On this date in franchise history
Ten years ago in the April 1999 issue of Franchise Times, we were covering:
- Franchise Finance included a listing of 24 active lenders. Publisher Mary Jo Larson wrote about the previous year: "There almost weren't enough deals to go around, and new franchise securitized lenders were entering the market every quarter. Securitized lenders were offering deals at 200 to 250 basis points above Treasuries, almost unheard of before in the franchise lending industry."
- Rocky Mountain Chocolate Factory was in talks with JC Penney about selling its premium chocolates in the retailer's stores. The franchisor's plan to sell its product at Penney stores, plus Sam's Club, was not a popular decision with franchisees at the time.
- The lodging industry was struggling in 1999. According to reporter Julie Bennett, "Stock prices of many publicly traded hotel companies reached lofty levels in early 1998, then dropped by 50 percent or more. Hotel company mergers and acquisitions set records before coming to a halt last fall. Capital for new construction has disappearedÉIronically the turmoil may be good for hotel franchisees." The reason? Chains were refocusing on franchising after lenders expressed a preference to lend money to "local franchisees, who know them, and know their markets."
- 38-year-old Mary Mahoney was profiled for being the first woman to head a major hotel chain - Howard Johnson. We described her as having the looks and perky personality also suited for being the host of "Good Morning, America."
The Oracle of Omaha, Warren Buffett, was quoted giving this advice: "Why potential buyers even look at projections prepared by sellers baffles me. I never give them a glance, but instead keep in mind the
- A survey on how franchisors choose outside counsels was presented at a bar association meeting in Colorado by Layne Randolph of Dorsey & Whitney. Her findings were: 44 percent based it on the firm's franchise knowledge; 20 percent on the firm's reputation; 13 percent on good rapport; 7 percent on reasonable fees and 3 percent on the individual lawyer.
- 1,300 people attended the 39th annual IFA convention in Miami Beach, Florida. Suppliers were seeking a greater role, aspiring toward chairing IFA committees, while franchisees were happy to have gained voting rights on the board.