Fantastic Sams, a full service hair salon brand with nearly 1,400 salons in the US and Canada, was recently ranked as one of the “50 Top Franchises for Minorities” and the “Top 25 Franchises for Hispanics” by the National Minority Franchising Initiative and Hispanic Enterprise Magazine. Fantastic Sams was the only hair salon franchise system selected by both surveys. As published in the September 28 edition of the USA Today newspaper, The “50 Top Franchises for Minorities” award recognizes Fantastic Sams as one of the exceptional systems that has demonstrated a focus on recruiting and supporting minority franchisees into its system. Selection was based on many factors, including historical performance, brand identification, market dynamics, franchisee satisfaction the level of initial training, on-going support and financial stability. The “Top 25 Franchises for Hispanics” was featured in the June/July issue of Hispanic Enterprise Magazine. Fantastic Sams was recognized as a franchise that has made a corporate commitment to recruit prospective franchisees from the Hispanic community over the past several years. According to Hispanic Enterprise Magazine, “This commitment is not based on altruism; it is based on sound economics. The companies noted here represent exceptional opportunities for prospective franchisees and have demonstrated a commitment to properly training and supporting you once you become a franchisee.” Fantastic Sams is also a charter member of Minority Fran, a program that was recently launched by the International Franchise Association’s Diversity institute. Minority Fran was created to build awareness of franchising within minority communities and to increase the number of minority franchise owners. “We are thrilled about our recent recognition by the minority business community,” said Scott Colabuono, CEO of Fantastic Sams. “We want to recruit franchisees who are interested in running a business and who also understand the culture of the clients they serve.” Fantastic …

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, …

We already talked about Manly haircuts, now lets look at Kids haircuts. You already know that we like salon franchises because they are simple to operate, it’s fairly recession proof, labor costs are low and supplemented with tips, no perishable supplies, brand loyalty has been low in the past with Fantastic Sams and Best Cuts types being identical, and kids "experience" business are here to stay. Getting your haircut is usually not an experience one normally looks forward to, that why we believe themed salons are a great hook. This is especially true for kids haircuts. Kids are all about the "experience" and have undeserved power in deciding where to go. Here steps in Snip Its. Check out their web site for a sense of how creative the place is designed. They cater to children of course, but also accomodate parents so the whole family can get their haircut simultaneously. What are some special and creative attractions at this kids salon? Glamour Parties Snip-its Glamour Parties make girls gorgeous! A glamour party allows girls to act like divas for a day by offering hair braiding, curling and styling as well as nail polish and make-up application. Dressy clothes are provided to complete the look. The culmination of the party is a stroll on the catwalk followed by cake and favors provided by Snip-its. Snip-its even provides a camera to capture all of the fun. Style-a-Doll Parties (Launching at Snip-its this summer!) At Snip-its’ Style-a-Doll Parties, attendees each receive a doll inspired by Snip-its’ trademark characters, the Clipette sisters – Marlene and Charlene. The dolls have been specially created so that birthday guests can style their hair with hair clips and accessories and apply Snip-its’ cosmetics that are designed for use on the doll. Stylists are on hand to help …

Discount hair cutting businesses such as Best Cuts and Fantastic Sams have always been remarkably profitable ventures. Two years ago a lawyer I knew purchased a Sports Clips franchise for his wife to run. He’s a smart and guy and did a lot of due diligence before hand. I can see how a themed hair salon for men featuring sports, large T.V.s, news, and manly decor can attract a steady flow of men willing to pay an extra $5 for a haircut. There’s even one called Roosters Men’s Grooming Centers that describes their business as the following: Stocked with leather chairs, men’s magazines and TVs tuned only to news or sports…Customers at Roosters get a free beverage of their choice (including beer) and a free shoeshine. For many services such as hair coloring and waxing, separate rooms are used for privacy. Is a guy more likely to go to a place with big screen TVs blasting sports and news, and specially catered mens attributes? Of course. Is it more fun for a dad to take his kids there for a cut? Yes. I’d strongly consider buying a franchise in this mass appeal niche, especially over the traditionals – Fantastic Sams/Best Cuts/Hair Cuttery/etc.

I loved this list. One of the United Kingdom’s most successful entrepreneurs, Luke Johnson, shares 21 lessons he’s learned in business: 1. The world is in love with the romance of start-ups. But all other things being equal, I believe it can sometimes be better to buy a business than start one. 2. Never demand a certainty: if you wait for that, you will be on the sidelines for ever. 3. Leave behind the notion of the big idea and just do what most successful entrepreneurs do: copy and improve. Imitate first, and then devote yourself to constant incremental improvement. 4. Whenever you can, make sure a name has some underlying meaning. Don’t copy the example of Diageo; one of the world’s biggest drinks manufacturers. “Diageo” means nothing. It’s not even easy to spell, or to Google. For everything that’s bad about high-concept names, look no further than Diageo’s own toe-curling explanation: “The word Diageo comes from the Latin for day (dia) and the Greek for world (geo). We take this to mean every day, everywhere, people celebrate with our brands.” I wonder if Diageo’s management realize that having to listen to that sort of rot could well make its staff want to quit and start their own business. 5. Today is a better time to start a business than tomorrow, no matter how today looks. 6. Achievement changes people. Once someone attains status and wealth, their attitude towards sharing the spoils and the glory alters. It slowly dawns on them that actually all the clever moves and breakthroughs were their idea and, in fact, they are the only one who really does any work. 7. When I interview managers, I ask them about their customers and competitors. The high achievers will know them intimately, and can talk for …

  What a sad story. Giordano’s is a leader and well-known institution in Chicago’s stuffed crust pizza game. It owns 10 corporate  stores and manages 35 franchised locations in Illinois and Florida.  Somehow this chain, where people (often tourists) stand in long line for an overrated $20 deep dish pizza, owed $45 million to a lender and had to file bankruptcy in February when it stopped paying back a note. Bidders for the company include the parent companies of Gino’s East and Connies Pizza. It sounds like they over-leveraged their real estate acquisitions and didn’t have enough income for debt coverage. Giordano’s was acquired by VPC Capital Partners in Chicago for $52 million.  It’s chairman, Richard Levy, hopes to elegantly apply his legal, bio-pharmaceutical, and energy background into the pizza industry, an obviously natural next step for him and sure to reassure franchisees.  Luckily, the Giordano’s family is going to stick around and collect big salaries to help out.   Don’t the new owners look happy in this picture (pic courtesy of Chicago Tribune) to the right?   They have BIG plans for the brand, hoping to clone the success of Paul Newman’s $200 million grocery business including developing a line of products for grocery stores “similar to what Paul Newman has done for salad dressing” and expanding the restaurant footprint beyond its Chicago and Florida markets.

The American Association of Franchise Dealers (AAFD), who previously awarded Cuppy’s Coffee a Fair Franchising Seal, has suspended Cuppy’s accreditation pending a determination of the Association’s Board of Directors at a scheduled meeting on September 24, 2008. This comes after many obvious shameful contracts breeches by Cuppy’s old and new management over the past year.   Below the fold you can read the entire statement released by the AAFD.   Here’s a link to the email sent by Robert Purvin, AAFD’s chair, to Cuppy’s owner Dale Nabors informing him of the suspension.  For a full background of articles, see FranchisePick’s biography of this situation.  Also read Paul Steinberg’s recent post on bluemaumau.org Blogger Opinions and Reports: Sean Kelly, Michael Webster, Janet Sparks

This article from the United Kingdom highlights some of the positive aspects of franchising. He said: “Choosing the right franchise is a big decision – it’s your own money on the line and you need to be sure that you are investing in a sound business model. McDonald’s employs some of the most talented professionals around and it helps to be able to draw on that knowledge and expertise.” There are significant advantages to running a franchised business, as a new idea has already been tested to ensure it is successful. What’s more, larger franchises will have a well-established trading name and are likely to offer marketing support and comprehensive training programmes in a wide range of business skills. Good franchisors can also help secure initial funding. Mr Thomas said: “McDonald’s has some fantastic training opportunities for staff at all levels, which means that when I identify talent I have the tools to help my staff develop their skills.” “At the same time, I can operate on a local level too and I’m involved in a number of community initiatives. I am deputy chair of the Trust for Sick Children in Wales, and regularly give talks on business and entrepreneurship at local schools and offer work experience placements through Careers Wales.” He added: “For entrepreneurial people owning a franchise is a great opportunity to take a fantastic brand and make your own mark.” The only portion I have issues with his last statement. For truly energetic entrepreneurs, owning a single franchise provides limited entrepreneurial satisfaction because of the lack of flexibility and adaptability limits built into the franchise operating structure.

It was reported today that Byron Ashbridge and Joe Pitt, who operate five Sona MedSpa franchises in Charlotte, Greensboro and Raleigh North Carolina, have purchased the controlling interest in S0na MedSpa International, previously based in Franklin, TN. Since 2002, Ashbridge and Pitt have run some of the most successful locations in the company and will build upon their accomplishments in North Carolina to fortify, grow and improve the operation. This includes developing and implementing extensive staff training and marketing programs, and providing franchisees with proven systems and best practices to ensure optimal performance, customer satisfaction and profitability. The existing franchise locations will now be company-owned training centers and be the models for “best practices” in the medical spa industry. Franchisees will now have access to these company-owned centers in order to assist in the training and development of their respective staff, as well as determining marketing and operational tactics to use in their centers. It was reported at Let’s Talk Franchising on May 26th, 2007 that Sona MedSpa Was Guilty of Fraud, Investors Liable! In that case an arbitrator in Atlanta, Georgia awarded nearly $400,000 to a franchisee who was duped into buying a Sona MedSpa franchise on the basis of “faulty” information about Sona’s hair-removal services. The arbitrator not only held liable the Nashville-based franchisor, Sona MedSpas, and its founder, Dennis Jones, but also a group of prominent investors that acquired the franchisor, but then failed to correct the misleading information. The investors included Carousel Capital of Charlotte, N.C., its Chairman, Nelson Schwab II, Jim Amos, former President of Mail Boxes, Etc., and his daughter, Heather Rose. As a result of the investors’ failure to act on the information, the franchisee not only proceeded with his investment, but also repeated the faulty information to its own clients. Subesequently …

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 — …

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.”

The American Association of Franchisees and Dealers (AAFD) announced today that Cuppy’s Coffee & More, Inc. (Cuppy’s) has been added to the AAFD’s roster of companies earning AAFD Accredited Contract status. This special distinction is available to recognize new franchise systems, or new ownership and management teams, whose franchise agreements substantially conform to the AAFD Fair Franchising Standards, but that lack operating history to evaluate franchise relationships. Cuppy’s is a specialty coffee drive thru franchise business that offers coffee, lattes, espresso and smoothie drinks. Cuppy’s is a new brand that is arising from the ashes of a much troubled brand known as Java Jo’z. As part of its response to rebuff suggestions that its new ownership is still connected to Java Jo’z problems, Cuppy’s management has committed itself to a collaborative franchise culture that adopts high standards of mutual respect between franchisor and franchisees. Cuppy’s franchise agreement earned nearly perfect score of 99.5% conformity with the AAFD Fair Franchising Standards, the highest grade ever achieved. Cuppy’s Coffee & More, Inc. is a Texas corporation wholly owned by Mr. Doug Hibbing and is headquartered in Fort Walton Beach, Florida. Medina Enterprises, Inc., an affiliated company which is owned by Mr. Robert Morgan, is the contractor for the system’s restaurants and other units, as well as a provider of office and staffing services to Cuppy’s. In May 2006, Medina acquired some of the Java Jo’z assets, including the Java Jo’z brand, which was later assigned to Cuppy’s. The Java Jo’z brand was confronted with major issues regarding Trademark ownership, allegations of unfulfilled contracts and personal problems of its prior owner. Cuppy’s new management team assessed that the myriad of inherited problems required a radical approach to change. That approach involved re-branding, a fresh start on training and support, and most importantly …

When I was growing up: Wednesday’s was always Prince Spaghetti Day, but at least once a week we had pizza from Papa Gino’s.   It’s great to hear that Papa Gino’s is planning to more than double its restaurants to 335 pizzerias over the next five years and expand for the first time outside its hometown New England market. The Dedham company is looking to add 135 stores in New England, including about 90 of its first franchised restaurants, and open shops in new regions along the East Coast in Florida, Virginia, and North Carolina. “We’re taking a giant leap,” said Anthony Padulo, Papa Gino’s senior vice president of franchise development. “We’ve been a market leader in the pizza business here, and we want to grow at a faster rate than what we’ve been doing. The timing is right.” The push comes as other major pizza purveyors, including Little Caesars, have targeted the competitive Boston market for expansion. Papa Gino’s, which was started nearly 40 years ago as a single East Boston pizza shop, was ranked as the 21st-largest operator with about $145 million in sales in 2005, according to the most recent figures from trade publication Pizza Today. Last year, Papa Gino’s sales exceeded $160 million, and existing stores have seen a 5 percent sales growth annually over the past five years, Padulo said. Papa Gino’s says this makes it a prime time for the company to expand its brand through franchises and take advantage of the growing $35 billion US pizza market. Papa Gino’s, whose parent company Papa Gino’s Holdings Corp. also owns D’Angelo Grilled Sandwiches, has already secured the market’s first franchise location, in Portland, Maine. Papa Gino’s recently unveiled the prototype for company and franchise stores that aims to create more of an authentic, yet contemporary …

Entrepreneur’s Franchise 500’s Best Franchise Businesses — Franchise 500 Top 10 Entrepreneur managezine’s best of the best. Subway Dunkin’ Donuts Jackson Hewitt Tax Service 7-Eleven (the recently bought out the White Hen chain in Illinois) UPS Store Domino’s Jiffy Lube Sonic Drive In Restaurants McDonald’s Papa John’s Pizza link to the the remaining 500. Here are a few I noticed in particular (some for good, some for bad reasons): 384. Nature’s Way Cafe: Healthy foods, salads, wraps, soups, smoothies 325. Cash Plus Inc. : Check cashing & related services 312. Rent-A-Wreck: Auto rentals & leasing 298. Steak n Shake: Steakburgers, fries, milkshakes 273. Nestle Toll House Cafe by Chip: Cookies, baked goods, coffee, ice cream 252. HomeVestors of America Inc. : Home buying, repair & selling system 225. It’s Just Lunch Int’l. LLC: Dating service 212. Pita Pit Inc.: Pita sandwiches 151. Super Suppers: Do-it-yourself home meal preparation 105. Bark Busters Home Dog Training: In-home dog training 87. Qdoba Mexican Grill :Fast-casual Mexican food 75. CiCi’s Pizza : All-you-can-eat pizza buffet 72. Sport Clips: Men’s sports-themed hair salon 58. Jimmy John’s Gourmet Sandwich Shops: Gourmet sandwiches 56. Edible Arrangements: Floral-like designs from sculpted fresh fruit Franchise 500 Criteria (important): All companies, regardless of size, are judged by the same criteria: objective, quantifiable measures of a franchise operation. The most important factors include financial strength and stability, growth rate and size of the system. We also consider the number of years in business and length of time franchising, startup costs, litigation, percentage of terminations and whether the company provides financing. Financial data is audited by an independent CPA. We do not measure subjective elements such as franchisee satisfaction or management style, since these are judgments only you can make based on your own needs and experiences. The objective factors are …

Entrepreneur magazine seems to always figure out new ways to publish the same “tips” on starting a business or buying a franchise. Nevertheless, the most recent “How to make a lot of money as a franchisee” is worth a quick scan. This item is most important in my opinion if you are looking at franchising primarily to increase your net worth (as compared to a ‘lifestyle’ business): 4. Reinvesting to achieve your absolute goal. If you find an opportunity that fits well for you and has a great return on investment, and you’ve got your first unit up and making a lot of money, you can reach your absolute number goal by acquiring additional units. This can either be done through further out-of-pocket investment or through the reinvestment of the profits you’re making into growing the business. I have a good friend who owns more than 40 haircutting franchises. The return on investment in each unit is great, but the absolute dollars in any one unit don’t meet his overall total income goal. He found that by adding additional units over time through the reinvestment of profits, he could realize a total income far in excess of what his absolute goals were when he started the business. In the example mentioned in the first point, if you want to make $100,000 per year, make four of the $5,000 investments and you’re there.

KFC is shifting its design strategy to more upscale. Here is the experience from one franchisee: The restaurateur has spent more than $3 million renovating all the restaurants, but only a location in Claremore and now the southeast Tulsa store boast the new image. “The idea was to bring KFC up to casual dining,” Schoenhofer said. “We’ve gotten away from the fast-food look.” KFC and its parent company, Louisville, Ky.-based Yum! Brands Inc., are in step with an evolution inside the quick-casual food industry — new images for many longtime chains, including fast-food giant McDonald’s. “It’s a trend and, obviously, it’s working,” Schoenhofer said. At KFC, hard plastic seating, bright primary colors,and old menu boards and lighting have been replaced with high, open ceilings, glazed tile floors, padded booth seating, upscale tables and chairs, and improved restrooms and lighting — all in a Tuscan color scheme of gold, rust, blue and brick red. The restaurant also features a colorful, revamped menu board above the service counter. With inflation, “We’re asking people to spend more money on food, and we want to give them the environment they want,” Schoenhofer said. “We want it to be a nice experience for them.” KFC is also making its menu healthier. …And after the renovations, business soared, he added. “Since we took the stores over, our sales went up 150 percent.” Most of the fast-food chicken brands such as Popeye’s, Church’s, Boston Market, El Pollo Loco, Pollo Tropical, Bojangle’s Chicken, Chick-Fil-A, and Chicken Kitchen, have relatively common cheap chair/booth style look. Improving the quality of the food and restaurant design is a smart, and very likely to be successful strategy. One strategy to capitalize on this new initiative is to buy an existing KFC franchise from an owner who does not have the cash …