In addition to the above-mentioned explicit questions for the future, can you identify other important questions which Farggi managers should consider in early 1995?

Question

What will be an ideal response?

Answer 1

This question does not have an explicit answer. It can be used as a device to make students think about the possibility that not all crucial strategic questions for Farggi’s future may have been explicitly raised in the text of the case. Some such important questions may be, “Are Farggi exclusive stores profitable enough? Are they profitable throughout the year? Are some more profitable than others? Why?”
The case does not have enough explicit information about these questions, but mentions that “. . . seasonal parlors, located in coastal resorts, were extremely profitable,” and that, in the case of non-seasonal stores, located in major urban areas, “. . . the key profitability factor . . . would be their performance during the difficult winter months.” It is quite obvious that, if Farggi opened its first exclusive ice cream parlor in July 1993, only a few stores were open during the ensuing 1994 winter season, and the case stops at the beginning of 1995.
These questions should make students think about the lack of accumulated historical sales and profitability records on the part of Farggi. Of course, one major critical threat to Farggi and its future smooth development would suddenly appear if some of the exclusive Farggi franchised outlets turned out to be not profitable enough for the franchisees, and some of them decided to close their franchises.
This consideration may allow instructors to raise a major question in the development of any franchise system: Has Farggi developed “a viable franchise business concept?”