The marketing function performed by most franchisors can mean the difference between a flat year-over-year sales, and 13% year-over-year decrease in sales.   For Pizza Hut’s largest franchisee, NPC, that difference in sales a massive amount of money.  Hypothetically, if the average Pizza Hut does $1.5 million in sales, then we are talking about a $195,000 difference per store.  With 1,150 stores, we’re talking about $22.4 million.  That’s a large distribution check for the owners to miss out on!

Burger King franchisees are suing their franchisor over being forced to price the double cheeseburger at maximum of $1.  Franchisees’ problem is that it costs more than $1 to make and sell.  I’m sure Burger King corporate response to the loss argument is that the total average sale involving the $1 double cheeseburger turns a profit, because on average people also buy at least a drink and fries.

I was browsing a few blogs and surprised at how many “we just make simple great burgers, fries and shakes” restaurant and franchises were popping up.  Some are going all-organic, most aren’t.  McDonald’s new higher-priced Angus beef burger is considered a response to the better burger trend.

Most everyone likes a good burger and are willing to pay up to $5 regularly for good one.  I think the new wave of better burger joints will have some staying power compared to other pure trends like tart frozen yogurt, salad or pita/wrap specialty franchises.

From what I’ve seen already from clients, these aren’t wildly profitable until you reach $1 million or more in sales per location assuming your rent is under 7% of gross sales, and that’s very difficult to do.Let’s look at one city.  

Opening in Austin in the past year were:

• Mooyah Burger & Fries
  • 
• Five Guys
  • 
• Elevation Burger
  • 
• Flip Burger
  • 
• TerraBurger
  • 
• Mighty Fine
  • 

Philadelphia Weekly put together this chart to compare the food, atmosphere, and wait times of various burger places.

A recent study lumps tanning in tanning beds in the same caustic category as arsenic and mustard gas. The tanning industry is simply a rental business, and the rental business can be very lucrative.  Just ask my hero Wayne Huizenga who made billions from starting integrated rental businesses Waste Management, Blockbuster Video, and partly Autonation.

The franchise tanning industry has been positioning itself for a reduction in the ultraviolet tanning beds with the spray tan alternative.   Most have purchase Mystic tanning beds (see video below) that can be rented in the same manner as bulb beds, plus some locations are offering spray-on artists to spray on manually that perfect tan with a high-end spraying device. 

Spray tanning has been booming most evidently in the celebrity ranks, with many celebrities even hiring their own full time spra-on tan artists.  Lindsey Lohan is even being sued for allegedly stealing the formula for her new spray tan retail line.  All this points to tan growing trend (remember, the trend is your friend) of spray tanning consumers. 

Can traditional tanning franchises offering spray tans grab a sustainable piece of this emerging spray tan market?  

In the short term, probably yes. But it will take five-figures of investment and marketing for each location.  Customers previously visited tanning salons to rent 20-minute increments on tanning beds because tanning beds were too expensive to purchase for the home.  But, consumers can now buy spray tan bottles at Walgreens for $5.  The key for the tanning salons is offering customers 1) the “spray on artists” and 2) machines that spray the perfect tan.  Self application of tanning lotions can leave a person looking laughably orange if applied to heavily or unevenly, or left on too long.  So the edge for tanning salons is to have machines and people that can give the tan glow with the spray. Until the self tan sprayers improve it application devices, such as offering inexpensive sprayers and improved formulas that tolerate lazy applicators, the tanning salons that make the investment in spray-on tanning should be able sustain themselves. 

A key to growth is attracting woman over 30 years old who have all abandoned traditional tanning salons from their justified fears of UV-light skin damage.  These women are currently spending $35 per bottle at department stores for spray tans.  Below are a few videos on spray tanning.

From Krispy Kreme’s 10-K…, focusing on smaller stores with lower overhead. I guess it took them a while to learn from Dunkin’ Donuts that selling only $.50 donuts and coffee doesnt add up to enough revenue for a large store.

The Company is working to refine its domestic store operating model to focus on small retail concept shops, including both satellite shops and shops that manufacture doughnuts but which are smaller and have lower capacity than traditional factory stores. Satellite stores in a market are provided doughnuts from a single traditional factory store or commissary at which all doughnut production for the market takes place. The objectives of the small retail concept model are to, among other things:

• reduce the investment required to produce a given level of sales and reduce operating costs by operating smaller satellite stores instead of larger, more expensive factory stores;
• achieve greater production efficiencies by centralizing doughnut production to minimize the burden of fixed costs;
• achieve greater consistency of product quality through a reduction in the number of doughnut-making locations;
• enable store employees to focus on achieving excellence in customer satisfaction and in-shop consumer experience; and
• stimulate an increase in on-premises sales of doughnuts and complementary products by increasing the number of retail distribution points to provide customers more convenient access to the Company’s products.

If you own a wing restaurant, like Wing Stop, and your in the middle of the $540k average store sales (see Item 19 of their FDD) for Wing Stop, then your costs went up $44,226 in December.  Why?  The price of wings has increased 39% since December 2008. 

You’ve probably heard about the cost savings of prefabricated modular building.  Church’s Chicken is going with a new prefab building to reduce startup costs, hopefully attracting new franchisees.

…Church’s Chicken estimates that the pre-fabricated buildings will cost 25 percent less than its traditional stand-alone structure, Brown said. The low-end of pricing for a traditional structure is about $660,000.

The modular store has a slightly smaller footprint than the store’s traditional prototype. The 1,750 square-foot building has 23 seats in the dining room, down 10 from the traditional standard.

Brown said he doesn’t see the smaller seating capacity affecting operations in most locations. The company is considering a 1,200-square-foot model to replace its small walk-up neighborhood units. It also may look into developing a larger store for regions where in-store dining is more popular.

While Church’s Chicken used modular buildings about 30 years ago, the new structures have advanced well beyond their forebears. Advances in metal extrusion and other technology have allowed for a building of equal quality to traditional construction, he said.

The modular store is designed to fit local building requirements, with each unit built according to pre-approved state building codes depending on the location.

Financing…

One program is an internally funded equipment leasing program in which the company would directly lease full equipment packages to franchisees. The leasing program, valued at $200,000-$220,000, would cover all necessary equipment, from smallwares to fryers, Brown said.

Church’s Chicken is offering an 11 percent annual rate on the seven-year leasing package — a rate equal to the corporation’s cost, Brown said. Franchisees can purchase the equipment at the end of the lease for $20,000-$30,000.

Brown said franchisees with great credit may be able to getter a better deal by purchasing the equipment with financing. But it’s a good deal for those who need to lease.

As if the sub sandwich category wasn’t crowded enough, Domino’s Pizza is adding sub sandwiches to its menu and delivery service.  The $4.99 oven-baked sub sandwiches will include classic favorites like Philly Cheese Steak and Chicken Bacon Ranch.

The move comes five months after Pizza Hut began delivering baked pasta dishes as well as pizzas. And it will be a wake-up call for sub shops Subway and Quiznos, which find themselves competing with pizza chains.

For the pizza giants, the message is clear: If pizza sales aren’t growing in a sour economy, maybe something else will. Besides the hot subs and baked pasta, some pizza chains also deliver chicken wings.

“It’s an attempt by the pizza players to try to get back into being a growth industry,” says Ron Paul, president of Technomic, a restaurant research firm. “They’ve all lost their mojo.”

They also are further conflating a fast-food world that’s grown jumbled. McDonald’s (MCD), Burger King (BKC) and Wendy’s sell salads and chicken. Subway and Dunkin’ Donuts have tried pizza. Arby’s, once roast-beef-only, now makes a killing on Market Fresh deli sandwiches and sells toasted subs.

Domino’s U.S. same-store sales fell 5.4% in the second quarter after a 5.2% decline in the first quarter.

Brandon says the move should boost Domino’s lunch business and expects lots of calls from groups of office workers. (The minimum delivery order is $8 to $10, depending on location, and delivery fees are $1 to $2.)

Rivals are unimpressed.

Pizza Hut delivers hot sandwiches regionally but is focused on growing its national pasta delivery sales, says Brian Niccol, marketing chief.

Tony Pace, marketing chief of the Subway Franchisee Advertising Fund Trust, says, “Domino’s is watching our success and wondering how to get a piece of the action.”

Half of Quiznos’ locations deliver, and two-thirds will by year’s end, says Rebecca Steinfort, senior vice president.

The trend is clearly delivery to prevent a loss of sales, and online ordering.

I’m sure they have research to support this effort, but the Better Home & Garden is expanding its brand to include real estate brokerages.I found this comment humorous considering he is the very first operating unit:

Better Homes and Gardens Real Estate unveiled its new Web site, www.bhgrealestate.com.Wilkins hopes to benefit from Better Homes and Gardens’ technology, business systems and advanced tools to help support the growth and operation of their brokerage. Those tools include business planning and strategic services; sales associate talent attraction and retention; training and career development programs; and Web tools and resources.  

From the Better Homes & Garden web site:

Key differentiators of the Better Homes and Gardens® Real Estate brand include:

• Financially oriented service platform
• National agent recruiting program
• Targeted direct-to-consumer marketing programs
• Web 2.0 principles to engage today’s consumer, along with best-in-class systems and tools
• A focus on the environment through our green initiatives
• A developing international real estate network to enhance global networking opportunities

At least their CEO is the former Chief Operating Officer for Coldwell Banker Real Estate LLC.

When I lived in Cincinnati, First Watch was the place for the “power breakfast”, where movers and shakers would gather to strategize over coffee and omletes.  Meeting with a venture capitalist or political insider?  You would likely meet them at First Watch.  There is no First Watch where I live in Chicago, but here to breakfast is big deal for meetings with local favorites the Four Seasons,  Orange, Bongo Room, and East Bank Club.

First Watch, the Florida-based chain with 76 company-owned restaurants in 11 states is planning to franchise this year.  It’s only open for breakfast and lunch, and is always located in affluent suburbs and downtowns.  Being closed for dinner, I was always skeptical that it could generate enough sales.  Apparently, that is not a problem.  Below

If the site meets our criteria, we think it’s a good time to build right now. We’ve weathered this economic climate pretty well so far. We have a very low check average [$7.50], we think we put out a high-quality product, and our value perception is high with our customers. We think that’s actually helping us. So far it’s been OK.

You’re not seeing declines in traffic or check averages?

We are not. We’re actually on our 25th straight year of same-store-sales increases. We’ve had 24. You never want to say that you’re recession proof, and we certainly don’t think we are. All we’re saying is that for the pressures that the consumer is experiencing now, we seem to be an outlet for that. We don’t know if it’s a trade from another dining occasion, trading off the expensive dinner to maybe a nice brunch on Sunday at our place. But we’ll take that.

Are you finding sites fairly easily?

No, I wouldn’t say fairly easily. We’re pretty disciplined in what we’re looking for, and we don’t like to waver from it. So to find sites that match all that criteria takes a lot of work and a lot of digging.

I will say, over the past two years, we’ve opened 11 and 14 restaurants respectively, which from a percentage basis, we were opening a large percentage of restaurants. Those stores are starting to mature now. Most of them are performing where we want them to be. Some are in markets where we didn’t have a lot of brand awareness, so we’re working a little harder to get up to our average unit volume.

Brand awareness is critical for all restaurants, as the Chief Marketing Officer confirms.  The beauty of franchising is that hopefully you can buy into an established, well-recognized brand that will immediate generate sustainable sales upon opening.

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.

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.

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

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 is ready for a reinvention of frozen yogurt,” said Carolyn Archer, senior vice president of operations for Beautiful Brands. “FreshBerry is the antithesis of the yogurt shops of the 1980s and 1990s. The whole idea is light, refreshing and really healthy. It’s the new wave of yogurt shops that’s going to hit the country.”

The berry of it all
If the success of Pinkberry is any indication, consumers are more than ready for a frozen-yogurt resurgence — and healthful toppings are leading the way.

While ice cream and gelato shops offer toppings such as gummy worms and candy bar crumbles, yogurt concepts such as Yovana, FreshBerry and Washington, D.C.-based Sweetgreen are capitalizing on fruit, nut and granola toppings trends.

Hanson said Yovana’s most popular topping is fresh fruit, which fits with the trend Beautiful Brands is seeing, too.

Darren Tristano, executive vice president for Chicago’s Technomic Information Services, said yogurt concepts are successfully capitalizing on healthful toppings instead of ones bogged down with preservatives and sugary syrups.

Unique flavors also are driving the segment.

Pinkberry only offers two flavors — plain and green tea — but there is plenty of room for innovation, Archer said.

“The Italians have been doing gelato in herbal flavors for decades,” she said. “And that’s coming over into the U.S. People are more adventurous in trying new flavors.”

Tristano also believes Korean-style yogurt concepts, such as Sweetgreen and Pinkberry, will continue to spread across the United States.

“We’ll see more of them and they’ll branch out more from the West Coast and areas popular with smoothies and ice cream and traditional frozen custard,” he said.

Pinkberry alone has 21 locations in California and New York, with plans for 50 more by the end of 2007. And another concept, Red Mango (with more than 130 locations in South Korea), made its U.S. debut this fall in Los Angeles.

Cross Posted at: Let’s Talk Franchising

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, yet need to be friendly and attractive. He conceded the short-shorts worn by Knockouts stylists in Texas may not go over well in New England, and he’s deciding on an alternative such as dresses that are worn by stylists in Atlanta. “That outfit works in terms of the girls willing to wear those, and the customers really appreciate them,” he said.

Yeo said the target demographic for customers is men, ages 18 to 55, though women and children are welcome.
Click here to find out more!

The stores, with a boxing theme, are 1,000 square feet to 1,500 square feet and feature eight to nine haircutting stations surrounded by a boxing ring. Each station has a medium-size flat-screen TV. In other states customers are offered a free beer, but Massachusetts’ stringent liquor laws prohibit that service. Complimentary nonalcoholic beverages will be offered instead.

Most haircuts cost $25 or more and include two washes, consultation and head and shoulder massages; other services cost between $3 for a beard trim to $90 for a massage.

Build-outs, which include the lease and remodeling, cost between $15,000 and $40,000. Total startup costs, including equipment, are between $90,000 and $190,000. Each store employs five to seven people.

Retailing expert and lecturer Rick Segel, based on Cape Cod, called the concept “inevitable” given the growth in the adult entertainment industry and extensions of it, such as establishments like Hooters. “If it’s done right and done professionally and tastefully … they’re a huge success. The old line, sex sells — it really does.”

“We’ve done an excellent job of not crossing the line,” said Tom Friday, CEO of Knockouts Management Company LLC, the chain’s parent company, based in Irving, Texas. He founded the concept when he opened the first store in Addison, Texas, in 2003.

Knockouts has nine locations nationwide with 123 franchises, including Yeo’s, slated to open over the next few years.

Texas-based Sports Clips Inc., another sports-themed haircutting chain geared toward men, is Knockouts’ main competitor. It currently has 447 franchised stores nationwide; it employs men and women stylists and does not require them to wear skimpy outfits.

Cross Posted at: Let’s Talk Franchising 

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 P&G coffee distribution deal.

How to Protect Yourself

The impact of brand leveraging through distribution deals and internet sales by the franchisor is increasing feverishly and should be considered when buying a franchise. There is really only one way to protect yourself. Ask the franchisor to include a cannibalization clause, or more nicely called a “territory commission” in the franchise agreement to credit or pay you as the franchisee a percentage of all sales derived in your buffered territory as compensation for your lost opportunity and lost sales, and to align your interests with the brand regardless of whether the sale transaction takes place in your store or a retail outlet.

I asked fellow New England Franchise Association member his take on the recently announced coffee distribution arrangement with Dunkin Brands and Proctor & Gamble, here is his reaction:

Mark A. Dubinsky, President of the Dunkin Donuts Independent Franchises Owners, Inc. (DDIFO) stated in an email that the DDIFO is diametrically opposed to Dunkin Brands announced program in its current format to distribute packaged Dunkin coffee in retail outlets. DDIFO firmly believes that this program will harm countless franchisees who enjoy the sales of pounds of coffee in their restaurants today.

Notwithstanding DDIFO’s objections, Dunkin’ Brands has opted to contract with Proctor & Gamble to sell Dunkin’ Donuts coffee in mass distribution channels, bypassing standard (franchisee) outlets in the process. This distribution program was created in the name of “increased brand awareness.”

DDIFO believes if the brand wanted to do better expose Dunkin’ Donuts Coffee in unrepresented or underdeveloped markets, this strategy could make considerable sense. DDIFO also feels to do so in New England, Dunkin’ Donuts oldest and mature market (with franchised restaurants approaching one retail site for every 6,000 in population), to be disingenuous, at best, or shear lunacy, at worst.

The following are comments to this program from three DDIFO members:

“It’s my opinion that Dunkin’ is trying to emulate Starbucks whose coffee is offered for sale in supermarkets,
the big difference being that Starbucks is corporately owned and Dunkin’ is 100% franchisees. It appears as if Dunkin’ wants to operate as a 100% company store (scenario) to the detriment of their franchisees.”

“I am shocked though not surprised that Dunkin’ Brands would consummate this deal with P&G. I understand the need to make consumers aware of the brand but I feel that this move will further damage the relationship between the franchisee / franchisor and erode the profitability in each and every restaurant. Dunkin’ Brands should always remember that the franchisees are the ones that made and continue to make this brand the success that it is.”

“The DDIFO should continue to communicate to its members the happenings of this deal and any changes and/ or updates that may arise. Also, I see no problem with going to the media to put our voice and reaction to the public.”

DDIFO urges Dunkin’ Brands to reconsider and correct this ill-conceived marketing strategy.

Great work, Jim!

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 Subway in Wal-Mart locations, Sbarro and Pizza Hut, among others.

Bruster’s began considering teaming with Nathan’s because it wanted a daytime component to add to its made-from-scratch ice cream, which sells better at night.

Adding Nathan’s to established Bruster’s locations has not been complicated.

Besides adding a fryer and a few other pieces of cooking equipment, as well as new signage, Bruster’s expanded its menu to include hot dogs, french fries, chicken tenders and lemonade.

Co-branding in franchising is an increasingly popular formula employed by such companies as Yum! Brands, which often operates its Pizza Hut, Taco Bell and KFC restaurants out of single locations.

“The advantage is you save money in management and personnel,” said Gary Garda, principal of Downtown-based TLC Brokers/Garda Realty, and formerly an area supervisor for Pizza Hut.

“With Yum! Brands, you have one manager managing three concepts in one location.”

Garda also said rising real estate costs made it increasingly difficult for a fast-food chain to exist on a single-menu item alone.

Cross Posted at: Let’s Talk Franchising

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.

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 — known for creating the highly successful Boston Market franchise concept — and Spitz decided to change the concept after months of focus groups and research led them to believe they were already reaching the fitness-minded consumer and needed to drop the word “fat” from their name to reach a broader audience. The new tagline is intended to attract that audience: “Feel great. Eat smart.”

In the agreement, the legendary boxer will lend his smiling mug to UFood Grill and franchises in return for an undisclosed number of shares in the company, according to Naddaff.

Cross Posted at: Let’s Talk Franchising

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.