The ICEDELIGHTS case brings up several important issues an entrepreneur and a potential franchise owner should consider. It also provides for a study in common sense thinking when evaluating a potential business idea. The main issue at hand is whether the team of Paul Rogers, Mark Daniels and Eric Garfield should invest in a franchise chain of ICEDELIGHTS stores throughout Florida. Furthermore, if they do invest, how big should the initial investment be, and how should they deal with outside funding.
The group has an impressive set of resumes, the drive, and ambition to potentially ull the business off. However, there were several red flags with the current business proposal that pose a significant threat to the success of ICEDELIGHTS, and for those reasons, I would not recommend moving forward with the franchise as planned. The main concerns are outlined below: The ICEDELIGHTS corporate team may not be 100% willing or capable to expand to Florida in a way that will set Rogers, Daniel and Garfield up for success.
ICEDELIGHTS has not proven yet that it can be successful outside of the Northeast or with cross-country franchise operations. The ranchises in California and Oregon are not yet up and running and this is a very sizable investment required on an unproven gamble. Rogers, Daniel and Garfield may be swept up in the excitement of opening a business franchise, and ignoring several pertinent facts and issues.
They will not have time to fully vet the real estate market, competition, the main threats, and other potential concerns before they have to sign the agreement with ICEDELIGHTS. There is already some infighting among the potential owners and differences in opinion that threatens the management eam. Mark Daniels appears to be the voice of caution for the group and his concerns are not being taken well by the rest of the team. This infghting could only potentially get worse.
It is somewhat suspect that ICEDELIGHTS corporate team would ignore the dozens of other interested parties (who all have more retail experience than the Harvard team) in favor of going with Rogers, Daniel and Garfield. I would advise that Rogers, Daniels and Garfield NOT sign the agreement on March 25 as it is currently structured. I would suggest they ask for a three month extension o do the proper due diligence needed to get all the information that they need in order to make an educated decision as to whether to proceed.
This is not only in their best interest, but in ICEDELIGHTS’ as well. It gives ICEDELIGHTS time to see how the franchise operations in California and Oregon are faring and to learn from what works and what does not. This also gives the team time to make sure Marks concerns are fully vetted and to try and come to some sort of agreement amongst each other about the business’s future. Overall, right now, I do not believe they have enough information to make a
