| Abstract: | Unlike a lot of corporate executives, Ken Veit never longed to be his own boss. But after 30 years on the fast track, he lost his high-powered job at one of the world's largest insurance companies and was forced to take an entrepreneurial leap of faith. In 1989, Veit signed a franchise agreement to own and operate a Cartoon Corner store in a mall in Scottsdale, Arizona. Cartoon Corner was based on the Disney store idea, but it carried hundreds of products featuring cartoon characters from every movie studio. Most important, Cartoon Corner offered extensive training and an elaborate management support system for its franchisees. The company planned to franchise 100 stores over the next few years, then go public. If all went well, its young executives claimed, the Cartoon Corner chain would build a market valuation of up to $100 million by the mid-1990s. In addition, the mall, which was in the planning stages when Veit signed on, was supposed to become a new kind of entertainment mall, with seven movie theaters, a space-flight simulator, and a shark-filled aquarium. It had all sounded too good to be true--and it was. Despite Veit's careful forecasting, he suffered a series of unexpected catastrophes. The mall failed to keep its promises. The franchisor lost its venture capital. The Gulf War dried up retail traffic. But it was too late to back out. Veit went forward on his own, truly alone for the first time in his life. When the mall and his store finally opened in May 1991, they did so in the midst of a recession. Despite the inspirational stories of other former executives, Veit has learned that the life of an entrepreneur is not all it's cracked up to be. As he notes, "I began with well-above-average experience, a proven concept, and excellent capitalization, yet in my case, personal bankruptcy remains a distinct possibility." |
