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| Ten-Year Anniversary.. |
Our Times in franchising
10 years, 100 issues, 1,000s of stories
Franchise Times has reached a major milestone in the publishing industry - we've survived 10 years. During that decade, we've matured, just like franchising. Travel down memory lane with us as we reminisce about just a few of the thousands of stories we've covered.
In the big scheme of things, a decade is a grain of sand in the proverbial hourglass. But to those of us who have spent the last 10 years producing Franchise Times, a decade translates into 100 issues, containing thousands of ads, millions of words (each and every one absolutely necessary to tell the story) and pictures galore. So please indulge us as we devote a few pages here to look back on the last 100 issues - into which we've poured our blood (numerous paper cuts over the years), sweat (most of which was from nerves, not exertion) and our family members' tears as we missed several hundred dinners with them during deadlines.
We did not launch Franchise Times. It was started in April 1995 as Franchise Buyer, a Crain Communication publication out of Chicago. Ellen Shubart was the first editor and it didn't take long for the creators to come to the conclusion that once people bought a franchise they no longer needed to read a publication about buying a franchise. In February 1996, "Buyer" was changed to "Times," and the magazine altered its editorial focus to cover the franchise community. We say "community," not "industry," because as the International Franchise Association will tell you, franchising is made up of many, many industries.
The publication went dark in 1997 and John Hamburger, publisher of the Restaurant Finance Monitor and owner of the Restaurant Finance & Development Conference, bought the title and the intellectual property and moved the magazine's headquarters to Minneapolis/St. Paul.
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John Hamburger, president of Franchise Times Corp. |
Now onto what we've covered for the past 10 years:
In the winter of '99
In 1999 we were lamenting the good economy - the general consensus is that franchise sales increase in down economies when executives are laid off with severance packages. What a difference 10 years makes.
Our first cover depicted a chess game between the International Franchise Association (IFA) and an upstart franchisors-only group, the National Franchise Council (NFC), which was splitting off from IFA in reaction to its acceptance of franchisees as members in 1993. At the time, this seemed akin to the South seceding from the union, but the "Battle for the soul of franchising," as we dubbed it, turned out to be much more civil than we predicted.
Later the NFC and IFA made up and the NFC franchisors were welcomed back into the IFA fold.
What caused more fireworks was our decision to put Susan Kezios, president of the American Franchisee Association, on the cover of the issue we took to the IFA's convention. We weren't so naive as to think it wouldn't cause a "sensation," we just had no idea the ill-will we would create for that breach of social etiquette.
While we were cutting edge in 1999 in our coverage of ways to motivate Gen X, 10 years later it's their younger brothers and sisters we're concerned about motivating.
Our first franchise focus was real estate, and RE/MAX founder Dave Liniger was our inaugural personality. Instead of focusing on his successful company, we wanted to know about his after-work pursuits - NASCAR racing, scuba diving, small plane piloting and hot-air balloon world touring. He also raised Arabian horses and built a private golf course in the mountains of Denver that Golf Digest magazine declared in 1997 to be one of the best new private courses in the country. His company was doing OK, too.
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"Doc" Cohen appeared several times in our inaugural issue. |
Cohen was the head of IFA's franchisee advisory council and he went on to become the chairman of IFA and to co-brand his cookie stores with the Mrs. Fields brands. He was also featured in several other articles in the same issue. We have always believed Franchise Times launched his career.
Dennis Monroe of Krass Monroe wrote on securitized lending for multi-unit franchises, and Philip Zeidman, who was then with Rudnick, Wolfe, Epstein & Zeidman, continued the international column he wrote for our predecessor.
FT's president, Hamburger, made a rare appearance on the pages of Franchise Times, writing about the dangers of get-rich-quick schemes. "In my opinion, franchising has more bonafide success stories than any multi-level or other distribution scheme. Yet, franchising seems to get an inordinate amount of scrutiny from politicians, regulators and lawyers, despite an overabundance of disclosure requirements. I'm missing something here," he wrote. He penned a few more columns that first year and then limited his satirical eye to the Restaurant Finance Monitor.
One of our favorite legal cases involved TV actor Drew Carey who sued A&W of Canada for refusing to pay his endorsement fees after he was seen eating at McDonald's on his TV show, "The Drew Carey Show."
Ten years ago there were 57 franchise concepts approved and 51 concepts under review for the Franchise Registry, developed by FRANdata to streamline the SBA loan process. Franchisors submitted a 12-page worksheet, plus electronic versions of their disclosure documents and all agreements signed by franchisees. The fee was $2,500 to register a single concept, with a $500 fee for updates, which are needed anytime material facts change in the documents. If the documents met the SBA lending guidelines, prospective franchisees no longer had to wait for a loan officer to review all the documentation a second time, thus speeding up the process.
Jeff Kolton, who founded FRANdata, sold the company to National Cooperative Bank, and its president Darrell Johnson bought the company in 2004.
Getting technical
During our first year we wrote about all the "new" advances in technology and how they were changing franchising. Looking back, it seems "so last millennium."
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We've had 20/20 vision over the years Unveiled in the November/December 1999 issue was our very first 20 to Watch. We originally planned to add one "watchee" every year, but the thought of writing 29 mini-profiles in 2009 seemed too daunting, even in 2000. The trendsetters a decade ago were, in no particular order: 1. Morton Aronson, vice president and general counsel with Bass Hotels, parent of Holiday Inn, and Neil Simon, executive director of the NFC. 2. Rep. Howard Coble, sponsor of the Franchise Act of 1998, which kept franchise groups on edge. 3. Warren Buffett, CEO of Berkshire Hathaway, who entered franchising a few years before via his purchase of Dairy Queen International. 4. Michael Dady, franchising's cowboy lawyer, who was making a name for himself by winning cases for franchisees. 5. Don Harty, principal of ADF Operating Group, a franchisee who was bringing Tricon's (Yum! Brands) three brands to the Northwest, a challenging area for fast food at the time. 6. Sid Feltenstein of Yorkshire Global Restaurants, who was charged with turning around Long John Silvers. 7. Mohammad Iqbal, a Hardee's franchisee known as a turnaround artist in his corporate life, was acquiring Hardee's locations to test out his turnaround skills. 8. Michael Kaufman, president of Metromedia Restaurant Group who was charged with beefing up the restaurant portion of the company. 9. Susan Kezios, president of American Franchisee Association, who was actively attempting to "level the playing field" for franchisees. (We regret to admit that we used "level the playing field" ad nauseam until 2007, when our fingers refused to type it ever again.) 10. Hala Moddelmog, president of Church's Chicken, who had just started a Professional Mentoring Program to introduce women to franchising. 11. Attorney Dennis Monroe of Krass Monroe, unusual in the franchising field for structuring deals, rather than litigating or drafting documents. 12. Henry Silverman, chairman and CEO of Cendant, had to sell off assets amid falling stock prices. 13. Raymond Schoenbaum, founder of Shoney's, was in the middle of a proxy fight. 14. Joanne Shaw, CEO of the Coffee Beanery, became IFA's first female Chair. 15. Curtis Nelson, in happier days, was thought to be next in line for his grandfather's company, The Carlson Cos. He was overseeing the restaurant division at this time. 16. Michael Snyder, Red Robin franchisee, who bought the company a couple of years ago, had brought it to a pivotal point. 17. Michael Strauss, a Burger King franchisee, was poised to become a major consolidator of the chain. 18. Tom Thomson, chairman and CEO of CKE, which had just bought Hardee's. 19. Brad Watt of Restaurant Capital Group was putting together a "neat boutique of concepts." 20. Philip Zeidman & Lewis Rudnick of Rudnick & Wolfe were the biggest names in franchise law. |
We also reported that the North American Securities Administrators Association (NASAA) completed its first test case of its coordinated review system. Franchisors had to submit their Uniform Franchise Offering Circulars (UFOC) to each state regulator who would then decide whether they met the state's requirements. Since one state regulator had to seek comments from every state regulator, plus turn the document around in 20 days, the whole process ended up being "a lot of work," according to Dale Cantone, assistant attorney general for Maryland.
The problem noted at the time, "until you're registered you're dark. You can't send literature or talk to prospects," Anthony Napoli, director of franchising for Century Small Business Solutions, the first guinea pig, was quoted as saying.
Our foray into multi-unit franchisees on the cover was kicked off by the flashy Burger King franchisee La-Van Hawkins as part of our series on successful entrepreneurs. A couple of months later, we ran a story on BK suing him. By the November/December issue, Burger King had dismissed the lawsuit.
Diverse offerings
Some things never change: We've been talking about diversity in August for 10 years. Although we've written about a number of different ethnic groups over the years, we always include women, because though they've come a long way, baby, they're still under-represented at the top of the ladder.
Franchisee satisfaction was subject of a lengthy story early on. Our survey was conducted by a researcher for the Institute of Franchise Management at the University of St. Thomas in Minneapolis. The list of names and questions were supplied by the original owners of Franchise Times, duplicating an earlier survey they conducted in 1997. In the '99 survey, 87 percent of respondents said they were satisfied with their franchise. The top reasons were: high earnings (37 percent), independence (82), growth opportunities (54) and security (23). Ninety percent would recommend franchise ownership to others.
In October we created the Top 200 ranking. It was different from the publication's previous rankings because it was based on financial data from surveys and filings, rather than a rating of the franchise.The results, based on 1998 numbers, revealed that the top 200 systems totaled 319,627 operating units for worldwide system sales of $244 billion.
A year into publishing, Roman Lubynsky joined us as a technology columnist. (We didn't notice until now that we've never updated his photo, we'll have to get right on that.) We've been fortunate to have other experts in their field become columnists and guest columnists.
In 2000 we reported on the American Asian Hotel Owners Association, better known as AAHOA, and its ongoing problems with Cendant, a franchisor of mid-range brands such as Travelodge and Super 8. And in March 2001, we ran a cover story on Cendant's CEO, Henry Silverman. Writer, Julie Bennett, who has been with us since that first issue, talked to him about the hospitality company's problems.
Offbeat franchises have always fascinated us, and we devoted an entire section one year to some of the more unusual: Bovinus.com, a bull-semen supply company by Express Personnel founder, Bob Funk, and Crime Scene Cleaners. But don't forget the more tame franchises, such as Table for Eight, which offers matchmaking services; Personal Alternative Funeral Services, a Canadian franchise that provides low-cost, low-pressure casket sales; and Interquest Detection Canines with its drug-sniffing dogs. PowerNap Centers, a place where people could go to take a nap at a public facility such as the Mall of America, never quite caught the fancy of a sleep-starved nation.
In the same issue, we profiled Shred-it's innovative franchise sales incentive: a trip to the NASA-sponsored space camp. (A much more desired perk than a trip to a NASAA-sponsored regulators' office to talk about your presales disclosure process.)
In addition to Legal Eagles, the peer-ranked best lawyers in franchising, we featured 20 Hot Shot lawyers under 40. We wrote profiles on 19 up-and-coming lawyers. In the next issue we profiled one Hot Shot who was inadvertently left out of the original spread.
Over the years some of our more successful features have been on the extra-curricular activities of franchise professionals. We revealed that American Association of Franchisees and Dealers' founder Bob Purvin at age 7 played a Hebrew slave in the epic movie, "The Ten Commandments." He never made it into the final cut, however, because anytime the camera passed by him, he rubber-necked to stare at it.
We've followed a number of luminaries as they've moved around, including Jeff Kolton's career from attorney with Brownstein & Zeidman to creator of FRANdata to attorney with Kaufmann, Feiner, et al, to franchise consultant - not to mention his veering off the path to become a certified sommelier. If he's in the room, we never order wine without consulting him first.
In March 2004, we introduced our first Fast 55 ranking, with FRANdata, of the fastest-growing "young" companies. Super Wash was No.1 with a 25,000-percent, five-year growth rate (no, that's not a typo).
We added our sister publication's ranking of top franchisees, The Restaurant Finance Monitor's 200. Like the Franchise Times 200, its ranking is based on sales. RTM Restaurant Group out of Atlanta, Georgia - with 811 Arby's and 16 Sbarro units - was No. 1 with $754 million in revenue, that first year. RTM, by the way, had held this spot for seven straight years.
In the June/July 2006 issue, we ran our first take-off on Vanity Fair magazine's elaborate celebrity spreads. We photographed poolside a few of franchising's beautiful people in the gowns and tuxes they were going to wear to IFA's gala the next night in Palm Springs. Models were Hot Dish's Dawn Lawin and Jenn Onnen; FRANdata's Darrell Johnson and Edith Wiseman; Scott Pressly, then with Roark Capital; and Brad Fishman of Fishman Public Relations.
We followed that with lifestyles of the rich in franchising and with franchisors and their dogs.
In other words, we've had fun covering franchising. We will always include the hard news and the how-to-run-your-business-better articles, but we'll never lose our sense of wonderment when it comes to franchising. There's a lot to cover here.
