...1.) What is the organization type of Icedelights? Why? • Promotional organization because they are supporting the Icedelights franchise. • They were bringing an innovated product to Florida since there were very few gelato shops in the state. • They had extreme objectives when starting the franchise Icedelights in Florida. • Because there were a large number of risks there was high level of uncertainty in starting the franchise. 2.) Is the Icedelights opportunity a good one? • Yes, it has the potential to be very successful because of its success in the Boston area. • They have the opportunity to be the only Icedelight franchise owners in Florida. • Good opportunity to become a part of a large business that is expanding. • Good opportunity because they have a good relationship with the Icedelights owner. • There were not many gelato shops in Florida which made for a very weak competitive market there. • This is a good opportunity because they are able to attempt a career that they all want. 3.) What are the key risk elements? • Risk of having no past experience in the food retail industry. • Risk of Icedelight backing out on supplying the gelato product. • Risk of not knowing Florida real estate. • Risk of Florida not being a suitable spot for the company. • Risk of being able to work productively together because of their different opinions. • Risk of not having enough financial security. • Risk of not having enough financial investors. • Risk of obtaining...
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...PJ Connolly Marco Borgato Charles Newcomb 2. ICEDELIGHTS (or “the Company”) This case has been written to allow you to begin to understand the process of getting into business for yourself as well as exploring some of the personal feelings and emotions that surface during this process. Specifically, the case focuses on: - Career Paths for the Aspiring Entrepreneur - The Search for an Opportunity - Evaluating the ICEDELIGHTS Opportunity - Obtaining the Resources to Pursue the Opportunity For your case write-up, please answer the following questions. Please be also prepared to discuss these questions in class: 1. What is the Organization Type of ICEDELIGHTS (the Franchisee)? Why? - PJ 2. Is the ICEDELIGHTS opportunity a good one? -Borg 3. What are the key risk elements?- Chuck 4. Did they pull together a good management team? -Borg 1) What is the Organization Type of ICEDELIGHTS (the Franchisee)? Why? a. Product/Service i. Their objective is to own a business and survive as entrepreneurs, nothing too extreme. They have projections, but no real formal strategic objectives besides make a profit. 1. They displayed formal projections and profit margins for the next 10 years, but no real plan of how they will go about it. 2. They have a plan of attack for investors: go after contacts of Mr. Rogers, but no real plan of how to convince them. ii. Leadership is craftsmen/technicians in the sense that they want to use their HBS experience in management...
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...as it is presented in the case As outlined below, ICEDELIGHTS is willing to provide an acceptable option to the franchisees due to their inability to commit to the venture immediately. The revisions to the deal allow the franchisees flexibility in their timeline for raising capital and financing the deal. Regardless of the timeline, the situation presents a concern with the franchisees ability to raise the amount of capital required to open their first three stores in a timely manner. • ICEDELIGHTS did not want to be legally bound to the Florida franchise because they felt they might not have sufficient resources to accommodate the franchisees. • A deal was proposed that would provide the franchisee and franchisor security o Pay $200,000 up front for development fees and franchise fees for the first five stores o Pay $20,000 per store opened after the first five stores o Pay a 5% royalty on sales • ICEDELIGHTS would then allow the franchisees to use their brand name and product, would train the franchisees and one manager per store, and would provide support for finding locations and construction of the stores. • The deal would come with an option because of ICEDELIGHTS inability to commit to the Florida franchise up front o The franchisees would make a deposit of $75,000 up front o The remaining $125,000 up front charge would not be owed until ICEDELIGHTS provided one acceptable location and the lease was signed...
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...Opportunity Evaluation ICEDELIGHTS was highly requested for Florida which suggests there is a market for their product. Being that no franchise had been established in the state this gives them early entrant benefits. On the downside ICEDELIGHTS is an up and coming company and they are significantly smaller than their competitors. The company lacks brand recognition. The company faced hard times due to early expansion, not having the necessary organization and control systems in place resulted in financial problems. ICEDELIGHTS conservative approach to growth could conflict with the franchisees plans of rapid expansion. The cost of franchising the company is expensive for a new and unproven franchise opportunity. Business and Marketing Strategy ICEDELIGHTS’s lack of adequate marketing resources, expertise and information can impact negatively the ability to have a clear vision on how their business will be performing in the long run under competitive conditions. Being that they are a new company entering a new market with not prior analysis can put the company under stress; the franchisee’s inexperience can only complicate and aggravate the situation. Is entering a market without obtaining market information a smart business idea? When seeking funding from investors one of the main concerns would be the high capital investment needed to start a franchise that has no prior performance record. Management One of the main requirements this business needs in order...
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