Chairman and chief executive officer of Marriott International, J.W. Marriott, Jr., announced the spin-off of its vacation ownership business, the Marriott Vacations Worldwide, as reported at PRNewswire.com.  He is optimistic about the continuous global growth of Marriott International in the hospitality industry.  Marriott International had been serving guests in more than 70 countries through its signature Marriott Hotels & Resorts, Courtyard by Marriott, Ritz-Carlton and Autograph Collection and AC by Marriott.

Since its founding nearly 85 years ago, never has Marriott International, Inc. (NYSE: MAR) been as fully focused on its core lodging management and franchise business as today, concluding the spin-off of its timeshare business.  To complete the spin-off, equity shares of the new company, Marriott Vacations Worldwide Corporation (NYSE: VAC), are being distributed tax-free to Marriott International shareholders.

Marriott International also expects to file a Form 8-K report with the U.S. Securities and Exchange Commission later today containing unaudited pro forma condensed consolidated statements of income, as well as an unaudited pro forma condensed consolidated balance sheet for Marriott International reflecting the impact of the spin-off.

J.W.

Read More

Your franchise brand can be its most single valuable asset.  It takes years to build a reputation and a name that is identified with your business.  AllBusiness.com has provided some tips on protecting your franchise brand.

What does all this mean for your franchise brand? A strong business brand is particularly important in a franchised network of businesses because it is the singular symbol and the common identity used to identify independently owned franchises to the public as one organization. The products and services offered by franchisees are all represented by the brand; it’s the one name that appears over everyone’s door.

Given its importance in any franchise network, great effort goes into promoting the brand and, of course, protecting it. Wise franchise managers know that their brand is as fragile as any person’s reputation. It can be irretrievably injured by bad decisions and bad behavior, and it can be sullied and devalued as easily as a jilted high school friend can start a gossip campaign.

Franchisors and their franchisees should take these four basic steps to protect their common brand:

1.

Read More

Restaurant chains like Popeye, KFC, Firehouse Subs and Rally’s Burger have stepped up incentive programs to lure franchisees to take the risk and open their own businesses, as reported in the Los Angeles Times.  Popeyes offers to waive its $30,000 franchise fee for new owners and lowered royalty fees from 5% of revenue to 2% for the first year.  But franchisees are advised to take caution as success will take time.

Fast-food chain Popeyes Louisiana Kitchen has 75 restaurants in Los Angeles, Orange and Riverside counties, and it plans to open 24 more despite the lagging economy.

Chicken-centric Popeyes, however, doesn’t plan on launching the new outlets on its own dime. It’s seeking franchisees — would-be entrepreneurs willing to take on the expense and risk of opening their own businesses.

“We just don’t have the resources to build everywhere ourselves,” said Greg Vojnovic, vice president of development of Popeyes, owned by AFC Enterprises Inc.

Restaurant chain franchising is on a slow but steady increase, and not just at Popeyes.

Yum Brands Inc. this year planned to turn about 400 of its company-owned restaurants into franchises, most of them KFCs.

Read More

During this period of economic downturn, people who lost their jobs or are uncertain about holding onto their jobs usually cannot find new employment. Alisa Harrison of the International Franchise Association said, “They tap home equity, severance packages and sometimes retirement plans to start a new business that they can own so they can have some control over their future”.  They go into franchising.  This year, there is a 2.5% growth in franchises compared to 2010, she added.  The State reports that fast-food restaurants top the list of franchises followed by personal services.

Altogether, there are about 785,000 franchised businesses across the nation, according to Alisa Harrison, spokeswoman for the Washington, D.C.-based International Franchise Association. That’s about 2.5 percent more than in 2010, but still shy of the roughly 792,000 in 2008, when financial markets collapsed in the fall and funding for start-up businesses all but disappeared.

By far, quick-service restaurants account for the highest number of franchised establishments at about 153,000, with personal services trailing at about 131,000. Franchises provide 7.8 million direct jobs and pump about $740 billion into the economy.

Read More

Larry Lundy whose franchise was ranked among the 100 largest minority owned businesses in the United States in the 90s is facing storm after storm in his business.  In 1999, he was diagnosed with leukemia and while undergoing treatment, his franchise stores was mismanaged by the staff.  As he got better in 2004, things started to turn around but the following year, Hurricane Katrina delivered him a crippling blow.  He salvaged only 44 out of his 67 stores.  He lagged behind in royalty payments and other obligations and with Pizza Hut working against him, Lundy decided to sell his franchise back to the latter.  And thus began his legal battle with the franchisor. You can read more on this at BlueMaumau.org

Veteran franchisee Larry Lundy has been no stranger to hardship, tragedy and setbacks in his three-decade career with Pizza Hut Inc. After being diagnosed with chronic myelogenous leukemia, his treatment for the rare cancer threw him into a spiral of bankruptcy restructuring of his 67 stores. Lundy landed on his feet, only then to be hit by Hurricanes Katrina, Rita and Gustav.

Through it all, the franchisee managed to stand firm, rebuilding his business in his native community that he loved, New Orleans.

Then came another blow. This one from his own franchisor, under the management of Yum Brands. When Pizza Hut began showing signs of wanting to take back the corporate-owned stores they originally sold Lundy, the relationship started to deteriorate. Lundy fought back tooth and nail, but finally succumbed when the franchisor took advantage of an opportunity to withdraw its guaranty on Lundy’s loans.

Read More

Wingstop franchise owners have announced in FastCasual.com that the company will be adding more than a hundred restaurants across Mexico in the next seven years.  WIS Masters has started interviewing interested parties to be franchisees and targets stores in other countries in Middle East, Latin America and Central America in the coming years.

Based on the success of its stores in Mexico City, Wingstop has announced that the company will add 120 restaurants across Mexico over the next seven years as part of a master franchise agreement with WIS Master S.A. de C.V.

Franchise owners Antonio Ortiz Dominguez, Jose Francisco Cantu Quintero and Jose Luis Serrato Villegas have opened 10 Wingstop locations in Mexico City over the last two years as part of an original multi-unit franchise agreement. Now, with the master license, the group plans to expand Wingstop throughout the country through their own development and sub-franchises.

WIS Master is currently seeking qualified franchise candidates throughout Mexico who are interested in expanding with Wingstop.

Read More

Regions outside of the United States are now targets for expansion for smaller franchisors.  These regions have been unscathed by the economic downturn, and they have appetites for American products and services. In a Wall Street Journal article, Angus Loten writes that small businesses are “turning to markets in the developing world where credit continues to flow, franchise buyers face fewer barriers to financing, and American goods and services are in high demand”.  One such company is Smashburger who plans to open a franchise in Kuwait in March next year.

Over the past month, a Smashburger outlet in Denver has had some unusual help in the kitchen: a group of Kuwaiti entrepreneurs.

The burger flippers were prospective franchisees looking to open Smashburger outlets back home—and the fast-food chain hoped the hands-on experience would help them better serve customers.

Kuwait might seem a remote target for a franchise that’s not anywhere near the size of, say, McDonald’s. But Smashburger Chief Executive Dave Prokupek has big plans for international expansion—not only across the Middle East but also Asia and Central and South America.

Why? Those regions were largely unscathed by the recession, as well as being places where middle-class consumers have a growing appetite for American goods and services. “Western premium brands have done extraordinarily well in the Middle East and elsewhere,” Mr.

Read More

Mosquito Squad, cited by INC as one of the fastest growing franchise concepts in 2011, is expanding to more states with the signing of new franchise agreements since September.  This was announced by Chris Grandpre, Chairman and CEO of Outdoor Living Brands, the franchisor of Mosquito Squad, in PR Newswire.  Mosquito Squad let Americans enjoy outdoor activities by eliminating mosquitoes and ticks.

Outdoor Living Brands’ Mosquito Squad continues its expansion with the signing of more than a dozen new franchise agreements since September 1, 2011, including its first in the north central United States. The announcement was made by Chris Grandpre, chairman and CEO of Outdoor Living Brands, parent company and franchisor of Mosquito Squad.

Mosquito Squad specializes in eliminating mosquitoes and ticks from outdoor living spaces so that Americans can enjoy their yards, business spaces and outdoor events.  Recognized as one of the 15th fastest growing franchise concepts in 2011 by INC. Magazine, Mosquito Squad has grown from 15 locations to more than 75. Mosquito Squad also has received accolades as a superior franchise organization by several industry organizations. For the 2012 season, new franchise locations will open in:

Read More

According to an article in USA Today, ShopHouse Southeast Asian Kitchen may do to Asian cuisine what Chipotle did for Mexican food.  ShopHouse opened in the nation’s capital amidst high expectations and media hype.  As at Chipotle, ShopHouse boasts the use of natural ingredients and meat that has no antibiotics or added hormones.  “ShopHouse has an enormous opportunity”, John Glass, analyst at Morgan Stanley says, “because Americans already have the Asian food habit.”

Chipotle’s new venture ShopHouse Southeast Asian Kitchen attempts to do for Asian food what it did for Mexican food.

The lunch-hour line to enter the newly opened ShopHouse Southeast Asian Kitchen curves out the door, around the corner and down the block on a recent Monday here in the nation’s capital, where the eclectic-but-electric restaurant is attracting far more buzz than any political candidate.

It’s no exaggeration to say that the restaurant world is salivating to see whether Steve Ells, the food-centric, bespectacled fellow who founded Chipotle 18 years ago with a single shop in Denver, can successfully expand his company beyond the burrito to the Asian noodle. If he can turn this repeat performance, Ells will accomplish something that even mega-giant McDonald’s (which briefly owned a big stake in Chipotle) couldn’t: excel in two restaurant concepts at once.

“Chipotle is the most successful restaurant concept of the past decade,” says John Glass, analyst at Morgan Stanley. He compares it to nothing less than what Starbucks did in the 1990s. “Chipotle transformed the way people think about Mexican food. ShopHouse can do the same for Asian.”

Read More

Lee Johns went all the way to Australia to learn how Cafe2U International conducts business and makes coffee, said an article in BendBulletin.com.  With the information he gathered, he brought home with him the rights to set up Cafe2U franchises in the United States.  Johns envisions 1,000 Cafe2U vans across the nation in five years.  Cafe2U brews and serves coffee to customers in a van, going where many people take their breaks.

If Lee Johns has his way, in five years at least 1,000 Cafe2U vans will be delivering high-end coffee to consumers across the United States.

The nation’s first, sporting bright red paint, coffee bean graphics and the company logo, began making deliveries in Bend in September.

Johns, president of Cafe2U Inc., believes the company is the first in the country to employ a mobile coffee business model. The company’s drivers travel to customers, rather than wait for them to show up at a bricks-and-mortar café, and brew up fresh drinks from a machine in the van.

And it’s not just drip coffee the drivers peddle.

“It is a premium gourmet coffee, a darker, full-bodied, rich coffee,” Johns said, adding that it’s espresso-based. The price of a drink ranges from $2 to $4, depending on size and style.

Johns, 53, does not credit himself with coming up with the concept. He is no longtime coffee expert. For years he and his wife published real estate magazines in Bend.

Earlier this year, Johns and the company’s Portland-based CEO traveled to Australia to learn how Cafe2U International conducts business and makes coffee.

Read More

Famous author Guy Kawasaki will be the speaker during the closing keynote lunch of the 52nds Annual Convention of the International Franchise Association’s in February 14 in Orlando, Florida. The Convention will be attended by 3,000 franchise professionals.  Developments in the industry, financials, new markets, franchising practices advice and more will also be highlighted during the four-day convention as reported by Franchise.org.

Guy Kawasaki, a Silicon Valley venture capitalist, best selling author, and former Apple Fellow who was the chief evangelist for the company and one of the employees originally responsible for marketing the Macintosh computer, will be a keynote speaker during the closing keynote luncheon at the International Franchise Association’s 52nd Annual Convention Feb. 14 in Orlando, Fla.

“Guy Kawasaki’s unique insights in business and technology will be well received by the nearly 3,000 franchise industry professionals expected in Orlando for IFA’s Convention,” said IFA President & CEO Steve Caldeira. “Guy Kawasaki’s in-depth knowledge of the high-tech industry combined with his years of management experience will enable him to address the wide range of franchise industries represented in franchising who attend the IFA Convention.”

Read More

Franchising grew significantly in the past decade and the Small Business Administration has lent small businesses more than $30 billion this year.  Of this amount, $25 billion went to SBA’s popular 7(a) and 504 programs.  Now that Congress is working on the appropriations, it should prioritize funding to help small businesses create jobs. The following appeared in Politico.com.

During the economic downturn, the Small Business Administration has been a lifeline for the small-business community. Now, as Congress moves forward with the appropriations process, members should consider three top priorities to help small businesses create jobs.

First, the SBA’s funding should be increased for fiscal year 2012 to ensure it has the resources to provide quality service to small businesses and small-business lenders.

Second, Congress should provide funds to extend loan guarantees for SBA’s 7(a) program, which allows private-sector lenders to make loans guaranteed by the SBA and has been a program vital to small-business lending during this economic downturn.

Third, Congress should include funding to extend fee waivers for the 7(a) and 504 programs, which range from 2 percent to 3.75 percent on the portion of the loan that is guaranteed, since they were key to SBA having its strongest year in FY 2011.

Under Administrator Karen Mills, SBA lent small businesses more than $30 billion in 2011, the most ever. This is because of the Small Business Jobs Act and increased loan guarantee levels and fee waivers for SBA’s popular 7(a) and 504 programs, which accounted for $25 billion of the SBA’s record lending.

Read More

J.J. O’connor first experienced the franchising business at age 15 when he witnessed the life style of his friend’s father, who owned a convenience store franchise.  He liked what he saw.  A year later, he had a hockey accident and ended up as a quadriplegic.  This disability did not prevent the former hockey player from pursuing his dream of owning a business.  Together with a marine veteran and his best friend’s nephew, he will soon operate four Sport Clips hair-cutting businesses, as reported at Entrepreneur.com.

While he requires 24-hour care and can’t stand on his own, he can use a computer mouse and voice-recognition software to run the back-end operations of his Sport Clips hair-cutting business, which he operates with partner Dick Marak, his best friend’s nephew.

O’Connor, who graduated with a business degree from Lake Forest College outside Chicago, opened two Illinois stores with Marak within a two-week period in 2008, purchased another in Wisconsin in 2010, and are in the process of opening a fourth location. And they hope to open a fifth, O’Connor says.

Running the business allows O’Connor to work from home, where he lives with his parents, grandmother, three of his five sisters and his dog. He also works as web manager for the Amateur Hockey Association of Illinois, chairs USA Hockey’s Disabled Hockey Section and does motivational speaking.

Because of his disability, it’s hard for O’Connor to sit and work for the 10- and 15-hour days entrepreneurs often have to log.

“Sport Clips was fitting for me because I didn’t have to necessarily be there all the time, all day long,” he explains.

Read More

TheStreet.com featured businesses in military bases including the UPS Store.  Chris Adkins, vice president of franchise development for The UPS Store, says the company averages opening 5 to 6 stores a year and by the end of the year, it will add 3 more to its existing 34 stores in military bases.  The UPS Store is found in many non-traditional locations.  It believes in being where their services are needed.

Military installations are a small yet growing avenue for businesses to expand. And, some say, a perfect avenue for a budding business to garner customers in a controlled environment.

There is an increasing push by the government to “provide more convenient and higher-quality service on military bases for their service members,” says Chris Adkins, vice president of franchise development for The UPS Store, a subsidiary of UPS.  ”The military is very open to outsourcing as a way to provide these services.”

The sentiment fits well with UPS’ store expansion plans in nontraditional locations, including hotels, convention centers and college campuses. The company has more than 4,700 retail locations in the U.S. and Canada – 34 on military bases. Three more UPS locations are set to open on base by the end of the year. Adkins says that on average, the company opens five to six stores per year on military bases.

UPS is one of several franchisors looking to incentivize veterans to open stores.

“Our goal is to be where our customers need us, and U.S. service members and their families require our services,” Adkins says.

Read More

If businesses don’t work out as expected, stakeholders have the tendency to look for someone to blame – this scenario is common when it comes to franchising.  Catching and addressing the dispute early on will prevent a full-blown litigation.  Andrew Caffey provides tips on how to prevent franchisor-franchisee disputes in the following AllBusiness.com article.

One of the most intimidating aspects of franchising is the prospect of litigation. Franchising has a well-earned reputation for being litigious, and the franchisor-franchisee relationship is in many ways a breeding ground for disputes. Consider: An individual invests a large amount of money in operating an unfamiliar business; the franchisor business undertakes the responsibility of training the new owner and helping him or her make the business a success. If the business doesn’t work out, fingers are pointed and lawsuits fly. And while litigation is expensive and disruptive for everyone, the franchisor pays an extra price: All lawsuits must be disclosed in the franchise disclosure document for 10 years.

Franchisors have been watching this movie unfold for a few decades now, and have developed a variety of innovative techniques to help them manage or head off serious disputes with franchise owners. Here are some tools that franchisors should have in their arsenal.

Read More

The International Franchise Association and Professional Athlete Franchise Initiative entered a deal to provide former athletes training so they can own their own businesses or franchises, reports the The Orange County Register.  IFA President and CEO Steve Caldeira says “Professional athletes are strong leaders in the ultra-competitive sports arena, so they inherently understand the importance of working as a team and as part of a system to achieve success.”

What do NBA center Shaquille O’Neal, tennis star Venus Williams and NFL wide receiver Keyshawn Johnson have in common?

They’re business owners. Franchisees, to be precise. And the franchise community would like a lot more of them.

Franchising is a way of doing business used by more than 3,000 companies worldwide. While fast-food restaurants are the most common user of franchising as a way to grow the company and concept, the method is used by printers, bookkeepers, automotive product sellers, home improvement services ad more.

Altogether they’ve sold more than 825,000 franchised units and employ almost 18 million people.

Read More

Tim Casey, TCBY’s CEO, discussed with QSRWeb.com how his frozen yogurt business keeps apace with customer expectations.  He counts its healthy product and their continuous research for new products and flavors, consumer feedback through social media, rebranding and self-service among the changes that clicked with consumers.  In 2012, the company will open more stores to offer the new look, new feel and new experience of TCBY.

The fro-yo category is expanding at a dizzying pace. According to a recent report from Technomic, nine of the 10 fastest growing “frozen desserts/snacks” concepts are frozen yogurt businesses.

As TCBY winds down its 30th anniversary year, the company has proven longevity is possible regardless of trends or saturation. QSRweb.com spoke to CEO Tim Casey about how the company has differentiated itself as the segment becomes more crowded.

QSRweb: How has TCBY maintained relevance in an increasingly saturated fro-yo category?

Tim Casey, CEO: I think always creating points of differentiation for the consumer is key. In any segment that is growing, there are new brands entering the arena and the consumer has more choices, so the more points of differentiation you create, the better chance you’re going to have at getting them to choose your brand.

QSRWeb: How does TCBY differentiate itself?

Casey: One thing we have that nobody else does is the longevity; the strong heritage and the strong background. Also, we have always had the healthiest product and that was taken to a whole new level recently when we launched our Super Fro-Yo. From my point of view, this put us on an industry-defining level.

Read More

UPS Store, in a move to support IFA’s “Operation Enduring Opportunity”, announced in BizJournals.com, that it will waive franchise fees for ten first-time veteran franchisees.  This amounts to $300,000 in financial incentives.  Prospective franchisees should sign a Letter of Intent between January and June 2012, said Tim Davis, a former U.S. Marine and now UPS Store Vice President of Operations.

The UPS Store wants to enlist 10 military veterans to open locations as part of an Obama administration effort to get more vets into jobs.

The UPS Store’s franchise network reported Thursday $300,000 in financial incentives to help up to 10 qualified U.S. military veterans open their own locations.

Tim Davis, vice president of operations for The UPS Store franchise network and a former U.S. Marine, said the franchise fee of $29,950 will be waived for up to 10 qualified veterans who are first-time franchisees wishing to open a new location. The incentive is valid for prospective franchisees who sign a letter of intent between Jan. 1, and June 30, 2012.

Read More

FRANdata, an independent research firm that tracks and analyzes franchises, launched FRANdex.  In its report that appeared in PR News Wire, the FRANdex market capitalization index performed better than the S&P500 and the Russell 2000 indexes.  Darrell Johnson, President and CEO of FRANdata, believes that the small businesses and franchises are often reliable indicators of where the economy is heading.

FRANdata has launched a new market index called FRANdex, which tracks the performance of the largest 50 U.S. publicly-traded companies that use the business format franchising model.

Using 1Q 2006 as a base, the FRANdex market capitalization index outperformed both the S&P 500 and the Russell 2000 indexes.  On a quarter by quarter percentage change basis, the franchise companies in aggregate averaged 1/2-percent better than the Russell 2000 and 3/4-percent better than the S&P 500.

“As we weather this economy, it is a particularly interesting time to study the performance of franchise systems,” said Darrell Johnson, President and CEO of FRANdata.  ”Small business is often a leading indicator of recovery from economic downturns and the franchise systems that these 50 companies oversee are composed of individual small businesses.

Read More

Pizza Hut filed a lawsuit against Lundy Enterprises, a corporation of Larry Lundy who owned 44 Pizza Hut restaurants, for royalty payment default.  Lundy counterclaimed that “Pizza Hut imposed unfair credit terms, refused his restaurants the chance to offer new products available in other markets and, over time, opened independent stores that became his competition”, according to Nola.com.  Amidst this legal rambling, Pizza Hut has reopened stores and employed 500 staff in affected areas.

The proverbial brick oven of justice is beginning to heat up for Larry Lundy, the New Orleans native and former Pizza Hut magnate who was forced to shutter his 44 restaurants earlier this year after years of souring relations with the Dallas-based pizza chain.

Starting in the mid-1980s, Larry Lundy rose up the corporate ranks at Pizza Hut’s headquarters in Kansas. In five years, Lundy became the highest-ranking African-American in any national restaurant company, he once boasted in an interview.

Lundy owned 44 Pizza Hut restaurants, including 11 New Orleans-area locations, that closed after the pizza chain filed suit Jan. 3 against his company, Lundy Enterprises, claiming it had fallen behind on royalty payments.

Pizza Hut and Lundy Enterprises, which had 1,200 employees across 64 stores in south Louisiana at its height a decade ago, spent much of last year in arbitration. Both sides reached a deal that would have transferred Lundy’s assets to Pizza Hut, records from the U.S. District Court for the Northern District of Texas show, but the value of the assets, pegged at $7.8 million, was not enough to pay off all liens, claims and other expenses.

Read More