Franchising in New England

In response to the Rhode Island Fair Dealership Act of 2007 (Act), Rhode Island State Senator Daniel Connors (D) and House Majority Leader Gordon Fox (D) have filed SB 2592 and HB 8150, respectively, to undo many of the provisions of the current law.

The International Franchise Association (IFA) sent letters to the bills’ sponsors State Senator Daniel Connors and State Representative and House Majority Leader Gerald Fox,  as well as to key legislative leaders voicing strong support for the proposals to rescind the Act. The IFA claims on their website to be the only association serving as the voice for franchising in the United States. IFA’s membership encompasses some 1,300 franchisors, 500 suppliers, and over 10,000 franchisee members.

On the other side of the issue is the Coalition of Franchisee Associations (CFA) which opposes Rhode Island Senate Bill 2592. The CFA is a coalition of brand specific franchisee associations focused on strengthening the franchisee community; representing over 15,000 franchisees and employing over 1.5 million individuals.

CFA members include the Brown Board Owners Association (UPS Stores), DD Independent Franchise Owners, Inc. (Dunkin’ Donuts),  Independent Hardee’s Franchisee Association, Meineke Dealers’ Association, National Association of Buffalo Wings Franchisees Inc., National Coalition of Associations of 7-Eleven Franchisees, National Franchisee Association, Inc. (Burger King), and North American Association of Subway Franchisees.

CFA opposes SB 2592 in that it weakens franchisee’s positions relating to contract terminations by diminishing the intent of The Rhode Island Fair Dealership Act.

• Specifically, the law incorporates the following provisions: “Notice Period” provision - requires the franchisor to give the franchisee at least 90 days written notice prior to termination of their contract.
• “Cure Period” provision - provides the franchisee 60 days to remedy any claimed deficiencies from the termination notice.
• “Good Cause” provision – specifically defines “good cause” for franchisor’s termination of franchise agreement as: Failure to comply with reasonable requirements of the franchise agreement. Bad faith in carrying out the terms of the agreement.

SB 2592 would lessen the notice period and eliminate both the cure period and good cause requirement.

The IFA believes that the Act makes it extremely difficult for a franchisor to end a relationship with a particular franchisee even when there are serious violations, such as safety and health code problems, violations of state or local laws, or failure to secure and maintain insurance.

CFA believes that small business owners should be given ample notice of a contract termination and the opportunity to remedy any problems before losing their businesses.

The Boston Business Journal reported today that Saladworks has announced plans to open three franchise locations in Boston.

This will be the first foray into the region for the quick-casual Pennsylvania-based restaurant franchise, which focuses on fresh salads, soups, paninis and wraps.

Four development partners will be involved in bringing Saladworks to town. Arpitkumar Trivedi is head of the development, which includes Kruti Dalsania, Manoj Patel and Veerat Kalaria.

The Boston development group is looking to the Financial District, Cambridge and Back Bay to open the stores, two of which would open in 2008 and 2009. Financial details were not disclosed.

John Scardapane opened the first Saladworks in New Jersey in 1986. The company has 91 franchise locations in seven states and Washington, D.C., with more than $60 million in sales in 2007.

Ice cream marketer Baskin-Robbins will hold its second annual 31 Cent Scoop Night to raise money for the National Fallen Firefighters Foundation, the company said on Wednesday.

Canton, Mass.-based Baskin-Robbins will hold 31 Cent Scoop Night on April 30 from 5 p.m. to 10 p.m. at all of its 2,700 stores, according to the company. During the event, the company, known for its long running branding platform touting its 31 flavors, will reduce the price of its 2.5 oz. ice cream scoops to 31 cents.

For the event, Baskin-Robbins will partner with the National Fallen Firefighters Foundation and donate $100,000 to the organization. The two organizations will also honor 31 firefighters from across the country who have demonstrated an exemplary commitment to community service through the newly created America’s 31 Firefighting Heroes program.

Scott Van Voorhis writes in the Boston Herald As it expands nationally, Dunkin’ Donuts is teaming up with a high-powered group of local sports marketers to bring in new customers.

The Canton-based franchise has hired Fenway Sports Group to help devise a national sports marketing campaign.

That could mean rolling out Dunkin’ ads featuring sports stars in some of its new markets across the country, said Mark Lev, executive vice president at Fenway Sports Group.

As it helps craft a national sports marketing strategy for Dunkin’, FSG, a sports marketing firm launched a few years ago by John Henry’s ownership group, which owns the Boston Red Sox franchise. FSG is expected to take a page from the Dunkin’s local marketing playbook. That strategy has featured promotional deals with local sports stars such as Tom Brady, Curt Schilling and now Sox reliever Jonathan Papelbon.

“As they start to grow their footprint nationally, a lot of the sports marketing activity they will be doing will become more national in scope,” FSG’s Lev said.

Dunkin’s new flatbread sandwich/personal pizza promotion featuring Papelbon - “Red Sox Win, You Win” - marks FSG’s debut as the chain’s sports marketing advisor.

FSG plans to explore other national sports marketing deals, such as teaming up with a sports league, as another way to transform Dunkin’ from a regional powerhouse into a national player, Lev said.

Dunkin’ now has 5,500 stores, but plans to triple that number over the next two decades, targeting markets like Dallas, Cleveland and Nashville that are outside its Northeast base.

FSG’s marketing plan for Dunkin’ should be complete by early summer, Lev said.

The Dunkin’ deal is a major coup for FSG, which has been building a broad portfolio of deals ranging from a 50 percent stake in a top NASCAR race team to consulting deals with a range of companies. Dunkin’ joins other major companies that have hired FSG as a consultant, including CVS, EMC Corp. and Stop & Shop.

“Their knowledge and experience, as well as strategic thinking and execution, will be a major asset to our sports marketing efforts,” said Tom Manchester, director of sports & entertainment marketing for Dunkin’ Donuts.

Robert Preer reports on Boston.com that the last original Dunkin’ Donuts sign standing anywhere has been dismantled and is now in storage and facing an uncertain fate.

The 1957 neon landmark, which towered over the intersection of Market and North Beacon streets in Brighton, was in poor condition with extensive rust. A backlighted fluorescent plexiglass sign with a modern Dunkin’ Donuts steaming coffee cup logo was erected in its place after the old sign came down on April 3.

“The franchisee of the Dunkin’ Donuts restaurant in Brighton worked with local officials to design an appropriate replacement for the original sign, which had deteriorated to an unacceptable condition,” said Andrew Mastrangelo, media relations manager for Canton-based Dunkin’ Brands Inc.

The sign now is in the construction yard of a sign company in Marlborough. Mastrangelo said he does not know what will happen to it, but the decision is up to the franchisee, who owns the sign and did not wish to be interviewed.

The American Sign Museum in Cincinnati once expressed an interest, but its president, Tod Swormstedt, said last week he probably is not interested now. He hoped that a private collector would acquire it.

“More and more of these signs that have had their day are coming down, and it’s important to preserve them from an historical standpoint and from an emotional standpoint,” said Swormstedt. “These signs evoke a memory of when times were simpler.” The sign was designed in 1950s graphic style with candy-colored neon.

David Waller of Malden, who collects neon signs, said he knows of at least one private collector who is interested. Waller owns what is believed to be the only other intact original Dunkin’ Donuts sign, which he bought from a collector and restored. His sign had stood on Southern Artery in Quincy, next to the first store in the Dunkin’ Donuts chain, which has grown into the largest coffee and baked goods operation in the world.

The Brighton sign “would need to be completely reworked, so it truly wasn’t viable to keep it at the original location,” Waller said in support of the decision to remove it. “But for a collector or museum, the sign is very restorable.”

Waller said he does not want the sign himself, since he already has one, but would acquire it to prevent it from being destroyed.

Currito, Burritos without borders, opened this week at Logan Airport Terminal C.

The pre-security food court at Terminal C is part of the Department of Transportation’s (DOT) Airport Concessions Disadvantaged Business Enterprise (ACDBE) program. The ACDBE program is designed to help small businesses, owned and controlled by socially and economically disadvantaged individuals, become self-sufficient and able to compete with non-disadvantaged firms.

The franchise owner, Chan Park, a US Citizen, of Korean dissent, was released from US Military Service in 1999 and has since worked in food service operations in Southern California. In 2006, Chan was looking for an opportunity to get involved in his own business. He heard about the Currito’s in Horton’s Plaza, in San Diego, and quickly became a fan. “I immediately liked the healthy ingredients, the freshness of the product, and the variety of flavors. The burrito may have originated from Mexico, but Currito has a fusion of flavors that takes the burrito to another level.”

When Chan contacted Currito he met Joe Lanni, Vice President of Franchise Development. “We were impressed with Chan’s experience, enthusiasm and desire, we where aware of the ACDBE opportunity at Logan, ran it by Chan, he saw the potential and wanted to be a part of it.”

Currito has one other location in Massachusetts, it is on the Bentley College campus, in Waltham. Corporate offices for Currito are in Cincinnati, Ohio. The company currently has 10 open locations with commitments to open an 6 more units in 2008.

Chan is pleased to be part of the business community at Logan Airport, “Logan is such a busy airport, I just love being part of it, Boston has so much history, and great institutions, I’m even getting used to the weather, but I don’t know if I’ll ever get used to the drivers.”

The American Association of Franchisee and Dealers (AAFD) announced today that the Federal Trade Commission (FTC) has been chosen to receive the AAFD Total Quality Franchising Chairman’s Award for Distinguished Service and Achievement in the Franchising Community.

FTC is Recognized for Distinguished Service and Achievement in the Franchising Community

The Federal Trade Commission (FTC), has been named the recipient of the AAFD’s prestigious Distinguished Service and Achievement in the Franchising Community Award for the work the FTC did on the recent Franchise Rule Amendment, and especially for including a requirement for disclosure of independent franchisee associations in the franchisor’s Franchise Disclosure Document (FDD).

Steven Toporoff, an attorney with the FTC, was honored to accept the award on behalf of the Commission. “The Federal Trade Commission is honored to be recognized by the AAFD, an organization that has repeatedly participated in the process while offering valuable input in regards to the FTC Franchise Rule.” Toporoff says. “I greatly appreciate the input of the AAFD during the rulemaking process and I believe that the amended Rule is a better product because of the AAFD involvement.”

The Federal Trade Commission (FTC) approved an amended Franchise Rule on January 22, 2007. The amendments change what franchisors are required to disclose in their Uniform Franchise Offering Circulars (UFOCs) which are now called Franchise Disclosure Documents (FDD).

The Amended Franchise Rule is mandatory as of July 1, 2008. One of the provisions of the Amended Franchise Rule is the requirement of the franchisor, if requested by a franchisee association, to disclose details of the independent franchisee association. This rule change now enhances the importance of the franchisee association because prospective franchisees will now be aware of their existence prior to purchasing a franchise.

AAFD Chairman Robert Purvin is proud to acknowledge the FTC, and happy that Steven Toporoff will accept on behalf of the FTC, “Steven, has worked for many years as the FTC’s Franchise Program Coordinator, and has always be willing to hear all sides of the issues, there isn’t a more fitting person to accept the award on behalf of the FTC.”

The AAFD Total Quality Franchising Awards will be presented at the Association’s annual TQF Awards Banquet on Monday, May 5, 2008, during AAFD’s 16^th Annual Conference in Newport News, Virginia.

For more information about the AAFD and the 16th Annual Conference visit: www.AAFD.org

Uno Restaurant Holdings Corp. a NEFA Member, has named Louie Psallidas senior vice president and chief financial officer.

Psallidas will be responsible for all aspects of the company’s financial operations, including transactions related to enhancing capitalization and long-term company growth, according to a release from the Boston-based company.

Previously, Psallidas was senior vice-president and CFO of Papa Ginos Holdings Corp, Inc., the parent company of Papa Gino’s and D’Angelo brands.

Uno Restaurant Holdings includes more than 200 company-owned and franchised units located in 29 states.

Dunkin’ Donuts is offering customers a free donut on Tax Day, April 15th.

The Canton, Mass.-based food chain said the donuts is free with the purchase of a cup of hot coffee.

“We know Americans work hard for their money and this is our small way of showing our appreciation,” said Frances Allen, Dunkin’ Donuts Brand marketing officer, in a prepared statement.

Dunkin said the company sells more than one billion cups of hot and iced coffee every year.

The company has launched plans or entered into agreements for expansion in Las Vegas, Indianapolis, Phoenix, Dallas, Austin, and Houston, and other U.S. location in the last year.

Dunkin’ is also making a push in international markets, including plans to expand into mainland China.

UFood Home Page, NEFA Home Page Member and a franchisor and operator of fast-casual food service restaurants and nutritional product retail stores, announced that the company has entered into a 38 store franchisee agreement with a franchise developer in the Rocky Mountain states of the USA.

The company said that the franchisee has entered into a five and a half year development agreement to open 38 UFood Grills in Colorado, Utah, Montana, Idaho, and Wyoming.

The agreement also provides the developer the right to open in any location deemed viable for the initial exposure of UFood Grill to the consumers in those states.

The first locations under the agreement are expected to open in Salt Lake City and Denver.