Recently i had a requirement where i had to replace some special character's like &,@ from SMS body that was sent as notification.
solution is very simple and basic :-), we need to use string function replace() for this and pass the pattern to replace.
var str= "Dolce & Gabbana";|
var pat = "&";
var rtn = str.replace(pat, "%26");
We can write a business service for this and call this in WF or Script which we are using to send the SMS/EMAIL.