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.

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 a fresh start with its franchisee community.

Cuppy’s intends to build its new brand on a foundation of respect for the AAFD’s vision of Total Quality Franchising, and Cuppy’s management has committed itself to a collaborative franchise culture, and one that sets a new standard of mutual respect between franchisors and franchisees.

Doug Hibbing, the President of Cuppy’s Coffee is excited about the AAFD Accreditation, he states, “we are committed to support our franchisees, we have great products, and a great staff. Our primary goal at Cuppy’s is to build a business with a reputation for integrity; the AAFD Accreditation is a giant step in that direction.”

AAFD Chairman, Robert Purvin praised Cuppy’s Coffee for setting a new standard in fair franchising agreements, “Cuppy’s Coffee has demonstrated its commitment to fair franchising, the AAFD is delighted to welcome Cuppy’s Coffee to its list of Accredited Franchises.

The story of Cuppy’s is a testament to the AAFD’s efforts to improve the franchising community and to reward Total Quality Franchising practices. The management team of Cuppy’s showed unprecedented willingness to accept the recommendations of the AAFD’s Fair Franchising Standards Committee.

Cross Posted at Let’s Talk Franchising

Domino’s slices off precious pizza time

Interesting observation in the pizza business:

No matter how big your global brand or your advertising budget, survival depends to a great degree on the speed of your deliveries.

…

The screens show employees what percentage of their pizzas are leaving the store within 15 minutes of the order having been received, what percentage are leaving within 15 minutes across the country, and what percentage within the specific franchise of which the store is a part.

The results, according to Domino’s deputy chief executive, Chris Moore, have been remarkable. “When we first thought of the idea, the average out-the-door time for the system was about 17 minutes,” he says. “We thought we would build a programme to reduce that to 14 minutes by the end of 2010.

…

“But the key thing is that the out-the-door time for that period was 14 minutes. We had already reached our 2010 objective, and the only difference we had made was getting those screens in.” He believes that simply being given the challenge of increasing their team’s speed compared with other stores was enough to motivate employees to move that crucial bit faster, particularly in the hectic periods between 5pm and 9pm on Friday and Saturday, which account for a third of turnover in the takeaway pizza game.

…

The delivery side now accounts for 51 per cent of the pizza market, having overtaken sit-down consumption within the past two years, and as its share increases, ways of getting the edge become increasingly precious.

Raving Brands Faces Copyright, Employee Litigation

COPYRIGHT CL AIM: Raving Brands’ legal troubles go beyond three franchisee lawsuits that allege fraud, misrepresentation, and undisclosed kickbacks. The holding company, which recently sold Moe’s Southwest Grill to FOCUS Brands, faces copyright and former employee disputes. In January, under the radar, federal courts ruled in favor of artist Janie Atkinson, who claimed Moe’s used her paintings—“Lady John” and “Sir John”—without permission. Both sides are currently arguing damages.

EMPLOYEE LITIGATION: In August 2005, former franchise sales director Anne Wheatley filed suit, alleging she was denied promised stock options in Moe’s and Mama Fu’s…

Wheatley requested 50,000 shares of Moe’s stock and 50,000 shares of Mama Fu’s stock. According to her 2004 Schedule K-1 (IRS Form 1120S), Wheatley indeed had deductions taken from her accounts, with a 0.43 percentage of stock ownership for the tax year. The tax documents do not say, however, whether the deductions were for restricted stock. In February 2005, two months before Wheatley requested her dividends, Raving Brands’ tax accountant advised management to revise shareholder options to help franchise expansion goals.

Dunkin’ targets illegals: Sues West Concord franchisee

A spokesman forDunkin’ Donuts said it doesn’t comment on pending litigation. But hesaid that last June, Dunkin’ agreed to voluntarily participate in the so-called “basic pilot” computer system that allows employers to verify whether workers are legally in the country and have Social Security numbers.
….

In its suit, Dunkin’ says West Concord Donuts “knowingly and purposefully breached” its franchise agreement by “violating” federal immigration and employment laws at its shop. The suit said owners “knowingly accepted false identification documents” for hiring purposes.

Dunkin’ also said the company failed to keep up its franchise fees, or the percentage of the shop’s total gross sales.

Dagwood’s sandwich-making skills are legendary and have made his name synonymous with outrageous sandwiches. Wikipedia defines “the Dagwood sandwich” thick multi-layered sandwich made up of a wide variety of meats, cheeses, and condiments. It was named after Dagwood Bumstead, a character in the comic strip Blondie who frequently made enormous sandwiches.  The comic strip was written by Chic Young.

Chic Young died in 1973, and his son, Dean, took over the strip, making every thought of Dagwood’s one of his own. And, over the past 30 years, Dean Young couldn’t stop thinking about opening a sandwich shop for Dagwood. He’s collected and created thousands of recipes over the years.

Now Dagwood’s Sandwich Shoppes have become a reality, the result of a partnership between Dean Young, who brings his creative genius to the arrangement, and International Marketing Systems (IMS), which has 17 years’ experience creating communications and franchisee-support programs for large retail companies and restaurant chains.

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David Crocker, Sr. Vice President of Marketing and Business Development for iSold It, LLC has posted on Blue MauMau an open letter to iSold it franchisees from Chief Executive Officer Ken Sully.
The iSold It franchise opportunity has been named “Hotter than Hot” and the “Best New Franchise for 2007″ by a leading national magazine.  However, a letter currently circulating the Internet indicates this American Dream may have become an entrepreneurial nightmare.
Mr. Crocker stated, “In the letter, it says that we are considering litigation, reorganization or liquidation.” Regarding a time frame to declare bankruptcy, he commented, “I cannot comment on when any liquidation might occur.” When asked whether the eBay drop off store model works, he said, “The model works for some and doesn’t work for others. There are stores that are profitable.”

AN OPEN LETTER TO OUR FRANCHISEES

As we have previously announced, we are now focusing all our headquarters resources on supporting our current base of franchisees, while limiting the sale of additional stores to new franchisees. We will continue to add new stores with existing franchisees under current development agreements and will also help facilitate transfers of existing stores to new owners. iSold It, now in its fourth year of operation, currently has over 170 franchised stores open. The chain has sold more than $100 million of merchandise on eBay since inception.

As you may know, in December 2003, iSold It joined the fledgling eBay drop-off store category, still in its infancy. The first two iSold It stores, one company owned and one franchised, generated significant interest from customers, the press and franchise candidates. The initial customer response was so strong that, encouraged by their results, that first franchisee quickly went on to purchase additional development areas and opened more stores. As the category rapidly grew and sales volumes were easily tracked (due to the transparent nature of eBay), franchise candidates moved forward to open individual stores, often securing areas large enough to develop multiple stores. After 18 months of operation, the 100th iSold It store was opened, and no stores had closed.

Today, while encouraged by system-wide sales exceeding $4 million per month, the distribution of sales by store has proven to be a bell curve – with top stores exceeding $80 thousand per month and others struggling to attain $10 thousand per month. Compounding the situation, average selling prices and labor hours per item also vary significantly by store, creating a wide range in store contribution margins. This has resulted in a significant number of stores operating below break-even, and has contributed to over 60 stores closing. Tragically, many individuals who believed passionately in the potential for the category have lost sizable investments, including homes and retirement savings. We personally find this unacceptable and, despite continued interest in this category, we do not feel comfortable selling any new franchises until we get the failure rate lower.

Over the past 40 months, in an effort to support the network, we have invested nearly $20 million in infrastructure, systems and marketing — spending most of the $8 million in shareholder contributed capital and $13 million in royalties and franchise fees. During this time, no director or shareholder has ever received any distributions or dividends from iSold It, with an exception for a small distribution to shareholders in early 2005 to cover pass-through tax liability related to 2004 company profitability. The company has not been profitable since 2004 and no further distributions have been made. In addition, with the exception of CEO Ken Sully, members of the Board of Directors and shareholders do not draw any salary from the company.

Going forward, the company faces significant challenges.

First, the company must preserve its remaining cash so it can remain solvent to support its franchisees. This is being addressed through significant reductions in expenses, including difficult decisions regarding headcount reductions and moving the office to a smaller location.

Second, the company is now focusing all resources on supporting the existing franchised stores. This is the rationale for eliminating the franchise development group and exiting the company store. (In separate posts, we will keep you current on the 3.0 conversion.)

The third and most significant challenge is addressing the claims of a group of franchisees who regrettably have each suffered significant financial losses. While we all feel very badly for anyone who lost money, we believe we presented this concept fairly from the beginning and it is unclear if we will be able reach a conclusion without litigation, reorganization or insolvency.

The team at iSold It remains committed to supporting our current franchisees and finding a success path for the network. We recognize the hard work and sacrifices that each one of you has made to help build your business and this company. We remain passionate about the potential for our business and appreciate your continued support going forward.

Ken Sully
President & CEO
iSold It, LLC

Weather seemed to be the common culprit cited by management explaining why same-store sales fell during the first part of 2007.

• Panera Bread: During the four-week period, company-owned bakery-café sales declined 1 percent and franchise-operated stores’ sales increased 0.2 percent.
• Frisch’s: Same-store sales declined 0.8 percent at Big Boy outlets, while Frisch’s Golden Corral restaurants posted a same store sales decline of 5.8 percent
• Mexican Restaurant’s, Inc. (Mexican Restaurants, Inc. currently has 80 company operated restaurants, 19 franchise restaurants and one licensed restaurant. We operate 6 different concepts, which include Casa Ole, Crazy Jose’s, Monterey’s Tex Mex Cafe, Monterey’s Little Mexico, Tortuga Mexican Kitchen and La Senorita. While a large majority of our restaurants are located in Texas, we also operate restaurants in Oklahoma, Louisiana, and Michigan.)
  • For fiscal year 2006, total system same-restaurant sales decreased 1.2%, Company-owned same-restaurant sales decreased 0.9% and franchise-owned same-restaurant sales decreased 1.9% from fiscal year 2005.
• Popeye’s Chicken & Biscuits:Total domestic same-store sales increased 1.6 percent compared to 3.3 percent in the prior year, and total global same-store sales increased 1.1 percent compared to 2.6 percent in the prior year. Company-operated same- store sales increased 9.0 percent, primarily driven by the re-opening of the New Orleans restaurants which were impacted by Hurricane Katrina.
• Carl’s Jr. Company operated same-store sales increased 4.9%, the seventh consecutive year of positive same-store sales for the brand.
• Hardee’s trailing 13 period average unit volume of $916,000 at the end of fiscal 2007 is a $42,000 increase over the level reported at the end of last fiscal year and the highest average unit volume for Hardee’s since 1995.
  • Hardee’s was also able to leverage its strong same-store sales to reduce restaurant operating costs. Hardee’s restaurant operating costs for the year were 81.9% of Company operated restaurant revenue, a 260 basis point improvement over the prior year and the best performance Hardee’s has posted in this decade. Lower food commodity costs and the leveraging of fixed and semifixed costs as a result of our higher same-store sales were the primary drivers behind Hardee’s performance. Like Carl’s Jr., Hardee’s achieved this year-over-year improvement despite the absence of favorable worker’s compensation adjustments compared to the prior year.

Choose franchises with care

…But for others a franchise proves far too restrictive. They have
thought long and hard about their own ideas to improve the business and
don’t want someone saying “no” when they want to implement them.

One example that comes to mind is someone who bought a franchise in
a sandwich shop chain and wanted to install a coffee machine.

No one else in the chain had a machine, and the franchisor had a definite view that the status quo should prevail.

So you had this fight between the franchisee and franchisor over a
cappuccino machine with the latter having to spend time and effort
convincing the franchisee that it wasn’t commercially smart.

What this means is that people have to be “culturally comfortable” with the franchise.

You will live and breathe this business so you had better like it. Don’t buy a McDonald’s franchise if you hate hamburgers!

This one apparently can: Party after party

This mom and Picture This Party franchisee brings her twins to the parties see organizes.

Her business is just party after party — children’s parties, to be exact. The Zion woman is owner of Picture This Party Inc. and a franchisee of Noah’s Ark Animal Workshop, which teaches children how to stuff their favorite animals at parties.

….

“I don’t have to leave the house unless I’ve a party, and then I can take the twins with me,” she said.

As owner of Picture This Party, she hosts birthday parties and other happy occasions for children. The parties usually have a theme, such as a dragon, a mermaid, Batman or a pirate, for which she furnishes costumes, balloons and cakes. She also snaps pictures at parties.

Jackson Hewitt Launches Internal Review of Allegations Against Franchisee

Jackson Hewitt Tax Service Inc., a leader in the tax preparation industry, today announced it has launched an internal review of allegations made against a franchisee of the company. The review is being led by Fred Goldberg, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom LLP.

Here is background on the IRS allegations

The government filed lawsuits against several corporations that operate 125
Jackson Hewitt offices. These offices in four states — including Michigan —
are owned by one franchisee.

The Justice Department says they were cheated out of more than $70 million
after franchise managers and employees took kickbacks for filing fraudulent
returns.

another article: Feds sue Atlanta franchisee of tax prep firm

S&P Downgrades Jackson Hewitt to Hold

One of the franchise opportunities that I thought was interesting at the IFE last week was the Fun Bus.

The cornerstone of the Fun Bus franchise is a full-sized and fully operational school bus whose seats have been removed and replaced with a padded playground ideal for children ages 2 to 7. The bus features a trampoline, a rope swing, a punching bag, a parallel bar, a basketball net and a big slide that is attached out the back. The bright green school bus brings fitness and fun directly to children at daycare, nursery schools and birthday parties.

The Fun Bus visits daycares and nursery schools once a week for a 10-week session, giving the children 30 minutes of learning and fitness taught in a fun way.

What I find appealing about the opportunity is there is no real estate involved, it’s an easy business to operate and it acts as its own billboard as it drives around town.

The investment is moderate: franchise fee is $25,000 fee, franchisees get the Fun Bus name in a secure territory, training, manuals, after-sale support and a list of potential customers (day care centers), a customized bus and equipment runs another $25,000. Add additional $15,000 for some advertising, working capital and misc. expenses, and the total investment is approximately $65,000.

Although they are fairly new to market, they do have some track record, they started franchising in 2003 and have 16 operating units.

I have yet to see the UFOC (I requested a copy), but I think the concept could be a good match for moms, or 20 something year olds looking to get into business.

For more information visit: Fun Bus Franchise

If you thought Curves and Lady’s Fitness were as niche as the workout industry was going to get, think again. Stroller Strides

At 8:45 a.m., the moms begin to arrive at the Thomas Jefferson Center. Jackets, gloves and hats are shed, children are strapped into strollers, and at 9 a.m., they’re off for a power walk around the gym.

They start with a 5-minute warm-up. During their

45-minute routine, the students will go through three body-toning exercises as well as stretches, lunges and an accelerated power-stride pushing their strollers. A 10-minute abs, stretch and cool down finishes the class.

Blended into the exercise routines are nursery rhymes, the chicken dance and singing of childhood favorites such as “Farmer in the Dell,” “Twinkle, Twinkle, Little Star” and “Head and Shoulders, Knees and Toes.”

As mothers breeze by drinking from their water bottles, the babies in the strollers have started enjoying their bottles of breast milk and water, too. One woman breaks from the crowd, rushes to the bleachers, and digs through a diaper bag to retrieve a small package of crackers for her teething baby.

Physical fitness aside, one of the fun parts of Stroller Strides is the social aspect of it, Ashley said.

“While you’re at home caring for your children, you can feel a little isolated,” she said.

As a result of that, Ashley has incorporated Luna Moms Club to seamlessly following the fitness class. The club includes a built-in play group that meets on Wednesdays at 10 a.m., monthly community projects and Mommy Time, which offers discussions about books, music, craft projects and an occasional night out for dinner or a movie.

I had the opportunity to visit Washington DC this weekend and participate and attend the International Franchise Expo which ended yesterday.

It was great to see old friends and make new ones; as franchising continues to expand and prosper.

Walking the aisles I observed and heard many interesting things:

Read more: From the Aisles of the IFE