The Winner's Column - January 2012
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 units, 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 email@example.com.
New Units & Deals
Yogurtini Self-Serve Frozen Yogurt Opens in Phoenix
Yogurtini Self-Serve, a pay-by-the-ounce, self-serve fro-yo franchise, has opened its newest location in North Phoenix, its sixth unit in Arizona, where the brand is based. The "serve-yo-self" concept allows customers to make their own frozen yogurt creations, creating blends and concoctions (like a martini, thus the name). Created by Tempe natives and sisters Natasha and Chelsey Nelson, Yogurtini offers up to 16 rotating healthy and fat-free flavors and more than 70 toppings.
Appleton Learning Signs 23-Unit Agreement in Texas
Appleton Learning has signed a multi-unit deal with Aristotle Holdings LLC to open 23 locations in Texas by 2015. The first three branches are set to open this July in Austin, with locations in San Antonio and Dallas-Fort Worth to follow. Five more units are planned for the Houston market in the next few years (in addition to the brand's first franchised unit, which opened there last February). "In addition to these franchised locations, we plan to open three company-owned branches in 2012 in Tennessee and Alabama," said Glenn Clayton, the brand's 25-year-old founder and CEO, who started the business while still in college. Based in Huntsville, Ala., Appleton (academic coaching, test prep, academic testing and assessments) began franchising a year ago and has 29 locations set to open in the next 3 years, along with plans to open 30 corporate-owned locations in the next 5 years, including Huntsville and Nashville.
The Joint Corp. Inks Deal for 35 Clinics in LA County
The Joint Corp., a franchisor of chiropractic clinics, has awarded Los Angeles County to Chad Meisinger and Raymond Espinoza for the development of more than 35 clinics. Meisinger has a background in Internet and high-tech communications startups, and Espinoza in business finance and management. Founded in 1999 by Dr. Fred Gerretzen, The Joint Corp. aims to make chiropractic care simpler and more affordable. The company has 96 clinics open or in development in 14 states, with 167 units under agreement with regional developers.
TGA Premier Junior Golf Awards 50th Franchise
TGA Premier Junior Golf has signed an agreement with new franchisee Dustin Cottingham for East Montgomery County, a suburb of Philadelphia. To attract more franchisees, TGA has developed an affordable business model with franchise fees averaging $17,000 per unit (depending on the territory's population and average household income). TGA, a youth development program, is now operating in 23 states with more than 2,000 schools offering after-school programs.
Crunch Fitness Plans 30 Gyms in New Jersey
Retail developer Dennis Cieri has signed on to open 30 Crunch Fitness franchise locations in Northern New Jersey. Cieri, founding partner of Eden Property Company in Rutherford, N.J., has opened dozens of retail shopping centers and freestanding Walgreens in northern New Jersey. He also is a founding partner of Heartland Restaurant Group, which in 2007 signed to build and operate 105 Dunkin' Donuts in the Pittsburgh area. He also is the founder and president of SSP Nutrition, a boutique performance nutrition company, and the founding partner of The Fitness Factory Group, which owns and operates three health clubs in Northern New Jersey. "I've been in the entrepreneurial and franchising industry for a very long time, but I've never been this excited about a brand," said Cieri. Based in New York City, Crunch is now co-owned by investment firms New Evolution Ventures and Angelo, Gordon & Co., who acquired it out of Chapter 11. Crunch has 35 gyms open in the U.S. and Australia, 12 of them franchised. Crunch has inked deals to open an additional 100 clubs worldwide.
Famous Dave's Now Serving Times Square
Famous Dave's of America has opened a new restaurant on New York's renowned 42nd Street between 7th and 8th Avenue.This is the sixth Famous Dave's in New York and the second in New York City. The new unit, owned and operated by Sammy Benmoha of 42nd Street Barbeque LLC, seats more than 500 customers and has a bar and separate rooms for catering special occasions. As of third quarter 2011, the company owned 53 locations and franchised 131 units in 37 states.
Mucho Burrito Crosses the Border to Seattle Area
Mucho Burrito, a fresh Mexican grill concept based in Mississauga, Ontario, has opened two locations near Seattle, in Renton and Lynwood. The franchisees are Feisel Ramjee and Roy Woolsey, who have opened a combined 25 Subway locations. "The growing trend in popularity of fresh Mexican dining coupled with the high business success rate characteristic of franchises in this market make Mucho Burrito a very attractive investment opportunity," said Ramjee, president of MB Development Inc. Mucho Burrito, with units across Canada, opened its doors in June 2006.
HuHot Growth Plans Heat Up for 2012
HuHot Mongolian Grills, with 40 locations in 15 states, completed the last quarter of 2011 with new restaurant openings in Oklahoma City, Bismarck, N.D., and a second location in Colorado Springs. HuHot is looking to add at least 10 new locations in 2012. Growth plans include North Carolina, where Mike Treadwell (Treadwell Enterprises) plans to open his first North Carolina unit in Greenville this spring, and anticipates new openings quarterly. Additional expansion plans in the works include Colorado, Minnesota, Wisconsin, Iowa, and Utah. HuHot opened its first restaurant in Missoula, Mont., in 1999.
Margaritas Mexican Inks 5-Unit Deal for Greater Philly
Continuing its outward migration from its New England home base, Margaritas Mexican Restaurant has signed a deal to develop 5 restaurants in the Philadelphia area in the next 5 years. Veteran franchisee Craig Colby (operator 4 Red Robins and 4 Cosi restaurants in Southern New Jersey and Delaware; and formerly 15 Burger Kings) plans to open new Margaritas in Delaware, Southern New Jersey, and Philadelphia through Mid-Atlantic Restaurant Concepts, LLC. Margaritas has 23 locations, 22 in Massachusetts, New Hampshire, Maine, and Connecticut, and one in New Jersey, which opened last year.
Uncle Maddio's Pizza Continues Southeast Expansion
Uncle Maddio's Pizza Joint has opened new stores in Atlanta and Louisville. Scott Dennison, a veteran Papa John's franchisee who sold his units in 2001, is the franchisee for Louisville. Founded two years ago by Matt Andrew, one of five founding members and former president of Moe's Southwest Grill, the brand has 60 units in development (Florida, Georgia, South Carolina, North Carolina, Tennessee, and Kentucky) and plans to open another 17 before year-end, including Alabama, Missouri, Louisiana and Texas. The company's goal is 500 stores in the next 10 to 15 years.
Dickey's Barbecue Pit Opens in Lufkin, Texas
Dickey's Barbecue Pit is now open for business in Lufkin, Texas, where franchisee Asim Jilani opened his doors in early December. Dickey's opened its first location in Dallas in 1941 and began franchising in 1994. At the end of 2011, the company expected to have 200 stores open in 35 states.
Mergers & Acquisitions
Einstein Noah Acquires Kettleman Bagel
Einstein Noah Restaurant Group (Einstein Bros. Bagels, Noah's New York Bagels, and Manhattan Bagel) has acquired Kettleman Bagel Company, a five-store bagel chain in Portland, Ore. The company framed the acquisition as part of its strategic growth plan to strengthen its position in the Pacific Northwest, and expects to rebrand all five locations into one of its existing brands. "I have complete confidence in the Einstein Noah management team," said Jeffrey Wang, president and CEO of Kettleman. "Now I can retire knowing my company is in good hands." Einstein Noah has more than 750 restaurants in 39 states and the District of Columbia and operates a dough production facility.
Fog Cutter Capital Acquires Buffalo's CafÃ©
Fog Cutter Capital Group's franchise development subsidiary has acquired Buffalo's CafÃ©, a 26-unit casual dining chain specializing in chicken wings. The brand, formed in 1985, has restaurants in Georgia, Texas, Florida, North Carolina, and Indiana; plus five in Kuwait and one in Riyadh, Saudi Arabia. Fog Cutter, parent of the 112-unit Fatburger chain, plans to market Buffalo's CafÃ© franchises to its existing franchisee base.
Tasti D-Lite Acquires Planet Smoothie in Co-Branding Move
Tasti D-Lite has acquired Planet Smoothie and its more than 100 units (mainly in Georgia and Florida). The acquisition, which closed November 30, seeks to boost unit growth through co-branding initiatives and non-traditional development opportunities. Under the plan, Tasti D-Lite products will be added to Planet Smoothie stores and vice versa. "The consumer profiles of Tasti D-Lite and Planet Smoothie are very similar, so combining the two complementary brands will provide both an opportunity to increase the scale of the combined store network as well as sales at the store level," said Jim Amos, CEO of Tasti D-Lite. Including this transaction, Tasti D-Lite expected to end 2011 with 170 locations open. Tasti D-Lite is majority-owned by Snow Phipps Group, a New York-based private equity firm.
Falconhead Capital Acquires Rita's Water Ice
Private equity firm Falconhead Capital has purchased a controlling stake in Rita's Water Ice Franchise Company. The seller is McKnight Capital Partners, which bought Rita's from the family in 2005; Jim Rudolph, a partner in the firm who became Rita's CEO, has retained a minority stake and was named vice chair. Thomas Christopoul, an operating partner at Falconhead, has been named chair and interim CEO of Rita's. Financial terms of the transaction were not disclosed. Based in Trevose, Pa., Rita's was founded in 1984 by Bob Tumolo, a former Philadelphia firefighter who, alongside his mother Elizabeth and brother John, made and sold Italian ice from their porch window. Since then, the brand has grown to about 550 franchise locations in 18 states.
Incentives & Discounts
U.S. Lawns Seeks Conversions with $0 Down Program
U.S. Lawns is looking to boost growth with an offer that includes a zero down payment, reduced franchise free, and no royalty payments for 90 days (contingent on creditworthiness and minimum revenue levels). The company is targeting independent landscape contractors ready to convert to franchising and is planning informational sessions in Arizona, California, Colorado, Illinois, Indiana, Minnesota, Nevada, and Wisconsin. At 25 years old, U.S. Lawns has more than 240 locations in all 48 contiguous states.
New Brand Launches
Go Roma Launches Franchising Effort
Go Roma, a fast casual Italian restaurant concept, is looking to expand beyond its Chicago roots this year through franchising, according to Jeff Drake, the company's co-founder, president, and COO. Founded in 2004 by three restaurant industry veterans (Drake, David Wolfgram, and Yorgo Koutsogiorgas), Go Roma has six locations in the Chicago area and expected 5 percent same store sales growth in 2011. The new prototype is approximately 2,400 square feet and AUVs were $1.3 million. Go Roma is owned by Boudin Holdings, a portfolio company of GESD Capital Partners, a San Francisco-based private equity firm (Wolfgram is CEO of Boudin). P.J. Evans joined the company in September as executive vice president of franchise development.
Eggfast Starts Franchising with Master/Regional Offers
Eggfast, working with Franchise Growth Systems, has begun offering master franchises nationwide. The 24-hour dine-in, carry-out, or delivery concept offers counter service in 3 minutes. Under the master/regional developer deals, franchisees are granted the rights to a large territory where they can open franchises at a reduced franchise fee and receive part of the royalty and franchise fee paid by each of their franchisees. The first Eggfast opened in January 2006, when a Greek diner was converted into an all-day breakfast restaurant. Franchise Growth Systems is a franchise management, start-up, and expansion firm whose clients include Massage Envy.
Mr. Ronnie's Donuts Readies for Franchise Move
Mr. Ronnie's Famous Hot Donuts, a popular destination in Houma, La., is working with Francorp to spread the goodness nationwide through franchising. The Picou family, which owns the brand, will spend the next 6 to 9 months preparing to franchise and doing initial marketing studies. "We're flying out for training in Chicago to start learning more about what franchising entails, so we can start our journey - or another chapter of it," said Wendy Picou, one of the restaurant's owners. The Picous plan to retain franchising rights in Houma and Thibodaux, La. Mr. Ronnie's started when Ronald Picou bought the Tasty Donut shop from Al Copeland, who went on to create Popeyes Famous Fried Chicken (also a Francorp client). The first store, opened in 1976, moved to its current location in 1994.
Guava Healthcare Launches Home Care Franchise
Home health concept Guava Healthcare has launched its new franchise business and the appointment of franchising veterans Ken Caldwell and Kevin Pike to the company's leadership team. Guava, which offers a full array of medical and non-medical services including personal care services, in-home medical care, pediatric care, and staffing, was started in 2006 by company President Mary S. Schreiber, a veteran of the healthcare industry. Caldwell, the brand's EVP, formerly was a partner with Paradise Foods, the franchising company for Heavenly Ham, which he helped grow from 10 units to 220 before it was sold to HoneyBaked Ham. Pike, vice president of operations and business development, formerly served as vice president of operations for U.S. Motor Works, helping that company grow to more than 100 franchises. He then joined Party Land as vice president of franchise services and was part of the team who grew that brand to more than 500 units in 24 countries. Guava was acquired by Capsalus Corp. in 2011.
Charley's Philly Subs Unveils Charley's Philly Steaks
Charley's Grilled Subs is opening the first Charley's Philly Steaks (CPS) in its home town of Columbus, Ohio. The new concept is a freestanding, fast-casual restaurant with drive-thru, an upgraded menu, and modern interior dÃ©cor. "This is the next step in taking the Charley's brand around the globe," said Charley Shin, company founder and CEO, who graduated from Ohio State University and opened his first location near the campus 25 years ago. The company plans to open 5 to 10 new CPS locations in 2012. In 2010, Charley's opened 38 new restaurants and had targeted 46 more in 2011. Founded in 1986, the brand has more than 430 locations (more than 90 percent franchised) in 16 countries.
Krispy Kreme Adds New Regions in Japan
Krispy Kreme Doughnut Corp. has signed additional development agreements with its Japanese franchisee, Krispy Kreme Doughnut Japan Co., Ltd. As part of the new agreements, the franchisee will build an additional 19 units in the next 5 years in the Kyushu and Chugoku regions. The franchisor also recently announced the development of 73 new locations in the Kanto, Kansai, and Chubu regions. Founded in 1937 and based in Winston-Salem, N.C., Krispy Kreme has more than 675 stores in 21 countries.
Fatburger Debuts in Seoul, More Planned in the Country
Fatburger has opened its first restaurant in Seoul, Korea. The Gangnam-gu location, in the southeast part of the city, is a business district and shopping and entertainment hub. This is the first of multiple units planned with the franchisee, SW Group, Inc. Fatburger executives confirmed plans to open 10 restaurants in Korea with SW Group, with additional units to be opened this year. Founded in Los Angeles in 1952, Fatburger has restaurants in 8 states, as well as in Canada, Dubai, Bahrain, Erbil, Riyadh, Al Khobar, Kuwait, Macao, Beijing, Seoul, and Jakarta. Fatburger is a subsidiary of Fog Cutter Capital Group.
Red Mango Goes to the Movies - in Mexico
Red Mango has announced its first international franchise agreement: an exclusive deal with Cinemex, a chain with 184 movie theaters operating across Mexico. Cinemex will own and operate the franchise, starting by introducing Red Mango kiosks immediately into movie theaters and developing an undisclosed number of free-standing stores. The first Red Mango locations are expected to open in Mexico City beginning this year. Based in Dallas, Red Mango opened its first U.S. store in July 2007 in Los Angeles, and now has more than 140 stores open across the U.S.
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