DDIFO Names Acting President
The DD Independent Franchise Owners Group, (DDIFO)which represents the largest association of Dunkin’ Donuts franchise owners in the U.S., has named Jim Coen, a member of the DDIFO Board of Directors, as its acting President and Chief Operating Officer. He takes over December 1, 2008 from Mark Dubinsky who has tendered his resignation after two yeas as DDIFO President.
Mr. Coen is Executive Director of the New England Franchise Association and founder of Franchise Perfection. He has been a director of and the Clerk for the DDIFO board since May, 2008.
In his interim role as acting president Coen will continue DDIFO efforts to support all franchisees. "I thank the board for the confidence they have placed in me, I look forward to working with the Board and the members. DDIFO has incredible opportunities to support existing members, implement it’s mission, grow membership and improve the organization’s capabilities,” said Coen.
“We are pleased to have Jim Coen assume the role of President of our organization,” says Kevin McCarthy, Chairman of the DDIFO board. “This is a critical time for franchisees because of the economic uncertainty. The DDIFO board is confident that Jim’s experience and skills will serve members well during this transitional period. We are also grateful to Mark Dubinsky for all he did on behalf of the DDIFO and wish him continued success in his business endeavors.”
Dubinsky says, "I have been honored to serve as DDIFO president and am gratified by the many successes we enjoyed over the past two years, including the passing of the Rhode Island Fair Dealership Act and the addition of new, valuable business services for our members.”
USA Today ranks Red Sox as the No. 1 franchise in baseball
Seth Livingstone of USA Today writes that the Boston Red Sox combine resilience in the field and a vision for excellence in the front office, have brought unbridled joy to the ever-growing population of Red Sox Nation in the past five seasons.
In 2004, there was literally dancing in the streets of Boston when the franchise stunned the New York Yankees by rallying from a 3-0 deficit in the American League Championship Series on the way to its first World Series title in 86 years. Three years later, a second generation of champions, led by high-stepping closer Jonathan Papelbon, danced in celebration on the Fenway green.
This year, after the Red Sox disposed of the Los Angeles Angels in the AL Division Series and the crowd had gone home, team owners John Henry and Tom Werner took a celebratory run around the basepaths.
The Red Sox have become winners on the field and in the community, and they’ve had a measure of fun doing it.
And when USA TODAY Sports Weekly ranked the performance of 30 Major League Baseball franchises in nine categories during the past five years, the Red Sox, who reached Game 7 of the ALCS this year, came out No. 1 overall.
A Bad Economy May Benefit Franchises
Mark C. Siebert for Entrepreneur.com writes that with all the negativity making headlines these days, it’s difficult sometimes to maintain perspective.
Foreclosures at record highs. Nearly a trillion dollars in bailouts. The Dow with record declines. Mass layoffs and unemployment at five-year highs. Reading Dickens–it was the best of times, it was the worst of timesthe period was so far like the present period–it seems that perhaps he only got it half right.
But for franchisors, truer words were never spoken. Yes, there are some short-term difficulties that will take time to flush through the system. At the same time, however, there are a number of reasons to anticipate that the best of times are right around the corner.
Perhaps the best place to gain this perspective is by understanding what drives franchise sales.
There are, of course, thousands of factors that drive franchise sales at the micro level. A bad day at the office. An overbearing boss. A neighbor’s franchise success story–and perhaps his new Mercedes. A cancelled flight that leads to the missed soccer game.
But at a macro level, there are three predictable factors that can lead to a surge in franchise sales activity–and many of them are pointing to a franchise boom on the horizon.
The first and foremost factor affecting franchise sales is a rising unemployment rate and the fear of losing one’s job. At 6.1 percent, the unemployment rate has increased by 1.4 percent in the last 12 months alone–adding 2.2 million people to the ranks of the unemployed. And some economists are predicting that it will hit 7 percent before it turns around.
While that news is terrible for the economy, and it sounds callous to even mention it, what this means for franchisors is a larger pool of franchise candidates.
Brueggers continues to expand despite weak economy
Bruegger’s the Burlington, VT franchisor announced that it will continue to add bakeries in spite of the weak economy. In 2008, the company is ahead of plan inking development agreements totaling 46 new bakery commitments. Since 2005, when Bruegger’s significantly modified its franchising program, the company has reached development agreements for 153 new bakeries.
This year, Bruegger’s also signed multi-unit deals in two of the largest and most competitive retail markets in the country. In August, the company closed a deal with Hart Street, LLC to open 20 bakeries in New York City over an eight year period. Earlier in the year, franchise rights for 15 bakeries in Chicago were awarded to Windy City Bagels. The company has also reached multi-unit agreements with franchisees in Ohio and Florida this year.
This announcement comes on the heels of a September Wall Street Journal article citing a Franchise Update Media Group survey in which 150 franchise companies, respondents said their franchise sales were about 72% below their 2008 goals, with inquiries from prospective franchisees down about 48 percent1.
“We look for people who love and understand the business and have the resources to build a successful franchise,” said Bruegger’s Vice President of Franchising Chris Cheek. “Our goal is to grow the right way. Choosing the right franchisees and pairing them up with the right locations is key to making that happen.”
Bruegger’s has also seen 18 consecutive quarters of comp sales growth. This month, the company announced third quarter system-wide gross sales of $45.13 million; a 8.7 percent rise over $41.52 million for the same period in 2007. Revenue for comparable sales grew 1.7 percent at company locations and 1.7 percent system-wide for the third quarter ending October 30, 2008.
“Over the last five years we have successfully restructured our business model and we’re seeing the pay off through consistent sales increases and new development deals,” said Bruegger’s CEO Jim Greco. “We’re looking to do even better in 2009.”
Patrick Kaufmann joins DDIFO Board of Directors
Professor and Chair of Boston University’s Marketing Department and renowned expert on Franchising
The DD Independent Franchise Owners Group, which represents the largest association of Dunkin’ Donuts franchise owners in the U.S., is pleased to announce the addition of Professor Patrick Kaufmann to its Board of Directors.
Kaufmann holds a BA in Economics from Georgetown University, a JD from Boston College Law School, an MBA from Wharton, and a Ph.D. in Marketing from Northwestern University. Prior to joining Boston University, he was on the faculty of the Harvard Business School and Georgia State University, and practiced law in Boston.
Professor Kaufmann is on the executive committee of the International Society of Franchising; he chaired the organization in 1992. He has also served as a member of the Education Committee of the International Franchise Association and is a member of the New England Franchise Network.
Kaufmann says, "I am delighted to be joining the DDIFO Board and to have the opportunity to work with the Dunkin’ Donuts franchisees. I look forward to assisting the DDIFO Board in its efforts to help franchisees operate profitably in this difficult economic environment."
Kevin McCarthy, the Chairman of the Board of the DDIFO, echoes Professor Kaufmann’s comments, "We are delighted to have Professor Kaufmann join our Board. Pat’s impressive professional background, combined with his collaborative and creative business style, makes for an excellent strategic fit with both the mission and franchisee membership of DDIFO".
Coffee News Announces New Ownership
Franchising in New England announced that NEFA Member William (Bill) Buckley of Bangor, ME and President of Coffee News USA, Inc. announced the purchase of the parent company and owner of intellectual property rights for the Coffee News franchise system, 2703203 Manitoba, Inc., located in Winnipeg, Manitoba.
Bill has operated the company under a Management Continuity Agreement since March 1, 2006, when founder, Jean Daum, became serious ill with cancer and died July 23, 2007.
Jean Daum founded Coffee News October 22, 1988 in Winnipeg, MB. After placing her lunch order, Jean resorted to reading the information on a sugar packet out of sheer boredom. It dawned on her that restaurants were missing the boat by not providing patrons with something entertaining to read for a few minutes while waiting for their food. After six months of research, Coffee News was born and has now risen to become the world’s largest restaurant publication and the world’s largest franchise publication with an estimated readership of over 8 million every week.
The purchase includes all stock of the corporation from the Estate of Jean Daum, the copyrights and trade dress of the publication and all existing franchise agreements in force in 32 countries. Manitoba, Inc. will continue printing operations in Winnipeg, Manitoba where Coffee News has been publishing for 20 years. In addition to Coffee News USA, Inc. in Bangor, ME, the newly acquired company maintains Head Offices in Brazil, Canada, Mexico, New Zealand, Spain and Venezuela.
Irene Tolman of Coffee News Worcester a franchisee since 2000, says, "Bill has been a strong force in the growth of Coffee News and having him at the helm will make people more comfortable by knowing he’ll keep Coffee News going and growing."
Irene goes on to say, "the people who oversee the franchise work long hours…Bill’s dedication is amazing! Whenever I call or e-mail Bill he replies within the day (mostly within the hour)…always in a pleasant way and always with an answer. Who can say that about their franchise owner?"
Created during an economic recession, Coffee News has grown in circulation dramatically in both good and bad economic times. Coffee News contains fun filled, good news and positive information to entertain while waiting. Community based-businesses are allowed to purchase exclusive ads, thereby targeting restaurant patrons while they dine. The restaurants receive a weekly quantity of Coffee Newses free of charge.
Coffee News reported 1142 franchises in force as of July 31, 2008 in 32 countries. Only about 2% of all franchise systems in the world have more than 1100 franchise units.
Restaurant Franchising Turns to Sale-Leaseback for Capital in Tough Market
Dees Stribling, Contributing Editor for Commercial Property News states in an interesting article that:
"The sale-leaseback deal was mostly invented to provide an alternate source of capital for a company that dislikes too much debt, or simply wants more capital than its bank cares to lend it. These days, it seems, that alternative can be all the more useful for corporate finance, now that banks in general are hesitating to lend, regardless of the creditworthiness of the borrower.
One real estate owner tapping into the sale-leaseback source in a big way recently is DineEquity Inc., franchisor and operator of Applebee’s Neighborhood Grill & Bar and IHOP Restaurants, which just inked deals with an assortment of buyers to sell 66 Applebee’s company-owned restaurants in Houston, Dallas, Texas and Albuquerque.
These deals come immediate after the company completed the sale of 15 company-operated Applebee’s restaurants in Nevada, and earlier this year, DineEquity sold 29 company-operated restaurants in southern California and Delaware.
All together, these transactions represent 110 locations, and the company is looking to sell more. DineEquity expects to generate about $63 million in after-tax cash proceeds from the sale of the 110 Applebee’s restaurants. An additional benefit to the company is that the locations are mostly Applebee’s lowest profit-performing restaurants, the sale of which will remove their negative impact from DineEquity’s P&L statement.
"We’re actively negotiating with several interested buyers for each of Applebee’s remaining company-operated restaurants available for sale," said Julia A. Stewart, DineEquity’s chairman and chief executive officer. "While the chill in the credit markets presents a challenge to our refranchising efforts, we believe it isn’t insurmountable."
But where to find the buyers? DineEquity, for one, is fortunate in that a number of its new franchisees are interested in becoming owners. "The sale transfers the stewardship of these Applebee’s to the hands of experienced restaurant operators new to the system, who are capable of delivering a higher level of performance in these markets," said Stewart. "They believe in and are committed to Applebee’s brand revitalization efforts under way."
For example, in the sale of 22 company-operated restaurants in Houston, Wellington D. Yu, a franchisee new to the Applebee’s system, is the buyer. Yu is the president of the Peterson Group Inc., a real estate development and management firm, but has been involved in the restaurant industry for more than 25 years as a franchisee of various brands, including McDonald’s.
Cross Posted at Franchising in New England
Nutrition Information Standard Urged By New Coalition
New coalition advocates national nutrition standard for chain restaurants, detailed nutrition information for consumers.
A coalition of interested parties and foodservice establishments announced today that it will support federal legislation that provides consumers with detailed nutrition information in chain restaurants and other foodservice establishments using a uniform national standard.
Legislation has been introduced by Senator Tom Carper (D-Del.), Senator Lisa Murkowski (R-Alaska), and Congressman Jim Matheson (D-Utah), which provides consumers across the country with nutrition information in a uniform, predictable way.
The Coalition for Responsible Nutrition Information (CRNI) was formed to ensure that consumers across the country will have access to detailed nutrition information when they dine out. Americans are becoming more health conscious and have a growing interest in the nutritional value of the food they eat. The Coalition is launching with more than thirty companies and associations that represent restaurant owners and franchisees, food manufacturers, distributors, suppliers, business organizations and health organizations.
"We believe consumers who visit chain restaurants should have access to detailed written nutrition information in a consistent and convenient manner. The only way to make sure this happens is by creating a uniform, national standard," said Dawn Sweeney, President and CEO of the National Restaurant Association. "When different rules exist in various parts of the country, it makes it difficult for consumers to compare options. Consumers deserve a federal standard that provides access to the same nutrition information no matter where they are or where they live."
Recently, several cities, including New York and Seattle, passed menu labeling laws requiring restaurants to provide consumers with calories or a limited range of nutrition information. This approach will not provide all consumers with all of the detailed nutrition information they may want when they dine out. In addition, providing limited nutrition information on a city-by-city or state-by-state basis creates a patchwork quilt of confusing and contradictory local regulations.
In addition to numerous state restaurant associations and state retail associations, Coalition members include Auntie Anne’s Pretzels, Blue Cross Blue Shield of Florida, Brinker International, Burger King, Carlson Restaurants Worldwide, Darden Restaurants, Domino’s Pizza, Dunkin’ Brands, Grocery Manufacturers Association, International Dairy Queen, International Foodservice Distributors Association, International Franchise Association, McDonald’s, National Chicken Council, National Council of Chain Restaurants, National Fisheries Institute, National Franchisee Association, National Restaurant Association, National Turkey Foundation, OSI Restaurants LLC., Sonic, and White Castle.
For a complete list of members got to: CRNI Members
Quiznos Franchisees Walloped by Recession
Franchisees claim High Costs, Lawsuits and Rivalry With Subway are contributing to woes caused by the economy.
While the recession and banking crisis have taken a toll on the entire restaurant industry, Emily Bryson York writes in Advertising Age that a number of Quiznos franchisees claim to have been disproportionately affected. Beset by higher-than-average commodity costs, lackluster marketing, a bruising promotional war with Subway and a premium-pricing structure incompatible with a tight economy, the chain has shuttered 150 stores this year.
It’s also embroiled in three separate class-action lawsuits in which franchisees allege, among other things, that the chain overcharges franchisees for food and other supplies. The suits are pending in Colorado, Illinois and Wisconsin.
"We can’t make money," said Quiznos franchisee Marty Tate, who said his Erie, Pa., store leads the region in sales. Mr. Tate, who is not part of the lawsuit, said 40% of his sales go directly into advertising, royalties and food for the next week. He added that three of seven locations in his county have closed in the past year. Mr. Tate said that when his contract expires next spring, he will open his own independent store.
Quiznos admits there are problems but said they are common to the restaurant industry as a whole. "Anybody who hasn’t noticed a change has their head in the sand," said Quiznos Exec VP Rich Emmitt. "Consumers are reticent to open their pocketbooks, and the consumers have become much more keen on making sure that what they are purchasing is a value purchase."
McDonalds Franchisees Honored at the White House
President George Bush welcomed four McDonald’s restaurant managers and franchise owner/operators to the White House for an invitation-only reception on Oct. 9, in celebration of Hispanic Heritage Month. This exclusive event brought together select Hispanic business and community leaders from across the nation.
McDonald’s U.S. restaurateurs were chosen to attend for their demonstrated leadership within their communities. Widely known as one of the leading companies for Hispanics, McDonald’s Hispanic Owners Association is the largest Hispanic franchisee organization in the country.
The following McDonald’s restaurateurs are among the 2008 Hispanic Heritage Month honorees:
Franchise owner/operator Tony Castillo of Holland, Mich.; franchise owner/operator Anthony Herques of Houma, La.; Franchise owner/operator Mark Ruiz of Newcastle, Calif. and restaurant manager Luis Cruz of Yonkers, N.Y.
National Hispanic Heritage Month is celebrated each year from Sept. 15 to Oct. 15.
Jim Coen, Mr. Franchise
I have learned franchising from the ground up. I’ve been a franchisee for a bad franchisor. I’ve worked for good franchisors and I’ve worked for marginal franchisors. I’ve helped many franchisees succeed.
I provide a consulting process that saves you time and money in your franchise search and provides you with the tools to make the right choice for you and your family.
Call Toll Free: 877-469-3002
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