Ch. 5

Marketing: Placement (Distribution) What was B&J's plan to increase sales in order to make their wholesale operation profitable?

Add distributors in areas they couldn't service with their own truck

Marketing: Placement (Distribution) What distributors did B&J add in 1981? Which accounts did they sell as a result?

Ben added Sut Marshall in Conway, New Hampshire. Sut first sold B&J to Colony IGA, a nearby family-owned supermarket. He was able to put B&J into most small mom & pops he serviced. He also added sub-distributors in Maine, who had similar success. Ben also found 3-4 other small distributors in the border states around Vermont, and at the same time, expanded company truck routes to Albany, New York.

Management: Organizational Structure Why did B&J decide to hire Chico as their general manager? What did they expect of Chico while starting out in the position?

Ben didn't like the "suits" who responded to his classified ad, and Jerry was willing to hire anyone. They agreed Chico would work part-time until he sold Hunt's

Management: Organizational Structure What was Ben's organizational plan for when Jerry left? How did he go about accomplishing this plan?

Ben wanted to hire a general manager who could oversee all the phases of day-to-day operation, leaving him free to concentrate on sales and marketing. He posted a classified ad for the position locally and in the Boston Globe

Entrepreneurship & Personalities: Organizing the Business Why didn't B&J sell their company to Thomas P. Hawe?

By the time the cash offer from Hawe was received, the listing agreement with CBS had expired; Ben didn't want to sell (Maurice Purpora had convinced him that there was nothing keeping Ben from redefining the business so that it was consistent with his personal values)

Entrepreneurship & Personalities: Personal Characteristics What was Chico doing when Jerry decided to leave the business?

Chico had bought Hunt's Nightclub with 2 partners in February of 1978 (2 months before B&J opened shop). Hunt's was only a block away from the gas station, so Chico got to know B&J through their businesses

Entrepreneurship & Personalities: Personal Characteristics How was business going for Chico at Hunt's at the time of B&J's private-placement offering?

Chico was actively trying to sell Hunt's. He had owned the business for 4.5 years and had built it into what was widely considered the preeminent nightclub in the state. Both of his original partners were no longer active in the business; one bought out within the first year of operation and the second still had ownership interest but no longer worked there on a regular basis. Chico was still working until 4AM, 3-5 nights/week.

Entrepreneurship & Personalities: Personal Characteristics Where was Chico from? What was his background like?

Chico was from Queens, Long Island. He wanted to go to a rural college, so he began at the University of Vermont in the fall of 1970 as a math major. He ended up switching over to the business school after getting a D- in calculus. He enrolled in a graduate business program at USC and ended up graduating within a year. He spent most of his time between classes in the basement of the law school playing pinball or foosball. He wrote a sports column for his MBA newsletter. After graduation, he wanted to return to Vermont and open up a small business. He had actually thought about opening a homemade ice cream shop in Burlington, but came across Hunt's and decided to buy the bar instead.

Management: Organizational Structure Who took over production once Jerry left?

Cia Rochford

Management: Planning How did gas station manager Don Miller account for the influx of customers resulting from the Time magazine article?

He converted part of the Mark Mumford Dining Room into Cone Express, which served only cones in limited flavors

Management: Leadership How did Ben attempt to control scoop sizes in the gas station? How did this play out?

He harped to Don about the need to control overscooping; he put a small scale on the counter and instructed scoopers to weigh every cone Slowed down lines and alienated customers, who thought they were getting stiffed

Management: Leadership Describe Jerry's new role upon Chico's entrance.

Jeff talked Jerry into retaining 10% of the company as an investment. The remaining shares would be purchased back by the business and put into its treasury. Since there was no cash to pay him out, Jerry received a consulting agreement that paid about $16,000 annually for 10 years. He was to return to Burlington 4x/year to participate in promotions, help create advertisements, and consult as needed.

Management: Leadership What concerns did employees have about Jerry leaving?

Jerry had a closer relationship with the employees than Ben. Some worried about a loss of balance with the more accessible and approachable partner no longer involved.

Entrepreneurship & Personalities: Franchising Who bought the first B&J franchise? When? For how much? What rights did this purchase entail them to? When did it open?

June, 1981; sold to Peter & Mary Ann Palumbo for $10,000; exclusive rights for 10 years to scoop B&J within a defined territory in and around Shelburne, Vermont; opened July 31, 1981

Entrepreneurship & Personalities: Franchising How did B&J search for franchisees?

Placed classified ads under "Business Opportunities" in Free Press, then interviewed prospective franchisees

Finance, Legal & Accounting: Sources of Funds What plan did Jeff Furman come up with to get Jerry the equivalent of what he would have gotten had the deal with Hawe gone through?

Sell some of Jerry's stock to friends & relations (private-placement offering); limited to no more than 35 investors

Finance, Legal & Accounting: Sources of Funds How did B&J try to convince people to buy their stock? Did it work?

They held an info meeting in a conference room at a local motel. About 20 friends and business associates attended, and a few of Ben's longtime friends signed up for the minimum amount of stock B&J needed to sell to a single entity.

Operations: Production Location Why did B&J move out of the gas station? Where did they move?

They never had greater than a year lease on the gas station, so they figured having a longer lease would make the business more salable (when they were considering selling). They moved to another location in downtown Burlington.

Entrepreneurship & Personalities: Personal Characteristics How were Ben and Jerry feeling about their roles in the business after the Time article came out?

They were burned out from 3 years of working 16-hour days, 7 days/ week. They felt they were becoming businessmen; the business had grown well beyond the small, community-oriented ice cream shop they had set out to open. Jerry wanted to follow his girlfriend Elizabeth to Arizona for her grad school at year's end.

Entrepreneurship & Personalities: Franchising Why did B&J decide to start opening franchised scoop shops?

They weren't sure how well pints would sell out-of-state, and were concerned about covering the overhead expenses of a new plant; franchises were a guaranteed outlet for their ice cream, and since they would be owned and operated by someone else, they wouldn't have to worry about portion or cash control