Icedelights Case

Cover Page

Student Name: Peter Deng

Case: ICEDELIGHTS

Executive Summary

Three Harvard Business School students have been presented with the opportunity of pursuing the franchising of ICEDELIGHTS in the Florida area. They each have a desire to run their own business and have found the prospect of franchising ICEDELIGHTS (a chain offering beverages, pastries and frozen desserts) to be a viable option. This case write-up has examined various aspects of the franchising proposal covering stakeholder concerns, franchising practicality and managerial capabilities. Due to the three students’ lack of relevant experience, inadequate market research and the low quality of franchising agreement, the overall recommendation is for them to not pursue this business opportunity.

Introduction:

The case examines three Harvard Business School students’ question about whether they should pursue the opportunity of opening up franchises of the ICEDELIGHTS chain store in Florida.

As students who discussed their recent experiences and aspirations, they have decided on exploring options for running their own business. For Paul Rogers, the rewards of creating and managing an enterprise at an early stage of his career excites him. For Mark Daniels, he feels a desire for the independence and satisfaction of owning and managing his own business. For Eric Garfield, he is attracted by the independence and financial rewards of running a business that cannot be matched by other career choices.

Upon exploring their different potential pathways, they have narrowed down their option to the opportunity of running a franchise of ICEDELIGHTS in the Florida region.

ICEDELIGHTS is a Boston-based chain of food outlets selling a variety of beverages, pastries and frozen desserts.

After a few business meetings between the three students and Bob Andrews, the chairman of ICEDELIGHTS, both parties have found themselves interested in coming to an agreement about opening up franchises of the store in Florida.

Financially, Paul, Mark and Eric find themselves in a position where they would be able to provide $75,000 of funding ($50,000 debt and $25,000 equity), with another $750,000 to be raised ($625,000 debt and $125,000 equity) from investors.

The questions the students find themselves having to answer include:

• Was there potential for the business in the Florida market?
• Did the franchise agreement make good business sense?
• Did the returns justify the risk?

Analysis of the situation:

For each of the stakeholders, there are issues that need to be taken into consideration.

For the students, there are personal and business reasons for wanting to take part in the venture.