On my last news assignment I had a sort of epiphany. The answer to the murky waters of buying and operating a franchise in America is the Chinese hui.

SALT LAKE CITY, Utah (Blue MauMau) - While you slept, we upgraded Blue MauMau.

But Lower Lending Rates May Indicate a Rise in New Restaurant Franchisors in 2008

SALT LAKE CITY (Blue MauMau) - Fewer new restaurant concepts are franchising compared to years past, according to a recent study. But why? What causes a boom or bust with new franchisor wannabees? The short answer is that the federal prime rate seems best at predicting an increase or decrease in new restaurant franchisors. (See graph)

Franchise consultants and executives have long thought that franchising performs well in bad times. Conventional wisdom says that during times of high unemployment, laid-off workers look to buy franchises. In turn newborn franchisors chase that growing market of franchisee investors. But as can be seen in the graph below, that is not necessarily true. Growth in unemployment rates do not translate immediately to more start-ups.

Trade journals struggle to decipher the data. Nation's Restaurant News on a front page ($$ subscription needed) headline declared, "First-time franchisors undaunted by recession fears." But its numbers were different from the words.

I am a Faith Based Community Economic Development Consultant. There is a big interest in ministries owning franchises.  I have been working with pastors that are beginning to consider opening social enterprise that provide jobs for there communities and unrestricted revenue sources for the social missions.

In order to sustain my business model I have been exploring becoming a franchise broker. In this exploration I have come across several companies that state for $20,000, they can provide me with access to training, franchisors and high commissions.

Personal Points: 

Enforceability of Arbitration Agreements with Franchisees a Key Issue

Matt Shay, the president of a Washington D.C.-based lobby group, the International Franchise Association, gives an interview to Nation's Restaurant News on legislative concerns in 2008. His two major concerns center around a weakening of the ability of franchisors to enforce arbitration on franchisees and immigration reform.

NRN: What federal legislation should franchisors be worried about?

After the IFA stressed some years ago that franchising was not an industry, Shay now describes it as a franchising industry. Says Mr. Shay, "The introduction of a bill that would amend the Federal Arbitration Act threatens to inflict serious harm on the franchising industry if it becomes law."

Representing some 1,000 franchisors and supposedly 8,000 franchisee members, Shay elaborates, "The so-called Arbitration Fairness Act, which would deny franchise companies (franchisors) the right to enforce arbitration agreements (with franchisees) if they’re entered before an actual dispute arises."

NRN: Do you think immigration reform will get back on track this year?

Over at Lexblog, the other day, Rob Gotta interviewed Eugen Volokh about his multi author legal blog, the Volokh Conspircacy.

Rob La Gatta: The Wall Street Journal Law Blog has called you "one of the undisputed kings of the blawgosphere." At what point in your blogging career did you realize you had achieved such a prestigious title, and what do you think was the most important factor in getting you there?

Eugene Volokh: I can't say we merit the title, but I am happy that we've got a lot of readers, and tend to get a good many links. Why? My guess: We've been around for a long time; we have people who are expert on interesting topics; we post a good deal of stuff on those topics; and most of our posts are accessible and interesting to laypeople as well as lawyers.

The Franchise Community Should Work to Ensure that Franchising Remains a Reputable Expansion Method

In nearly 12 years of developing new franchise systems, I have begun noticing an interesting, albeit, disturbing new trend that should bring cause for concern to franchise investors. An increasing percentage of clients interested in franchising their business are asking the question: “Do we have to call our franchise offering, a “franchise”?

When I first heard a client ask this very question two years ago, I chalked it up to the clients’ customers and potential franchisees; people that wouldn’t be caught dead in a chain store (Target and Whole Foods withstanding), never mind entertaining the thought of owning a franchise.

However, when I heard the same question again and again over the following months, I took notice and thought there must be more to the story. In spite of the many good reasons for franchising one’s business (local control, local motivation, access to expansion capital), when questioned further, these potential franchisors admit having unsettling concerns due to one or more of the following four general factors:

Super Blogger Jeff Jarvis Says Its Time for Corporate America (Translation: Franchisors) to Wake Up By Engaging the Blogosphere or Risk the Perils of Ignoring It

Beet.tv's Kate Lyon interviews BuzzMachine power blogger Jeff Jarvis. He cautions that companies need to change their approach to interact with customers (i.e. franchise owners and buyers).

Case in point: Jarvis blogged about a negative experience with Dell, which Dell ignored. But soon many unhappy Dell customers joined. With its bottom-line stinging, Dell finally chose to respond.

Writes Lyon, "The transparency that new media creates in the hands of customers can be a death knell for companies, but it can also be an opportunity for companies to talk with their customers and build a new kind of relationship. Choose wisely."

A Few Networks Are Opening Up to Having Franchise Units Alter Menus and Prices to Compete Better Locally

It is something of a see-saw. Tip up the local freedom of a franchise to decide local foods and price points and they can better compete with local independent restaurants, but down goes brand consistency. And vice versa. Yet franchisors are increasingly letting their franchisees localize food, decor, price points, opening hours and even name.

But wait. If you localize the name or change the customer experience, where's the brand identity? Here is one franchisor who thinks localizing names and hours with its franchisees is good for business.

Wings Over restaurants can incorporate the city or region where they're located into the name — say, Wings Over Washington, D.C. — "to make it feel more homey," says Mark Simonds, president of the Agawam, Mass.-based Wings Over franchise chain. In addition, stores in college towns, where Wings Over is popular, don't have to open until 4 p.m. and can close at 3 a.m. to 4 a.m. Usual weekday hours are 11 a.m. to midnight.

Then comes the adjustable menus. You've heard of McDonald's Apple Pie. Well, try the local favorite, Taro Pie, served in McDonald's in Hawaii (see photo above).

Five Guys Burgers & Fries, Cheeburger Cheeburger, Leo's Coney Island, Milio's Sandwiches and Buffalo Wild Wings Among Fast Growing. Exceptionally Shrinking Chains Listed Too.

Writer's Note: Below is a list of growing and emerging concepts from the Restaurantchains.net Weekly Newsletter. This weeks newsletter reflects activity captured from 04/07/07 to 08/07/07. We publish net unit growth from (each company as their own four-month cycle) one four-month period to the next. This is performed by
re-verifying net growth figures of approximately 1,000 companies per month. Once
our researchers identify the following growth results from our research efforts, we
highlight a new round of results each week in our newsletter. Featured growth stories are
only a fraction of the growth stories received by clients.

BIG BURRITO RESTAURANT GROUP headquartered in Pittsburgh, PA (founded 1993) has increased by 2 units, from 14 to 16 (14% growth). The company opened a new Mad Mex location in Cranberry, PA and also a new concept called Café Phipps. Locations tend to be family/casual with full bar and seating for about 200. Current concepts are Casbah (1), Eleven (1), Kaya (1), Mad Mex (9), Soba (1), Umi (1), Warhal Café (1) and Café Phipps (1). Cuisines for the different concepts vary from Mexican to Asian, American and Sushi. Locations are company owned and are in OH and PA.

CHEEBURGER CHEEBURGER of Fort Myers, FL (founded 1986) has increased by 2 units, from 61 to 63 (3% growth) and expanded into CA and MO. These are family/casual service restaurants with seating for about 70. Beer and wine is served and the per person check average is around $6-$15+. Locations are more than 90% franchised and are in AL, AR, AZ, CA, CO, FL, LA, MD, MI, MO, NC, NJ, NY, PA, SC, TN and VA.