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March 2018

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In this issue

Trying on 10 franchises for size, in our exclusive Zor Awards project

Franchising can be daunting for first-timers considering making an investment to go into business “for themselves, but not by themselves” as the popular mantra goes. There are thousands of brands to choose from in an ever-expanding array of categories, and most do a great job highlighting the best-case scenario for prospective franchisees. That makes choosing a franchise—and deciding which hat you will wear as an entrepreneur, as our photo shoot illustrates—a difficult task.

Restaurant bosses kick around six big themes

The annual ICR event is one of the first big restaurant and retail events of the year, and it’s where companies public and private go to outline their strategies for the next year—as well as drum up a little support from the investment community. Here's a rundown.

Doggie disco? Zoom Room says yes

Dreams of cuddling puppies and being herded by sheepdogs 40 hours a week is the holy grail for franchisees looking to turn their love of pooches into profits. Once up and running with any number of doggy franchises out there—from pet spas to pooper scoopers—that enthusiasm can fade with the reality of lawsuits, onerous zoning restrictions and 3 a.m. phone calls that are common in the business of canines.

‘The dance’ takes Fastsigns to Malta first

As the newest master franchisee for Fastsigns, Malta-based Famalco Group expands its already diverse portfolio with plans to grow the signage, digital media and graphics brand to Italy and Greece.

Undercover checks out three chicken joints

When the Uber driver finds out you’re heading to Cowboy Chicken for lunch and is only half joking when he invites himself along because the rotisserie meat “is just about the best there is in Dallas,” expectations jump even higher. The food lives up to the hype at Cowboy Chicken, known for its slow-roasted-on-a-spit, wood-fired chicken that in real life is as succulent and flavorful as the online imagery suggests.

Freshii lobs letter at Subway franchisees

Melissa Gallagher grew up as the daughter of Subway franchisees in Ontario, Canada, and her earliest job for the brand was as Subway mascot. “It’s a giant sub with a cape. It’s called Subman,” she says with a laugh. Today, she’s VP of marketing for Freshii, which published an open letter to Subway corporate in the Chicago Tribune in January, offering a “sincere proposal” to allow a smooth transition for Subway operators to become Freshii franchisees instead.

Once crumpled, Crunch Fitness powers back

Crunch Fitness has emerged from a checkered past that is equal parts sexy and sad. Originally branded as a high-end fitness studio in the late 1980s, its formative years included shows on cable TV, energetic DVDs sold at big-box outlets and the first-ever stripper pole classes that shocked the eyeballs out of plenty of grandmothers in what now seems like sweeter, simpler times. That sweat-fueled party came to an end in 2009, eight years after Bally Total Fitness acquired the brand, when Crunch filed for Chapter 11 bankruptcy protection.

Upward mobility at Black Bear Diner

An ‘aggressive streak' is a desired attribute for a California operator of two Black Bear Diners, with 19 more on the books.

‘Eyes wide open’ as retailers close stores

Headlines are everywhere describing a “retail apocalypse” or the “tsunami” of retail store closures. Rest assured, the sky is not falling on the entire universe of brick-and-mortar retail. However, franchise operators are taking note of the changing retail real estate market and being more diligent when deciding where to locate new stores.

When age shows, to renovate or raze?

The restaurant industry has been on a tear in recent years with a surge in expansion that has delivered thousands of shiny new stores touting the latest designs, efficient floor plans and innovative tech. Standing behind them is a fleet of aging restaurants that are starting to feel a bit dowdy. Those older restaurants are facing more pressure to step-up their game—and their image—in order to remain competitive in today’s marketplace.

How to get your piece of ‘deal fever’

The franchise world has an acute case of deal fever. The consolidation that grew through 2016 and 2017 shows no sign of slowing down this year. Headlines are filled with deals big and small, and the amount of “dry powder” or un-invested capital is at historic highs—many reports put it at $1 trillion. This flurry of activity can be intoxicating for owners who are plotting a course to something bigger.

10 ways to manage the 10-year lease

Let’s face it—the restaurant business has always been fraught with risk. Fickle customers, unpredictable food trends, changing lifestyles, stormy economic cycles, and relentless competition are just a few culprits. And now come the latest disrupters—delivery, order apps, over-development, the rise of the independents, and, of course, millennials. At November’s Restaurant Finance and Development Conference in Las Vegas, there was a lot of talk about staying flexible and nimble during these tumultuous times.

Getting your plans through City Hall

I recently witnessed a public tarring and feathering for the ages at an open house that left me scarred as a reporter and occasional public speaker. Picture the scene as a well-dressed 30-something from a local development company presented plans for a new apartment complex to be built within eyesight of my own kitchen window. He came with impressive demographics and beautiful renderings, but walked into a buzzsaw of uncouth words, disgusted chuckles, hoots, hollers and generally embarrassing antics from a cohort of my neighbors who hated his plans with visceral intensity.

In Italy, a fashionable marketplace

With three vertical bands of green, white and red, the French flag brought to Italy by Napoleon in 1797 inspired the design. The colors are those of Milan (red and white), combined with the green uniform color of the Milanese civic guard.

How Living Large brands aim to boost unit sales

Digital Doc uses brokers to enter new markets. DMK Burger Bar relies on personal connections and one-to-one conversations. And Huey Magoo's has hired two experienced franchise sales people to get the unit count growing.

Though few understand Bitcoin, IRS wants cut—and Happy Tax will help

Though few understand Bitcoin, IRS wants cut—and Happy Tax will help Long before most people have even figured out Bitcoin (or other forms of cryptocurrency) the Internal Revenue Service is targeting those who profit from it to get their cut. One franchised tax preparation firm, Happy Tax, is aiming to be the first to help taxpayers comply with the law.

In China, why people who should know better keep getting it wrong

Many years ago I heard a “China scholar” recount a mantra he said was then circulating among his colleagues: Travel to China for six days: write a book. Travel to China for six months: write an article. Live in China for six years: write nothing at all.

Pain, fear and other realities when finding your franchise connection

Think back to your most recent car buying experience for a moment. Did you start by researching the entire universe of models and styles? Did you research safety ratings, miles per gallon, anticipated resale price, and all the ratings from the last three years of Consumer Reports? Or did you instead fall in love with a car based on its look, image or reputation and then talk yourself into buying the one you most loved—perhaps using some of those exact “features and benefits” to convince yourself (or your spouse) that you were making a sound decision. Be honest now. Your spouse is not looking.

Loyal people are key for WKS boss, plus no drama desired for Signal 88

Roland Spongberg acknowledges it’s tough finding hourlies and managers in Southern California. “Today, having a sign that says ‘Now Hiring’ doesn’t get it done. You have to be more proactive than that,” he says.

Scoreboard

The true health of the restaurant industry is up for constant debate. While there is data, it’s hard to know exactly what makes up that data. Anyone looking just at legacy casual dining is going to think the industry is falling to pieces. Anyone just looking at asset-light QSR stocks may be wearing rose-colored glasses.

Executive Ladder

Lena Hamideh was hired as a paralegal by Gray Plant Mooty’s Franchise & Distribution Practice Group. Previously with DLA Piper, Hamideh will assist its franchise team with filings, state- and country-specific franchise regulations and renewals. Office Evolution appointed Eileen Proctor to the new position of vice president of revenue optimization and marketing, and hired William Edmundson as its new chief operating officer.

The Boss

What was your upbringing like? I was born and raised in the Seattle area. My dad was in the broadcasting industry. He was able to raise some capital and got into buying troubled radio stations and turning them around. In addition to all the normal stuff, I actually was a student of The Little Gym, that’s where it was founded. My mom was in journalism, with the Seattle Times. By 2002, we moved to Arizona and by 2002 she went to the Arizona Republic.
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From the Magazine

Publisher's Column

Sound of music, franchise style, hits the right notes

Ask yourself this question: When at work, what is music to your ears? For the high school teacher, it’s probably, “Tell me more about the Stamp Act of 1854. So fascinating!” For the caterer, it could be getting the big order over the phone, “Ms. Kardashian is wondering if you are available for…”
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