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September 2016

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In this issue

Internship opens up a World of Beer

When Jamaal Lemon and Shep Jenkins return from a trip, their debriefing always includes an inventory of what they’ve lost. “In San Francisco, I had a South American bracelet I lost and Shep lost one shoe,” Lemon says.

Legendary eater wins Chronic Tacos prize

The taco-eating challenge at The Palms in Las Vegas this year was chronic, if not pretty. The legendary eater and reigning champ Takeru Kobayashi gobbled down 137 chicken soft tacos in 10 minutes to claim the $5,000 cash prize and the flowered skull trophy of the 6th Annual Gringo Bandito Chronic Tacos Challenge.

Coyote Ugly’s world is a pretty place

If the 600 young women lined up in front of the soon-to open Coyote Ugly bar in Wales were taking the name literally, they might not be so keen on being a Coyote. After all, the origin of the name is taken from one-night stand lore, where a man wakes up in the morning, sees the grossly unattractive woman he brought home from the bar sleeping on his outstretched arm and would rather gnaw off his arm to escape than wake her up.

HealthStore Foundation is changing its stripes

After 15 years in Africa, the HealthStore Foundation is changing its stripes, going from a non-profit platform for its franchised health clinics to a for-profit franchisor.

Every day is game time for Denny’s operator

When it’s third-and-one at 10 a.m., it’s not time to punt, declares former Colts great Donnell Thompson, today a Denny’s operator. We asked him to share his playbook.

Saints QB Drew Brees suits up for his next franchise gig

Shouts, cheers, clapping, honest-to-goodness screams—that’s business as usual when Drew Brees makes an appearance in Walk-On’s, the brand he has just thrown his considerable celebrity behind. Here’s a look at where the New Orleans Saints superstar is going after he throws his last professional pass down the field.

Why a robot may be in your store’s future

Robots in retail may seem like a gimmick today, and a fun one at that. But tech watchers believe current experiments, at places like Domino’s and Lowe’s, may turn into tomorrow’s innovations. Which retailers are out front in AI?

Browsing our way through four retail concepts

1. The KASE The concept: With more than 150 stores in nearly 30 countries including France, Germany, India and Singapore, The KASE has established itself as a formidable player globally where it sells custom-made cases and accessories for smartphones, laptops and tablets. Now, the company launched in France in 2012 wants to expand its U.S. footprint by selling franchises, said co-founder Steve Rosenblum.

When cars don’t need drivers, who will need repair shops?

Take a nap while your car drives itself? That future is coming, trend-watchers say, and along with it a sea change for franchises that exist to fix all those autos. The key will be shifting to large-scale fleet customers.

For Franchising Gives Back award winners, doing good is second nature

September 12 marks the second annual celebration of Franchising Gives Back, the International Franchise Association’s recognition of franchise companies’ contributions to the well-being of their communities through monetary and in-kind donations and volunteer hours. One winner in each of five categories will receive the gold distinction from the stage prior to the IFA’s Franchise Action Network initiative, where members visit their congressional leaders. Two other franchises will bring home the silver in each category (the Spirit of Franchising has three silver winners).

From rock-bottom after Katrina, NOLA rallies

Calling New Orleans’ comeback ‘a great win for human beings,’ Smoothie King’s CEO details his brand’s role in the recovery. From Antoine’s, the oldest restaurant in the U.S., to VooDoo BBQ, a young franchise, our reporter walks the streets to tell the story.

Sentinel Capital builds investments, brick-by-brick

Past the receptionist (ahem, the director of first impressions as is her official title), it’s an enviable view from the 27th floor conference room of Sentinel Capital Partners in Manhattan.

Family offices investing from the shadows

Shadowy entities that control billions of dollars are among us. No, this isn’t some tinfoil hat-Illuminati madness, but family offices are all across the franchising industry and few people—if anyone—has a complete picture of what they’re doing.

Show the numbers to sell more units

When you are trying to sell franchises, do you show your unit sales results to prospective franchisees? If not, why not? If the reason is that someone told you not to show this information, it is time to rethink that advice.

Midas’s FDD goes under the microscope, in Analyze This

ITEM 1 In most FDDs, Item 1 is a quick read. Midas Inc.’s is so complicated it requires a flow chart. Midas began selling franchises in 1956. A subsidiary, SpeeDee Worldwide, sells quick-oil-change franchises through its own FDD. Tire and auto parts distributor TBC Corp. has owned Midas since 2012, and TBC is owned in turn by the Sumitomo Corp. of Japan. TBC is the “indirect parent corporation” that sells Big O Tire franchises, and operates 763 other non-Big O tire stores. Midas has four more subsidiaries including Progressive Automotive Systems (PAS), point of sale software designed for use in Midas shops, a point we’ll take up in Item 8, below.

Is your HQ mindset so old it’s mossy?

Isn’t it great when juicy rumors turn out to be true? While walking around Detroit and conducting interviews along the way this spring, there was no denying change was afoot in the gritty Motor City.


Apair of damning reports predicted some dark times for the industry ahead.

Specialists tell the upside of being down under

John Kanawati, a commercial specialist for the U.S. Consulate General in Sydney, answers questions posed to him by his U.S. colleagues, Jennifer Stone Marshall and Curt Cultice of the U.S. Commercial Service, on Australia’s mature market.

All about franchising in Australia, at a glance

Location: Between the Indian Ocean and the South Pacific Ocean Neighboring countries (include): Indonesia and Papua New Guinea to the north; and New Zealand to the southeast

Emerging brands live by data, more or less

One CEO is ‘100 percent data.’ Another learned the hard way to emphasize only a handful of metrics. But all three bosses of our Living Large franchisors believe doing the math is part of building a brand.

Submarina says full steam ahead, but founder’s son points out iceberg

Later this month, CEO Bruce Rosenthal believes Houston-based Submarina’s three-year ordeal in bankruptcy court will at last come to an end. He expects to receive a judgment to collect at least $1.7 million from a group of franchisees in California who stopped paying royalties in 2012. Rosenthal plans to use that recouped money to repay creditors and exit Chapter 11.

Come, let us reason together? New Dutch code raises thorny questions

When we examine the laws that will apply to the relationship between a franchisor and a franchisee in a cross-border context, we are accustomed to asking the usual questions: Will it be governed by the law of the franchisor’s home country? The franchisee’s? Or, in unusual circumstances, the law of a third country?

A house divided cannot fall, or Honest Abe’s take on websites

If you’ll forgive me, I’m going to blatantly misquote one of our most storied presidents, Abraham Lincoln, for the sake of this column.

One at a time is fine for Fazoli’s, plus high steaks and labor pains

Slow unit growth is the intelligent strategy these days, isn’t it? You open, say, one or maybe two franchise restaurants annually — and, well, Bob’s your uncle. Just to make sure, I posed the question to franchise consultant Andy Simpson of Results Thru Strategy. “The franchisee who’s thinking smarter has a development deal that calls for one a year. That’s a strong deal,” he affirmed.
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From the Magazine

Publisher's Column

Oh, to be an intern again, aka ‘aspiring millennial’

Twenty-three-year old son Sam had a friend, Dylan, with a job I thought sounded like a scream: driving the Mr. Peanut truck around the country for one year, and wearing the Mr. Peanut suit at functions along the way. This was affectionately named “The 2015 Nutmobile Tour,” and concluded with a professional YouTube video of Dylan dancing with the Louisiana Dance Collective (ala Mr. Peanut). C’mon. You’re 22 with no ties? One year on the road with a bunch of other millennials in a big nutmobile? Freakishly fun.

Loose Ends

Bernie’s year of Ben & Jerry pales to Hillary’s one pint of EmpowerMint

In 2008, I covered the Democratic and Republican parties at their respective conventions, and when I say “parties” I mean the cocktail parties hosted by the International Franchise Association in both Denver and Minneapolis for congressional members they supported and local IFA bigwigs. While walking to the convention site along the 16th Street Mall in Denver one sunny day, I spotted a vendor selling Obama action figures. The six-inch-tall doll was part of the Einstein collection being sold in bookstores. I asked if I could also buy a George W. Bush doll, but the artist/businessman turned up his nose and said he only made “geniuses.”
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