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Case
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Reference no. 802-081-1
Subject category: Entrepreneurship
Published by: Babson College
Originally published in: 2002
Version: 10.11.02
Length: 9 pages
Data source: Field research

Abstract

This is a two-part case. A successful entrepreneur, Jack Grumet, who specialises in establishing and then selling food franchises, enters the bagel business by buying a one-third interest in an ongoing concern operated by two brothers. The company quickly expands through franchising and in two years has 146 stores. The bagel industry is growing rapidly across the United States and it appears the entrepreneur has a major success worth millions. The company goes public on the NASDAQ and uses the proceeds to expand and to acquire competitors. Jack has an opportunity to harvest his share of the business as the company''s shares hit an all-time high in 1996. His advisors urge him to cash in chips but seeing no indication that the company or the industry is going to slow down, he decides to hold on to his interests. Soon thereafter the business is hit hard by charges of financial irregularities, the stock plummets and eventually the company goes into bankruptcyàleaving Jack with virtually nothing to show for his efforts. The teaching note includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.
Location:
Industry:
Other setting(s):
1991-2001

About

Abstract

This is a two-part case. A successful entrepreneur, Jack Grumet, who specialises in establishing and then selling food franchises, enters the bagel business by buying a one-third interest in an ongoing concern operated by two brothers. The company quickly expands through franchising and in two years has 146 stores. The bagel industry is growing rapidly across the United States and it appears the entrepreneur has a major success worth millions. The company goes public on the NASDAQ and uses the proceeds to expand and to acquire competitors. Jack has an opportunity to harvest his share of the business as the company''s shares hit an all-time high in 1996. His advisors urge him to cash in chips but seeing no indication that the company or the industry is going to slow down, he decides to hold on to his interests. Soon thereafter the business is hit hard by charges of financial irregularities, the stock plummets and eventually the company goes into bankruptcyàleaving Jack with virtually nothing to show for his efforts. The teaching note includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.

Settings

Location:
Industry:
Other setting(s):
1991-2001

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