Friendly Ice Cream Case Analysis

Profile of the Company

Friendly Ice Cream is a full service casual dining in restaurant that has a major objective to serve mid price lunch and dinner items. The items also include the ice cream desserts. At the moment, the company has around 205 units controlled by the franchises. There are several restaurants which are located in 16 states throughout the country. The company also maintains supply related operations for its manufacturing facility in the state known as Massachusetts. The company has maintained suitable revenues for themselves. Therefore, a case analysis of the Friendly Ice Cream will be discussed in detail.

Financial Analysis

The company known as Friendly Ice Cream's stock price increased from the IPO price of $18 to over $26 per share by the month of June in 1998. Though, the stock price then decreased to less than $5 per share. This was a major development as the company had to shut down most of its operations in the coming months because of the poor performance in the Stock Market. The major shareholder of the Company known as Blake had several concerns regarding this particular issue. The conditions related to the stock market deteriorated to an extent that the higher management of the company feared bankruptcy. Blake purchased many shares at this rate and it made him the largest shareholder in the company. In the subsequent months, Blake continued to have dialogue with important members in the company. It included the CEO and Chairman of the company known as Smith who had the control of the company's operations.

Smith had given an important charge to the Blake to look after the operations of the company. The reason is that Blake had always enjoyed a major stake in the company and had been associated with the company since long time ago. Though, they both were involved in a conflict with each other. There were some serious disagreements on the important issues of the company as both Smith and Blake were involved in a serious deadlock. This was not a healthy development of the company as it was already suffering from financial problems and the higher management was even having confrontation with each other. Blake started using harsh statements against the higher management of Friendly Company and openly requested for the resignation of the current CEO known as Smith. This was a serious issue and it triggered a major ...