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August 2016

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In this issue

Scenes from the International Franchise Expo

Argentina native Noemi Grupenmager has never liked body hair, with the exception of her head, eyebrows and eyelashes. But her quest to find the perfect waxing solution cost her not an arm but almost a leg, when it took two days and two times the fee for a spa to wax her daughter’s legs.

Domino’s doubles down on cool cars

Domino’s, a massive investor in high-tech delivery equipment, is doubling down on its super-cool, leading edge DXP delivery vehicles that seek to improve the pizza delivery process.

Sexy staff at RazzleDazzle Barbershop

There have been a lot of ironies in Elena Linares’ life—the most noteworthy of which is as a former battered wife, she created a 1940s-style barbershop, RazzleDazzle Barbershop, where men are pampered while being titillated by scantily clothed beauticians.

For Rita’s developer, ice is nice

Eli Ailloni, 12, strolled into the Rita’s Café in Bloomington, Minnesota, stowed his backpack, and after parking himself, headphones on head, at a table by the window, tucked into an Italian ice topped with custard that was on the house.

The people angle is the toughest job for resale operator

Becky Finger owns and operates 20 units of Once Upon A Child, Plato’s Closet and Clothes Mentor in and around Cincinnati. Like many operators, she finds her biggest challenge in the people business.

#getfried says hands off the hashtag

There are many approaches to naming a new restaurant, but the owners of #getfried Fry Café have stumbled upon something unique—a Twitter-inspired name they feel is every bit as golden as their warm, crunchy, loaded-up French fries.

The Ferdowsi family: From terror in Iran to prominence in Nashville

From terror in Iran to prominence in Nashville, the Ferdowsi family lays the groundwork for the next generation of franchising royaltyand hard work.

As feds meddle, players bet on vaping’s future

A major health study vindicates vaping just as government action decimates the industry’s mom-and-pop shops. Can the e-cigs business survive, and in what form?

Rise of Zika fuels pest control brands

It’s the world health concern that’s been getting all the buzz this year. How are mosquito-control franchises reacting in the wake of Zika? We find out.

After cuts, Fazoli’s aims for higher ground

CEO Carl Howard turned around America’s largest fast-casual Italian chain by changing everything, even bringing back the beloved breadstick ladies. Franchisee interest is starting to pick up again.

Red Robin reboot, plus more NRA Show news

Complacency is the enemy, while changing with the times is the necessity. It’s a message that permeates the restaurant industry and a lesson Red Robin President Denny Marie Post knows well.

Boston’s starts over with new executive team

Hit by the recession and slowing sales, Boston’s made drastic company-wide changes. Will they be enough to start growing again?

Six ways to design stores like the cool kids

Franchisors battling competition and changing shopping and dining habits are revamping store designs to woo both customers and new franchisees. Keeping stores fresh, relevant and cost-effective are all top-of-mind today.

Nurse Next Door can’t be bought

Success breeds all sorts of things, like jealousy, complacency or even more success, but it also attracts M&A activity, especially in today’s franchise climate. For Vancouver, British Columbia-based Nurse Next Door, an at-home senior care provider that quickly spread throughout its home market during 15 years in business, impressive unit growth attracted the interest of California-based St. Joseph Health—a $6 billion healthcare giant.

Exploring the ‘eminently walkable’ French Quarter

Traveling reporters are occasionally accused of being paid to vacation, which sounds really nice—Anthony Bourdain-esque. That withering indictment overlooks the reality of lining up interviews in advance, the soul-sucking aspects of air travel and, of course, how many appointments are inevitably packed into a reporting trip.

New column, Analyze This, delves into Comfort Keepers

Item 1 Comfort Keepers began franchising in Dayton in 1999, but since 2012 the company has been owned by Sodexo S.A., just outside Paris, France. Sodexo’s U.S. holdings are operated from Gaithersburg, MD. In later portions of the FDD, we see that Comfort Keepers manages 31 franchises for Sodexo Holdings (SDX). When asked if prospective franchisees expressed concern about Comfort Keepers’ international ownership, director of strategy and network development Natalie Black said, “No. In fact, they feel it validates us, because we are backed by a large parent company.”

Scoreboard

There’s plenty of opportunity, but the choppy economy poses some challenges for restaurant operators. Hudson Riehle, SVP of research and knowledge at the National Restaurant Association, addressed a crowd of analysts and investors in a keynote presentation at the 2016 Piper Jaffray Consumer Conference in June.

Canada is not one big, giant market to the north

We may talk alike, dress similar and act somewhat the same, but when it comes to franchising, Canada and the United States are not identical cousins. And that’s why you’ll need a guide to the great northern expansion.

Country Profile: Facts about franchising in Canada

Location: North America Provinces: 10, plus four territories Capital: Ottawa Population: 35.8 million Urban population: 81.8% (Canada’s geography and harsh climate have tended to isolate the rural areas of the country; however, all that is changing with technology and the lessening need to “be in the office.”

Exclusive: FT’s Restaurant 200 ranks the largest restaurant franchisees

Each year, our sister publication, the Restaurant Finance Monitor, surveys the largest restaurant franchisees in the country and pores over publicly available data to prepare this exclusive listing: a ranking of the top 200 franchised restaurant owners in the United States. The numbers are ever more eye-popping: Our biggest operator, Flynn Restaurant Group, topped more than $1.65 billion in revenue last year from 484 Applebee’s and 179 Taco Bells, a newer brand for Flynn. Meanwhile Serazen, No. 95, put up just shy of 100 percent (nearly $60 million) sales growth by jumping on a CKE Restaurants refranchising plan. Read on to see how the big get bigger, and with what brands.

Living Large brands find ways to help franchisees hire

Our three Living Large subjects know all about joint employer concerns, of course. But that doesn’t stop them from helping franchisees hire and retain great people. It just has to be done with finesse.

Executive Ladder

Lori Johnson was appointed vice president of brand management at Dwyer Group. The company also added Imran Jooma as a new board member. Tropical Smoothie Café brought on Barry Schnur as chief financial and administrative officer. Along with leading the company’s fiscal functions and day-to-day operations, Schnur will play a significant role in developing and implementing technology initiatives for the franchise system.

Liberty’s drip-drip-drip of bad news

It’s weird when an anonymous source becomes a regular pen pal, but such is the case with Liberty Tax. On one recent day, he or she even provided a handy summary, with links to news stories including these:

Hotel franchising finds growth beyond U.S. borders

The lodging industry has always been a linchpin of cross-border franchising, but recent months have been exceptionally active ones for international hotel franchisors opening in a wide swath of foreign destinations, or announcing plans to do so, as the co-author of this article, Tao Xu, and I observe.

How to mine data properly from multiple sources

People have been digging for gold for centuries—some speculate for more than 7,000 years. The discovery of gold in California in 1848 led some 300,000 people to leave their homes and seek their fortunes despite the risks. And while there were certainly those who made their fortune when they lucked into a find, far more found their fortune through a systematic approach.

Potbelly bets on restaurant newbie, plus more deals

It’s an age-old story in the world of franchising. A person falls in love with a product or service, discovers he or she can buy a franchise, and dives in. In Todd Stimson’s case the product was the sandwich he often consumed while visiting his personal-loan outpost in Chicago’s Loop.
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From the Magazine

Publisher's Column

A journey of 1,000 miles begins with a single issue

When adult son Ben was in grade school, he and his classmates were tasked to write a report on a relative or ancestor who had immigrated to the United States. Luckily for him, his grandmother had known her great-grandfather Andrew P. Johnson. And even better, my mom’s older cousin was his grandchild and knew well the story of his arrival in the U.S., so Ben set out to interview her.

Loose Ends

I left my heart in New York City, but not the one in the cappuccino

People who hailed cabs to the Javits Convention Center for the International Franchise Expo in June missed out on a street concert of NYC-patented sights, smells and sounds that bring to mind the chaos of an orchestra tuning up for the main show. On just Thursday alone, I spotted a woman crouched on her front stoop using her cell phone to take pictures of her toes; a reclining, underpanted Jim Gaffigan eating pink cotton candy atop a NYC cab marquee; and pedestrians crossing busy streets against the lights (OK, that was every day).
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