October 2016

I used to be a franchise lender, but I lost interest.

Tristan Jimerson and Daniel Laeger-Hagemeister delivered sandwiches freakishly fast for Jimmy John’s. No one, Jimerson says, has delivery as dialed in as Jimmy John’s. Since the delivery zone for each store is small, the sandwiches sometimes rode in cars, sometimes in messenger bags via bicycles.

“Wetzel’s is a great business for private equity investors because it has everything they look for,” declares Bill Phelps, who as co-founder and CEO of Wetzel’s Pretzels could be considered biased. “It has high cash flow. It has good growth.

Americans sending food abroad has historical roots. During WWI, U.S. citizens curtailed their consumption of wheat and sugar, eating instead fresh produce, in order to send shippable food to Europe for both the allies and our own soldiers. The slogan was “Food will win the war.” There was a similar campaign during the second World War.

Michael and Babz Barnett had their 15 minutes of fame six years ago on the hit TV show “Shark Tank.” Like other contestants, they pitched their concept—a modernized kids’ gym called Romp ‘n Roll—to high-powered celebrity judges, and got the coveted offer.

‘There has to be an allowance for people to make mistakes,’ declares Gary Moore, operator of 58 Burger Kings plus three other brands. Judging from the operation’s success, many more hits than misses are likely.

How to last for 100 years? For Nathan’s Famous, it’s the hot dog, stupid. And if you’re Nathan’s boss, Wayne Norbitz, the only way to eat it is plain. ‘That’s the way God intended it to be,’ he says.

Tilted Kilt’s CEO Ron Lynch is rolling out a new prototype for the Celtic-themed sports bar and grill, where the servers are known for their skimpy kilts. It will be lighter and brighter, with less kitschy Old World stuff hanging around. It will re-introduce games, the old-fashioned kind like pool tables, shuffleboards and dartboards. It will have a new lunch menu, with healthier options and smaller portions.

Ann Littmann, a freshly minted VP at Safeway Driving School, is right on message as she describes the mission of the Houston-based franchise. “Safeway is a 43-year-old company, and we were invented to prevent the phone call no one wants to get,” she said, about a tragic car accident involving a young driver.

It was the great, unavoidable war. With so much money and interest flowing into the marinara-red-hot pizza category, many industry watchers see Pieology’s recent acquisition of Project Pie as the first move in an eventual wave of consolidation that will trim the number of players in this rocket-fueled restaurant segment.

Ultimate fighting started on the streets, featuring brawls so bloody that lawmakers tried to get it banned. Today, UFC just sold for a staggering $4 billion to a new group of owners, and events like UFC 200 in July draw sell-out crowds. Enter UFC Gym, a young franchise owned 50-50 by UFC and a group of private investors, trying to translate the sport’s worldwide popularity into unit sales.

Rebranding efforts range from a logo change to exterior updates to vehicle wraps, but they all share something in common—everything goes better when franchisees buy in. Three franchises describe their decisions to have a little work done.

Recruiting and retaining top talent are critical to a franchisee’s success. By offering competitive healthcare employee benefits, franchisees can utilize a proven retention strategy to hold on to quality store managers and ultimately help increase profitability.

As competition for top real estate locations continues to heat up, franchise groups are finding that forging relationships with developers can pay big dividends when it comes to securing space in new retail projects.

Think about your average trip to a shopping mall—the height of car-based convenience. You jockey for an open spot, park, then walk the gauntlet through a chaotic lot filled with other distracted drivers. Judging by the crowds at most malls, walking the equivalent of a few blocks to the entrance doesn’t appear to scare off any shoppers.

A trio of healthy lifestyle young men started Jamba Juice by opening a single smoothie shop in California in 1991 that they called Juice Club. They began franchising, and in 1997 changed their company’s name to Jamba Juice. In 2000 Jamba Juice acquired rival Zuka Juice and in 2003 was acquired itself. The new owners took the company public in 2006 as JMBA, at a price of about $50 a share.

Marcato Capital had some choice words for the Buffalo Wild Wings board after a tepid quarter and lackluster analyst day. The hedge fund’s founder and CEO Mick McGuire sent a scathing public letter and detailed presentation that questioned the company’s direction.

Franchisees and other small-business owners have a number of ways to comply with new overtime guidelines established by the U.S. Department of Labor and the Obama Administration, but attorneys and lawyers working with such clients suggest getting started sooner rather than later.

The 10 largest franchised brands collectively lost systemwide sales for the first time in the history of the Franchise Times Top 200+, our exclusive annual research project. But 190 other big franchisors turned in their strongest sales increase in at least five years. Learn who’s up, who’s down and what’s behind the numbers.

Change is a constant in auto-mobiles, but with the rise of shared-car services and fast-tracked driverless vehicle technology, the pace of upheaval in this massive industry is going faster than ever.

Here’s a statistic that jumps right out: AtWORK Group’s systemwide sales zoomed up 56 percent last year from the prior year. The temporary staffing company’s gain was by far the biggest increase in a diverse category that also boasts a few other standouts.

Cleaning houses and businesses isn’t sexy, but with nearly $10 billion in sales across the top 16 franchised brands in the space, it’s still lucrative. The nearly flat sales growth, however, shows there is some stiff competition.

It’s the year’s most booming sector. As home healthcare franchises seek to serve an ever-aging population, every brand in this year’s health and medical group recorded growth to the tune of 14 percent overall, with all but two companies hitting double-digit increases on their own. That’s on the heels of 11.7 percent sales growth in 2014, with 281 total units coming online in 2015, a 6.1 percent increase.

Fortunes are still rising in hospitality, with sustained increases in business and leisure travel fueling a multi-year growth streak that has fattened profits and spawned new flags from many established hoteliers.

The fitness industry is pumping up the personal services sector, which saw sales climb 7.6 percent from 2014 to $14.2 billion thanks in large part to the massive growth of brands such as Planet Fitness, Anytime Fitness and Snap Fitness. Together these concepts added more than 500 units in 2015 and each saw double-digit sales growth.

Printing, shipping and signage franchises posted a 3.6 percent increase in systemwide sales last year, one of the more modest gains by an industry sector.

A lot of people think casual dining will soon disappear, that it’s a hot potato being tossed from one private equity group to the next before time runs out. Despite the segment’s issues, there is plenty of innovation among the best brands.

What hasn’t already been said about the wonder that is the fast-casual restaurant: It’s what millennials want, it’s what busy families want, it’s true menu innovation, it’s making gobs of money.

When your industry sports a behemoth like 7-Eleven, it’s hard to escape from the shadows of the big dog’s results. While sales for the retail category as a whole decreased 1.5 percent, sales for the rest of the Top 200+ category sans 7-Eleven actually increased by 3.6 percent. Overall unit growth held strong at 4.1 percent from the prior year.

While it remains in the No. 1 spot overall, McDonald’s shows its behemoth status—though not how it would like as the company’s $5 billion-plus sales drop means the sector as a whole saw less than 1 percent growth.

The sandwich segment is touching on some familiar notes, but change is afoot at some of the strongest growth brands.

Sri Lanka doesn’t offer the population numbers its neighbor India does, but its inclusion in the December trade mission points to the fact that it’s ripe for expansion. Nothing is ever a given in international expansion, which is why a boots-on-the-ground approach is so valuable.

The lion represents Sinhalese ethnicity, the strength of the nation and bravery; the sword demonstrates the sovereignty of the nation; the four bo leaves—symbolizing Buddhism and its influence on the country—stand for the four virtues of kindness, friendliness, happiness and equanimity.

What to do after a negative review. How to turn non-techie owners into social media mavens. These are two topics tackled this month by the participants in our year-long Living Large column. Read on to learn their tactics.

Becoming Mom Spa+ Ultrasound hired Susan King Glosby as its new vice president. Villa Restaurant Group added Enrico Cundari as the new controller of its corporate finance team.

Fame in franchising is a double-edged sword, as actor and former Funky Bunch member Mark Wahlberg and brothers Paul and Donnie just learned.

The famous 1976 Saul Steinberg cartoon in The New Yorker depicts a map of the world from the perspective of a resident of that city: beyond Manhattan, a few cities and states, small and faint; the U.S. ending at the Pacific, with Japan barely visible; and the country turning its back on the Atlantic, with Europe nowhere to be found. That sardonic depiction has come to be a shorthand way of thinking about the U.S.: myopic, with tunnel vision, imagining itself as the center of everything.

While touring London in 1897, American author and humorist Mark Twain caught wind of rumors that he had died. Upon hearing this news, journalist Frank Marshall White sent a fellow reporter to check on Twain’s well-being. “The report of my death has been grossly exaggerated,” was his response.

By now, anyone not residing under a rock understands the importance of computer security. Just ask the folks at the Democratic National Committee if you harbor doubts.