Organisational Structure

Dear SAP GURU,

My client [one year old interior design comp]. during as-is requirment, my client mention us.for this fiscal year[2012], they have only one legal entites.

after next fiscal year onwards they have 5 legal entites and 7 branches all within country.

option 1) total 7 branches (each branch have 5 legal entites) = total 35 legal entites.[this detail given by my client their future plan]

option 2) 5 legal entties have 7 branches (here we use branches all business area).[ this option suggestion by my comp sap team]

which is best option ist or iind?. i am very confussed to give suggestion to my client. please help me. i need org structure for above scenairo?

Regards,

Suresh.