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June-July 2019

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In this issue

Why esports franchises are big business beyond gamers

The esports industry is drawing massive audiences and hundreds of millions in revenue, but are these gamers athletes, is playing video games a sport and does it matter? We dig into this competitive phenomenon—and how franchise brands can get in the game.

Don’t resist the risk, says Paul Davis Restoration ‘zee

Today, Sarah Gabbard expects the various businesses under her Kentucky Bluegrass Management Group umbrella to gross $5 million in annual revenue. That’s from an industrial cleaning company called Pressure Tech, plus a Paul Davis restoration franchise, a Black Diamond pest control franchise and most recently a group of buildings she bought that are ripe for redevelopment.

At Pancheros, a burrito resurgence

“I’d be bored to death, I love working.” That’s Bob Thomson’s response when asked if he’s considering retirement anytime soon. In fact Thomson, who celebrated his 93rd birthday in March, is probably putting in more hours as he works to expand the presence of Mexican fast-casual franchise Pancheros in the Twin Cities market of Minnesota.

Cousins Subs makes its sandwich comeback

At corporate headquarters in late April in Menomonee Falls, Wisconsin, Cousins Subs CEO Christine Specht was feeling fine. Her management team, assembled “person by person” over the last few years and finally in place as of January, was especially proud of the 40-store deal just inked with OM Group, two brothers who are experienced operators in Chicago.

Hotels are going to the dogs to win customers

Hotels are courting free-spending and loyal pet parents to bolster their revenue. But it’s not enough to slap a ‘pet-friendly’ label on a website. Consider the case of Roxy, but don’t call her a dog.

FT Undercover checks out three moving brands

Putting your house on the market and moving to Chicago is fun, except for the putting your house on the market and moving parts.

Wetzel’s Pretzels’ pleasant delivery surprise

Just a few weeks into a delivery test for Wetzel’s Pretzels, new CEO Jennifer Schuler counts two surprises, in a good way.

Deka Lash attracts cast of characters

John Bianco answers the phone in his thick Brooklyn accent—“How ya doin?’”—and the Deka Lash franchisee in New Jersey sounds exactly like his memorable character in “The Sopranos,” Gerry Torciano.

Passion part of Muse Global program

With a mission to inspire and prepare people “to live consciously with themselves, one another and the planet,” Muse Global could initially be mistaken for an environmental nonprofit instead of an early childhood education concept that just began a franchise program.

No sneaking in for Del Taco operator, in Multi-Unit Mindset

In going from worst to top of the system, Paul Hitzelberger put focus on the guest experience and building a team through real incentives.

Subway grants spur store remodels

There are a lot of large, legacy brands updating the look and feel of restaurants across the country. The trick is getting the operator to invest in a costly remodel with unclear or anecdotal return on investment.

Wild Birds Unlimited migrates online

When Pat Perkinson started working at Wild Birds Unlimited in the mid-‘90s she wasn’t into the hobby of backyard birding, but, in the 24 years since, “I’ve become a full-blown bird nerd,” she says.

Using tech to win the retail experience battle

The numbers don’t lie. Studies from Forrester Research have shown that making the customer experience your business is good for business. Brands that invest in experience register tangible benefits: their average revenue growth rate is 23 percent compared to 13 percent for those that don’t. Given such a powerful incentive to invest in experience, franchises, too, are hopping on board. And they are leveraging a powerful ally to help them get there: technology.

High-tech apps versus the human touch in hiring

Two approaches to the hard job of hiring seem on opposite ends of the scale: old-school hiring parties that show off the brand’s culture, and cutting-edge tech that standardizes and smooths the process. We examine both.

Employee training, in the guise of mobile games

Job training can be a real bear, and I have the proof: C-C-C-O-B-B-B-E-T. It’s a clumsy mnemonic device I created to memorize every ingredient of a Cobb salad at the Rainforest Cafe during two arduous weeks of training when I was a younger member of the restaurant jungle.

In volatile retail market, negotiate for real estate

The ongoing shakeout in the retail sector has put renewed focus on the importance of structuring leases to avoid the potentially costly risks of being stuck in a poor location.

Is mixed-use the future of retail? The Urbane Franchisor explores

There’s an interesting dichotomy playing out in the urban retail scene as more cities encourage or require ground-floor retail spaces in residential, office or mixed-use buildings, while at the same time retailers and casual dining brands are facing an (almost) unprecedented wave of closures.

Snapshots from the Finance & Growth Conference

C-level execs from more than 70 brands arrived at the Rio Hotel in Las Vegas to detail their growth plans and connect with franchise lenders and investors during the Finance & Growth Conference May 6-8. The event also brought together the 2019 Dealmakers of the Year for an awards luncheon and recognition of Flynn Restaurant Group as the Deal of the Year winner for its acquisition of U.S. Beef’s 368 Arby’s stores.

Mr. Transmission ‘zee aims to change Africa’s auto aftermarket

In an environment where bribery is still commonplace, this Mr. Transmission/Milex franchisee did ‘everything by the book’ to get her shop open in Nigeria, where she wants to bring transparency to the auto repair industry.

Economic ups and downs in Malaysia, reports Country Profile

The flag’s 14 stripes stand for the equal status in the federation of the 13 member states and the federal government. The 14 points on the star represent the unity between these entities. The crescent is a traditional symbol of Islam, the blue symbolizes unity of the Malay people and yellow is the royal color of Malay rulers.

Don’t play catch-up with franchisee field support

Building a support team that can coach and communicate with franchisees is essential to long-term system success. And with trained field ops staff, there’s less pressure at the top to be all things to all people.

From fitness to swim school for Big Blue ‘zees, in Deal Tracker

Wendy and Erik Skaalerud were among the first crop of area representatives for Orangetheory Fitness, growing the concept in the Denver area to 30 units—including seven of their own—before exiting the system in 2018.

KFC’s delivery advice: Look for ‘brand protector’

Mac Shimmon could be considered the dream franchisee for Jersey Mike’s nascent efforts to get into the delivery game. As the operator of 17 stores in the Chicago area, he’s all in.

Modern slavery and its impacts on franchising

There is no shortage of outrages in today’s world, surely more than enough to keep us in a state of near constant anger and revulsion: the bombing of innocent civilians, not infrequently by their own rulers; rampant disease, allowed to become epidemics by indifferent or incompetent political leaders; and crimes against humanity so ubiquitous that we become inured to the fleeting reports of them on the nightly news.

A three-point strategy for negative feedback damage control

We live in a country where majority rules, most of the time, but no matter who gets elected, which entrepreneurs make the 30 Under 30, or what flavor of ice cream was decided the favorite for 2019, there will always be a sub-group of those ready to argue about it. Not the kind of dignified arguments from life before social media, but loud, crass, opinionated arguments spewed across airwaves, spouted on Twitter and screamed out at town hall meetings, all to be played repeatedly by the media and to live forever online.

No discount concern for Denny’s ‘zee; calculated growth for BK owner

I was recently perusing Yelp ratings for a Denny’s in Murrieta, California, a residential community of 115,000 people in Riverside County. Several reviewers who liked the restaurant had singled out two servers for high praise. I figured the outpost must belong to Denny’s franchisee David Beshay. After all, Beshay Enterprises is headquartered in Murrieta.

‘Shark Tank’ fame won’t faze Press Waffle founders

Tell me about your upbringing. Bryan: We were born and raised in Richardson, Texas. Mom’s a teacher, dad’s an accountant. I can vividly recall back when I was 10 years old I wanted to be a chef when I grew up. I ended up studying theater in college and acting professionally and teaching theater. Eventually it was time to go back to that dream and start a food truck. Caleb: I went to the University of Texas, majoring in accounting. As a kid I saw myself in a suit. And the more and more I led toward that reality it didn’t seem as appealing.

Big QSRs see positives in first quarter, reports Scoreboard

The big three QSR players had some decent results in the first quarter. McDonald’s reported a leading 4.5 percent same-store sales growth in the U.S. (5.4 percent globally). Wendy’s was next, up 1.3 percent in same-store sales in the U.S. (3.3 percent globally) and Burger King was flat with 0.4 percent same-store sales in the U.S. (2.2 percent globally).

Executive Ladder

Michael Mabry is the new chief development officer at Fuzzy’s Taco Shop, hired by President Mel Knight. The two got to know each other after two private equity firms bought their brands in separate deals a couple of years ago.
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From the Magazine

Publisher's Column

When playing games pays off and personalities shine

After I read this month’s cover story, a stark truth was unveiled to me: Years ago, I should have made sons Sam and Ben hunker down in the basement with their video games, rather than cart them off to baseball and basketball practices after school. They haven’t made a lick of money off their pitching arms, but maybe they could’ve earned some cash with that flick of the wrist one develops being a video gamer.
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