Fill in order details

  • Submit your instructions
    to writers for free!

Chat with the writer

  • Chat with preferred expert writers
  • Request a preview of your paper
    from them for free

Editing

  • Project edited by the quality evaluation department

Download Your Completed Project

  • Download the completed project from your account or have it sent to your email address

Read the case study below.  You will need to answer the 3 questions at the end of the case study.  Your final submission will be 3-5 pages in length using APA format.  You will also need to incorporate a minimum of 3 web sources in your response.

Read the case study below.  You will need to answer the 3 questions at the end of the case study.  Your final submission will be 3-5 pages in length using APA format.  You will also need to incorporate a minimum of 3 web sources in your response.

Case: “A Cautionary Tale”

For 29 years, Jan Lee had thrived in the corporate environment at international giant IBM. When she decided that it was time for a career change, she knew she wanted to work in something completely different from the computer industry. She also knew that she had grown accustomed to having the support and guidance of a management team throughout her career and wanted that assistance to continue. That’s why a franchise seemed to be the ideal solution for her second career. After evaluating several franchise opportunities, Lee decided to open a Slender Lady diet and exercise outlet near her home in Hawthorn Woods, Illinois, a Chicago suburb. “I was attracted to this business because it was about helping people, especially women, be healthier,” she says.

Lee paid a $30,000 franchise fee and began getting her business ready to open. The franchiser also convinced Lee to reserve five other franchise territories in the surrounding area at a cost of $5,000 each so that she could open franchises there once she was able to get her initial location established. Lee soon discovered that the $30,000 franchise fee she paid for her first outlet was just the tip of the iceberg.

She paid $40,000 to land a storefront location in an upscale mall that attracted many of her target customers. Signs and décor cost Lee another $9,000, and other expenses that she had not expected constantly cropped up. “Even the music you’re supposed to play had to be downloaded from a certain source, and that cost extra,” she says. “There was one expense after another that wasn’t mentioned in the initial estimates—$10,000 in advertising, then payroll taxes—or payroll period. To get new customers, I had to hire a salesperson, who cost me $2,500 a month. That wasn’t mentioned anywhere.”

Lee was expecting to get lots of support from the franchiser, but she says that the company provided her with very little management and marketing assistance. She says the franchiser’s idea of marketing was to use drop boxes located in nearby businesses, into which prospective customers could deposit information cards. Lee found the boxes to be of little value to her franchise’s marketing efforts. “They’d be full of gum wrappers,” she says. When she contacted the franchiser about the problems she was encountering, she says their response was, “Keep using the drop boxes.”

As time went on and expenses mounted, Lee ran through the entire $100,000 she had saved from working at IBM. She took out a home equity loan to keep her franchise afloat, but by then a new Curves franchise had opened nearby, and new customers were increasingly more difficult to come by. Just as she did in her corporate career when things got tough, Lee responded by working harder and longer. She was spending 12 hours per day on the phone contacting people who had signed up as customers and then dropped out. “Nothing in my corporate life prepared me for this,” she says. “I was exhausted and depressed all the time.”

Lee soon hit the cap on her home equity line of credit, but because her franchise was operating at a loss, she could not afford to repay the loan. She was about to lose her home, and her marriage was failing. A few months later, Lee signed the franchise over to one of her employees for $1. “I just wanted out,” she says.

When Lee called the Slender Lady headquarters to ask about getting a refund on the $25,000 she had put up to reserve the right to develop the other five territories, the franchiser declined. She learned that her options had expired and that the franchiser already had sold two of the territories to other franchisees. Bruce Sharpe, CEO of Slender Lady, says, “There is a time limit clearly stated in the contract. If you don’t use the territory within 12 months, you lose it, and you don’t get a refund because you have tied up that territory for that time.”

Lee admits that she learned a valuable—and expensive—lesson. Those who have succeeded at franchising emphasize the importance of researching the franchise opportunity and the potential for the market you are considering entering before taking the plunge.

Before Terry Tryon, a 30–year veteran of the insurance industry, purchased a Tutor Time daycare franchise in Wyomissing, Pennsylvania, he investigated the franchiser and the local market thoroughly. “I looked at statistics on the rising need for child care in two–income families, and then I looked at this part of Pennsylvania to see what demand was and who my competitors were likely to be,” says Tryon. “A gut feeling is fine, but the more knowledge you have, the better off you are. I also talked to lots of other franchisees, some of whom had succeeded and some of whom had failed. I got more insights from the ones who failed.”

Source: Adapted from Anne Fisher, “Risk Reward,” FSB, December 2005/January 2006, pp. 45–61.

Questions:

  1. What should Jan Lee have done differently before purchasing her Slender Lady Franchise?
  2. Suppose that a friend tells you that he is considering purchasing a franchise and asks for your advice about the steps he should take to ensure that he makes the right decisions.  What would you tell him?
  3. Summarize the advantages and disadvantages your friend is likely to experience if he buys a franchise.

What our customers say
_____

Ishita M.Ishita M.
Great Job! Thank you so much for your work. You got it done faster than I imagined and everything is perfect. Will definitely be using you again!
Megan J.Megan J.
"As a wife, mother, and full-time student, I was struggling to try to go back to school and take care of my responsibilities. Sometimes you just need a little help, and I appreciate all the help I have gotten from Academic Research Bureau. My papers are on-time and the writers are easy to work with. Thanks for the support!"
Rajab M.Rajab M.
Universitywritingservices.com has saved me a lot of time. I was tired of taking the same classes many times over again. As an ESL student, my professors were taking points off of my assignments for my grammar mistakes. It made it very hard to feel encouraged to continue with my studies. Thankful for having found an answer for better grades."
Frank N.Frank N.
As a working student, I just really don't have the time to write paper after paper and complete assignment after assignment. Working full-time and going to school was nearly impossible until I was able to feel comfortable with the writers on this site. They make me feel secure enough to trust them with my papers. While I'm busy with life, they are busy writing my papers. They always do an outstanding job!
Courtney B.Courtney B.
Thank you! You were really patient with me and my needs. This was my first time using you guys, however, I will definitely be using you again!
John H.John H.
I cannot tell you enough how amazing your company is! Your writers are superb, on time, excellent content, so very thankful you reached out to me that day! Lifesaver for sure! Couldn’t be happier with the results I’ve gotten from my first 2 papers with you, I have 4 papers left to go and I’ll be using your company for them all!
Rebecca T.Rebecca T.
After I ordered a dissertation from your writing service, the first paper that I was given did not met my professor’s demand. I set the paper on revision and the writer made the revision for free meeting all my requirements and I was very satisfied
Thomas R.Thomas R.
I was shocked by how your writers managed to deliver my paper on time, and I was among the best in our class in that paper. Thank you so much and I will never hesitate to use you
error: protected!!