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 …

Below is the Small Business Administration’s annual compilation of performance data on thousands of franchisee loans it has guaranteed covering loans made from October 1, 2000, to September 30, 2007. A “failed loan” below is when the SBA must step in and pay back a loan that it has guaranteed. However, does failure rate of a loan equal the number of failed franchises? No, because the chart below only captures the worst of the worst, when someone completely abandons their debt obligations. Definitions are tricky and can mask the true data. Franchisees who sell their units and pay off or transfer their loan or franchisees losing money are not caputred. But, the value in the report card can be a vague checklist for avoiding high-failing franchises. Hat Tip: WSJ REPORT CARD Class Leaders Franchiser Failure Rate Failed loans Total loans Comfort Inn 0% 0 158 Primrose 0 0 110 Edible Arrangements 0 0 104 Massage Envy 0 0 61 Holiday Inn Express 1 1 157 Culver’s Frozen Custard 1 1 150 Hampton Inn 1 1 88 Bruster’s Real Ice Cream 1 1 84 Little Caesars Pizza 1 1 72 Fastsigns 1 1 71 Super 8 Motel 2 8 363 Best Western 2 3 156 Choice Hotels International 2 3 144 Rita’s Water Ice 2 2 103 Arco 2 2 85 Zaxby’s 2 2 81 Anytime Fitness 2 1 65 Econo Lodge 3 4 119 Goddard 3 3 109 Subway 4 84 1,974 Dunkin’ Donuts 4 17 410 Sport Clips 4 8 191 Cartridge World Stores 4 5 112 Travelodge 4 4 91 IHOP 4 3 67 Class Trailers Franchiser Failure Rate Failed loans Total loans All Tune and Lube 48% 37 77 Philly Connection 48 30 63 Cottman Transmission 46 75 163 Blimpie Subs & Salads 37 58 158 …

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 …

1) Are You Franchisee Material? We asked franchisors what they want in franchisees, and 4 qualities rose to the top. 2) 2007 Franchise of the Year? (Entrepreneur Mag) #1: Subway #2: Dunkin’ Donuts #3: Jackson Hewitt Tax Service #4: 7-Eleven #5: The UPS Store/Mail Boxes Etc. #6: Domino’s Pizza #7: Jiffy Lube #8: Sonic Drive In Restaurants #9: McDonald’s #10: Papa John’s I’d personally choose in the following order: McDonald’s, 7-Eleven, Papa John’s, Dunkin’ Donuts, Domino’s Pizza. 3) Great comments from a few franchisees and people in the industry. You can listen to the segment with Real Player too. 4) Franchisee rebuffs new product offerings and promotions from Taco Bell. Some notable actions taken by Dalham since the opening of his franchise in 1990: • Refused to expand his menu beyond the basic, non-premium offerings such as the “Taco.” • Used plain white Styrofoam soda cups until the corporation forced him to use branded paper cups during an audit in 1999. • Furnished dining room with squeeze bottles of hot sauce to avoid purchasing branded sauce packets. • Failed to update logo – currently displays the red, green, yellow, and purple logo phased out in the 1990s. • Did not hang promotional posters featuring the talking Chihuahua when the campaign was introduced in 1997. • During the “Head for the Border” campaign, posted a banner that read “Americans Even Do Tacos Better.” Due to franchise regulations, Dalham was forced to adopt certain conformities, such as the display of the words “Taco Bell” on his backlit menu and identifying his restaurant as a Taco Bell in the local yellow pages.

One concept I heard about several years back that I still think is a good idea are mobile oil changes franchises.  Specifically, those franchises that contract with large businesses to service their employees’ cars in the parking lot while they’re working. Providing businesses and office buildings (especially in the suburbs where everyone parks in the same lot) with on-site routine services such as dry cleaning, child care, oil changes, and other concierge type is tremendously convenient. Often, in the case for oil changes, there is only a time saving benefit and no extra cost to the employer unless they want to subsidize it. The oil change “van” is customized to hold the equipment to rapidly suck out the old oil and pump in the fresh oil (I’m sure companies use different methods, but that is how I understand one method). While the employees are working, the oil changer collects the keys and car descriptions. In a few hours and $25 later, the employee has a freshly oil auto. The employer has probably gained a half-hour of work from the employee. Maybe the franchisee offers other services, like windshield repair, minor maintanence, car detailing, tire changes, or inspections…maybe even a mobile mechanic. I would feel comfortable selling and coordinating this type of service with corporate customers. You have a very compelling story with real cost and time savings for the employees. A quick search on my favorite search engine turned up these companies: Oil Butler Lube N’ Go On Site Lube …readers can post more in the comments If you want to start this business on your own, the equipment per truck costs about $10,000. I haven’t heard of the big guys (Penzoil, Jiffy Lube, you know who they are) getting into this, but don’t be surprised if the do. …

VERY OUT OF DATE.  Do a search instead.  This was manually updated March 21, 2006 Companies Mentioned in Posts (likely incomplete):Automotive 1-800 RADIATORS Oil Butler Lube N’ Go On-Site-Lube Business & Home Services 1-800-WATER-DAMAGE Bartercard Garagetek Help-U-Sell Home Instead Homewatch Caregivers My Girl Friday PropertyGuys.com Sears Carpet & Upholstery Tax Centers of America Cleaning & Maintenance none Computer & Internet (some are listed in “Retail”) Screenz Food and Restaurant Arby’s Auntie Anne’s Blimpies Cheeburger Cheeburger Chipotle Dippin’ Dots Dream Dinners Doc Green’s Gourmet Salad Dominic’s of New York The Dugout Durango Grill Fazoli’s Fire of Brazil Fogo de Chao Goldstar Chili Jamba Juice Jerq’zine Krispy Kream Lenny’s Sub Shops Mauwi Wauwi Original Hamburger Stand Panaderia Taza Papa John’s Pizza Factory Pizza Patron Pretzel Time Quiznos Red Rock Chili San Francisco Soup Co Shane’s Rib Shack Skyline Chili Smoothie King Smotthie Planet Soup Nazi Steak-out Subway Submarina Sub Station II Super Suppers The Soup Box Supercuts Suzanne’s Kitchen We’re Rolling Pretzel Company Wetzel’s Pretzels Z Pizza Zoup! Fresh Soup Co (List all sub franchises) Health & Fitness Curves Liberty Fitness Home Building & Repair Services See “Business and Home Services” above Personnel & Staffing none Pet Retail and Services Camp Bow Wow Doody Calls The Pet Pantry Wag My Tail Interquest Detection Canines Pets Are Inn Retail Franchises Ace Hardware AuctionDrop Battery Plus Best Cuts GNC Educational Outfitters Fantastic Sams Fastframe Foot Solutions Friendly Computers Geeks on Call GNC Hair Cuttery Herman’s World of Sports Imagine This Sold Orbit Drop Play It Again Sports QuikDrop Roosters Men’s Grooming Centers Screenz Snips Its Sports Clips Stone Mountain Carpet Mill Tom’s Foods We the People Categories: eBay drop offs (generally) Hair Travel & Hotel none Industry Lists & Research 2004 Same Store Sales Growth of QSRs (quick service restaurants) Royalty and Advertising …