1. write an executive summary in 4-6

sentences

2. write a problem statement in 3 sentences

3. develop 3-4 alternatives to solve the issue & how

4. what is the ideal solution & why

5. create a timeline with recommendations

please answer all these quwsrjons according to the case study - will thumbs up!!!!

the pro the co SL CASE 10 was a fun and unique way to com versary of National Ice Cream Month DIPPIN' DOTS: IS THE FUTURE FROZEN? Dippin' Dots Mas produced and distributed its tiny Nash frozen beads of ice cream, yogurt, sherbet, and flavored lee products since microbiologist Curt Jones invented the cryogenic process in 1988 Available in many tastes and types-Original Dots, Dots Cream, Coffee and Dot Treats-Dippin Dore innovative take on frozen food has changed some portion of the publie's way of looking af ice cream, Made at the company's production facility in meals. Paducah. Kentucky Dippin' Dots unique frozen products are distributed in all 50 states and Il countries At the beginning of 2017. Dippin" Dots had experi- enced a steep increase in total sales and was involved in numerous lucrative developments. Since being acquired by Fischer Enterprises in 2012. Dippin' Dots had pursued a multipronged distribution strategy of establishing partner ships with other renowned amusement destinations such for budding entrepreneurs. as Philadelphia Zoa Chuck E Cheese, and several premier parks. The new distribution strategy also included a part- Dership that involved co-branding between Dippin' Dots and Doc Popcorn, which increased the product presence munity events (eg, fairs and festivals). in nearly 7,000 convenience stores around the U.S. Many challenges remained, however, for the company to expand internationally and achieve organic growth instead of struc turing partnership and co-branding contracts The company was bailed out of bankruptcy in 2012. Corn Dippin' Dots, and Dinner Dots 100 C The company had launched the Monster 2014. The Monster Munch line included themed navors with what the company ca VOIN, Crazy names and some CTY TO Dinner Dots line included dot size portions The company promoted the low cost ibility of its franchising options. In an interview Mong: Steve Rothenstein. Dippin Dos dienos chising, said the company had a lot of opportune a variety of business models. With a franchi or only $15,000, the company offered an ODAM Dippin' Dots was flexible with alternative det els in addition to its more traditional back locations. These included kiosks at malls and What remained to be seen was whether all the Tages, innovations, and fixes would have a las on reversing the softness in company revenues and financials a much needed boost. Were these chance to the product portfolio, promotions, and busi There seemed a lot of potential to grow Dippin' Dots at that sion efforts clever ways of growing the business, last-ditch effort before the end? Despite the intro time. The vision and creativity of the company founder and CEO, Curt Jones, appeared to be complemented perfectly innovative new products, record setting promotion by the business acumen and experience of its president and enticing franchise expansion opportunities , the late of the company remained uncertain Scott Fischer Recently, Dippin' Dots had added five new franchises within the U.S., increasing the total number of franchises Company Overview from 130 in 2015 to 135 in 2016. However, the number of in May 2012. Dippin' Dots LLC, a newly formed Dippin' Dots U.S. franchises was not growing steadily, and Oklahoma and funded by private capital the number of international franchises remained stagnant. acquired the Paducah, Kentucky-based Dippin' Dots Inc A year earlier. Dippin' Dots had celebrated the 30th A motion to approve the proposed sale was filed in A anniversary of National Ice Cream Month** by attempting to set a new world record in the world of ice cream. Dippin' In November 2011. Dippin' Dots Inc. had filed for Chapter 2012 in the U.S. Bankruptcy Court in Louisville, Kentus Dots, the maker of the iconic flash-frozen ice cream and frozen treats, achieved a Guinness World Record title for 11 bankruptcy protection in federal court in Kentucky list the number of ice cream cups prepared by a team of five in a combination of reasons, including owing millions to let three minutes. Curt Jones, Dippin' Dots founder and CEO operating costs and plummeting sales. Despite its un ers from costly patent litigation, as well as having increased Dippin' Dots had been encountering abysmal revenues This case was prepared by Professor Alas B Elsner of Pace University and graduate student Brian R. Callaha and Saad Nazir of Pace University sa having trouble maintaining attention in the market. Feli ** July was designated National Ice Cream Month by the US gove pany base was part of the record setting team. Our record attempi twist on the classic frozen novelty, prior to the acquisto basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative station. Copyright 2017 Alan B. Elsner 1984 C58 CASE 10 DIPPIN' DOTS: IS THE FUTURE FROZEN? shortly after Fischer said here the company had looked to indietrow or blended with Frappe beads to make a Dippin E promotions, and button clots the hope for a urnaround. In the bankruptcy in the twist y sted about $20.2 million and more than Dot Proppe. Jones's once kid carpeted dots now had a very 51 minon in liabilities. The acquisition approved Jones was thinking about more id friendly treats, too Dippin Dots employed apply 170 workers at its For years Jones had been thinking of coming out with low calore, low-fat Dippin' Dots that could meet the nutrition Alle Paducah, Kentucky and Scott Fischer, president be sold at the schools. The result was "Chill" a los requirements and regulations set by public schools and thus of Dppi Dots LLC. had no particular plan to move the dib or let po any existing employees. Dippin Dots LLC Wiated with the existing Dippin' Dots Inc. entity calole alternative to ice cream. Dippin' Dots Chille was a low-fat frozen beaded dessert made with Travia an all- natural wweetener. This healthier alternative to Ice cream We are looking forward to working with the Dippin was also an excellent source of vitamin C It was avail pande able in three flavors: Sour Blue Ratz, Wango Rainbo, and the opportunity of the business and realize the Chocolate. In the words of Dippin' Dots' vice president of Coy's growth potential in a global market. We sales, Michael Barrette Od to ensure that Drippin' Dosseclaims We're starting to dibute Chilta through the vending is status of as a novelty of the past, but as the ice chanel We already have two contracts under way cream or the future. This transaction has become and expect to get more. Vending companies know and very equitable solution to the parties involved, and we love the Dippin' Dotstrand. With Chills and other expect a very smooth transition products, it's a great opportunity for them. Schools Fischer said they had taken the opportunity to acquire need that too. They ve thrown out a lot of products in recent times that have no nutritional value. So we Dupin Dots Inc, in order to rescue the frozen novelty and feel bullish about Chill Let it afloat Fischer added: An Innovative Product We are koking forward to rolling up our sleeves and personally meeting with all of the employees, The company's chief operation was the sale or BB-sized pel franchises, and business associates of the company lets or flash frozen ice cream in some two-dozen flavors to d moving forward in a very stable and productive franchisees and national accounts throughout the world. As manner. We see substantial value in the Dippin' Dots Six Flags customer commented. "I gotta say. man, they're band one of the most well-known brand names in the pretty darn good... Starts off like a rock candy but ends up like ice cream. -10 Dippin' Dots was the product of a marriage between Showing their enthusiasm for growth, in January 2013 old-fashioned handmade ice cream and space-age technok Fischer and the new executive team decided to invest over ogy Dippin' Dots were tiny round beads of ice cream made $ki million in the company's home facility in Kentucky, at super-cold temperatures served at subzero temperatures expanding operations and creating 30 new full-time jobs in a soufle cup, and eaten with a spoon. The super cold Prior to the expansion of Dippin' Dots' 170 workers, 60 freezing of Dippin Dots ice cream, done by liquid nitro lived in the Paducah area Fischer stated, "This investment gen, cryogenically locked in both Mavor and freshness in a underscores our long-term commitment to market the way that no other manufactured ice cream could offer. The wonderful Dippin' Dots brand, introduce new products to process virtually climinated the presence of trapped ice and complement existing ones, and maintain the historie ties to air, giving the ice cream a fresh flavor and a hard texture. Kentucky. Other improvements were to include purchas Not only had Jones discovered a new way of making ice in energy efficient equipment, upgrading processes, and cream, but many felt his product was more flavorful and rewating the facility richer than regular ice cream. According to Jones, "I cre Earlier, Dippin' Dots had expanded its product lineated a way ..to get a quicker freeze so the ice cream wouldn't get large ice crystals. ... About six months later, from ice creams to uniquely brewed coffees. Founder Curt I decided to quit my job and go into business." Jones took a colder than-cold instant-freezing process, Jones was a microbiologist by trade, with an area of similar to the one that made Dippin' Dots ice creams so expertise in cryogenics. His first job was researching and delectable, and redirected that technology to fresh-brewed coffee. Just as he had dubbed Dippin' Dots the "Ice Cream engineering as a microbiologist for ALLtech Inc., a bioengi- neering company based in Lexington, Kentucky. During his the Future two decades earlier, he said the new coffee days at ALLtech, Jones worked with different types of bac des* would adopt the slogan "Coffee of the Future." Real teria to find new ways of preserving them so that they could spresso was made from fresh, high-quality arabica beans be transported throughout the world. He applied a method And then flash-frozen into dots immediately, capturing the of freezing using super-cold temperatures with substances vor and aroma. Named "Forty Below Joe edible coffee." such as liquid Co, and liquid nitrogen-the same method the coffee dots could be eaten with a spoon, heated with aler and milk to make a hot "fresh-brewed coffee without CASE 10 DIPPIN DOTS: IS THE FUTURE FROZEN? 059 al macker he later used to create Dippin' Dots by family-owned businesses such as Dupu The frozen dairy industry has tradition One prices fones developed was microencapsulating Industry Overview the baby being their medium with Biquid nitrogen Others thought he was cry because nothing e that had ever been done before. Jones, however, was dairies, and a couple of large international focus on only a single sales region. Theyat convinced his idea would work. He spent months trying to perfect the process and continued to make progress. While foner was working over 80 hours a week in ALLiech labs to perfect the microencapsulating process, he made the most ential decision of his life. He took a weekend off and attended a family barbeque at his parents house so happened that his mother was making ice cream the day of the barbeque. Jones begin to reminisce about homemade ce cream prepared the slow, old-fashioned way. Then down wandered if it was possible to astfreeze ice cream. Instead of using a bacteria medium, was it possible to microencapsulate ice cream! The answer was yes. After virtually reinventing a fro zen dessert that had been around since the second century BC." Jones patented his idea to flash-freeze liquid cream. und be opened the first Dippin' Dots store. Once fran- 12 chising was offered in 2000, the "Ice Cream of the Future" could be found at thousands of shopping malls, amusement parks, water parks, fairs, and festivals worldwide. Dippin' Dots ice cream was transported coast to coast and around the world by truck, train, plane, and ship In addition to being transported in specially designed cryogenic transport tively at year for the production and of volume in traditional varieties remained lan of ice cream emerged. Despite highet manufacturers were continually charning though at a shower rate than in the previos y ucts and varieties range from super premium Rood for you varieties to cobranded pack Most novelty ice creams can be found together ket freezer cases, in small freezers in con and in carts, kiosks, or trucks a popular we cvents, Ice cream makers have been touched tion trends allecting the overall food and bever that extend beyond their products, as cente have been folded into global conglomerates The ice cream segment in the United SSS ground for two huge international consumer panies seeking to corner the ice cream market industry giants are Nestl SA of Switzerland, the largest food company, with more than $88 sales, and Unilever PLC of London and Room Over 553 billion in annual revenues. Both have boy U containers, the product was transported in refrigerated ing Into U.S. firms for quite a while, but Not already owned the Hagen-Dazs product line, molt boxes known as pallet reefers. Both types of containers ensured fast and efficient delivery to franchisees around the ante with its June 2003 merger with Dreyer's Grand Ice Cream Inc. of Oakland, California. But we se world. The product was served in 4, 5, and Bounce cups and in Sounce vending prepacks. giants dominate the U.S. ice cream industry, about small businesses continue to produce and distribute in Product Specifics treats. As one commentator has said, "Like mictober ers and small-scale chocolate makers, entrepretena Dippin' Dots flash frozen beads of ice cream typically are drawn to ice cream as a labor of love. -14 served in a cup or vending package. The ice cream averages known brands are regional ones, such as Blue Bell, but 90 calories per serving, depending on the flavor, and has 9 Brenham, Texas (see Exhibit l). grams of fat. The ice cream is produced by a patented pro cess that introduces favored liquid cream into a vat of nega Approximately $54 billion was spent on ice cream Live 320 degree liquid nitrogen, where it is flash-frozen to 2016." Ice cream and related frozen desserts are consume produce the bead or dot shape. Once frozen, the dots are col by more than 90 percent of households in the lected and either mixed with other Navors or packaged sepa States. Harry Balzar, of the market research firm NO 16 rately for delivery to retail locations. The product has to be Group, said about ice cream in general. "It's not a smal stored at subzero temperatures to maintain the consistency category, but one that has remained flat for more than of the dots. Subzero storage temperatures are achieved by decade, and is not likely to grow."1? The challenge for utilizing special equipment and freezers supplemented with dry ice. Although storage is a challenge for international ducers is to woo customers away from competitors and shipping the beads can maintain their shape for up to 15 tain a loyal fan base by continuing to innovate. The trend toward more healthy treats has spurred the major players Some of the days in their special containers. To maintain product integ. Nestle and Unilever, to develop reduced-fat productive rity and consistency, the ice cream has to be served at 10 to that still have the taste and texture of full-fat it comes stored and served at such low temperatures. it is unavailable 20 degrees below zero. A retail location has to have special Edy's/Dreyer's, Breyers, and Hagen-Dazs have all com ued to experiment, and the "slow churned, double chart in regular frozen-food cases and cannot be stored in a typi- cal household freezer. Therefore, it can be consumed only at of near a retail location, unless stored with dry ice to main tain the necessary storage temperature. A novelty product delivery system in the independe Scoop shop is the "slab concept. Employees at franchise such as Marble Slab Creamery and Cold Stone Chan work ingredients on a cold granite or marble slab to CGO CASE 10 DIPPIN DOTS: IS THE FUTURE FROZEN? IT I Toplice Cream 2016 P Dreyer 1.125 en Jerry 1995 Haagen Das Wells Bunny 4189 2042 2515 Dreyerdy's Grand Dreyer's Coy's Slowchurned Turkey 2493 2287 Blue Bell Other Unilever Bestfoods North America 2224 2072 200 400 600 800 Sales in million US dollars 1000 1200 2017 premium ice cream with the customer's choice of tasty Industry Segmentation ditives, such as crumbled cookies, fruits, and nuts, before serving it in a cup or cone. The novelty is the entertain Frozen desserts come in many forms. Each of the following ment of watching the preparation. Both chains rank in foods has its own definition, and many are standardized by Supremer's list of the top 500 franchise opportunities, federal regulations. dat commentators are skeptical or their sustainability once Ice cream consists of a mixture of dairy ingredients, the novelty wears ofl, especially since the average price is such as cream, milk, and nonfat milk, and ingredients $for a medium serving for sweetening and flavoring, such as fruits, nuts, Kona Ice, shaved ice with a wide range of flavors, was and chocolate chips. Functional ingredients, such among the popular ice cream brands of 2017. The com as stabilizers and emulsifiers, are often included in pany's primary selling points are 814 decorated shaved the product to promote proper texture and enhance Ice cream trucks that entertain customers with colorful the eating experience. By federal law, ice cream must characters and tropical music while serving ice cream contain at least 10 percent butterfat before the addition of bulky ingredients, and it must weigh a minimum of a Konalce franchisees own trucks that they bring to social 4.5 pounds to the gallon tients, schools, sports events and other community groups. Interestingly, Kona Ice experienced steady growth from Novelties are separately packaged single servings of a frozen dessert, such as ice cream sandwiches, fudge the start of the company in 2008 and ranked 127th on Entrepreneur's Franchise 500 list of 2017.20 sticks, and juice bars, which may or may not contain dairy ingredients Another prominent participant in the ice cream indus- Frozen custard or French ice cream must also contain by is Yogurtland Franchising Inc. Started in 2006, the a minimum of 10 percent butterfat as well as at least California-based company offers 16 Navors of frozen yogurt 1.4 percent egg yolk solids. along with 33 toppings. Customers are charged the price of frozen yogurt by the ounce. Yogurtland has been grow. . Sherbets have a butterfat content of between 1 and 2 percent and have a slightly higher sweetener content at a significant rate by expanding the number of fran than ice cream. Sherbet weighs a minimum of 6 chises in the U.S. as well as Venezuela, Australia, Thailand and Dubai. By 2017, the company had 326 franchises and pounds to the gallon and is flavored with either fruit or other characterizing ingredients. 184th on Entrepreneur's Franchise 500 list 21 CASE 10 DIPPIN' DOTS: IS THE FUTURE FROZEN? C51 from competitors. Gelate is characterized by an intense flavor and is served in a semifroren state. Gelato contains weteners, milk, cream, cre yolks, and flavoring Sore and water lees are similar to sherbets, but they contain no dairy ingredients A quiescently frozen confection is a frozen novelty such as a waterice novelty on a stick. Frozen yogurt consists of a mixture of dairy ingredients, such as milk and nonfat milk that have been cultured, as well as ingredients for sweetening and flavoring Dippin' Dots' Growth from Its Origins23 The growth of Dippin' Dots Inc. has been recognized in the United States and the world by industry watchdogs such as Ine magazine, which ranked Dippin' Dots as one of the 500 fastest growing companies two years in a row. in 1996 and 1997. Dippin' Dots Franchising Inc. ranked number 4 on Entrepreneur magazine's 2004 list of the top on Entrepreneur's Franchise 500 for 2004. In 2005 Dippin Dots ranked number 2 as a top new franchise opportunity and climbed to number 93 on the Franchise Soo list. By the end of 2009, Dippin' Dots had slid to the 17th posh shows the growth of tranches for Du shows the growth trajectory of TRUE and Exhibit 4 lists key corporate milestowe of Curt Jones and Dippin' Dots did y ce Despite the company's initial succes obstacles, Once Jones had perfected this wa start a company for the new process of the his family to support his endeavor. It was cream, like many new entrepreneurs he encha selling his product, and he had no protection The first obstacle confronting Jones was the locate funding to accomplish his goals. Her needed seed money to start manufacturing the to for the patent to protect his intellectual property, once the patent was granted. At the same time was perfecting the flash-freezing process for us he was also working on a Small Business Admin (SBA) loan to convert the family farm into o manufacture ethanol. However, instead of using SO new franchise companies, and it achieved the lost spot produce the alternative fuel, Jones's parents took and then a second, mortgage to help fund Jonest Thus, Jones initiated the entire venture by se company with personal and family assets Unfortunately, the money from Jones's par tion on Estrar's Franchise 500 list. And by 2017 enough to pay for only the patent and some cruce turing facilities (a liquid nitrogen tank in his pain Dippin' Dots had fallen to the 382nd position Exhibit 2 EXHIBIT 2 Dippin' Dots Franchise Growth Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owl 2016 120 13 1 2015 115 13 1 2014 116 13 1 Se www.trepreneur Year Total Employee 170 170 EXHIBIT 3 Dippin' Dots Revenue and Productivity Growth Revenues (in millions) Productivity (Revenue/Employee) 2015 $34.80 $185,000 2014 $32.85 $185.000 2013 $31.26 $180,000 2012 $29.87 $175,706 2011 $27.70 $167,879 2010 $26.70 $157,059 009 $33.90 $188,333 008 $36.00 $189,474 mm,M 165 170 180 190 incom/campaaleepindusine, author estimates 190 CASE 10 DIPPIN' DATS AWT & Dippin' Dots Milestones DingDots is establecembery in Grand Chains SOP First amusement park account debuts at Opryland USA in Nashville 9 Production facity moves to Paducah, tucky 1997 Dnaler network is established for fair, festival and commercial locations First international licensee is set up apan) 1995 New 32,000-square foot production facility Opens in Paducah Production facility expands by 20.000 square feet. company cars spot on Inc. 500 list of fastest growing private companies in the 200 Dippin' Dots Franchising Inc. is established, and first franchise is offeredigion against competitors insted to protect patient Dippin' Dots enlists 30 new franchisees. Franchise Times against Doin' Dots third in the United States in number of ice cream franchise locations, behind Baskin Robbins and Dairy Queen 20 fastest growing franchise companies, and is named the number 1 new franchise company. Dippin' Dots becomes a regular menu offering at McDonald's restaurants in the San Francisco Bay area 7 sted States 2001 Korea 2000 2005 Dippin' Dots Franchising Inc achieves 144th spot on Entrepreneur magazine's Franchise 500 list and number 4 on Entrepreneurs 2003 list of the top 50 new franchise companies. Dippin' Dots opens the Ansong manufacturing plant, 90 miles south of Seoul, South Dippin' Dots Franchising Inc, ranks number 4 on Entrepreneur's Top 50 New Franchise Companies list and achieves 101st spot on Entrepreneur magazine's Franchise 500 ist. Curt Jones and Dippin' Dots are featured on a segment of the Oprah Winfrey Show appearing in 110 countries. Dippin' Dots is featured among the top 10 ice cream palaces on the Travel Channel. Cunt Jones is quoted in Donald Trump's best-seling The Way to the Top Ip. 1311 International Dairy Foods Association names Dippin' Dots Best in Show for Dot Delicades Dippin' Dots also wins three awards for package design. Dippin' Dots Franchising Inc. ranks number 1 on Franchise Times magazine's Fast 55 list of the fastest growing young franchises in the nation, Ice cream cake and ice cream sandwiches (Dotwiches) are introduced to launch the Dot Delicacies program Company leadership is restructured. Curt Jones becomes chairman of the board. Tom Leonard becomes president of Dippin' Dots 2006 Inc. Dots 'n Cream, conventional ice cream enhanced by beads of Dippin' Dots, is introduced for market testing in Kroger stores in the Midwest. The 200th franchisee begins operations. 2007 Dippin' Dots is available in Colombia, and www.dippindots.com V.5 is launched 2008 Dippin' Dots Franchising Inc. ranks 112th on Entrepreneur's Franchise 500 list 2009 Curt Jones returns to running the day-to-day operations of the firm. Dippin' Dots slides to 175th on Entrepreneur's Franchise 500 list 2010 Dippin' Dots has 3 million Facebook fans. 2011 On November 4, 2011, Dippin' Dots files for chapter 11 bankruptcy. 2012 On May 18, 2012, the purchase of Dippin' Dots by Scott Fischer, president of Dippin' Dots LLC, is approved by U.S. Bankruptcy Court: Scott Fischer joins the team as president. 2013 Dippin Dats begins distribution to pharmacies and convenience stores to Increase access. 2014 Dippin' Dots enters Guinness World Records book for producing the largest number of ice cream cups with a team of five in 3 minutes 2016 Dippin' Dots teams up with the singer/songwriter Dawin for exclusive remix dessert. Dupla Dots Inc. Undated. History. www.dippindo.com/morfo/history.html. FUTURE FROZEN MOBIT 5 Ice Cream Franchises, 2016 Anche Start-Up Costs doing Number of Franchises $943-102 Frage yogurt, frozen beverages frozen yogurt sorbet, smoothies 7,728 ferry $156K 486% 582 t's Real Ice Cream $264K-132M on on yogurt, les, sherbets Contuille kce Cream Bars be cream Shakes, frozen yogurt 192 31526-553 2 Cane $250K-383 Ice cream cakes Cold Stone Creamery sobe! 417 $52K-467K 1,263 Cuer Franchising System Inc. custard, specialty burgers $1.84M-415M 574 Dairy Queen $361K-1.83M 6,711 becam, burgers, chicken Dippin' Dots Franchising LLC Specialty ice cream, frozen yogurt, ices. $112-377K 135 Freddy's Frozen Custard LLC Poze custard, steakburgers, hot dogs $606K-1.18M 234 FraZen. Yo $354K-588 9 $154K-542K 205 Fazen yogurt The Haagen-Dazs Shoppe Co. Inc. ke cream, frozen yogurt Happy Joe's Pizza, pasta, sandwiches, salads, frozen yogurt 5310K-1M 54 Kona Ice Shaved-ice truck $117K-136K 814 $293K-381K 343 Marble Slab Creamery ite cream, frozen yogurt, baked goods Menchie's Sel serve frozen yogurt ani Gelateria $218K-385K 496 1 $176K-242K Stato ciugo Gelato Caff $101K-455K 37 ato, beverages bar $217K-457K 23 to Sorbetto and frozen yogurt on a stick 314 Mango - Yogurt Cafe & Juice Bar den yogurt, smoothies, juices, wraps $297K-415K 47 cd's Italian Ice nice and gelato $152K-176K Continue sorry CCU for ice creamoll on me oct still has to have Main Tower a cu Dippin' Dots seems to appeal money He next had to open a store and doing so required even more money-money that Jones and his family did not have They were unable to get the SBA Loan because, while the product was novel and looked promising there was n CFO (his sister) went to an alternative lender who lent them cash at an exorbitant interest rate that was tacked on to the principal weekly if unpaid, Jones and his family opened their first store. Its summer time opening created a buzz in the community. The store was mobbed every night, and Dippin Dots was legitimized by public demand. With the innur of cash. Jones was able to move his manufacturing operation from his family's garage into a vacant warehouse. There he set up shop and personally made flash frozen ice cream for 12 hours every Dippin' Dots fans. day to supply the store After the store had been operating for a few months, the Joneses were able to secure small business loans from local banks to cover the expenses of a modest manufactur- ing plant and office. At the same time, Jones's sister made As one individual commented, "How canh continuing to call itself the ice cream of the proof that it would sell So Jones and his newly appointed the future is now, folks, and they have been and zoos since I was a little kid-2 In 2002 MeDonald's reportedly spent in Now in possession of the seed money they needed, advertising to roll out Dippin' Dots in rants in the San Francisco arca Jones called the ended if it worked favorably for both CW 2007 Dippin' Dots was available only at a few franchises in southern California. Stor tion issues were problematic, and the price uctSounces for SS. was too sleep for an bu In other marketing efforts. Dippin' Dots ning in issues of Seventeen and Nickelodeon Additionally, Dippin' Dots hired a Hollywood movie scenes, including the 2003 Cheaper by te Dom place its ice cream in the background of we calls to fairs and other events to learn whether Dippin Dots 2002 the Food Network's Summer Foods: Uosta cased Dippin Dots as one of the most unicut products could be sold at them. Luckily for the Joneses, the est ice cream treats. 'N Sync member Joey Font amusement park at Opryland in Nashville, Tennessee, was a Dippin' Dots freezer for his home after se willing to have Dippin' Dots as a vendor. Unfortunately, vending machine at a theater the band rent in the first Dippin' Dots stand was placed in front of a roller Caterers also sought Dippin' Dots for their sati coaster, and people generally did not want ice cream before A birthday party at the home of NBA Star Shaquille they went on a ride. After a few unsuccessful weeks, Jones moved the stand and business picked up considerably featured Dippin' Dots ice cream. Dippin Dots to pursue the celebrity word-of-mouth route by Eventually, the Joneses were able to move to an inline loca tion, which was similar to a store, where Dippin' Dots had producent events such as the MTV awards and other charity functions personnel and area customers Through word of mouth, interest in Curt Jones and Dippin' Dots' sales come from approximately 13. he Dippin' Dots spread. Soon other entrepreneurs contacted chisees. 90 percent of which have multiple can Jones about opening up stores to sell Dippin' Dots. A deal- Dippin' Dots has met with increased competition is te ership network was developed to sell ice cream to autho- out-of-home ice cream market. The major threats to Dipod rized vendors and provide support with equipment and Dots are other franchise operations, such as Bendy marketing. During that time, Jones employed friends in cor Hlagen-Dazs, Baskin Robbins, Carvel. Dairy Queen, at porate jobs. Dippin' Dots grew into a multimillion-dollar newcomers such as Cold Stone Creamery, Maggie company with authorized dealers operating in all 50 states and Marble Slab Creamery (see Exhibit 5). and internationally Although one dealer commented that Dippin' Det The result was a cash inflow for Dippin' Dots fran incoming franchise fees from royalties on sales for so chising. A franchise location was any mall, fair, national account, or large family entertainment center. According support, most dealers converted to the new franchise corporate means rather than for improvements in francis to the franchising information in 2016, the initial franchise foe was $15,000, with an estimated initial investment rang. tem. Dippin' Dots Franchising Inc. grandfathered ing from $112.204 to $376,950. In addition, franchisees are ing dealers' locations by issuing a franchise and required to pay a variable royalty fee. the franchise fee for the first contract period of five Many dealers had to renew their contracts in 2004 The Ice Cream of the Future many were initially apprehensive of converting to Dippin' Dots is counting on youthful exuberance to expand firm has shown franchise growth. chise system, fewer than 2 percent left the system and growth. "Our core demographic was pretty much 8. to 18-year-olds." said Terry Reeves, former corporate commu- Meltdown? nications director. "On top of that, we're starting to see a generation of parents who grew up on Dippin' Dots and are Frosty Bites and Mini Melts, Dippin' Dots brought at starting to introduce the products to their kids. Although 054 CASE 10 DIPPIN' DOTS: IS THE FUTURE FROZEN? In an attempt to counteract the copycal threats to ent infringement lawsuit against them in 2005. How Start-Up Costs $150K-439K $35SK-1. 10K 3 This winsbe D. come ice messe tri $5886-596K 5 EXHIBIT 5 Continue Franchise Rie's Italianice Matice for custard, gelate Ritter's Frozen Custard From custad Sloan's Ice Cream Ice cream, candy toys, novelty items Stricklands Froren Custard Frozen custard, ice cream, yogurt, sorbet Sub Zero Ice Cream ke cream, yogurt, custard, smoothies Tast D-Lite Frozen desserts Yogurtland Franchising Inc. Self serve frozen yogurt 51BBK-315 Cur tal the reca $161K-386K $234-423K EN 1 $310K-702K 325 2 1 Source for franchi Aroary 30,2017, www.entrepreneur.com/Tranchise categories/ficer.html during the jury trial. Dippin' Dots' testimony in support of the original patent revealed that Jones had made sales of the beaded ice cream product to over 800 customers In spite of these challenges, Jones, always that that has superfrozen dots embedded in it and we invested in R&D to create a conventionale co more than a year before submitting the patent application, conventional freezers while preserving the super dots in the ice cream. Called Dots 'n Cream Even though Jones argued that these sales were for the purpose of market testing and that the production method able in berry creme, caramel cappuccino, mint chacie orange creme de la creme, Vanilla beani, vata had subsequently been further refined, and therefore was rainbow, wild about chocolate, and banana split this deserving of a patent, the court rendered the patent non- uct was introduced for market testing in Krogers enforceable because these sales were not disclosed to the the Midwest in 2006. Thus, Dippin' Dots was finally dete Patent Office. An appeal by Dippin' Dots was denied in verge of having a take home ice cream option. As el 2007. and the patent was declared invalid. 2011, the Dots 'n Cream product was still available Mini Melts, released from the lawsuit, continued to expand its manufacturing facilities throughout the world, it a few locations but could be bought online, has plants in South Korea, the Philippines, the United Arab By 2010, Dippin' Dots had started an online Emirates, Hong Kong, and China as well as the United selling some of its products through its website. Custome Kingdom and the United States. Instead of having fran- could order ice creams, yogurts, and sherbets online, chises. Mini Melts sells dealerships for vending machines the items would be delivered to their doors. and kiosks carrying its products. One year Mini Melts A new product line introduced by Dippin' Dots was CEO Tom Mosey was nominated by Ernst and Young as Delicacies. A new product in this category was Data Entrepreneur of the Year and Mini Melts has been listed in the Inc. 500 for two separate ventures over the years. As of April 2011, there were seven different Dot Treats Site Freeze, sundaes, floats, shakes, Clusterz, Quakes, and Lot By 2009 Dippin' Dots had billed itself as the "Ice Cream of the Future" for over 20 years. However, Dippin' Dots was (lots of layers). These products were available at mesta close to a meltdown. Founder Curt Jones said that Dippin' retail locations where Dippin' Dots ice cream was soll Dots "just got hit by a perfect storm of soaring operating As mentioned earlier in this case, the company and costs and plummeting sales. Jones resumed daily control out and released a series of coffee-based products. The ver the troubled Dippin' Dots after a three-year break from fee dots" were new concepts in coffee-frappe and operations. He let go President Tom Leonard, who had run that could be eaten by spoon or could be made into her Camsonite before joining Dippin' Dots in August 2006, market Jones and his team tried to enter was the sun drinks by just adding water and milk. Again, another and Operations Vice President Dominic Fontana, who healthy ice cream. The new low-fat frozen beava de named "Chillz," made with an all-natural sweetener duced by Dippin' Dots as a healthier alternative to ad earlier spent about 17 years with Haagen-Dazs. Jones escribed the separations as amicable and regrettable. 5 CASE 10 DIPPIN DOTS: IS THE FUTURE FROZEN