• 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.

• Structuring the New Franchisor
• Hotel Franchise Agreements: Opportunities And Pitfalls
• O’Charley’s Franchisee Settles
• Franchisor Reality Show
• Common Areas of Dispute

I unfortunately need to board my 2-year-old beagle while I leave on trip. I shopped around thinking I would find franchise dog hotels everywhere considering I’m in downtown Chicago. I’ve discussed pet franchises like Camp Bow Wow here and here. To my surprise, in Chicago all I found were all privately owned business started by practical entrepreneurs , some being very innovative such as Stay started by dog-lover architect who said, “Why do pet boarding facilities need to be small locations with chain-link cages. He charges between $45 and $75 for one night of dog boarding, and he easily get’s that fee.

Mobile pet grooming seems to be a franchise getting attention lately. I found this Chicago-based entrepreneur that could have purchased a pet service franchise, but decided to build it herself. After a few years she added a mobile pet grooming service to her existing two Chicago pet service (grooming, boarding, walking, training) locations.

She could have paid a $25,000 franchise fee plus 6% royalties and other mandatory marketing fees to a franchisor, which may have been worth it if the business had a strong competitive advantage and high brand recognition with the target market. But, that just wasn’t the case here in Chicago.

The moral of the story is - demand a lot from franchisors. As a franchisee, you are literally making a multi-million dollar bet, while the franchisor is not at much financial risk.  You are taking on the risk that could result in bankruptcy if the franchise business projections don’t pan out or competitors can copy your poorly branded business, so require that as a franchisee you license a business model with a proven and sustainable business model, a business with high barriers to entry and difficult to duplicate business, and can provide a much higher return than your money in the market and your time working for an employer. Just being “new” or “unique” or “better looking” in a new or mature market is NOT enough. See the meal assembly industry for a perfect example of a good idea but bad business with no real protectable competitive advantage.  You should choose your business and build out your projects with the assumption that competitors with a fresher twist or lower prices will move in next door.  In the franchising industry, if a concept makes money, rest assured there will be improved copycats out within a year or two.  Can you still be certain that you’ll earn a sufficient return on your investment?  If not, keep looking for another franchise or start your own business…even if it’s a copycat.

• Structuring the New Franchisor
• Are you thinking of Franchising your Business?
• To Franchise or Not to Franchise?
• Franchise Industry Shakeout Coming? {Part 4 of 4}
• GameStop to Franchise

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%,

• 2006 First Quarter - Yummy Same Store Sales Increase
• New Englands own Papa Ginos wants a bigger slice of the national pie!
• Same-store sales roundup
• Pizza Styles
• Captain D’s Largest Franchisee Files Chapter 11 Bankruptcy

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.

• Wendy’s franchisee bids for company
• McDonald’s chickens out on Boston Market
• Advice from a McDonald’s Franchisee in U.K.
• Winner of Coffee Taste Test
• Smoothies Competition from McDonald’s

McDonald’s is the largest supplier of free wireless internet in England. I imagine a similar plan is in the works for the USA.

I’m a fan of free wifi or near free wifi (pay an extra $5 and you can have unlimited internet for the day) if you have the seaing capactiy.  I am a frequent user of free wifi in stores and think it usually makes economic sense. I go to Panera Bread and other local restaurants just for the free wifi.  In fact, many visitors will buy a coffee and snack, then in a few hours buy lunch. The idea that people will sit there all day and not spend any money is rare because people simply cannot sit and not eat for 10 hours, especially when they are in a restaurant. You will always have people who pay you $2 for a coffee and use your wifi for several hours, but most don’t.  The $20-$30 per month spent on wifi will certain pay for itself in higher net sales.

Panera Bread limits free wifi to 30 minutes during lunch times (noon - 2pm).

• Clever Way to Get Free PR
• No freebie promotional coupons or gimicks
• Geek Perspective: Can a Gaming Cafe be Successful?
• Family ditches perfect life for pizza franchise, togetherness
• Franchisors vicariously liable for their franchisees?

Franchising your business offers you some intriguing benefits:

• Attracting franchisees to invest their capital into your brand.
• Franchisees are manpower to work the business as stakeholders.
• Increased number of franchises contribute to the establishment of the brand.
• Gain royalty income without capital investment or an increase in contingent lialbility.
• Retain control of the trademark and the business format.

Before you consider franchising your business:

• Make sure the first units economics are strong and profitable.
• Then open a second unit to see if you can replicate the success of the first.
• If the second unit succeeds, try opening a unit at least an hour away. This will show you if your processes work without your being around all of the time.

If your experiment succeeds, you will be in a good position to consider franchising your business.

Cross Posted at: Let’s Talk Franchising

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• Required Facelifts & Capital Expenditures
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• The AAFD Awards Cuppy’s Coffee Franchise with Contract Accreditation

I recently interviewed John Renner, who is the Business Development Specialist for the Small Business Administration’s Office, in Cleveland. John does great work for the Veteran community, including helping Vets learn about getting into their own businesses, the many programs available, and teaching them how to get contracts for work, when they get into business.

How long have you been at the SBA, and what is your official title?

I am in my 17th year at the SBA’s Cleveland District Office.
My title is Business Development Specialist.

How does that translate to helping veterans in small business, and those wishing to get into a business of their own?

I am a generalist at the SBA, focused on making sure that all existing and prospective small businesses are aware of the variety of programs offered through the SBA. I am also the offices’ Veterans Business Officer, a charge that I take very seriously. In that capacity, I work with many Veterans groups and Veterans who own businesses to insure that they are aware of specific benefits to businesses owned by Veterans and Service-disabled Veteran-Owned small businesses. Each SBA office across the country has a person who is designated as the Veterans Representative.

I understood you won an award for your work with veterans. Can you tell us about it?

I was honored this year to be chosen as the recipient of the Stanley Mageria award. Our Office of Veterans Business Development in Washington presents this award to “recognize a Veterans Business Development Officer who has provided exemplary business assistance and services to veteran, service-disabled veteran small business owners and self-employed members of the Reserve and National Guard.” This award is the most fulfilling recognition I have received in my time with the agency.

In your experience, do veterans make good small business owners? If so, what sets them apart from other small business owners?

There is no doubt in my mind that Veterans make great entrepreneurs. Military experience teaches strong organizational skills, solid decision making processes and focuses on motivational issues. These are the same skills and characteristics that are needed for business success. An article that drives this point home can be found here http://www.inc.com/news/articles/200708/census.html

Would you please describe some of the programs available to help Vets obtain loans for their new businesses?

The SBA has a stable of loan guaranty programs that can address the majority of financing needs of small businesses. This summer we introduced a loan initiative called Patriot Express that is specifically targeted at:

Veterans, service-disabled veterans, active-duty service member’s eligible for the Military’s Transition Assistance Program, Reservists and National Guard members, current spouses of any of the above as well as spouses of active duty service personnel and, the widowed spouse of a service member or veteran who died during service or of a service-connected disability. Additional details of the Patriot Express Loan can be found at http://www.sba.gov/patriotexpress/. Of course, it is important to point out that all of our loans are bank loans with an SBA guaranty and the process always starts with a strong business plan and a relationship with a small business banker. The SBA has resource partners all over the country.

Outside of the financing programs, we also assist small businesses who are interested in selling their products and services to Federal agencies. There is currently a mandated goal that all Federal agencies spend at least 3% of their procurement budgets with service-connected disabled owned small businesses. This creates a huge opportunity.

How is the SBA gearing up for the thousands of vets that will be returning from active duty in Iraq and Afghanistan?

The agency has recently taken a much more aggressive approach to assisting Veterans and the Patriot Express and procurement programs above are the first examples of what the SBA and the entire Federal community is doing to help create and build businesses owned by our Veterans.

{This article was cross posted on Thefranchiseblog4Vets.com}

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• Franchise Industry Shakeout Coming? {Part 4 of 4}
• Sign a Rama First Franchise to Win U.S. Presidential E Award for Exporting Success
• Little Caesars Veterans benefits
• Investment Alternatives

Since Tamarac-based Puroclean began franchising in 2001 it has sold more than 180 franchises, making it one of the 50 fastest-growing concepts in the nation. The company provides mitigation, restoration and reconstruction services for damage caused by fire, water or vandalism.

Part of the company’s success is that it’s a business-to-business model — working largely with insurance agents and adjusters. That draws franchisees who might shy away from traditional sales, said Puroclean President and COO Keith Gerson.

‘’We are one of those under-the-radar opportunities that most people don’t think about,’’ he said. “But when you align all the stars in terms of what makes a good business — growth opportunity, great margins and low cost of entry — it’s just one of those rare models that is firing on all cylinders.’’

Gerson, of Puroclean, said there’s a simple formula to keep fueling the growth of a franchise: Keep the franchisees happy. In fact, some of the company’s best marketers are owners who are eager to sell the concept — which is different than selling the business, said Gerson.

If you talk to a franchisee about buying in and they say, ‘ `Gee, you want to buy a business? I’ll sell you mine,’ ‘’ be leery, he said.

Cross Posted at: Let’s Talk Franchising

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