Paul Steinberg's blog

Mr. Robert Purvin, chair of the American Association of Franchisees and Dealers, has spent two decades building an organization to change the dynamics of franchising.

In response to the Rhode Island franchise relationship legislation, Matt Shay of the IFA sent a letter to the legislators opposing the statute.

From Microsoft to Federal Express, an increasing number of employers are classifying workers as “independent contractors” to skirt federal labor laws and employment liabilities.

According to the Mar. 24 Nation's Rest. News, John Gay (formerly of the IFA) is now at the National Restaurant Assn, and is now supporting Rep. Conyers' bill (H.R.

The selling of old franchise myths is finding a new home - the United Kingdom. David Spittles in London's Evening Standard wrote an advertorial that praises franchisor Smart Cartridge. 

Headline: Break Into Business Without The Risks

The article assures Evening Standard readers and those looking to buy a franchise, "Even novices with limited financial reserves can prosper quickly."

As one who has been critical of the IFA for working against the interests of franchisees, I must nevertheless commend the IFA for its involvement with BLX.

Yes, you heard that correctly and I have not even started on my first beer yet.

Terry Hill should be defending IFA's involvement with BLX, not running for the tall grass.

Purchasing a franchise has long been seen as a path to upward mobility. The recent influx of mid-level execs and retirees is not the historic norm. Rather, much of the demographic targeted by franchisors was immigrants who did not have a lot of options available to them. As a franchisee and now as an attorney, I have met many of those people myself. For many of them, language skills, discrimination, and credentialing problems foreclosed traditional pathways. So they bought a franchise, put the whole family to work, and in time many of them have purchased homes and put their kids thru school on the profits from their franchised businesses.

The Oct 8 2007 issue (page 24) of Nation's Restaurant News has an article by Sid Feltenstein (Captain D's, Del Taco) decrying the threat to "carried interest", and mention of Jon Luther's (Dunkin' Brands) testimony on the wonders of "carried interest."

Arcane provisions of the Internal Revenue Code rarely attract mainstream press, but the spectacle of some of the wealthiest people in America arguing that they should have a tax rate that is half of their lowly employees smacks of Louis XIV. A good argument can be made that taxes are too high at the lower end of the pay scale. And a more problematic argument can be made that income from sitting on your assets should be rewarded and working your ass off should be penalized.

But... when someone working behind the counter is paying 15.3% (and yes, that "employer" part is effectively a reduction insofar as it will reduce that portion of the labor cost going to the employee's pocket) off the top and then paying state and federal income taxes while Jon Luther and Steven Schwartzman (himself worth almost $8 Billion) is paying "capital gains" of 15% total (no FICA), we should pause.

Writer's note: This is one of the overlooked risks of being a franchisee. Unlike the franchisor, who can limit liability through use of the corporate form, most franchisees are placing their personal assets at risk and need to understand that and decide how risk tolerant they are.

Sub-prime rate fiascos. Mortgage loans not being paid. Foreign bankers calling in credits. Could this be affecting franchise ownership?

Bankers are tightening lending standards. The greatest risk for smaller businesses is not higher interest rates but rather the drying up of capital. The sense on the street (at least as reported in the Dallas Morning News below) is that underwriting guidelines for small business deals are being readjusted, and that this is affecting franchises.

The situation is worse for entrepreneurs who financed the purchase of a franchise through adjustable-rate home-equity loans. Lawrence Clasby, chief executive of Grapevine-based Sparkling Image Franchising, said the commercial cleaning company has a few franchisees finding it difficult to make their higher loan payments.

"That financial model made sense two or three years ago," he said, "but now those loans are adjusting. ... They didn't budget for those adjustments."

Soup Nazi Losing Franchise Owners

Sept 13 2007 NY Post article reports many Original Soup Man (aka "Soup Nazi" of the television series Seinfeld fame) franchisees are not even lasting a year. Reports that out of 40 sold, 8 are already shuttered. Those who have followed this franchise may recall skepticism voiced more than 2 years ago about this concept; among other things, the idea that there would be a lot of repeat customers for expensive ($7 to 11 per 12oz) soup.

Turns out, they were correct.

This is the beginning of Cuppy's Coffee entry on Wikipedia by Pseudomega.
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Cuppy's Coffee, Smoothies & More, Inc. Type Private Founded 2006, Fort Walton Beach, FL Headquarters Fort Walton Beach,