The purpose of URL encoding is not to create the URL of a web site; it's to include additional text as a part of a URL. There are a handful fo characters that need to be converted in order to be interpretted correctly by the receiving server. These include &, /, ?, # and other otherwise legal url characters.
Go to any site that does encoding for you and they'll encode the ampersand. Eric Meyer's site for instance.
BTW, your single quote should be URLencoded to %27.