The Winner's Column

The Winner's Column

As savvy franchise companies continue to flourish in this challenging economy, FUSR will continue to bring you good news each month, highlighting brands that are adding units, increasing comp store sales, striking deals with investors, and continuing to grow despite the economy - maybe even because of it. And, as the U.S. struggles through its "jobless recovery," growth-oriented franchisors continue to look overseas for expansion opportunities. To be considered for next month's Winner's Column, please send your good news to [email protected]

Monkey Joe's Adds Five New Locations

Monkey Joe's Party and Play Center is expanding - into New Jersey, Tennessee, and South Florida. The inflatables-filled indoor party and play center reports "significant growth in franchise locations" over the past year, and now has 50 locations in 17 states. In New Jersey, new franchisees Ami Shah and Nirav Desai will open the first Monkey Joe's in the state this year. In Tennessee, franchisees Ed McGhee and Robert Richey plan to add Knoxville and Chattanooga to their current location in Madison. In Fort Lauderdale, new franchisees Anthony and Francine Martino will be adding two locations to the South Florida market.

Elements Inks 3-Pack Deal, Enters North Carolina

Elements Therapeutic Massage has signed a franchise agreement for three studios in North Carolina, marking its entry into the state and a growing trend by the brand toward multi-unit franchise licenses. Franchisee Mark Little of Matthews, N.C., expects to open his first studio in Charlotte in April, with plans to open 2 more by mid-2013. Before becoming a franchisee, Little spent more than 25 years in management, operations, engineering, and business research at Tessera North America, Digital Optics Corporation, the Corporate Executive Board, Alcatel, and as an officer in the U.S. Navy Submarine Force. "I was really interested in doing something with my life that was going to give me more scheduling flexibility. I expect to work hard but also wanted to have the ability to set my own schedule," he said. Based in Highlands Ranch, Colo., Elements Therapeutic Massage, with 75 studios in 22 states, is owned by Fitness Together Holdings, which also oversees Fitness Together Franchise Corp.

Boardwalk Fresh Burgers & Fries Expands in Virginia

Koteswara Aluri has signed an agreement to open five Boardwalk Fresh Burgers & Fries over the next four years in Virginia's Fairfax County. The first unit is slated to open in April in Springfield, says Aluri, a serial entrepreneur with investments in the hotel, financial, and banking industries. The brand, with restaurants now open in Virginia, Maryland, Georgia, Pennsylvania, California, and Florida, has 160 new restaurants in development in the U.S. and has development plans in place for New Jersey and Michigan. Brothers Dave and Fran DiFerdinando created the fast casual concept in 2007.

New Johnny Rockets for Las Vegas Strip

The newest Johnny Rockets has opened in the Flamingo Las Vegas Hotel & Casino's food court. Located near the Flamingo's main showroom, the food court has five eateries, all managed by Fifth Avenue Restaurant Group, a Nevada-based multi-unit franchise company that also owns Johnny Rockets units in the Venetian Hotel & Casino, Fashion Show Mall, and Meadows Mall. "Our company has been successful in developing restaurants in the Las Vegas market since 1993," said franchisee Frank Bonanno, president of Fifth Avenue Restaurant Group. (For an in-depth profile of Bonanno, click here.) The new location is the brand's 18th restaurant in a casino, its largest category of revenue growth in the past year. "Casinos have proven to be very profitable for Johnny Rockets franchise partners," said Cozette Phifer Koerber, vice president of brand marketing for the brand, which plans to open additional units in casinos. Based in Aliso Viejo, Calif., Johnny Rockets has 295 corporate and franchise-owned restaurants in 32 states, plus Washington, D.C., Puerto Rico, and 15 countries.

Cool Cuts 4 Kids Opens First Franchise

Cool Cuts 4 Kids, with 65 salons nationwide, is opening its first franchised salon, with a grand opening scheduled this month. Located in Hollywood, Fla., the salon will be operated by first-time franchisees Gary and Maggie Sarner, who have four children. The brand offers the latest in haircuts, braiding, and specialty styles for children (and "Biggies Cuts" for adults), starting at $18.95. Cool Cuts 4 Kids is owned by Regis Corp., which operates more than 12,700 salons worldwide.

Corner Bakery Cafe Continues Texas Expansion

Dallas-based Corner Bakery Cafe, with 22 locations in Texas, has announced plans to add at least 50 new cafes in the next 8 years in the state. Areas slated for franchise growth include Houston, San Antonio/ East Texas, and El Paso. In Houston, Fairview Capital Management Group purchased two company-owned locations and plans to open 19 more in the Houston area in the next 8 years. Fairview consists of investors Ricky G. Caples, Adam G. Beasley, and Jesse H. Roberts III, who partnered with Steve Whiddon, former regional vice president of operations for Corner Bakery. In the San Antonio area, new franchisees Chris and Mariah Pheiffer of Whistler Bakery Group LLC plan to open 11 cafes in the 6 years. In October, franchisee RKO Bakeries LLC of Tyler, Texas, signed on to open eight locations in East Texas and North Louisiana in the next five years. President and owner Robert Owens, along with his wife, vice president and co-owner Kandi Owens, plan to open their first cafe this year in Tyler. Bakery Ventures I Ltd., a franchisee since late 2007, will open its second location in El Paso in late February and has plans to open six locations in all. The franchisor also is exploring company-owned units in Austin and greater Central Texas.

Cafe2U To Expand in U.S.

Australian mobile coffee franchise brand, Cafe2U, is preparing to expand its operations in the U.S., following a successful concept launch in the San Diego area in June 2010. "We see America as a key market for the brand," said Managing Director Derek Black. He said the brand has seen a 30 percent year-over-year growth rate for the past 3 years in Australia. Cafe2U is also negotiating deals in New Zealand and China. The Australian-owned company has 106 franchisees operating across Australia, with an additional 52 operating in England, Scotland, Wales, Northern Ireland, and Ireland.

Subway Adds 500 Locations in Q4

Between October 1st and December 21st, Subway franchisees opened more than 500 new restaurants worldwide, after the brand racked up similar numbers in the previous quarter. Subway now has more than 33,700 locations worldwide, 9,900 of them in international markets. Milestones reached during the quarter include opening the 2,400th location in California, the 500th in Brazil, the 50th in Malaysia. Subway also reported it has more than 7,700 nontraditional locations in airports, department stores, hospitals, and park and recreational facilities worldwide.

TZP Capital Completes $150M Acquisition of The Dwyer Group

TZP Capital Partners I LP, a private equity fund based in New York, has completed its acquisition of The Dwyer Group in a transaction valued at $150 million. The Dwyer Group, based in Waco, Texas, is a holding company for seven residential and commercial franchise service brands - Aire Serv, Glass Doctor, The Grounds Guys, Mr. Appliance, Mr. Electric, Mr. Rooter (Drain Doctor in the U.K. and Portugal), and Rainbow International - with more than 1,500 franchisees operating in the U.S. and seven other countries. Dwyer's franchisees, along with its company-operated stores, account for nearly $800 million in annual system-wide revenues. The completed purchase transferred majority ownership from The Riverside Company to TZP along with a significant reinvestment from The Dwyer Group executive team, and a new investment from each brand president within The Dwyer Group. The Dwyer Group's executive team will remain in place and the company name will not change. Founded in 2007, TZP Group LLC is a private equity firm focused on control investments in business and consumer services companies with enterprise values generally up to $200 million.

Popeyes Opens in Smryna, Ga.

Popeyes Louisiana Kitchen has opened its first restaurant in Smyrna, Ga., northwest of Atlanta. The franchisee is Aziz Hashim, president and CEO of National Restaurant Development. The Smyrna location is his company's 10th Popeyes in the Atlanta area. (For an in-depth profile of Hashim, click here.) Founded in 1972 in New Orleans, Popeyes is the world's second-largest QSR chicken concept (based on number of units). As of October 2010, the brand had 1,949 restaurants in the U.S., Guam, Puerto Rico, the Cayman Islands, and 26 other countries.

INCENTIVES: Back for 2011?

Wingstop Launches First Incentive Program

As part of an aggressive national expansion campaign, Wingstop announced a franchise incentive program to help new and existing franchisees open more Wingstop restaurants nationwide. The program, designed to double the number of stores over the next several years to nearly 1,000, is targeting existing and new markets in the Northeast, Midwest, and Southeast. This is the first time the brand has offered franchise incentives, a move aimed at attracting more multi-unit owners. "With the launch of this program we are taking the most aggressive approach in our company's 16-year history," said David Vernon, vice president of franchise sales. The incentive, available through April 1, offers qualified candidates a reduced franchise and royalty fee. In 2010, Wingstop opened more than 40 new locations, including its first store in Queens, New York, its 50th locations in Los Angeles and Houston, and its first international stores in Mexico City. The company, acquired by private equity firm Roark Capital Group in April 2010, has reported more than seven straight years of positive same-store sales. Founded in 1994 and based in Richardson, Texas, Wingstop has 470 restaurants open in the U.S. and Mexico.

Subway Waives or Reduces Franchise Fees for Vets

In a move to expand its presence at military/nontraditional locations, Subway is now waiving its $15,000 franchise fee for any honorably discharged veteran seeking to open a Subway on a government or military installation. In addition, the franchise fee will be reduced by 50 percent for any veteran opening a Subway at any non-military or non-government location. The brand currently has units at more than 250 military locations worldwide.

Papa John's Unveils 2011 Development Incentive Program

Under Papa John's new 2011 Development Incentive Program, qualifying restaurants opening in the U.S. in 2011 can receive the following: no franchise fee ($25,000 value); two Middleby-Marshall ovens, which can be purchased for $50 after operating for 2 years; a royalty waiver for up to 12 months; and a $3,000 food credit with PJ Food Service, which operates the brand's fresh dough and food distribution quality control centers, for each restaurant that opens at least 30 days before the scheduled opening date. The program is generally available for new U.S. unit development agreements signed by Oct. 31st for new restaurants opening in 2011. (The incentives are subject to the complete rules and eligibility requirements of the program at the time of signing.) Headquartered in Louisville, Papa John's International is the world's third-largest pizza company. "With the continued uncertainty of the economic recovery as we head into 2011, we are proud to offer this program," said Jude Thompson, Papa John's president and co-CEO.

Published: January 5th, 2011

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