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FranNet’s CEO wants to clean up the brokerage biz, plus more


Self Esteem Brands

Self Esteem Brands’ Chuck Runyon, left, Papa Murphy’s Victoria Tullett and Great Clips’ Steve Hockett.

How much is brand loyalty worth to your franchise? To Chuck Runyon, CEO of Anytime Fitness, the answer is a cool half million and counting. That’s how much Anytime has spent reimbursing any franchise partner or customer who gets a Runningman tattoo, the company’s symbol, snaps a photo of it and sends it in to headquarters. “This is very conservative, but I bet you we have spent maybe 4- or $500,000 over the last several years,” Runyon said at the Faegre Baker Daniels Franchise Summit in August. It’s the kind of investment a big brand can make, and the topic of the panel was how to keep growing once you’ve pushed past the 1,000-unit mark. Anytime Fitness just passed 4,000 gyms by “always being close to our customer.”  Victoria Tullett, general counsel at Papa Murphy’s International, said, “The product has to be the king. If it’s not the foremost quality, and consistent and delicious and it brings people together to enjoy this meal then we’re nothing.” Steve Hockett, CEO of Great Clips, said, “We focus on haircuts. There’s all sorts of pressure to say we should get into color and all the other things...What are we going to do and what are we not going to do?”

Clean-Up Time

Jania Bailey believes what the franchising world needs is another franchise disclosure document or FDD, but this time for brokers. Her company, FranNet, is launching what she calls the first broker disclosure document or BDD in franchising, meant to throw open the doors on the often hidden ways that third-party franchise brokers work. “It just made sense to put it in writing. It takes out the mystery,” says Bailey. She says there are many honorable players but also plenty of bad behavior in the brokerage sector. “I want to raise the bar so high they can’t get over it, or they clean up their act so they don’t harm the industry.”

Rusty Returns

You heard it here first: renaming Rusty Taco to R Taco was a terrible idea, especially since Rusty was the name of the taco brand’s late founder, Rusty Fenton. As one of the first public-facing changes under the new Inspire Brands parent company under CEO Paul Brown, the 27-unit fast-casual brand has reverted to its old name—Rusty Taco. Co-founder Denise Fenton said Brown made an unannounced visit to her store. “I introduced myself, and Paul said he loved the name Rusty Taco. I think he saw this as a brand with a story behind it. There was a man named Rusty who had a dream and chased that dream. Paul is very connected to people and their story, and he took the time to find out ours.”

A Classic Re-Launch

We at Franchise Times are hard at work on a new project: the acquisition of The Franchise Handbook, for 30 years a recognized industry resource and now preparing for a re-launch. Available January 1, 2019, The Franchise Handbook is an annual print supplement and online resource, providing a compendium of franchise facts, dates, easy-to-read charts, statistics and succinct explanations of challenging franchise topics to help franchisors, franchisees, suppliers and vendors find answers to their franchising questions. The new guide is meant for handy reference again and again each year.

Wendy’s Windfall

Wendy’s has quite a windfall after selling its ownership stake in Inspire Brands. The stake came out of the  2008 deal to buy Wendy’s for $2.3 billion via the beverage giant Triarc Companies, creating the Wendy’s/Arby’s Group. The group then sold Arby’s to Roark Capital in 2011, retaining a $30 million stake. After Arby’s, Rusty Taco and Buffalo Wild Wings merged under the Inspire Brands umbrella, the ownership stake converted to the parent company and was diluted to 12.3 percent. Growth from $30 million to $450 million ($335 million after taxes) is quite a nice return on investment (and values Inspire Brands at $3.6 billion).

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