From the Phoenix Business Journal:

Fifteen of the fast-casual [Corner Bakery Cafe] restaurants are planned in the state under an agreement between franchisee Roland Spongberg and WKS Bakery Cafe Inc. The chain, which serves breakfast items, salads, sandwiches and desserts, has more than 100 locations in nine cities across the country.

Spongberg’s WKS Restaurant Group expects to open its first restaurant in late 2008 near Arrowhead Towne Center in Peoria. He also operates 50 El Pollo Loco and Denny’s restaurants in Southern California and Phoenix.

Corner Bakery is scattered throughout Chicago where I live and is a staple for many urban lunch-goers. It’s strategy of blanketing select cities and building local brand recognition and leveraging marketing dollars is an efficient brand-building strategy. A primary reason to become a franchisee is to leverage existing brand recognition and pool marketing resources with other franchisees, which Corner Bakery seems to have incorporated into their expansion strategy.

Franchisors must keep their UFOC’s up-to-date, and at a minimum, must be updated when:

1. The information contained in the UFOC document must be current as of the close of the franchisor’s most recent fiscal year. After the close of the year, the franchisor must prepare a revised disclosure document within 90 days.
   
2. The franchisor must update its disclosures to reflect any material changes within a reasonable time after the close of each fiscal year quarter. A material change is generally “any fact, circumstance, or set of conditions which has a substantial likelihood of influencing a reasonable franchisee or a reasonable prospective franchisee in the making of a significant decision relating to a named franchised business or which has any significant financial impact on a franchisee or prospective franchisee.”  Examples of a “material change” include:
   • changes in the franchisor’s management, corporate structure, address or interim financial statements;
   • changes to the offer itself;
   • closing or failing to renew a significant number of franchisees; and
   • the filing of material litigation or administrative proceedings.
3. Third, the FTC Rule contains specific updating requirements if a franchisor makes earnings representations. A franchisor must notify prospective franchisees of any material changes in the information contained in its attached earnings claim document prior to entering into the franchise relationship.

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/

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]

Getting permits and approvals from local boards can be tedious and overly political.  I used to work at a real estate development company that hired “expediters” to get local planning approvals pushed through. 

A Farmington, NY Dunkin Donuts franchisee is finding out the hard way what a pain this process can be.

By Billie Owens, staff writer at the Daily Messenger

Now that the old Pizza Hut building on Route 332 has been razed, it’s going to stay like that for awhile.

A Dunkin’ Donuts is planned for the site, but on Thursday code enforcement officer Floyd Kofahl put the brakes on the project.

He slapped a stop-work order on franchisee David Francisco of Canandaigua because the project differs vastly from what the permit allows. The property is owned by Farmington Realty LLC.

Francisco disputes the notion that the project differs a lot from what his permit allows. He said the only sticking point is a glass wall that he wants to put in instead of a regular one.

The permit allows renovation of the existing building to accommodate a bakery to make doughnuts and sell them. Not all Dunkin’ Donuts franchises have a bakery; most of them have the baked goods delivered from a Dunkin’ Donuts that does operate a bakery.

A bakery for doughnuts and one for pizza, as in the case of the building’s former occupant, is the same under state law. For that reason, Francisco’s plans did not require review by the Planning Board unless more than 1,000 feet were to be added to the building.

But last week, Kofahl said, Francisco informed him it would not have a bakery.
Francisco disputes this claim, too, saying he and corporate officials will make the bakery decision jointly over the next two weeks.

Clever. Pay for a survey about Super Bowl eating habits, get free publicity, get your brand associated with “healthy” and “Super Bowl”.

SUBWAY Restaurants, which has long been committed to promoting “better-for-you” meal options among both children and adults, conducted an Omnibus survey of more than 1,000 Americans regarding their Game Day snack consumption habits and learned they overeat the most during the Big Game (27%)–trailing only Thanksgiving (85%) and Christmas (61%). More than half surveyed (59%) admitted to overeating during the Big Game and reported gorging themselves on nachos, fried chicken, chicken wings, pizza and other generic “junk food.”

Methodology: An Omnibus survey conducted a telephone survey on behalf of SUBWAY(R) Restaurants of a nationally representative probability sample of households; 1,090 interviews were completed among adults ages 18+ (53 percent female, 47 percent male). Interviewing took place January 7-9, 2008.

Things will probably work out for Heartland Automotive Services Inc. of Omaha, Neb, a 438-unit Jiffy Lube franchisee filing Chapter 11 bankruptcy as it will probably sell/close underperforming and money-losing units.Chapter 11 bankruptcy, the business filing usually continues to operate while a bankruptcy court supervises the “reorganization” of the company’s contractual and debt obligations. The court can grant complete or partial relief from most of the company’s debts and its contracts, so that the company can make a fresh start. Often, if the company’s debts exceed its assets, then at the completion of bankruptcy the company’s owners (stockholders) all end up with nothing; all their rights and interests are terminated and the company’s creditors end up with ownership of the newly reorganized company. The other type of bankruptcy is chapter 7, whereby the business ceases operations and a court appointed trustee sells all of its assets and distributes the proceeds to its creditors in accordance with statutory defined priorities.The large franchisee most likely negotiated favorable terms when faced with closing or selling units, such as reduced transfer fees, low or no penalty for closing a certain number of units, delays in royalty payments when filing bankruptcy, etc.

According to a statement on Heartland’s Web site, the company filed for Chapter 11 because of what it calls a “breakdown of negotiations with Jiffy Lube International to resolve long-simmering disputes regarding the companies’ relationship” over advertising and marketing, and support from the franchisor, product pricing from JLI’s parent, Shell Oil Co., and expansion strategies.Economic pressures in the volatile gas and oil market were also cited as reasons for the filing.Heartland said it anticipates going back to the negotiating table with JLI after the initial stabilization phase of its reorganization, which was to go heard in court on Jan. 23. If settlements still can’t be reached on the issue, Heartland said it will seek a rejection of its franchise agreements and rebrand the business.Heartland said in the statement that it had $8 million in cash on hand at the time of the filing.

This is somewhat old news, but I missed it. We previously wrote about Suzanne Somer’s meal assembly business venture called “Suzanne’s Kitchen”. Well, it closed last April and was only open for a few months.

From the abbreviated archive of Lexington, KY Herald-Leader:

Apr. 19–Five months after opening, Suzanne’s Kitchen, a do-it-yourself meal preparation business represented by actress Suzanne Somers, has closed its flagship store in Tates Creek Centre. Former Gov. John Y. Brown Jr., mastermind behind the Suzanne’s Kitchen idea, said yesterday that the store closed last weekend because he wanted his business team to “revamp the whole format to get something even more convenient.”

The second Suzanne’s Kitchen store, in New Jersey, has also closed.

Brown said both would reopen, though he did not estimate when.

Culinary ability wasn’t required at Suzanne’s Kitchen. Ingredients were diced, …

Hat Tip: mysterymiss in the comments.

USA Today, world reknowned for their franchise evaluation skills (note the sarcasm) as evidence by naming Quinoz #2 in 2006, has named 7-Eleven as their #1 franchise for 2008.

7-Eleven management is very systematic and generally organized.  With so many world-wide stores, it has invested heavily in automation and technology.   Marketing partnerships are big with 7-Eleven to get people in the stores, see the Simpsons movie promos and Citibank ATMs as examples.

7-Eleven does not allow absentee-ownership, and each location generally must be  a minimum of 1,400 square feet and must be at least 1/2 mile from another 7-Eleven franchise.  Franchise fees are at least $70,000 plus typical build out costs.

The article mentions a unique system that builds “equity” in their store, so if the franchisee wants to sell, the seller can ask for a premium “goodwill” payment representing built-up equity.

Single store ownership is a way to make a living, but not make a six-figure income.

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.

I know a few people who have attended BNI meetings in Chicago, and have had a positive experience.  There is a lot of niche competition in this arena, but it could make a mildly profitable side business if you are passionate about networking, like calling and staying on top of people, and love socializing.