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COVER STORY
Stints at the White House and the U.S. Small Business Administration convinced BK franchisee Ben Jarratt of the value of business ownership. Now he takes charge to keep franchisees politically active. The press office was in the West Wing, which as we know from at least one television show is an action-packed part of the White House. "It was an exciting time," he says. The world was changing at a rapid pace and the economy was shaky - something today's assistant press secretaries are all too familiar with. When the battle over the Employee Free Choice Act (EFCA) intensifies this spring, the nation's franchise community will be in the fray. The pawn shop industry often is viewed as the financial institution of last hope for poor people, but owners are working hard to reverse that perception. The Coalition of Franchisee Associations was founded in 2007 and collectively represents more than 14,000 franchisees employing more than 1.2 million people. "We started a PAC (political action committee) because we want to be on the Hill with dollars," said Frank Capaldo, CFA chairman. |  |
FRANCHISE FOCUS
Building
New franchises opening around the world
Business Services
Business services weather the economy
At a time when stocks are trading at half what they did 18 months ago, the loss of 10,000 franchise estab- lishments doesn't seem so bad. The key, of course, is to make sure that it's not your business that closes.
How To...
Co-branding is back, but if it's done poorly, it can generate operational difficulties, do little to generate traffic and may even hurt the brand. Here's how to do it so that both brands win.
Should you bring in a "competitor" as a consultant to your restaurant? Sure, consultants say, because it's their reputation on the line, too.
Newcomers
Prime Time Boxing is one of a handful of new health trends gaining momentum in the fitness industry. Based on the "sweet science" of boxing, the concept is geared towards those interested in a more skill-based workout.
UPFRONT
Currents
On this date in franchise history
Ten years ago in the April 1999 issue of Franchise Times, we were covering:
Vintage ad: With Hertz, you can take it and leave it
A vintage ad for Hertz rental cars
Events
The IFA discovered it takes more than money to get former President Bill Clinton to be your keynote speaker. It takes a fellow Arkansan - more specifically, a friend of Clinton's, Margaret McEntire.
In today's economy, "you're growing, if you stay flat." That may be Godfred Otuteye's observation, but the president/CEO of Money Mailer doesn't believe in flatlining, just to stay safe. To move his company forward, he's taken advantage of the in-vogue technology to deliver savings to franchisees' customers.
IFA convention kindles optimistic outlook
What do you get when you pour a group of glass-is-half-full people into a luxury hotel in San Diego? The 49th annual International Franchise Association Convention.
It's not too late for franchisors and area developers to improve their own recruitment programs. Here are two dozen franchise sales tips taken from presentations at the recent franchise convention in San Diego that you can implement today.
Tariq Farid was honored as IFA's Entrepreneur of the Year. At the IFA convention, we sought out innovators who were doing business as unusual. If there's one lesson to be learned from the economy right now, it's that you can't keep doing what you've always done and get the same results. It's like that old joke: A man says to his doctor, "My arm hurts when I do this." And the doctor replies, "Then stop doing it." Perhaps now is the time to stop making your arm hurt and try something new. Embrace change. Remember the former president of Porsche's quote: "When there is no change,
Pictures and highlights from the IFA in San Diego, February, 2009
News
As consumers tighten their belts, restaurant chains have begun rolling out coupons for free menu items in an attempt to lure in customers. Not only does the promise of free food appeal to that most primal of human emotions - namely, the desire to get something for nothing - but the promotions behind the offers generate publicity.
Guidant Financial in Bellevue, Washington, shook up the franchising industry for two weeks this winter - based on a rumor.
Recent changes in franchising
Personalties
A few questions with Joel Goldstein.
Up Front
Why can't food chains just be themselves?
Once upon a time, a franchise like McDonald's was content with being known primarily as the home of the Big Mac. But as the burger wars reach domestic stalemates, some food chains have expanded their menus to include items atypical to their main offerings in an attempt to attract new customers.
SPECIAL FEATURES
Departments
Scroll down for answers...
Exit Interview
I couldn't live without the Internet, of course. It's made researching stories so much easier. Years ago when I worked for a newspaper, I'd have to visit the morgue for my research. Now I deal with interactive news clips rather than dead paper ones. And while I am a huge fan of e-mail, I refuse to text message. Refuse is perhaps too strong a word - "can't" is probably more fitting.
Publisher's Column
In years past, with a consumer willing to spend and cheap capital available to any business wanting to grow, many businesses didn't have to operate on all cylinders. One could choose when to go the extra mile; when those "jobs" would get done. Fine-tuning the business could be for "ma-ana" - why worry about tomorrow when today was oh so fine?
BIZ WISE
Finance
I am tired of listening to speeches, reading articles, hearing about conferences and webinars, and having every conceivable means of communication all tout the latest and greatest on how to manage in tough times. I am sure you are tired of these things as well. Many of these communications have the same ideas and thought processes. Once in a while, someone will talk about opportunities. But very seldom will anyone focus on not only managing in tough times, but thriving.
The default rate on SBA-backed loans given to franchisees has more than quadrupled since 2004, according to information prepared by the Coleman Report, a newsletter out of California that tracks the SBA lending market. In 2004, the default rate for franchisees was 3.1 percent. By 2008 it was 13.4 percent.
Tight credit is turning franchisors into lenders
Incentives such as reduced royalties or waived franchise fees have been common as franchise sales have fallen amid the recession and the collapse in the credit markets. But a growing number of systems are taking an even more radical step by guaranteeing and servicing the loans or even lending the money outright.
The discussion at the Krass Monroe Winter Franchising Summit in early March about the real-estate market, and the opportunities it provides concepts that are expanding, was one of the few bright spots in a summit that was filled with a sizable amount of pessimism. Few seem to believe that the economy will turn around any time soon.
Marketing
Joel Johnson, 22, spends most of his day on Twitter, Facebook and other social networking hot spots reading posts about what people are doing in real time. That's probably not all that unusual for someone of his generation; what is unusual is that he's getting paid to do it.
By virtually all accounts, the Internet represents the single biggest lead source for most franchisors. Yet despite its dominance of the franchise lead generation market, a significant number of franchisors simply do not use it effectively.
Chris Hurn loves attention. Or at least he loves it when his businesses get attention, because attention frequently translates into sales.
As a business leader, you spend countless hours thinking about your company's brand, but what about your own?
Operations
But before you take that trip to Paris, Rome or Beijing, you need to take a step back and evaluate whether you are ready. Only then can you realistically begin to develop an overall strategic plan that will guide you when you make your market-specific decisions.
People
New positions and promotions for franchise executives.
Real Estate
A 2009 Construction Outlook by McGraw-Hill estimates that the level of construction starts will fall by 7 percent to $515 billion this year, which follows a 12-percent decline in construction activity in 2008. Companies that still have the resources to expand are being rewarded with a rollback on construction costs.
Q&A: The net-lease outlook for franchising
An interview with Jon McClure and Peter Carlson, Principals, Chesapeake Companies in Minneapolis
Nazmi Ozokur recently negotiated a great lease for his new Tropical Smoothie Café in Mobile, Alabama. Franchisees such as Ozokur who once had a hard time getting the time of day from landlords are now on the receiving end of a full-court press as landlords scramble for tenants amid a challenging retail climate. Shopping center owners are offering concessions such as free rent, tenant improvement dollars and delayed rent increases to attract tenants as retail occupancies continue to slip.
Scoreboard
Tight belts might be a way of life for awhile
With a few exceptions like Wal-Mart, most companies are treading water and slashing jobs and wholesale lines of business in an effort to stay afloat. If the government were to start acting the same way, we'd have nowhere else to turn, and the recession that we now have would become more like that other word, the one that starts with a 'D.'
Technology
A few weeks ago I attended the TED Conference held in Long Beach, California. TED stands for Technology, Entertainment and Design, and in 1984 it was where Steve Jobs introduced the original Apple Macintosh computer.
LEGAL
Cases
A federal judge in Georgia has dismissed a lawsuit filed by mostly former franchisees of Mama Fu's Asian House, agreeing that the inherent risks of opening a franchise - and not fraud or misrepresentations on the part of the concept's former owner, Raving Brands, and founder Martin Sprock - were the reason many franchisees failed.
Continental Franchise Review
Giving a positive slant to negative reporting
have followed the litigation path between franchisees and franchisors in various cases, some over the course of several years. I report on both sides of the contract negotiations, and the process can be excruciating for both sides. But the stories that come out of it can be enlightening.
International
A few days after the IFA convention ended, a meeting was convened in South Africa for which I believe there is no parallel in the history of franchising. The leading bank serving the franchise industry is sponsoring a project ("The Franchise Think Tank 2009"), and convened a meeting of 50 franchisors, government representatives, financing sources, consultants, attorneys, and experts in allied fields.
News
Kinkade franchisee wins $1.4 million, AFC sues a supplier, FSB names virtual franchise practice team, Lewis, Weatherbie join Ackerman Senterfitt, and Rifkin joins F&B
Kinkade franchisee wins $1.4 million, AFC sues a supplier, FSB names virtual franchise practice team, Lewis, Weatherbie join Ackerman Senterfitt, and Rifkin joins F&B
