Celebrity Execs

Inta Juice cleverly received a lot of PR by asking NFL football player Randy Moss to be a shareholder and board member. Celebrity involvement at the management level may help increase brand recognition, and brand recognition generally should be a prerequisite for franchisees before they buy into a franchise system. The buzz will probably occur for the first few franchisors that engage celebrities in this way.

I don’t like the name “Inta Juice”, though.

The company claims

Fuller said the company has received more than 50 calls about opening franchises since the company announced Moss was joining them.

“There are (currently) over 30 locations in eight states, and with the amount of leads we are getting, we’re looking to have at least 50 by the end of July,” Fuller said. “It’s due to Moss and strategic marketing and advertising. But the biggest reason is the media buzz coming from Randy’s involvement.”

American Male

“Target and dominate increasing segments” is one of the Goal Tenets of the outstanding Return Driven Strategy developed by Professor Frigo and Joel Litman (a director at Credit Suisse First Boston and Clinical Professor of Business Strategy) at the Center for Strategy, Execution, and Valuation @ DePaul University. I often use the RDS to evaluate and filter franchisors’ strategies. The RDS framework is a means for designing, developing, and evaluating business strategy that will lead to maximized financial value creation.

The American Male franchise understands this Goal Tenet, and is going after the U.S. men’s grooming market, which is expected to reach $10 billion by 2008, up 25 percent from last year. Why try to forge a customer base in a stagnant market when you can much more easily capture a portion of a new, growing market?

For a brief overview of franchises focusing on men’s grooming, check out this article.

Baking a Pizza in 5.5 minutes

Middleby’s new $55,000 WOW! oven is quite an innovation, reducing pizza baking times from 7.5 minutes to 5.5 minutes.

The WOW oven cuts a pizza’s “belt speed,” or cooking time, to five-and-a-half minutes from seven-and-a-half minutes. That means places like Jimmy John’s can serve more customers even as it advertises — and charges for — “gourmet” sandwiches, and Domino’s can deliver faster or to a wider area. The oven creates a more pleasant workplace, too, since the oven stays cooler on the outside.

It’s helping Papa John’s with a “takeout pizza in 10-minutes or less or it’s free” program.

For six years running, consumers have rated Papa John’s no. 1 in customer satisfaction among all national QSR chains in the highly regarded American Customer Satisfaction Index (ACSI). At March 26, 2006, there were 2,924 Papa John’s restaurants (509 companyowned and 2,415 franchised) operating in 49 states and 22 countries.

Here’s another article about the oven.

Quick trivia – What are the five most popular pizza toppings?
1. Pepperoni 2. Sausage 3. Mushrooms 4. Ham 5. Green Peppers

Pizza Styles

I found this article giving an overview of the different styles of pizza across the USA quite interesting. While I love Chicago style, I’m quickly becoming a fan of California style pizza. With all the popularity of speciality pizza, choosing a non-traditional style pizza franchise concept will help differentiate your menu offfering in the minds of customers, and will help you command a premium price.

Franchisor Reality Show

You know it was coming sooner or later:

Squeegee Squad wants to work with a reality-based TV production company in order to document their growth as a franchise company and expansion into high-rise window cleaning.

Franchise development will include interviewing candidates, training franchisee’s, servicing franchisee’s, promoting the franchise organization overall in order to become the first brand name window cleaning company in America.

Even if the show never materializes, it’s boosting name recognition with customers and franchisees.

Unique Strategy to Franchising

I enjoyed reading about Unique Pizza & Subs’ franchising strategy of converting a local mom-and-pop pizza shop in each town within 100 miles of a company-owned store. In theory, I imagine this can work quite well for the franchisor with the right sales team.

Panera Pizza

pepperoniPanera Bread looks to pizza to further increase sales:

The analyst day event included a showcase of management talent at key skill positions and the unveiling of the soon to be offered Crispani, a pizza-like product to be rolled-out this September.

After sampling the Crispani products, Oakes said they adhered to Panera’s “quality image” with an “upscale twist.” Management repeatedly emphasized that Crispani was part of an overall “evening strategy” geared to serve the Panera customer desiring to avoid the dinnertime delay at casual diners.

Bally’s Total Fitness tries more franchising

weightsFranchisees should obviously be cautious of the extra burden of buying into a brand that is very tarnishes with customer service issues, Bally’s Total Fitness being one of them. Currently, 30 of 390 locations are franchised. At least you’ll be able to glean some performance results from the public filings (NYSE: BFT, but ignore that the stock dropped 5.26% today). I know my father pays under $100/year because he bought a membership 15 years ago, and I refuse to give the company any more money after they failed to cancel my membership per the agreement until I made my 12th telephone call to customer support.

Franchise fee: $30k
Royalty: 4% of cash receipts
Advertising: 4% of cash receipts
Investment: ~$1.5 million (you need at least $200k liquid assets)

RSS Discussion Forum

  • Re: margins March 7, 2010
    You seem to be assuming there are profit margins.   Why is that?   Please be aware that you need to go back in time and recalculate old numbers for current lease obligations.   FuwaFuwaUsagi […]
  • Re: Searching for insights good/bad on Blimpies? March 4, 2010
    Is this the same Paul W. Steinberg who failed to pay the taxes on his franchise operations to the extent of over $33,000 with the result that NY State had to go to the expenses of issuing a series of Tax Warrants against him.  Go to:  http://appsext8.d... […]
  • margins February 28, 2010
    I am looking at a few fast food franchises and wondering what type of profit margins I should be calculating.  Guidelines? […]
  • Re: ARE CICIS PIZZA PROFITABLE February 17, 2010
    Quote from: FuwaFuwaUsagi on February 16, 2010, 05:03:15 PMThe Pundit writes:I was browsing through old posts and came across this one.  It's a great one for all to read.My reply:Thanks for the kind words Ryan, but did you up... […]
  • Re: ARE CICIS PIZZA PROFITABLE February 16, 2010
    The Pundit writes:I was browsing through old posts and came across this one.  It's a great one for all to read.My reply:Thanks for the kind words Ryan, but did you up my karma points - NOOOO!!!!!!  Cheap &(*%$&^ - LOL!!!Once a year, whether ... […]

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