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I’m neutral on it

The Original SoupMan and Cold Stone Creamery Franchises Team Up

Soup Kitchen International, the creators of the Zagat-rated soups of Al Yeganeh, the legendary soup man who inspired the “Soup Episode” on Seinfeld, and Cold Stone Creamery, today announced the grand opening of the first The Original SoupMan/Cold Stone Creamery at 2 Astor Place in New York, NY in early November. Recent Penn State graduate Daniel Petryszyn is opening the first hybrid, co-branded franchise that will feature both The Original SoupMan’s world-renowned soups and Cold Stone Creamery’s super-premium ice cream. Petryszyn’s Original SoupMan/Cold Stone Creamery, in addition to ice cream, will showcase Yeganeh’s 50 varieties of soup as the “centerpiece of the meal.” Each meal will be presented with a piece of fresh, crusty baguette, fresh fruit and a piece of imported chocolate — just like Al Yeganeh served it at his original shop. As Yeganeh explains it, this is simply “the way to eat.” Alongside Yeganeh’s 50 varieties of soup there will also be an extensive line of gourmet salads and sandwiches. “Customers demand choice and innovation,” said Dan Beem, Cold Stone Creamery President. “We’re pleased and excited to explore these opportunities with the Original SoupMan to introduce both the highest quality, most creative ice cream experience alongside premium, gourmet soups, all under one roof.” It was reported on Let’s Talk Franchising that  “Seinfeld’ Soup Nazi Franchises Troubled”  that disgruntled franchisees say many of the franchises didn’t make it through their first year: At least eight have closed for good. Two more have shut their doors for now, although the company said it has deals in the works to reopen them. Cross Posted at Let’s Talk Franchising

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A New Culture to Yogurt Franchises

Valerie Killifer reports in Fast Casual The culturization of yogurt  when a little-known frozen yogurt shop opened in West Hollywood in 2005, Californians from the Valley to the Hills (Beverly Hills) couldn’t get enough.Pinkberry unsettled an otherwise quiet neighborhood and gave health-minded patrons the ability to indulge. It also reinvigorated consumers’ taste for frozen yogurt. Since the launch of the TCBY franchise more than 25 years ago, frozen yogurt has experienced a pop-culture roller-coaster ride of popularity. But with the launch of several new frozen-yogurt concepts, and the success of existing custard franchises such as Culver’s, the segment has completed its latest uphill climb and is once again ready for accelerated growth. Pinkberry’s owner told the Los Angeles Times on Aug. 4, 2007, that she understands the consumer desire for low-calorie, healthy food. And she’s not alone. Concepts such as TCBY and Beautiful Brands International are banking on that same mentality for the success of and launch of their premium and frozen yogurt franchise concepts, Yovana and FreshBerry, respectively. Yovana brand manager Rob Hanson said the concept was created in response to consumer health trends and features proprietary premium and frozen yogurt offerings in addition to yogurt-based smoothies. “Yovana took TCBY’s expertise in yogurt beyond frozen yogurt and presented a healthier alternative to consumers,” Hanson said. “I think it fits very well with where consumers are going.” Yovana has four open locations, two in airport locales and two standalones, but Hanson said the concept is still in the test phase. “Really, we’re refining the concept,” he said. “We’re making sure the menu is right and everything operationally flows the way it should.” FreshBerry as well is in its infancy. The first location is slated to open in October after sitting in concept development for about a year. “The public …

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Risqué hair salon franchise enters the ring in Boston

Knockouts, a full-service salon franchise that would make Floyd the barber blush, is busting into New England.Naomi Kooker reports in the Boston Business Journal that Neko Corp., headed by Bing Yeo of Lexington, bought the rights to franchise the salons that have been dubbed the “Hooters of haircutting,” where a scantily clad “specially chosen staff of female stylists” provides professional grooming services, including haircuts, coloring, waxing, manicures, pedicures and massages for men. Yeo purchased the rights in June to develop the franchises or sub-franchise the stores in Massachusetts, Maine, New Hampshire and Vermont. He plans to open his first store in Greater Boston by the end of this year or early 2008. He is looking in Allston-Brighton, among other areas, to open the first store, though no lease is signed. The franchise agreement gives him 15 years to roll out 20 stores; but Yeo, a business consultant, said his goal is to roll out that many in five years, focusing on the eastern Massachusetts and southern New Hampshire markets. Yeo did not disclose the cost of his agreement. Knockouts’ one-time franchise fee is $20,000 per location, with a 6 percent royalty fee thereafter. A 1 percent national advertising fee is also implemented after a store opens. To date, some Knockouts franchisees have reported brisk business and profit margins exceeding 20 percent. The concept comes at a time when other salon chains geared toward men are entering Greater Boston. For example, Floyd’s 99 Barbershop opened in Boston earlier this year. However, none require the stylists’ uniforms that Knockout does. “I wouldn’t deny the sex appeal,” said Yeo, who lists his wife, Winnie Yeo, as the director of the company on his Web site. “It’s certainly part of the branding.” Yeo confirmed that the stylists, all women, are professional and certified, …

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The Franchisor’s Owner Matters

Business are bought and sold with more frequency today than ever. Franchisors tend to receive high valuation based on untapped global growth opportunities, making them more likely to be acquired by other franchisors or private equity firms looking to leverage the brand and generate cash flow. Case in point: Dunkin’ Donuts. Last year, Dunkin’ Donuts was acquired by a group of private equity firms. Their strategy is to position Dunkin’ Donuts as a higher end brand to compete with Starbucks head-to-head, including in the grocery aisles. The primary focus is to increase their return on investment, which doesn’t necessarily align the interests with their franchisees. Grocers to Sell Dunkin’ Donuts Coffee In addition to many small retailers, big-box retailers that will sell the coffee include Wal-Mart Stores Inc., Target Corp., Costco Wholesale Corp. and BJ’s Wholesale Club Inc. Also on board are drug chains CVS Caremark Corp., Rite Aid Corp. and Walgreen Co. But most of the retailers are supermarkets. The list includes Kroger Co., Pathmark Stores Inc., Albertson’s LLC, Shaw’s Supermarkets Inc., Acme Fresh Market Inc., Publix Super Markets Inc., Shop-Rite, Stop & Shop Inc., Giant Brands Inc., Roche Bros., Safeway Inc.’s Safeway and Dominick’s stores, and The Great Atlantic & Pacific Tea Co.’s A&P chain. How much of the franchisee’s sales were derived from in-unit packaged coffee sales? Probably a small portion, and the profit margins on packaged coffee beans are nowhere near the cup of coffee margin of 95%, but with the consumers bypassing the visit for a “cup of coffee” and a “pound of medium-roast beans”, same-store sales will be negatively impacted as a small portion sales shift from the franchisee to grocery. Obviously, the new owners ran the numbers and any slowdown in franchisee’s sales will be more than made up for by the …

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Bruster’s Ice Cream franchise warms to idea of co-branding with Nathans Hot Dogs

After growing a successful franchise selling desserts, Bruster’s Real Ice Cream  is ready to serve up a full meal.Tim Schooley reports in the Pittsburgh Business Times, that the Bridgewater, PA, based ice cream chain recently began a strategy to co-brand its stores with The Nathan’s Famous Corp., the publicly traded New York-based hot dog chain known for its nationally televised Fourth of July hot dog-eating contests. So far, six of Bruster’s 260 locations have become two-in-one Bruster’s/Nathan’s stores, including the region’s first in Dormont, said Dave Guido, vice president of concept development for Bruster’s. Two more area locations are slated for conversions, said Guido, estimating that 15 to 20 Bruster’s could operate jointly with Nathan’s by the end of the year. While Bruster’s only began testing the co-branding strategy in February, and the Dormont location was the pilot store, Guido sees broad potential from early sales tallies, which he declined to disclose. “The results are going to tell the tale. But early on, we’re very, very happy with how it’s gone,” said Guido, adding the company is considering co-branding with other franchises, although he declined to name them. “If we continue to get favorable results, it will be an option for everyone who is an existing store.” Randy Watts, vice president of operations for Nathan’s, sees the co-branding franchising effort as a way for Nathan’s to reach new markets through Bruster’s territory, which extends throughout the eastern United States. “It seemed like a natural synergy for the two brands to use their real estate a little better,” Watts said. “We’re the No. 1-selling all-beef premium hot dog in the world. We definitely think they have a real top-quality ice cream brand.” Co-branding is nothing new for Nathan’s, which also owns Kenny Rogers Roasters. Nathan’s also operates joint locations with …

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Interesting Idea – Auto Relocator

I came across this franchise and thought it was interesting, particularly because of the strong potential for commercial contracts with repeat business. Vehicle relocator opens Columbus office Auto Driveaway provides personal and fleet relocation services for cars and light-duty trucks, and arranges certified drivers for trucks and heavy equipment. “We’ll be a full-service office, able to move any type of vehicle that can be driven on the highway,” Schultz said in a statement.

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KnowFat Franchise Changes Its Name to UFood

KnowFat, a healthy fast casual restaurant franchise based in Massachusetts is changing its name to UFood Grill. George Naddaff Chairman and CEO of KnowFat Franchise Co. bought KnowFat Low Fat Lifestyle Grill in 2004 with Eric Spitz co-CEO and President. They are changing the name to UFood Grill, updating the menu, and redesigning the stores to capture a larger audience. To help market the UFood Grill franchises, Naddaff has signed a deal with former heavyweight champ George Foreman. The new concept and the Foreman endorsement agreement come at a time when quick-serve restaurant sales continue to climb and consumers are increasingly looking for more healthy dining options. The first UFood Grill opened in Naples, Fla., a couple of weeks ago. The KnowFat stores in Boston’s Downtown Crossing and Landmark Center, as well as the five other locations in Massachusetts, will close for two days this summer to be converted to UFood Grills. The 74 KnowFat units slated to open under eight area developers nationwide will open as UFood Grills The menu items, all without trans fats and many low-fat or no-fat, will remain largely the same with name changes for some of the products — KnowFat AirFries will become UnFries, for example. Efrem Cutler, the former executive chef at Ritz-Carlton Hotel Atlanta, is the vice president of food development. The company is selling three franchise models: a two-in-one food and retail store at about 2,500 square feet; a smaller, 2,000-square-foot model without retail; and a 1,000-square-foot mall food court model. Many of the KnowFat stores have a retail component already to them and can account for 20 percent of a store’s sales. The fast-casual segment has been averaging 15 percent to 20 percent growth over the past few years, according to food service research firm Technomic Inc. Naddaff — …

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Junk Hauler

Positive 1-800-GOT-JUNK Article Uniformed drivers remove junk from where it’s located, break it down to conserve volume, load it in the truck and haul it away. … The cost for the volume-priced service starts at $120 and goes up to $598 per truck load. The average job in Hawaii ranges from about $375 to $400. … When McDowell took over the Hawaii franchise last year, she started with two junk trucks. She’s since added a third truck and is considering purchasing a fourth vehicle. McDowell has grown her staff to five full- and part-time employees and is looking to expand. “Business has more than doubled in the last year,” McDowell said, adding that she’s found quite a need for the business in Hawaii, where many people struggle to live in small spaces or in multifamily situations. Believe it or not, the “800” franchises tend to do well and receive reasonable flow given the name of their business is their telephone number (clever).  Partnering/revenue sharing with local funeral homes, moving companies, or hardware/equipment rental stores is smart way to keep business volume high and expand with more trucks.  The laborers you can obtain inexpensively from emove.com may dampen cap the business potential, but this would be a reasonable franchise for those with a strong back and keen marketing/parntering skills.

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Secrets to Arby’s $3.5 million/year Store

Arby’s franchisee finds formula for success The keys to their success can be summed up as: Hiring reliable employees, and nurturing them so they stay consistency of product quality (linked to employees) flexibility of franchisor to permit altenative and innovative store layout Below are direct quotes for the article: Lowe attributes much of the company’s success to hiring standards almost unheard of in the restaurant industry. The company has a turnover rate of slightly above 50 percent, unusually low for the industry. Before an employee goes to work for The Restaurant Co., they undergo a psychological profile, a drug test and a criminal background check, and that’s after having gone through several interviews. … Once the company hires someone, Lowe said, the processes in the restaurant are designed to help them be successful. The company conducts employee satisfaction surveys twice a year to help spot problems. Restaurant employees also have the authority to solve a customer problem, up to $100. … “We are full-service guys running fast-food restaurants, so we look at things differently,” he said. “We focused on dinner, where a lot of quick-service restaurants focus on breakfast.” The company supported that effort with innovative restaurant designs including carpet on the floors, softer lighting, granite countertops and wooden chairs. The Short Pump restaurant even serves beer and wine, although it’s a small part of the business, Lowe said. “If you are really trying to analyze why our average unit volume is so high, dinner has a lot to do with it,” Lowe said. “Our lunch/dinner mix is about 50/50.”

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Can a Full Time Mom Effectively Run a Franchise?

This one apparently can: Party after party This mom and Picture This Party franchisee brings her twins to the parties see organizes. Her business is just party after party — children’s parties, to be exact. The Zion woman is owner of Picture This Party Inc. and a franchisee of Noah’s Ark Animal Workshop, which teaches children how to stuff their favorite animals at parties. …. “I don’t have to leave the house unless I’ve a party, and then I can take the twins with me,” she said. As owner of Picture This Party, she hosts birthday parties and other happy occasions for children. The parties usually have a theme, such as a dragon, a mermaid, Batman or a pirate, for which she furnishes costumes, balloons and cakes. She also snaps pictures at parties.

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Moms Fitness

If you thought Curves and Lady’s Fitness were as niche as the workout industry was going to get, think again. Stroller Strides At 8:45 a.m., the moms begin to arrive at the Thomas Jefferson Center. Jackets, gloves and hats are shed, children are strapped into strollers, and at 9 a.m., they’re off for a power walk around the gym. They start with a 5-minute warm-up. During their 45-minute routine, the students will go through three body-toning exercises as well as stretches, lunges and an accelerated power-stride pushing their strollers. A 10-minute abs, stretch and cool down finishes the class. Blended into the exercise routines are nursery rhymes, the chicken dance and singing of childhood favorites such as “Farmer in the Dell,” “Twinkle, Twinkle, Little Star” and “Head and Shoulders, Knees and Toes.” As mothers breeze by drinking from their water bottles, the babies in the strollers have started enjoying their bottles of breast milk and water, too. One woman breaks from the crowd, rushes to the bleachers, and digs through a diaper bag to retrieve a small package of crackers for her teething baby. Physical fitness aside, one of the fun parts of Stroller Strides is the social aspect of it, Ashley said. “While you’re at home caring for your children, you can feel a little isolated,” she said. As a result of that, Ashley has incorporated Luna Moms Club to seamlessly following the fitness class. The club includes a built-in play group that meets on Wednesdays at 10 a.m., monthly community projects and Mommy Time, which offers discussions about books, music, craft projects and an occasional night out for dinner or a movie.

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Franchisee may buy Friendly’s Ice Cream

It was reported in the Rochester Democrat & Chronicle in an article by David Tyler that the Kessler Family LLC of Brighton, NY, the largest franchisee of Friendly Ice Cream Corp., may be interested in buying the chain. The Kessler company said Monday it has retained Mastodon Ventures Inc., a merger-and-acquisition firm in Austin, Texas, to explore “strategic alternatives,” including the purchase of some or all of Friendly’s assets. The move follows Friendly’s announcement last week that it had retained Goldman Sachs & Co. to explore its own set of strategic alternatives. Friendly Ice Cream has a network of 530 franchised and company-owned restaurants and distributes ice cream at 4,500 supermarkets. The company has been in a public battle with Sardar Biglari, head of the Lion Fund and Western Sizzlin Corp., which controls about 15 percent of Friendly’s shares. Biglari and associate Philip Cooley are seeking seats on Friendly’s board. The company has also drawn criticism from 91-year-old co-founder Prestley Blake, who was 20 when he and his brother opened an ice cream shop in Springfield, Mass., during the depths of the Depression, selling double-dip cones for a nickel. Kessler Family, run by brothers Dennis and Laurence Kessler, is the largest Friendly’s franchisee, with 46 restaurants. Reached Monday, Dennis Kessler declined to comment, citing the early stage of the process. Robert Hersch, a principal in Mastodon, said the Kesslers wanted to explore options because “they believe in the Friendly’s concept.” “Most of this is up to Friendly’s,” Hersch said. Asked if the Kesslers supported Biglari’s effort, he said, “no comment.” In addition to the Friendly’s restaurants, Kessler Family owns upstate Burger King restaurants.

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Unpacking Franchise

Boston’s ”Simply Done” Unpacking Service Now Franchising The slogan of Simply Done is “Unpacking Made Easy” — and it is made easy for relocating executives, upsizing families, and downsizing seniors — even vacation homebuyers. Sounds like an interesting niche if you have prior relationships or can secure large contracts. But, emove.com, started by U-haul, is a popular eBay-style web site to find movers and strong guys to help you unload a moving truck, move furniture, etc. emove and Simply Done target different customers, and Simply Done may want to take a page form the emove strategy book and create a similar auction and peer-review web site for high-end unpacking and decorating service.

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Gaming Franchise

Play N Trade Sells 200 Video Game Store Franchises in 10 Months This is an interesting “full-service” approach to gaming. They have a “try before you buy” policy, do game console repairs, in-house tournaments, and sell all the gear a gamer needs. Selling 200 stores in 10 months (1,000 store goal in 3 years) is a dangerously fast – how can a young franchisor adequately service so many franchisees? I’m skeptical. Update March 2, 2007: Great comment by a reader: I think this concept will have legs for another 5 years, but then it will crumble. All the new game consoles and obviously the PC games are played in group mode online. Downloading patches and extended game mods are all the rage, so it only make sense to download the original game too (which PC users often do now). So, Play N Trade will live a short life much like video rental and trading. Of all business to invest in, why would you choose a product that would obviously be replaced in the near term? I’d prefer a high-end game center because many kids can’t afford the $1,500 – $3,000 for top-of-the-line gaming PCs and video cards.

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No Royalty Coffee Franchise? I Doubt it!

The Human Bean, an Oregon-based specialty coffee drive-thru franchise, recently announced in a company press release “it is expanding with 28 stores now open and area development agreements for another 110 drive-thrus in the U.S.” The Human Bean claims they are offering an attractive franchise concept that is almost unheard of in the industry: no royalty fees!!! I’m sure that is sweet music to some ears, but I suggest buyer beware. Sounds too good to be true, doesn’t it? What’s the catch?  A quick look at the FAQ off the Human Bean Website reveals: Q: What are the ongoing royalty fees? A: We do not collect a royalty fee on sales.  We earn revenues from bulk sales of coffee beans, cups, lids and other supplies to our franchisees.  Sounds like a “Tie-Buying Clause” some say the most dreaded clause in franchising.  The press release goes on to say: “Not having to pay franchise royalty fees each month means more money in the pockets of the franchisees.” Not necessarily; if the cost of the beans, cups, lids and other supplies are above market prices, then more money may not be left in franchisees pocket. I’m not passing judgment on the Human Bean, I don’t know all the details, the stores look pretty cool, and I believe in “fair trade” coffee but if it sounds too good to be true it probably is! Cross Posted at: Let’s Talk Franchising

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