The Winner's Column - November 2011

As savvy franchise companies continue to flourish in a volatile economy, FUSR continues to bring you good news each month, highlighting brands that are adding increasing comp store sales, striking deals with investors, innovating, and continuing to grow, whether domestically or overseas. To be considered for next month's Winner's Column, please send your good news to

New Units & Deals

Pollo Campero Debuts New Design in Houston
Pollo Campero will open three Houston locations by year-end featuring its new design and menu. A fresh salsa bar will remain at the center of the restaurant's layout, said Roberto Denegri, president of Pollo Campero USA. The revamped design will also feature a patio for outdoor seating. The family-owned brand opened in 1971 in Guatemala and now has 200 locations worldwide, with 27 in the U.S. The new design is intended to help with plans to expand in the U.S.

U.S. Lawns Adds 4, Celebrates 25th Anniversary
U.S. Lawns has signed four new franchisees, bringing its total new signings to 31 since summer 2010. The new franchisees are Jeff and Justin Weinzierl, Colorado Springs; Ron and Blake Gordon, Frankfort, Ky.; Greg and Ann Hinson, Goldsboro, N.C.; and Jonathan Sparks, Lexington, N.C. The brand, with more than 240 commercial landscape-management franchises operating in all 48 contiguous states, is celebrating its 25th anniversary with a year of double-digit growth.

Subway Adds 400 in 2 Months, Tops 35,000
Subway opened more than 400 new locations in 44 countries, 36 U.S. states, and 7 Canadian provinces during August and September, bringing the total number of Subway restaurants to just over 35,300 locations in 98 countries. The chain also announced the opening of five new "green" Subway Eco-Restaurants, bringing the number of these restaurants to 14. Each is designed with environmentally friendly elements to reduce water, and waste consumption.

Quaker Steak & Lube Opens New Prototype
Quaker Steak & Lube opened a new prototype in Springfield, Ill., last month. The new unit, its first in Illinois, extends the brand's footprint to 15 states. "Dubbed the Lube Classic II, the new prototype is going to play an integral role in our brand's expansion throughout the next couple of years," said John Longstreet, Quaker Steak president and CEO. Founded in 1974 and built in an abandoned gas station in Sharon, Pa., the original Quaker Steak & Lube began as a cook-your-own steak restaurant before expanding to more than 40 locations in the U.S. and Canada.

Mellow Mushrooms Sprout in D.C., Georgia, Oregon
Mellow Mushroom Pizza Bakers has opened three new restaurants. In Washington, D.C., franchisees Amit and Pooja Mehta are opening a three-level restaurant in the Adams Morgan neighborhood. All three levels feature a full-service bar, and this Mellow will include a Beer Club with 80 beers and member-only rewards. In Oregon, a new Mellow will open in the Pearl District of Portland, the brand's first West Coast location. And in Georgia, franchisees Charles and Kelly Wilson are opening a new unit in Cumming, in The Avenues of Forsyth shopping center.

Volvo Rents Targets Arizona
Volvo Rents has acquired Papé Rents, a single location equipment company in Phoenix, continuing its strategy of growing a network of company-owned stores. The acquisition is the fifth Volvo Rents store in Arizona and its first in Phoenix. The other Arizona locations are in Eloy, Miami, Thatcher, and Tucson. The focus on Arizona is buoyed by predictions that local construction spending will top $44 billion in the Phoenix-Mesa-Glendale marketplace between 2012 and 2016. Volvo Rents, a wholly owned subsidiary of the Volvo Group, operates a network of 70 company-owned and franchised rental stores in North America.

Carstar Auto Body Repair Adds 7 New Franchisees
Seven independent collision centers joined Carstar Auto Body Repair Experts this spring and summer: Premier Collision Carstar in Tacoma, Wash.; Bailey's Carstar Auto Body & Glass in Poplar Bluff, Mo.; Miller's Carstar Collision in Houston; Carstar Collision Pros, ProCare Carstar Northeast, and ProCare Carstar Southside, all in San Antonio; and Galles Carstar Collision Repair in Albuquerque. The new franchisees will benefit from the Carstar Management Systems, which provide resources to improve key business metrics such as cycle time, participation in Carstar's 17 corporately managed DRP programs, and improved purchasing power from 44 corporately managed purchasing programs. Carstar is the largest group of branded collision repair facilities in North America with more than 400 locally owned and operated locations in 31 states and 10 Canadian provinces.

Villa Enterprises Opens Dual-Brand Unit at PHL
Villa Enterprises Management Ltd. opened a Green Leaf's/Bananas location at the Philadelphia International Airport last month in Terminal D, its seventh Greenleaf's/Bananas airport location and the third in Pennsylvania. Villa Enterprises, a global multi-concept restaurant franchisor with more than 300 QSR locations in 38 U.S. states and 5 additional countries, was founded in 1964 by Naples, Italy native Michele Scotto as a small pizzeria in New York City. Its brands include Villa Fresh Italian Kitchen, Villa Pizza, Green Leaf's, Bananas, Casa Java, Mo' Burger, Far East, and South Philly Steaks & Fries.

Corner Bakery Cafe To Add Seven Units in South Texas
Dallas-based Corner Bakery Cafe today has signed a deal with restaurateur Bernardo Castillon to bring seven new locations to the South Texas region within five years. The deal brings the total number of planned franchise locations to 45 in a state that already has 23 company-owned and franchised Castillon's first will open in McAllen in the first half of 2012, with six additional locations planned for Corpus Christi, Laredo, Brownsville, and Harlingen. Other upcoming franchise openings slated for the state include RKO Bakeries' new Tyler location (October), Whistler Bakeries LLC's two new San Antonio locations (November and January), Fairview Capital Management's third Houston location (November), and Bakery Ventures' third location in El Paso in 2012. The brand also plans to open more company-owned locations in Dallas/Ft. Worth and will be introducing the brand to the Austin market in 2012. Established in 1991, Corner Bakery Cafe restaurants are owned and operated by CBC Restaurant Corp. with 121 company-owned and franchised locations in the U.S. The brand's acquisition by Roark Capital Group in June 2011 is providing additional resources and support to accelerate the growth of both company-owned and franchised cafes.

Charley's Grilled Subs Opens 100th Military Location
Charley's Grilled Subs, a Philly Steak franchise, recently opened its 100th restaurant on a military installation, on Joint Base Lewis-McChord in Washington, marking a new milestone with the company's largest franchise partner, the Army & Air Force Exchange Service (AAFES). Charley's opened its first military installation in June 1999 at Hickam Air Force Base in Hawaii. Founded in 1986 and based in Columbus, Ohio, Charley's has more than 430 locations worldwide in 44 states and 16 countries, with more than 90 percent run by franchisees. Charley's opened 38 new restaurants in 2010 and is planning to add another 46 this year.

New Brand Launches

Top That! Pizza Opens First Franchise
Top That! Pizza has opened its first franchised unit, in Tulsa. Lori Walderich, founder and co-owner of the brand, said four more units are under construction with dozens more in the pipeline. Six locations are set to open by year-end, with five more scheduled to begin construction in the first half of 2012, in Oklahoma, Texas, and Missouri. Top That! offers custom, personal-sized pizzas for a set price ($6.99 for a 10-incher, and $3.49 for a children's pizza). Some key differentiators for the concept: 1) the two prices remain the same no matter how many toppings a customer may pile on; 2) the creation process resembles a sub shop, with customers choosing their crust, sauce, and toppings; and 3) hot pizzas are ready in under 3 minutes. For drinks, the brand offers Coca-Cola's Freestyle touch-screen fountain dispenser, which can serve up more than 100 varieties of beverages. "People have told us they'll drive 15 miles to create their own pizza and custom drink. Now they're asking us when we'll build a store near them," said co-owner Jeff Walderich.

Domino's Founder Launches Gyrene, a New Burger Delivery Concept
Domino's Pizza founder Tom Monaghan has launched Gyrene Hamburger, a military- burger concept. The restaurants will offer only two types of burgers: a classic with ketchup, mustard, and pickle, and a deluxe with lettuce, tomato, and mayo (both will feature two beef patties, bacon, and cheese). Prices will start at $5.99, and in an interesting twist, there will be no sides or drinks and no seating. Delivery will be free by employees dressed in camouflage The 74-year-old former Marine said the name was inspired by his military background (Gyrene is a nickname for a Marine). Monaghan said he plans to open the first Gyrene in two months in Naples, Fla., and the second 30 days later. Monaghan, former owner of the Detroit Tigers, sold Domino's in 1998 when the chain had more than 6,000 locations.

SC Asian To Debut in San Francisco
SC Asian, a new hybrid fast-casual restaurant with full-service elements, is set to debut on Nov. 14 in San Francisco in the court of Macy's, near Chinatown. "How do I feel about being three blocks from the most dynamic Chinatown in the U.S.? I feel great about it," said company president Greg Carey. The brand is the third from Flat Out Crazy Restaurant Group, which operates Stir Crazy Fresh Asian Grill (casual) and Flat Top Stir Fry Grill (fast casual). Guests will order at the register, find a table, and "food runners" will deliver their meals. From there, a server will wait on diners who want to order more drinks and and will accept credit card payments on a handheld device. Carey says the new concept, which allows for a flexible footprint, could fit into about 100 Macy's properties nationwide, as well as airports, food courts, and freestanding units. Flat Out Crazy, based in Chicago, operates 17 Stir Crazy locations in 10 states and 17 Flat Top units in 5 states.

MoneySaver Unveils Aggressive National Growth Plan
MoneySaver Coupon Book, which supplies coupon books and online printable coupons in South Florida and Northern New Jersey, is pursuing an aggressive national franchise growth strategy. "No doubt, there is an insatiable enthusiasm for coupons," said Brian Squires, president of MoneySaver. Franchise fees for the home-based business range from $15,000 to $22,500 and include three to five mailing zones, each with 20,000 mailboxes. MoneySaver's home office handles all the graphics, and web development, allowing franchisees to focus on growing their business through ad sales. Founded in 1990, MoneySaver began franchising this year.

Big Plans

Krystal Plans to Double Units in 5 Years--and Sell the Company by Year-End
The Krystal Co., founded in 1932, wants to double the number of restaurants it owns or franchises to 760 over the next 5 years. One wrinkle: a planned sale of the company. "We're halfway through the process," said CEO Fred Exum. "The plan is to complete the process by the end of the year." Krystal, which reportedly has closed more than 40 restaurants in recent years, is now counting on consumers seeking lower prices, its purchases of undervalued properties since 2008, and smaller, more affordable models to drive growth, including the "Krystal Too" storefront model that can be sited in strip malls or other new types of locations for the brand. The new, smaller designs cost about $500,000 less to build than a typical Krystal, bringing the cost for a new restaurant down to about $1 million, according to the company. The chain has opened six restaurants so far in this year, in Chattanooga, Tenn., Tampa and Jacksonville, Fla., Gulfport, Miss., Millidgeville, Ga., and Murphy, N.C. Three more are scheduled to open in Florida soon, in Winter Haven, Plant City, and St. Augustine. Krystal is owned by a private investment group that includes Summerfield K. Johnston, Probasco and Patten family members in Chattanooga, and the Ingram family in Nashville. Based in Chatanooga, The Krystal Co. has 380 restaurants in 11 states.

H&R Block Looking To Add 100 More Locations
After adding more than 120 franchise offices in 2010, H&R Block is looking to add 100 more to its 11,000-office network. Block plans to grow its 55-year-old franchise network through two business models. One will focus on independent tax business owners who want to join its franchise network; the other is aimed at owners ready to retire or who are looking for an exit strategy and want to sell. The company offers an "Assisted Acquisition Program" to help franchisees identify customer acquisition opportunities, and provides financial support by paying up to 80 percent of the purchase price. H&R Block, the first company in the U.S. to offer has more than 4,300 franchise locations among its 11,000 offices. The company says its average franchisee owns three locations and has been on board for more than 19 years.


Pei Wei Goes to Mexico
P.F. Chang's China Bistro has signed an exclusive development and licensing agreement with Alsea to develop Pei Wei Asian Diners throughout Mexico. Alsea is the leading QSR, shop, and casual dining operator in Latin America. Its other brands include Domino's Pizza, Starbucks, Burger King, Chili's Grill & Bar, and California Pizza Kitchen. The agreement requires Alsea to open 3 restaurants in 18 months and has an option for a long-term contract with a commitment to open 50 restaurants over 10 years. The first location is anticipated to open in Mexico City in the next few months. Alsea already operates 8 P.F. Chang's restaurants in Mexico under a 2009 agreement to develop 30 P.F. Chang's restaurants in Mexico over 10 years. This year, Alsea also entered into a similar agreement to develop 17 P.F. Chang's restaurants in Argentina, Chile, and Colombia over the next 10 years. P.F. Chang's owns and operates two restaurant brands in the Asian niche: P.F. Chang's China Bistro and Pei Wei Asian Diner.

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