The Australian:

STARBUCKS is planning for a drawn-out recovery in consumer spending, but believes it has trimmed its high-growth business model with more than $US500 million ($581.4m) of cost cuts.

“We have shaped our plans assuming there’s a long recovery here and takes a while for the consumer to come around,” Starbucks chief financial officer Troy Alstead said at a recent Goldman Sachs retail conference.

The consumer health outlook in the US is still hazy as unemployment approaches 10 per cent and consumers build up their savings, leaving Starbucks preparing for more uncertainty before prosperity.

Alstead also said Starbucks would continue to use traditional marketing and social media such as Facebook to fight against attacks from competitors that have chided the worldwide coffee shop for being too pricey.

“Starbucks will not allow others to continue to define us in the customer’s eyes,” Alstead said.

Starbucks, which closed most of its Australian stores last year after failing to penetrate the local market, has elsewhere faced new competition in the premium coffee market from McDonald’s.

Earlier this year, McDonald’s billboards in Seattle, Starbucks’ home turf, proclaimed: “Four bucks is dumb.”

But McDonald’s premium coffee launch, McCafe, may not be giving the chain the boost it wanted. McDonald’s has posted disappointing August same-store sales results, including a 1.7 per cent increase in the US, a figure Research Edge analyst Howard Penney says reflects consumers not taking to McCafe with the gusto predicted.

Starbucks shares have more than doubled this year and have bounced from a low of $US7.06 last November.

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Examiner.com:

The Capital Region’s second Juicy Burgers and More opened today, in the Karner Corners Plaza on New Karner Road in this Albany County suburb.

The opening came on the first anniversary month of the original Juicy, located in the Milton Center Plaza in Ballston Spa.

Founder and owner Bobby Mitchell is behind the budding local chain. He previously launched such restaurants as Wheatfields and Doc’s Steakhouse in Saratoga Springs.

Mitchell stayed away from opening a Juicy in the Spa city because of a non-compete clause in the contract signed when he sold Doc’s Steakhouse there. That clause expires this coming February. Plus, in an interesting twist, Doc’s has closed and filed for bankruptcy protection.

Which means, Mitchell told Saratoga.com, “The public should expect a Juicy Burgers and More location in downtown Saratoga Springs in the Spring of 2010.”

Mitchell said his goal is about 10 locations in the Capital Region and Warren County, with locations in downtown Glens Falls, Malta, and Latham/Loudonville cited as definite targets in addition to Saratoga Springs.

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TheFranchiseMagazine.net:

Children’s physical activity specialists franchise Sports Xtra has announced the launch of four new territories to mark the end of its first 12 months of franchising. The four new franchise owners recently spent four days training at head office learning how to operate and develop the business.

Four more areas are already scheduled for opening during October, taking the network size to 15. “At the outset we knew we had a fantastic concept so we set ourselves an ambitious target to reach 15 franchises by the end of 2009,” said Managing Director Gareth Lippiatt. “To reach that target three months early and reach the final of a FSB Enterprising Business Award isn’t a bad first year and testament to my head office team, which also seems to be growing on a monthly basis at the moment!

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PRweb:

Franchise Services, Inc. is pleased to announce that more than 200 franchise owners and salespeople from around the world received awards at the annual Sir Speedy, PIP and Signal Graphics International Convention and Vendor Show at the San Diego Marriott Hotel and Marina, July 28 - August 2.

Kathy Morgan of Irvine, California received the Sir Speedy Franchisee of the Year award and Tom Coughlin of St. Clair Shores, Michigan received the PIP Franchisee of the Year award.

George Coriaty of Whittier, California received the Sir Speedy Top Volume award and Ganga Prasad of Jeddah, Saudi Arabia received the Sir Speedy International Top Volume Award. The Fulner Family of Indianapolis, Indiana and Nashville, Tennessee received the PIP Top Volume award. Awards were also given to franchisees and salespeople in the following categories: Top 10, Top 25, Volume Increase Percentage, Century Club, Million Dollar Club, Sales Achievement Awards, and Application Innovation Awards.

“Being a top producer among our franchise network is a worthy accomplishment given today’s competitive business environment.

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Nation’s Restaurant News:

Rock Bottom Restaurants Inc. said it plans to debut a new “polished casual” concept next month in Omaha, Neb. The new restaurant, Rock Bottom Gold Medal Tap, will focus on craft beers from Rock Bottom’s proprietary lineup and microbrewers around the United States.

In addition to the requisite emphasis on specialty beers, the brewpub concept will have a large selection of cocktails, infused spirits and wine. The menu reportedly will feature steaks, seafood, build-your-own burgers, flatbreads and prime-rib specials on the weekends.

“This is kind of a hybrid concept for us, which should allow us to make it more attractive for potential franchisees that want to align with Rock Bottom but don’t want to incur the cost of building a brewery,” said Dave O’Connor, franchise marketing manager for Rock Bottom Restaurants.

The company first learned how to execute the Rock Bottom concept without an on-site brewery at franchised locations in the Denver and Minneapolis international airports, O’Connor said.

“We found that we couldn’t build a brewery, but we could ship in our beers to serve on tap and carry a selection of others,” he said. “So we said, let’s see if we could do this in other areas.”

All the Rock Bottom-brewed beers available at Gold Medal Tap have won the top prize at either the Great American Beer Festival or the World Cup of Beer competition.

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NY Daily News:

With the city’s unemployment rate topping 10%, many jobless New Yorkers are considering ways to become their own boss.

Some move to launch startups on their own, others partner with former co-workers. And some look for opportunities to expand a thriving business as a franchisee.

Depending on the business, becoming a franchisee can mean very different expenses and expectations. Your Money spoke with three New Yorkers in different industries about their franchise experiences.

* * *

Well into a career as a geriatric social worker, Jackie Reiter bought a Home Instead Senior Care franchise in Staten Island seven years ago for $18,500 (today’s price: $35,500).

The franchise idea was appealing because she wouldn’t be working alone and would get business support.

“When I learned about this one,” added Reiter, 53, of Annadale, Staten Island, “I realized that it’s exactly what I stand for — helping the elderly, believing in their dignity and being respectful to them.”

Some clients are in temporary rehab or assisted-living facilities, or hospitals or nursing homes.

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PR.com:

As the fastest growing and second largest painting franchise company in North America, Five Star Painting has recently been recognized by the National Minority Franchising Initiative (NMFI) as one of the 50 Top Franchises for Minorities. Amongst rigorous competition, Five Star Painting received this distinguished honor and will appear in the October 2, 2009 special issue of USA Today – “Franchising Today.” Factors contributing to this selection include one of the company’s objectives of both recruiting and advancing minorities within its organization. Additionally, Five Star Painting has proven successful in historical performance, brand identification, market dynamics, franchisee satisfaction and the level of initial training and ongoing support and financial stability.

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BusinessWeek:

PARIS — The Left Bank café is furnished with sleek wood paneling and leather armchairs. Patrons sip espresso from china cups and nibble on croissants and pastries. So what are those golden arches doing on the sign outside the door?

The coffee shop on rue Linois is one of 200 “McCafés” McDonald’s is opening in Europe this year. By yearend, McDonald’s (MCD) hopes to have some 1,100 of the cafés across Europe. The cafés are located inside existing restaurants but with a separate counter, comfy furnishings, and nary a Big Mac in sight. Next year, the company plans 200 more, with an eye toward becoming “the No. 1 coffee seller in Europe,” says Jerome Tafani, the company’s chief financial officer for the region.

That’s a grande order. Starbucks (SBUX) is currently Europe’s top coffee chain with nearly 1,200 stores. But McDonald’s strategy of opening McCafés in existing franchises gives it a leg up over the Seattle-based java king. A stand-alone Starbucks in Europe requires an investment of $350,000-plus, at least triple what a McCafé costs, says Jeffrey Young, managing director of London management consultancy Allegra Strategies. “McDonald’s finally woke up and smelled the coffee,” says Young. “With the number of outlets it already has in place, it can take Starbucks head-on.”

McDonald’s is rushing to grab market share where Starbucks has hesitated. While Starbucks continues to avoid Italy, for instance, McDonald’s opened its first Italian McCafé in Milan in 2005. Today it has 65 of them across the country. And McDonald’s is undercutting Starbucks on price.

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