“We should not approve the business loan application of the local grou

The following appeared as part of a memorandum from the loan department of the Frostbite National Bank:
“We should not approve the business loan application of the local group that wants to open a franchise outlet for the
Kool Kone chain of ice cream parlors. Frostbite is known for its cold winters, and cold weather can mean slow ice
cream sales. For example, even though Frostbite is a town of 10,000 people, it has only one ice cream spot—the
Frigid Cow. Despite the lack of competition, the Frigid Cow’s net revenues fell by 10 percent last winter.”
Discuss how well reasoned . . . etc.


The argument claims that the business loan application of the local group that wants to open a franchise outlet for the Kool Kone chain of ice cream parlors should not be approved, as Frostbite Is known for its cold winters, and cold weather can mean slow ice cream sales. Stated in this way, the argument fails to mention several key factors which could be useful in evaluating the basis of the argument. The argument relies on several assumptions and does not present any clear evidence for the same. Therefore, the argument is rather weak, unconvincing and has several flaws.

Firstly, it readily assumes that the revenue generated by a competitor brand – Frigid Cow, accurately demonstrates the demand for ice cream. This reasoning is flawed because of the dip in Frigid Cow’s revenue could be due to several other reasons. It could be possible that the sale of ice cream itself might have increased, but the selling price might have been subsidized. In such a scenario, the revenue volume undoubtedly portrays an inaccurate picture of the demand of ice cream. In addition to this, another reason could be that Frigid Cow could not produce enough ice cream this year because of a reduction in the supply of the raw materials like flavouring, cream and sugar. In such a case, even though the demand for ice cream could have possibly increased, Frigid Cow would have been unable to meet those demands. Furthermore, it is possible that Frigid Cow produces poor quality ice cream that does not appeal to the citizens of Frostbite. Undeniably, such a situation would impact the sales of Frigid Cow’s ice cream, but it does not signify that the citizens of Frostbite will not purchase good quality ice cream elsewhere.

Secondly, the argument incorrectly assumes that cold weather can mean slow sale of ice cream. This again is a weak and unsupported claim as the argument does not provide any evidence to prove the correlation between the weather and the sale of ice-cream. In fact, it fails to take into consideration several other elements that could have been useful in drawing a parallel. For instance, the calorific value of ice cream is significantly higher than other food items; this is primarily due to the high sugar content. During cold weather, the human body requires a high number of calories to keep the body warm – thus ice cream can possibly be an easy and quick way to achieve optimal body temperature. Undoubtedly, the argument fails to consider other points about ice-cream, except temperature, such as calorific value.

Finally, the argument fails to acknowledge that Kool Kone ice-cream parlors may not necessarily serve only ice-cream – in several cases, ice-cream parlors serve several other items apart from ice-creams. For instance, there are several franchises of popular ice-cream companies that serve milkshakes and sandwiches as well. In such a scenario, the entire basis of the aforementioned argument is wishful thinking rather than substantiative evidence. The sales of products at Kool Kone ice-cream parlors would thus not be related to the weather of the city.

In summary, the argument is flawed and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts. In order to assess the merits of a certain situation, it is essential to have full knowledge of all contributing factors