rational business decisions, encouraging learners to reflect on how values and governance affect long-term sustainability. Applying the RBV and valuable, rare, inimitable, and non-substitutable (VRIN) model, students evaluate strategic resources such as trust, family commitment and operational know-how. They are challenged to propose governance solutions, including family and advisory councils, formal salary structures and a succession plan aligned with family values and business continuity.Ideal for upper-level undergraduate and graduate courses in family business, strategic management or entrepreneurship, the case promotes critical thinking and applied problem-solving. Students examine ethical dilemmas, power dynamics and resistance to delegation within the context of a family firm. The teaching note includes learning objectives, discussion questions and a structured teaching plan. By addressing governance and emotional complexity, the case prepares students to support professionalization and continuity in family-owned enterprises operating in emerging economies. Complexity academic level The case is suitable for undergraduate students majoring in business administration, as well as for graduate students specializing in family business management or related.In the case of undergraduates, students should already be familiar with the concepts of the RBV theory, the VRIN model, genograms, the three-circle model and the family enterprise model. Supplementary material Teaching notes are available for educators only. Subject code CSS 7: Management Science.