RE: Business structure
Based on what you have said in your description:
1- Do i need to create 4 companies (1 for HO and 1 for each store)?
No, unless you need to track financials separately (Payables, Receivables etc0
2- Is the inventory of the store (if a company) represent the store items on display/shelves?
Yes and you can setup multiple location inside 1 database. Location "HQ", "StoreA" etc. You can also setup user security by location (including view/update) limiting people in store A from seeing Store B for example. You can transfer inventory between location or between HQ and StoreA. People in HQ can purchase to ship directly to StoreA if needed as well.
3- Can above be handle by one database, one installation?
Should be able to
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