Home | Gossip (page 5)

Gossip

Little Caesars Veterans benefits

U.S. Veteran and Little Caesars franchisee Patricia Evans celebrates the opening for her new Little Caesars Pizza Restaurant in Valdosta, Georgia. Evans is the fifth veteran to open a store under the Little Caesars Veterans Program which offers honorably discharged, service-disabled veterans who qualify as Little Caesars franchisees a benefit of up to $68,000. Honorably discharged, non-service-disabled veterans who qualify as Little Caesars franchisees are eligible for a benefit of $10,000. http://news.yahoo.com/nphotos/slideshow/photo//080130/480/60cbb1da1d1f490eb8e41cb12271e710/

Read More »

Captain D’s Largest Franchisee Files Chapter 11 Bankruptcy

http://www.bizjournals.com/memphis/stories/2008/01/28/story4.html Serve Holdings LLC, the largest franchisee of Captain D’s restaurants in the country with 26, has filed for Chapter 11 bankruptcy to, in part, avoid payment of $245,000 to the franchisor. [note: post title amended on 2-1-2008 to more accurately identify the zee as filing….hat tip: FuwaFuwaUsagi and Michael Webster in the comments]

Read More »

Tesco in California

If you have been to Europe, particular the U.K., you know what Tesco is. It is an omnipresent, progressive grocery chain. They are opening up their first US stores starting in California. I always enjoyed Tesco’s twist on the supermarket, and I am sure they will be making a very successful entrance into the US marketplace. Labor unions don’t like Tesco’s non-union workforce, and are already starting trouble. Store layouts, customer experience and ergonomics has always interested me, and it should interest you to if you plan to open a storefront. Below is a slideshow of the store. Below is what the store looks like:

Read More »

Government Regs

Local government regulations can be an expensive pain to comply with, as this Lamar’s Donut franchisee found out with its sink: •When is the Lamar’s going to open on Johnson Drive? A sign has been up since this summer. An area Lamar’s Donuts franchisee took over the spot at 5901 Johnson Drive in May but was slowed down dealing with city regulations, such as fitting in a three-compartment sink to a 600-square-foot spot, along with other plumbing issues. The “satellite store” opened Friday. Doughnuts are made at the midtown store and then taken to Mission. The franchisees, Alan and Kimberly Foster, own the Lamar’s at 3395 Main St., as well as locations in Lee’s Summit and Greenwood, Mo.

Read More »

Relief to McDonald’s Franchisees for New Coffee

McDonald’s is planning to pick up 40% of the $100k-$150k in remodeling costs for franchisees to accommodate the new high-end coffee drinks.  The franchisees are still responsible for the equipment costs. Most franchisors are NOT so generous.

Read More »

Franchise News Roundup – 11/26/2007

Gas prices hurting delivery drivers. New owner of Shoney’s hopes to fix the brand by improving the food freshness, more upscale menu items, and upgrade the buildings. Quote: Franchisee Glenn Wood rum, who owns 21 Shoney’s in South Carolina, Georgia and Florida, said he sometimes disregarded corporate norms in the past in an attempt to boost his own profits, but now he’s looking forward to more continuity from headquarters. “Any change in the right direction is what we want,” he said. You will be seeing a lot more co-branded Noble Roman’s Pizza and Tuscano’s Italian Style Subs.  ….The Area Development agreements entered into thus far provide for the sale of a total of 868 units over multi-year periods as defined in the various individual agreements. The company will continue to market its traditional co-brand business by offering additional development territories. Additionally, the company has also sold 53 traditional co-brand franchises directly to individual franchisees… The company’s traditional co-brand franchise program would be strengthened by several operational enhancements. These enhancements include: more rigorous franchisee selection criteria; a longer, more robust training period for new franchisees; more direct franchisee involvement in the construction and marketing processes; and intensified monitoring and enforcement of operating standards and unit performance. Recognizing that these steps could slow the speed of franchise development within territories covered by existing Area Development agreements, the company intends to offer reasonable accommodations to the exclusive development time frames specified in those agreements so as to align the interests of Area Developers and the company in sustainable growth of the traditional franchise program. In Taiwan, franchisee are mostly between 30 and 40 years old.

Read More »

RETAIL Same Store Sales Update

Restaurants seem to have had a good year. The largest Pizza Hut Franchisee in the U.S., NPC International, Inc., owned 874 Pizza Hut locations during the 3rd quarter of 2007. With $173.3 million in total 3rd quarter sales, the annualized sales per store was about $793k, which translates to a monthly revenue of just over $66k, and daily sales for a 30 day month of about $2,200. Comparable sales, or sales in stores that have been open at least a year, increased 4.9 percent in the third quarter. That makes five consecutive quarters of comparable sales growth, pushing NPC’s positive comparable sales record to 35 of the last 37 quarters, Schwartz said in the release. CKE Restaurants reported Wednesday that Hardee’s same-store sales rose 3.6 percent for the four-week period ended Nov. 5, and increased 2.7 percent for the third quarter ended on the same date. In the U.S., McDonald’s same-store sales rose 5.4 percent in October, boosted by the ongoing popularity of the Monopoly game promotion, the company said. RETAIL UP: Target +4.1% Wal-Mart +0.4% TJX (TJ Maxx, Marshall’s) +3% RETAIL DOWN: Anne Taylor – 4.2% Chico’s -10.6%, Bon Ton, Cato -8%, Fred’s -0.6%, J.C. Penny -1.8%, DSW – 3%, Cache -3%, Pacific Sunwear -.08% Sharper Image -8%, Gap -8%, Nordstrom -2.4%, Macy’s -1.5%, Kohl’s -1.5%, Talbot’s -7.9% Shoe Carnival -5%,

Read More »

Wendy’s Following McDonald’s Lead on Coffee Bistro

A benefit mentioned on this blog before (see similar posts below and this McDonald’s post) of paying fees to a franchisor is their investment in research and development in the product or services offering. Wendy’s seems to be following McDonald’s lead in rolling out its own high-end coffee bistro called Javaccino. While McDonald’s seems to going the standalone route, Wendy’s is looking to carve out space in existing restaurants to offer gourmet coffee.

Read More »

Funding the Franchise through Debt or 401k

Joel Libava, blogger at FranchiseKing and owner of Franchise Selection Specialists Inc. in Cleveland (and invited blogger at this web site), was quoted in a Wall Street Journal article about franchisee funding sources: • Think About Franchising. These days, franchisers are actively targeting boomers because of their deep pockets. Entrepreneurs are generally expected to put up some of their own money to start a franchise, and boomers have lots of it on hand. But you don’t have to bet the farm. “We recommend that you use the smallest portion you can of your own money and leverage the rest,” says Joel Libava, president of Franchise Selection Specialists Inc., a franchise consulting and marketing business in Cleveland. Generally, entrepreneurs should expect to pay about 15% to 30% of the total cost of starting the franchise out of their own pocket, including the franchise fee and working capital, Mr. Libava says. For instance, Louis H. “Gig” Runge of Houston has put up about $80,000 of his savings to open a Martinizing Dry Cleaning franchise. The money has gone toward franchise and legal fees and other necessities. He plans to fund the rest of the business with a $350,000 loan guaranteed by the Small Business Administration. The loan requires him to provide an equity injection of $82,000. “It was a challenge for me to work through the tax benefits of borrowing versus just funding it myself,” says the 47-year-old Mr. Runge, a certified public accountant who has done a variety of financial jobs at JP Morgan Chase for the past 18 years. Mr. Runge decided that the SBA financing would help him protect his personal savings and use it as collateral to invest in other stores down the road. Here are my initial thoughts…. Leveraging (borrowing money) is a good idea so …

Read More »

Update to “What a Quiznos Franchisee Makes”

Download the Quiznos Profit Spreadsheet Based on the 115 comments, the most popular post on FranchisePundit.com has been What a Quizos Franchisee Makes, posted on April 10, 2005. The purported author of the financial projects also founded the web site QuiznosSucks.com (don’t bother going there, it now defunt and replaced with a domain aggregator’s advertising search engine). More of his experience is posted in this forum thread (pdf) on ToastedSubs.info. Here is the main snippet: QuiznosSucks 08-10-2005, 11:35 AM Yeah, Corporate is aware of Quiznossucks.com. Richard Sauls, the fellow who is responsible for the site, is himself a former Quiznos franchisee. Corporate actually sued to force him to kill the site and lost. My own feeling is that Quiznossucks makes them a bit nervous. It was developed on a shoestring and to little fanfare, but now averages in the neighborhood of 30k hits per day. I know that ever franchisor has its share of unhappy franchisees, but the situation with Quizno’s has reached a fever-pitch. From my research, the only comparable situation I have found is UPS Store franchisees. Ultimately, the Quizno’s business model doesn’t work. particulars vary from region to region, and depend heavily upon the franchisee’s rent and debt load, but break-even for a Quizno’s store is astronomical for this type of operation. The only thing keeping this house of cards aloft are second and third owners, who buy existing stores based on cash flow, at a fraction of the cost of a new store. I actually had a Q owner in my area approach me to see if i was interested in buying his store. The store was 3 years old, and he was running at break-even for the first year-and-a-half, with sales around 6700 per week. The Q opened a store near him (you have …

Read More »

It’s Official: McDonald’s to offer Specialty Coffee in all Stores

McDonald’s is planning to offer lattes, cappuccinos and other specialty drinks in all 14,000 by 2009. Internal projections estimate a $1 billion boost in sales. What is the cost to franchisees to upgrade? Costs will vary, depending on the size and configuration of each restaurant. Franchisees must buy equipment to make specialty coffees, and, eventually, smoothies, as well as wall-mounted refrigerators for bottled sodas and energy drinks, and would have to remodel the counter and drive-thru service areas to make room for the equipment. A franchisee who installed the new beverage equipment as part of a company test pegged the cost at $100,000 per restaurant, according to notes from a meeting of restaurant owners in August. McDonald’s hopes to equip 1,500 restaurants to sell the new drinks by the yearend, with the rest on board by late 2008, the planning documents indicate. It’s the biggest change for McDonald’s since it overhauled its cooking procedures in the late 1990s to make sandwiches to order, says Dennis Lombardi, a restaurant consultant with WD Partners in Ohio. As it rolled out that plan — the Made for You campaign — McDonald’s agreed to pay half of the estimated $25,000 per restaurant in equipment expenses for franchisees. But when the costs for the program exceeded the estimates in some restaurants, it caused hard feelings among some franchisees. The test market numbers looked good: In test markets including California, Georgia, Michigan and Texas, specialty coffee has increased customer traffic by 44% a week, an August memo from a franchisee group shows. The initial tests show the new plan doesn’t require more employees or slow down service. Specialty beverages such as lattes have much higher profit margins than sandwiches. Sales in this new beverage category could rise by 90% in the next five years, generating …

Read More »

Geek Perspective: Can a Gaming Cafe be Successful?

The tech-savvy community at Slashdot.org in 2006 had an interesting post and comments on the viability of a Gaming Cafe and what branding, culture and services have shown to work. Re:Yes we have one. (Score:5, Insightful) by Orangejesus (898961) on Friday August 11, @11:56PM (#15893072) you have to understand that most people don’t go to gaming cafes for the games perse, they go for the social interaction, they go to play with their friends and be able to yell at them, they go to hang out with people with similar intrests. I have a better PC than the local place I go to game at and so do most of my friends, but it’s easier to spend a few bucks and just go to the gaming place down the street than drag a bunch of computers around and fool with networking them and making sure everyone has the same version of what we want to play and working cd keys and ect. the gaming place I go to is open 24/7 and after 5 hours is free, (5 an hour) So it’s pretty common for us to just go and set up shop and do an overnight there playing till the wee hours of the morning. When I was on break from college one summer about 6 of us litterally lived up there for almost a week straight sleeping on the couches and ordering pizza. I mean we probably didn’t smell very good by the end of the week but it still ranks as one of the most fun times i’ve ever had. The key to a good gaming place is to make it somewhere that people just want to go to hang out and escape and not be bugged. I don’t know how long this place will last …

Read More »

GameStop to Franchise

Acquisition monster GameStop (they have merged with Software Etc., Babbages, Gamesworld, Funcoland, EB Games) looks like it is planning to begin franchising next year. Our forum mavens have heard the confirmed rumors and preparations at GameStop’s annual gobal manager’s conference in Vegas this weekend. From the forum: Quote from: brem on August 27, 2007, 05:07:11 PM GameStop Offering Franchises? I’ve been in the video game industry a while and thinking about a franchise and just heard from a well connected distributor contact of mine in the business that GameStop’s looking at starting to sell franchises for their stores in the near future. As the dominant game retailer, I wonder what that will do to other video game franchisors that have to deal with all GameStop’s aggressive competitive marketing and their volume cost advantages with game manufacturers. Need more info on pricing, etc, but this might be my way in — seems smart to join forces with the giant instead of trying to compete against it. Well, here we go. I’m out at GameStop’s annual gobal manager’s conference in Vegas this weekend with several of the other distributors / industry players and heard other sources rumbling about GameStop’s plans to start franchising (prepresents new income opportunities for many in the business to set up franchise service networks to work with them). After the second source discussed it, I’m trying to find out where the sign-up list is. The industry players are apparently a little dissapointed because it requires dealing with “onesie / twosies” versus one stop shopping for consolidated groups, but apparently GameStop’s not doing what a lot of the more sophisticated franchisors like Pizza Hut do and only sell franshises to massive, deep pocket franchise groups that can afford to buy up a whole cities worth of stores (although …

Read More »

Tough Competition: Just Fresh Kitchen Café

On Donnie Deutch I just saw an interview with the new CEO of Just Fresh Kitchen Café, Dana Sinkler, who previously was a chef at a four-star NY restaurant and coincidentally founded and sold for $25 million the Terra Vegetable Chip.  Dana was previously a franchisee and has spent the past year revamping the menu launching the Kitchen Cafe concept, characterizing it as an innovator in Fine Casual Dining. The new Kitchen Cafe menu looks ideal for my increasingly healthy-focused palate (South Beach Diet / Body for Life style diet foods – salmon, shrimp filled omelettes, marinated chicken, veggies…you get the point).  And, it takes the focus off the cookie-bread centered menus.  Last I read there were 73 franchises under contract, mostly the Carolinas and Georgia. The restaurant claims to provide a fresh, great-tasting food and the atmosphere of a table service restaurant with the speed and pricing of a quick service restaurant – all in a setting that’s friendly to the senses and the environment. Why would I spend time writing about this place? Because it shows what can be done when the franchisor-owners are willing to take a risk and let a successful entrepreneur and chef take the lead.  This brand was suffering the past 10 years but now the new Kitchen Cafe concept extention seems to have the right menu, management and financial backing to expand at will, raising the bar above Panera Bread on gourmet fresh food and fine dining food in a fast casual atmosphere.  See below for examples of what the brand and food looks like.

Read More »

McCafe = Coffee + Soups +Sandwiches + Pastries

I don’t know anybody who hates McDonald’s coffee the way some hate Starbucks coffee (mostly they say it is too strong or bitter). Nevertheless, McDonald’s is testing the McCafe concept in Japan. The company opened 15 “McCafe” cafe-style outlets in and around Tokyo, aiming at catering to a wider range of customers and serving soft drinks, soups, sandwiches, pastries and ice creams. 10 McCafe’s were opened inside existing traditional McDonald’s restaurants, while the rest were launched by renovating smaller restaurants. It looks exactly like the Starbucks tucked in the corner of Target, or the cafes in Barnes & Noble.  From the photo, you can clearly see the snacks are well above the quality of the hot apple pocket pie served by McDonald’s – you can see large cakes (carrot cake), danishes, and other pastries you expect to find in a Panera Bread bakery, albeit none of the goodies are baked onsite at McCafe.  I am sure this has been in the works for many years, and was confirmed to launch as a competitive response to Dunkin’ Donuts successful coffee brand upgrade in recent years.

Read More »