Franchising in New England

NEFA member Itamar Chalif, principal of Atlantic Capital Solutions, will appear on WPI’s Venture Forum program on Saturday, February 7th, which will air from 5:00 p.m. to 7:00 p.m. on WTAG 580 AM and 94.9 FM. Mitchell Sanders, Executive President of ECI Biotech, will host the program.

The WPI Venture Forum Radio Program is a talk show for anyone interested in starting a business. Whether trying to write a business plan, raise capital, create a benefits package or determine the best way to structure a management team, the program’s hosts and guests have been there and done that.

Besides a discussion between host and guests, the audience is also encouraged to phone in with  questions and comments. In addition to tuning in on the radio, you can listen to the program online on WTAG’s Web site at www.wtag.com.

It’s 11:30 on a Monday morning, and Karim Menebhi is waiting for the first customer at his brand-new Ronzio Pizza & Subs franchise in Smithfield.

Menebhi has been busy — loading boxes of supplies onto shelves, talking on the phone to suppliers. Now he’s getting a little nervous. “I was feeling just normal until about 20 minutes ago,” he said. “Now I’m feeling that I need to see some people walk in and start serving them some food.”

Finally, about 11:40, the elusive first customer arrives. He’s Ryan West, who manages a karate school, Mastery Martial Arts, in the same shopping plaza as the new Ronzio. West orders a chicken sandwich. He also represents a potential source of future business, telling Menebhi that his martial arts school frequently hosts birthday parties for its young clients. Menebhi said he could provide discounts on pizza, and West took some Ronzio menus with him when he left.

Ronzio is a local chain, with 19 locations in Rhode Island and 1 in Massachusetts. Julian Angelone, chief operating officer for the company, said it’s opening a second Massachusetts location, in Worcester.

Read the whole story at Providence Journal

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.”

NEFA President and PR Works founder Steve Dubin and account manager Joe D’Eramo recently met with TV star Christopher Lowell at the national convention for their mutual client DirectBuy Franchise System.  The convention was held in San Francisco and attended by more than 1,500 DirectBuy staff members.

Lowell, a decorator and television personality, is the host of It’s Christopher Lowell! and the Christopher Lowell Show for which he won a Daytime Emmy Award in 2000.

Christopher Lowell has become a household name and has appeared appearing on The Hollywood Squares. DirectBuy provides members access to twelve room settings created by Christopher Lowell.  Lowell will host an upcoming series on Fine Living Channel called Work That Room with Christopher Lowell.

PR Works met with Lowell to discuss a variety of public relations initiatives to expand awareness of DirectBuy. PR Works develops visibility programs for the more than 160 DirectBuy franchises that are located in the United States and Canada.

Held from November 22 to 25 at the San Francisco Marriott, DirectBuy’s conference, appropriately titled the Brilliance by the Bay, brought DirectBuy franchise owners, staff and vendors from across the U.S. and Canada.
Besides awards banquets, keynote speakers, the conference provided a team-building opportunity.

“DirectBuy executives and staff are energized to create new business opportunities and continue to grow their brand,” noted Dubin. He added, “The conference underscored the unique niche that DirectBuy can offer to consumers - buying at manufacturers’ price can save an enormous amount of money and should be a fun, positive experience.”

As the leading members-only showroom and home design center, DirectBuy offers manufacturer-direct pricing on products ranging from light fixtures to televisions to kitchen cabinets, all from more than 700 manufacturers and their authorized suppliers. DirectBuy also offers design services to its members, as well as a listing of local contractors who offer installation services to DirectBuy members, many times at a discounted rate.

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.”

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”.

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.

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.

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Rhode Island, which in recent years has been lauded for its job and productivity growth, saw its unemployment numbers skyrocket last month. “In the 10 years that I have lived in Rhode Island, we have had an economic development policy that has been directed toward failure,” said Edward M. Mazze, a professor of business administration at the University of Rhode Island and a former dean of the business school.

In the Boston Globe Eric Moskowitz  writes:

“Even more than the gleaming new condos or the boom of restaurants and stores in the heart of this old mill city, the regular WaterFire festivities are held up as a signature of the rise from industrial decay, drawing jubilant crowds and their money. But as thousands thronged the bonfire spectacle this month, some noticed a troubling, if subtle, absence: shoppers.

We were slammed with people, but nobody had any bags in their hands,” said Eli Fernandez, who works at a cellphone kiosk in Providence Place, a vast mall that opened in 1999 as a centerpiece of Providence’s renewed prosperity.

There are other clues of something amiss. In residential neighborhoods around the city, a litter of “For Sale” signs. In nearby West Warwick, a young waitress pawns jewelry to make ends meet because tips are declining. To the south, in the mill village of Peace Dale, a food pantry for the needy sees a near quadrupling in the number of families enrolled in its emergency meals program - from 261 enrolled a year ago to 905 now. “Every day there’s new people,” said Susan Gustaitis, executive director of the Jonnycake Center. “It’s not slowing down.”

Rhode Island, just a few years ago celebrated for job and productivity growth, is suddenly reeling - with some indicators showing the worst economic climate in 17 years. According to figures released yesterday by the Bureau of Labor Statistics, unemployment ballooned in September to 8.8 percent, the highest rate in the nation, and the state’s annual job-loss rate was un equaled. Even Providence, the capital city that has drawn national headlines over the past decade for its downtown renaissance, is looking at a housing collapse and retail contraction.

“It’s real bad, man,” said Joel Diaz, who works at the Providence Place phone kiosk with Fernandez and who knows several people who have lost jobs, faced foreclosure, or both. “Some are just going crazy now because of it.”

It is a precipitous fall for a state that three years ago boasted the highest job and productivity growth in New England, and it has set off a flurry of blame. Public officials are scrambling to retool economic development policies and defend the state’s image, contending that Rhode Island has been pulled down by national and international currents; the sudden downturn reflects temporary growing pains, they say, as the state tries to move from manufacturing to an information- and innovation-based economy.

 

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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