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May 2020

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In this issue

Unity Rd.’s race to win the weed business

Zero franchised stores are open despite nearly five years of work. Licenses to sell cannabis cost from $2 million to, in one case, $70 million, even before buying a $1.1-million franchise. Oh, and their product is illegal. Why the founders of Unity Rd. want to be first to franchise marijuana stores anyway.

How Burgerim’s red flags got missed

Burgerim, the mini burger-focused concept that originated in Israel and was brought to the United States in 2014 by Oren Loni, sold more than 1,000 franchises within five years. Hundreds of franchisees paid the $50,000 franchise fee, built and opened stores, but didn’t come close to the 23 percent operating profits Loni promised, says franchisee Robert Jameson.

Cancer recovery inspires creation of Raw Juce

Before getting Raw Juce off the ground, Barry Rabkin wasn’t one of those juice fanatics running around drinking wheatgrass. He was a hedge fund guy, flying from his home in Florida to New York and attending his fair share of steak-centric client dinners.

With founder’s return, Tin Drum team thinks big

It’s not the typical midlife crisis for restaurateurs—to earn a master’s degree in architecture from Georgia Tech with a focus on the future of retail. But that has been Steven Chan’s unusual path for the last few years.

Gold’s Gym angles for a resurgence

Providing an inside look at their brand’s development plans, C-level execs presented to investors, lenders and operators at the Franchise Investment Conference in March. We sat down with leaders at Gold’s Gym, Pedal Pub, Wingstop and Mutts Canine Cantina to learn more.

Pedal Pub parent Go Xperia targets experience economy

Suppose you could buy up brands in four segments of the experience entertainment category—pedal pubs, escape rooms, ax-throwing spaces and emerging brands (also known as whatever people come up with next)—and franchise them. Sound like a fun business?

Wingstop matures with focus on growth-minded operators

Like many millennials at 25 years old, Wingstop is now maturing. The company got its own place, is focused on self-improvement and is becoming more globally minded.

Mutts Canine Cantina digs into booming pet industry

Imagine yourself sitting outside in a beer garden on a sunny day. Puppies are running around and you’re sipping a Barkarita during Yappy Hour, chatting with some friends. A few Bark Rangers are even patrolling the area, filling up water bowls and cleaning up after your dog.

FT tries out the latest wellness treatments

After a week of indulgence (OK, overindulgence) during vacation I was ready to rid my body of some toxins, which is what the infrared sauna at CYL Sauna Studio purported to do. These saunas, which use infrared light to heat the body from within instead of heating the surrounding air, aren’t new, but as franchise concepts are popping up in greater numbers as they ride the wellness wave.

E-2 visa helps brothers invest in Glass Guru

Julio and Roberto Medrano, two brothers hailing from Honduras, wanted financial independence and to start their own business.

Revamped Noodles & Co. brings operator back for more

After Noodles dialed back the complexity and created a new prototype, longtime franchisee Mike Lamb is ready to start building again and knows to be successful, every detail matters.

Legacy restaurant brands find connection in small markets

Urban markets don’t always equal higher sales, and for Bennigan’s, Beef ‘O’ Brady’s and A&W, sometimes success comes in a smaller town. While these brands are facing new challenges amid the pandemic, their market strategy could position them better for a comeback.

Franchise concepts focus services on special needs

It was in 2009 that Gabriel, Dina Kimmel’s son, was diagnosed with moderate to severe autism spectrum disorder. Kimmel remembers the time well as her family could hardly visit any playgrounds without being asked to leave. After the fifth such experience, she was fed up and decided to create a private gym in her bedroom—one that both Gabriel and her neurotypical daughter, Sophia, could play in.

How to find your next franchise CEO

Umbrella companies, many backed by private equity firms and with multiple concepts under each roof, are the rage in franchising. Buzz Brands has three concepts. Self Esteem Brands now has four after two acquisitions last year. Xponential Fitness has eight and counting. So how to find leaders to drive all those concepts? The Human Element went to find out.

Sale-leasebacks can unlock capital for franchisees

Some franchisees that are hungry for capital may be able to tap into equity stored in their real estate via a sale-leaseback transaction.

Snap Fitness signs master deal for Japan

Minnesota-based Snap Fitness and its newest master franchisee, Global Fitness Japan, expect the brand’s flexible 24/7 model that also incorporates group workouts will appeal to Japanese consumers.

Country Profile: Per capita income a draw in Japan

The red disk in the middle of the flag represents the sun without rays. The sun plays an important role in Japanese mythology and religion as it is said the emperor is a direct descendant of the sun goddess, Amaterasu. The flag itself is called Hinomaru, which means “circle of the sun.”

How to embrace franchise resale programs

“There is an expression in franchising that you’re in business for yourself, not by yourself,” says Johnny Sellyn, founder of FranchiseREsales.com, reciting a common phrase. The exception to that is when it comes time to sell the business. Then, franchisees are on their own. “To be honest, a lot of brands don’t even want to have a discussion with franchisees about a resale,” he says.

Don’t stop marketing, development during a crisis

Emerging franchises might not have the deep pockets or all the resources of big brands, but by emphasizing communication and staying focused on growth, they’re managing the pandemic with an eye toward the future.

Restaurant vet makes switch to salon suites in multi-unit deal

Mitch Cohen’s lengthy career as a franchisee includes operating top-performing Baskin-Robbins stores, successfully adding Dunkin’ units and later getting into Nathan’s Famous Hot Dogs. He now has five Jersey Mike’s shops throughout Long Island, New York, but his newest brand is seemingly a total departure from the restaurant industry. “Seemingly” because, as Cohen explained, his experience from 35-plus years running restaurants will translate to a unique take on customer service as he steps outside foodservice to develop locations of Sola Salon Studios.

As founder struggles to fix Edible, franchisees file lawsuit

February 14, 2020, dubbed the Valentine’s Day disaster in a lawsuit, was the last straw for a group of Edible Arrangements franchisees.

Looking for the positives in the pandemic

Global health crises of the magnitude of the COVID-19 pandemic have far-reaching implications for international economics and commerce, and franchise systems must navigate the resulting storm. There have been catastrophes and casualties. That said, franchises have demonstrated a remarkable resilience and resourcefulness in weathering the conditions—providing valuable lessons and insights for the franchise community going forward.

What franchises should know to adjust development in this recession

I often hear, usually from franchise recruiters, that recessions are “positive” for new franchisee recruitment because new entrepreneurs enter the market. Mid-career executives find themselves downsized and use retirement funds, severance or credit to launch a business. The new business creates income and the opportunity for personal reinvention. Younger candidates may eschew corporate life altogether and bet on themselves via franchising.

Aloha Poké, Jellystone Park owners talk growth

I’m talking by phone to Bojangles franchisee Baryalay Razi (he said just call him “Razi”) on March 24. A week earlier, officials in Maryland, where he operates five of the chicken-and-biscuit outlets, ordered all restaurants to stop serving customers inside their establishments to help control the spread of the novel coronavirus. As of now, they are only permitted to sell food through drive-thru windows.

Get to know the founder of Everbowl, in Grab Bag

Who would play you in the biopic about your life? Oh, that actor who played Rocky Balboa’s son, he was also in ‘Heroes’ (looks it up on IMBD) … Milo Ventimiglia. Just from watching his personality, he’d be a goofy, funny guy. Or Sean Connery, but he’s a little old for me.

COVID-19 economic recovery a question of when, how

While COVID-19 approaches its peak in the U.S., business leaders, economists and extroverts alike are struggling to get a clear view of what the recovery looks like and when it might happen.

New Jabz Boxing president plans responsible growth

Danielle Scott is the new president of Jabz Boxing, a full-body circuit workout that uses boxing-inspired exercises designed for women. Scott, who worked at HES Holdings, Zippy Shell and Patrice & Associates Franchise, will lead development and management of franchise operations, corporate growth, marketing and profitability at Jabz.
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From the Magazine

Publisher's Column

Amid a crisis, look ahead, and to learn from others

At the beginning of the stay-at-home order in my home state of Minnesota, I called some of my professional network of friends, colleagues and customers just to see how they were doing.
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