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Feature Story:

Fund-Amental Change?: Is Aziz Hashim's New Fund For Franchisees A Game-Changer? »

By Eddy Goldberg

Tired of paying royalties? How would you like to get in on collecting them? That's one of the reasons--among many--behind an innovative fund created to allow multi-unit franchisees to own or invest in franchise brands.
"If you're in franchising as a multi-unit franchisee and have built your enterprise by paying royalties, it's a very natural hedge to have an investment in an entity that's in the business of collecting royalties," says Aziz Hashim, founder and general partner of the new fund, called NRD Partners.
Hashim, who has made a career operating restaurant franchises, says he has been preparing for this new role all his franchising life. "I've entered and exited 14 brands in my career. So in a way I've been practicing as a little mini-private equity or fund anyway...

Feature Story:

Arizona Says No To Wage Discrimination »

Multi-Unit Franchisee

The state of Arizona stands with the IFA and has filed an amicus brief with the Ninth Circuit Court of Appeals in support of IFA's effort to halt discrimination against franchisees by the city of Seattle. Last year, Seattle approved an increase in the minimum wage that classifies franchisees as large corporations rather than the small, locally owned businesses that they are. The IFA says this artificial distinction that will force franchise businesses to boost their workers' wages faster than other small businesses.
In his brief, Arizona Solicitor General John R. Lopez, IV says that the Seattle ordinance is discriminatory and directly burdens 13 franchisors based in Arizona and their 54 franchise units operating in Seattle. The brief also asserts that the ordinance violates the U...

Feature Story:

IFA Says New Overtime Regulation "Unnecessarily Meddling" »

Multi-Unit Franchisee

The International Franchise Association (IFA) is condemning a proposed overtime regulation rule from the Department of Labor that it says would dramatically increase the threshold for overtime pay and ultimately force thousands of employers to shift the pay status of their workers from salaried to hourly.

"This change is likely to have the opposite of its intended effect and will clearly harm more workers than it helps," said IFA Executive Vice President of Government Relations & Public Policy Robert Cresanti. "Millions of salaried workers will now become hourly and lose out on key benefits such as workplace flexibility and long term advancement opportunities. This is just the latest example of the Obama Administration unnecessarily meddling in the everyday management of small businesses...

Feature Story:

Make It So!: Customer Growth Lessons From Amazon »

By Jack Mackey

Amazon founder Jeff Bezos is a Star Trek junkie. He almost named his company MakeItSo.com, based on the adventures of the USS Enterprise, when Captain Jean-Luc Picard would confirm his commands with the words, "Make it so!"
"Make it so!" may also be the ultimate personal motto for multi-unit operators trying to grow their businesses. But the practical question is, How exactly do you increase sales and business value continuously over many years?
What is the secret to Amazon's growth? Bezos answers like this: "We know customers like low prices. We know customers like big selection. We know that customers like fast delivery. And we know those things are going to be true 10 years from now. They are going to be true 20 years from now...

Feature Story:

Just Be-Cause: Cause Marketing Is Making A Difference »

By Kerry Pipes

Doing good is a longtime pursuit in America. You might even say it's a part of the culture. Americans love a good cause and like to help when they can. Whenever needs arise, there always seem to be businesses, organizations, and private citizens ready to come forward to lend a hand. And in the past couple of decades, businesses, especially franchises, have been getting more and more involved in supporting charitable causes.
It makes sense, both personally and for business. Franchises are local operations, most run by people who are part of the community. As a result, many franchise brands and tens of thousands of franchisees have become involved with good causes. Sometimes those causes are global, national or regional, but more often they are local and franchisees and franchisors alike are there to step in...

Feature Story:

IFA Opposes Damaging California Franchise Legislation »

Multi-Unit Franchisee

A bill making its way through the California State Assembly would undermine existing business contracts between franchisors and franchisees, says IFA President & CEO Steve Caldeira. The IFA opposes the bill and issued a statement saying Assembly Bill 525 would create untested new statutory language that will lead to costly litigation and hinder future franchise development for an industry that has outpaced overall economic growth for five years since the recession.
"In keeping with the spirit of Governor Brown's veto message last year on this matter, the International Franchise Association has been working in good faith with Assemblyman Holden (D-CA-41) to reach a consensus on a number of outstanding contractual issues between franchisees and franchisors...

Feature Story:

2015 AFDR Highlights: Website Mystery Shopping & Social Presence »

By Eddy Goldberg

This newsletter continues to present highlights from the 2015 Annual Franchise Development Report (AFDR). The 2015 AFDR is based on responses from 139 franchisors representing 36,313 units (32,693 franchised and 3,620 company-owned).

This week: website mystery shopping and social channel performance.

Process Peak conducted this portion of the mystery shopping, examining the websites of 147 franchise brands to evaluate how well they are using their online presence to grow their brand and manage their reputation.

Process Peak's Jon Carlston noted that franchisors are doing a "great job" of getting their websites to appear on Google's first search results page, but are not doing a great job using social channels as an additional way to promote their franchise opportunity...

Feature Story:

Multi-Unit Franchisee 'Strategies For Growth' Collection Available »

Multi-Unit Franchisee

Multi-unit franchisees who are looking to gain an edge on their competition have a new resource at their disposal. Franchise Update's Franchise Learning Academy has just released its "Strategies For Growth" Collection, a series of 14 video seminars, covering more than 20 hours of programming, and providing access to the insights, experience, and success stories of more than 40 multi-unit and multi-brand franchisees and franchising professionals.
The timely and topical information found on the videos comes straight from many of today's top multi-unit franchisees who have been there, done it, and successfully lived to tell the tale. Their invaluable advice can provide tips and insight for taking your business to the next level. All video seminars were produced at Franchise Update's Annual Multi-Unit Franchising Conferences in 2014 and 2015...

Feature Story:

Melting Pot Launches New Recruiting Incentive Program »

Multi-Unit Franchisee

The Melting Pot is looking to reopen some franchise locations and it has created a new incentive to help recruit qualified restaurant operators. The new program will provide financing to those who sign a franchise agreement to purchase an existing Melting Pot location in select markets across the country, starting with Chattanooga and Memphis.
Under the guidelines of its new "Path to Grow" program, approved restaurant operators can inject as little as 5 percent liquidity into the purchase of the restaurant to partner with the franchisor, who would provide the financing. In exchange, the franchisor would initially assume 51 percent ownership of the restaurant under the conditions that the operating franchisee agrees to pay back the initial loan within three years of signing the franchise agreement...

Feature Story:

Fresh CREAM Deal Coming To Florida »

Multi-Unit Franchisee

The cold rush is coming to Florida. The Sunshine State will be the location of more than 30 new shops of the San Francisco-based dessert franchise CREAM over the next 7 years. The franchise specializes in premium ice cream sandwiches and other frosty treats.
The new agreement marks CREAM's largest and most significant franchising announcement since launching its franchise opportunity in 2012, and will develop stores starting in South Florida before moving towards West Florida and beyond.
"There's definitely a lot of excitement around the brand," says CREAM president and COO Jim Ryan. "We are very excited to have over 30 units available to entrepreneurs in Florida and to make our East Coast debut."
The initial deal was inked with Armando Martinez Stone, who discovered the brand while participating in his High School DECA program in which participants were given the challenge to outline a plan to improve a company's national and international success...

Feature Story:

IFA Appeals To Stop Seattle's Discrimination Against Franchise Business Owners »

Multi-Unit Franchisee

Franchisees in Seattle have the International Franchise Association (IFA) on their side. The group is appealing a recent decision in federal court that allows the city of Seattle to discriminate against small franchised businesses as part of the city's 2014 minimum wage law. The IFA sought a preliminary injunction, which was denied by U.S. District Judge Richard A. Jones court in mid-March.
The IFA and five Seattle franchisees have given notice that they will appeal Judge Jones' decision to the United States Court of Appeals for the Ninth Circuit. The original lawsuit filed in June 2014 requested fair treatment for franchises under the law, which treats them as large, national companies, rather than the small, locally-owned businesses...

Feature Story:

Fastsigns Franchisee Advocates For Industry At U.S. Chamber Event »

Multi-Unit Franchisee

Fastsigns franchisee Clint Ehlers is taking a stand in support of the franchise industry at this week's U.S. Chamber of Commerce event, "The National Labor Relations Board (NLRB) and the Joint-Employer Standard: New Interpretations, New Liabilities and the Impact on Other Statutes."
Ehlers owns and operates Fastsigns locations in Lancaster and Willow Grove, PA. This isn't his first time to speak up about the issue. He previously took a stance against the ruling in an appearance on September 9, 2014, testifying before Congress against the "joint employer" decision, with Catherine Monson, CEO of Fastsigns International.
As a pervasively critical issue within the franchise industry--among franchisors, franchisees, and employees alike--the NLRB's ruling on the Joint-Employment Standard will be addressed by Ehlers at the March 20th event, including the threat to locally-owned and operated franchise businesses across the nation that provide incredible value to communities by providing jobs, products/services, and sales tax revenue...

Feature Story:

Georgia Franchisees Are Back To Fazoli's »

Multi-Unit Franchisee

Allen Peake and Mike Chumbley are the powers behind C&P Restaurant Company, a Macon, Georgia-based company that operates Captain D's and Cheddar's locations. The duo has just inked a deal for six Fazoli's restaurants in Georgia and South Carolina.
The new deal brings Peake and Chumbley back to Fazoli's. As executives and minority owners of RMS Family Restaurants - where they worked together for 15 years - they previously operated 12 Fazoli's in Florida, Georgia, and South Carolina. RMS sold its Fazoli's restaurants in 2000; they eventually were closed.
Under the new agreement, C&P Restaurant Company plans to open Fazoli's restaurants in Macon, Warner Robins, Athens, Augusta, Columbus, and Savannah.
"We always knew that we wanted to again be part of Fazoli's, and now the timing is right," says Peake...

Feature Story:

Cybersecurity Tips For Small Business Operators »

By Darren Guccione

From Target and Home Depot, to Apple's iCloud, Sony, and Anthem, it seems there's a new security breach announced every other week. Polls indicate that 50 percent of small- to medium-sized businesses believe they are immune to targeted cyber-attacks because criminals are more focused on large corporations. The reality is these companies are easy targets because they don't invest in new tools to defend against today's new breed of cyber attacks.  All companies, regardless of their size, are at risk.
Older, traditional security solutions are based on technologies that rely on knowing something about the attack, such as the vulnerability targeted, the malware used, or the reputation of the email sender. These tools may block basic known malware, but they are incapable of identifying today's dynamic, multi-vector, multi-stage attacks...

Feature Story:

6 Tips For Taking Leaps Of Faith »

By Scott Petinga

As a former Marine, cancer survivor, and highly successful serial entrepreneur, I've learned a thing or two about risk. If you're happy languishing in a gelatinous pool of indifference and stagnation then, by all means, keep doing what you're doing. If you're ready to take a leap and change things for the better, here's some wisdom to get you started:

1. Realize you take risks every day. Getting up, answering the phone, and heading out the door are all risks, albeit minor ones. However, every time you do those things you're putting yourself out there--you're even risking rejection daily in your professional and personal life. You do these things every day and survive. Trust me, it won't kill you. You are very capable of risk taking...

Feature Story:

Collaborate, Communicate, Grow: Franchise Relations Come To The Fore »

By Eddy Goldberg

Franchise relations are in the midst of powerful, fundamental change. Driven by the maturity of franchising, the rise of large multi-unit operators, the after-effects of the recession, and, most recently, external regulatory and political threats to the franchise model itself, franchisors and franchisees are working together more than ever before--and looking for ways to do it better.
In our conversations with multi-unit franchisees and franchisors, we found three overriding themes: collaboration, communication, and having a structure in place to facilitate them. Here's how some are working together for mutual gain.

Collaboration
In his 35 years in franchising as a franchisee of Great American Cookies, Doc Cohen has seen the brand trade hands from its founders to a private equity firm, sold to its chief competitor, and then sold twice more to private equity firms...

Feature Story:

Check Your Franchise Agreement Before You Sell »

By Scott A. Augustine

Franchisees around the country are breathing a collective sigh of relief as the post-recession rebound officially sets in. For many who weathered the economic downturn, earnings have increased, profits are up (thanks to strategic management decisions), and potential purchasers are again lining up to enter the market with finances in hand. And for others, fair market value for the business has reached a point where it may make financial sense to sell, particularly for those who held on to see a better day.
But before you make plans to sell the franchise, whether now or in the next few years, there are a few simple steps that you should take to prepare and avoid unwanted surprises. After all, preparation enhances the value of your business; surprises cost money and time...

Feature Story:

Information Retrieval: FDDs Need More Useful, Actionable Detail »

By Darrell Johnson

When evaluating a brand, experienced operators have two big advantages over first-time prospects. First, they know what questions to ask. Second, most of the time they know what a good answer looks like.
The first advantage really isn't all that much of an advantage. Common sense leads prospects to ask many of the most relevant questions. In addition to how much they will be asked to invest and how much can be made from that investment, some of the more frequently asked questions include: the franchisor's financial position, the experience of the franchisor's management team, the amount of training and support, brand marketing efforts, and the performance of units and franchisees.
The second advantage is usually considered the big one...

Feature Story:

Can Energy Management Systems Really Work? »

By James Walton

Energy management systems (EMS) are great in theory but often prove problematic in practice for many multi-unit franchise owners. The reasons tend to vary but a common theme centers on the administration of the intelligent thermostats, the pre-conceived cost of installation and complexity to ascertain, analyze, and effectively apply the data.
All of these are valid points against EMS for entrepreneurial multi-unit franchisees who operate in environments with razor thin margins and who may have limited internal resources. These owners simply don't have the bandwidth or dedicated staff to effectively administer, monitor, and analyze the fire hose of data associated with energy management systems.
As a result, multi-unit operators often discard the notion of embracing energy management systems and the significant financial benefits and operational efficiencies they provide...

Feature Story:

Franchisees Testify NLRB Actions Could Shut Them Down »

Multi-Unit Franchisee

Two franchise business owners urged Congress to address regulatory overreach by the National Labor Relations Board (NLRB) to expand the definition of what constitutes a joint employer during a hearing February 5 before the Senate Health, Education, Labor and Pensions (HELP) committee. The franchise business owners testified that recent actions by the NLRB would significantly undermine their ability to operate and sustain their businesses - potentially forcing them to close down. 
At issue is the recent NLRB recommendation to upend the decades-long, well-established joint employer definition. Should the NLRB expand the definition of joint employer to include a franchisee's national brand, it would destroy the franchise model - leading to industry consolidation and, ultimately, to store closures and a loss of jobs, economic activity and entrepreneurial investment...



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