Summary to “Velvet Freeze- What Should Mr. Dawson Do?”
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What should Mr. Dawson do? This article talks about Mr. Dawson, a history teacher who was considering becoming a proprietor of a roadside stand selling a frozen ice milk dessert called “Velvet Freeze”. In his Preliminary study about the Velvet Freeze market, Mr. Dawson started his interest in a frozen ice milk dessert stand when his daughter had observed the popularity of a Velvet Freeze stand in her community college that she goes to. Since then, Mr. Dawson observed the rapid growth of such outlets in Riverdale and in surrounding communities including the construction of a Velvet Freeze stand being constructed in a nearby suburb around his neighborhood.
Upon inquiry with the owner, a Mr. Miller, he revealed that he has found the operation very profitable which in fact the building under construction was his third store. Mr. Miller offered to help Mr. Dawson in acquiring a franchise by introducing him to the Velvet Freeze Organization. The Velvet Freeze Organization runs a booming business of frozen ice milk where they had outlets in 47 states as well as Cuba, Mexico, Canada, and Alaska, with arrangements currently being completed for expanding operations on a global basis.
Retail sales for the Velvet Freeze outlets in 1941 were only $60,000, but had jumped to more than $660,000,000 in 1953. Velvet Freeze stores in the United States were owner-operated on a franchise basis. In selecting a location for the stand, two business opportunities were available. One located in the town of Boylston, an established business already in operation which the present owner was offering for immediate sale. The other, to be built in the town of Shafersville, was to be constructed and ready for occupancy the first week in July. In my opinion, I suggest that Mr. Dawson choose the first offer than the latter due to the fact that Shafersville is not the best location, as the target market does not clearly match the population that the area has.
Most of its residents in Shafersville belonged to the low-middle income group rather than the more commercial location of Boylston which composes of mainly upper- middle working class visitors with approximately 19,000 population and an expected additional 500,000 from a nearby lake resort. The store is readily available that’s completely equipped and established, having already sold $ 19,740 worth of Velvet Freeze from 4,200 gallons in just half a season.
Mr. Carling’s store could be expected to sell 6,000 to 7000 gallons in the following year compared to Shafersville’s expected sales of 6,000 gallons. Rent in a Boylston store would be $175 monthly where all taxes on the land and building were already paid by the landowner. The initial selling price was $14,000 on Boylston that increased to $19,000 but later decreased to a final price of $15,000, where the cost of the construction in a brand-new store in Shaversville is $19,000.