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Log In / Register | Feb 7, 2012

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Home Based Franchises Keep on Growing

Expert | Ed Teixeira | Feb 3 | buy
The number of home based franchises continues to grow and in some franchise segments the home based feature exists in the majority of the franchise companies. Looking back into franchise history the typical franchise was a bricks and mortar franchise whether it was a KFC, Dunkin Donuts or McDonalds. It wasn’t that long ago that a home based franchise was considered an anomaly or an exception to what we typically consider a franchise. In recent years however, things have changed as the number of home based franchises have continued to grow in numbers and popularity. If the franchise customers are not required to go to a specific location then chances are that particular franchise can be home based.  Consider the following franchise categories and the percent of...
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Establishing Franchisee Expectations

Expert | Jeff Johnson | Feb 1 | franchising
One of the responsibilities of a franchisor (and its development team) is to establish realistic franchisee expectations.  Of course, this includes an accurate disclosure of expected return on investment, but it needs to go beyond “the numbers.”  What sort of opening support can the franchisee expect from the franchisor?  What ongoing training and support are offered?  What can be expected in terms of new product and market development?  Is there open, helpful communication between franchisor and franchisees, as well as between franchisees?   Another issue which is often overlooked in the process of “selling” a franchise concept to a candidate is the match between the prospect’s personality, life experience, and personal...
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EEOC Takes Aggressive Measures to Enforce the ADA

Expert | Mark Fijman | Feb 1 | legal
Phelps Dunbar has been advising our clients over the last year to expect an increase in EEOC charges and litigation following the passage of the Amendments to the Americans with Disabilities Act. Since the EEOC's final regulation under the Act were published in March of last year, there has been a sharp increase in EEOC charges filed under the ADA.  Many of those charges have now worked their way through the EEOC process and we are seeing an increase in litigation that the EEOC is pursuing on behalf of employees who allege that they have been denied a reasonable accommodation under the ADA. In a press release the EEOC issued following a consent decree it obtained against an employer, an EEOC Director was quoted as saying the following:  "When an employer is on...
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Is Your Franchisee Association Board Dysfunctional?

Member | Mark Alcorn | Feb 1 | manage
Attorneys and consultants who work with associations see their share of troubled boards of directors. In fact, I believe that troubled boards outnumber focused efficient boards by a substantial margin. Notwithstanding their problems, most boards seem to get by, although they could be better. However, when a board of directors has more than its share of troubles and struggles, it can become dysfunctional. This article will point out ten key indicators of a dysfunctional board. While every association has a different way of working, the presence of more than a few of these signs is cause for concern. Key indicators are: Power Struggles - power struggles shift the board's focus from the business of the board to individuals or sub-...
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3 Tips for Reducing CAM Costs

Member | Mary Clapp | Feb 1 | manage
While there are many business factors and legal points to consider when negotiating a commercial lease, in today’'s uncertain economy, the “"bottom line cost”" of the lease often tops the list of concerns for a commercial tenant.  You are probably aware that most commercial landlords pass the cost of all repairs and maintenance of the premises and the common areas to their tenants.  Tenants often find, however, that their CAM charges are more expensive than anticipated.  While there are many factors that need to be evaluated and provisions that need to be negotiated in a commercial lease, as you head into negotiations, arm yourself with these three tips for keeping your CAM charges in line with your expectations.  Landlord...
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Restaurateurs, 50 Percent Bonus Depreciation Available in 2008 and 2009

Expert | Bruce Schaeffer | Jan 31 | manage
According to CCH, the Internal Revenue Service Chief Counsel has concluded that qualified restaurant property and qualified retail improvement property are eligible for fifty percent bonus depreciation in both 2008 and 2009. Moreover, taxpayers are not required to take any special steps to claim bonus depreciation for these items. The key factor, the Chief Counsel determined, was that property that also is qualified leasehold improvement property qualifies for bonus depreciation, even if the restaurant or retail property would not qualify by itself.
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Zee Association Lawsuit Survives Motion to Dismiss

Expert | Mario Herman | Jan 25 | legal
On July 19, 2011, the United States District Court, District of Connecticut, Warren W. Eginton, Senior District Judge ruled that EA Independent Franchisee Association, LLC ("plaintiff") could proceed with its lawsuit against Edible Arrangements International, Inc. ("EA") , and certain affiliates thereof (collectively, "defendants"). The plaintiff in this case represents more than 170 franchisees of EA and its complaint alleges that: EA violated federal regulations by failing to disclose its relationships with its affiliates while requiring its franchisees to do business with them; that there were undisclosed fees associated with franchisees' mandatory use of an online ordering system provided by an affiliate of EA and computer software...
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Is Conscious Capitalism Good Business?

Expert | Paula Rosenblum | Jan 24 | retail
Every MBA student from time immemorial has been asked to memorize the following as soon as he starts school: “The purpose of a corporation is to maximize shareholder wealth.” On some levels it seems to be an indisputable axiom. But on other levels, after the economic debacles of 2008-2009 people with political persuasions right, left and center have begun to ask the question: “Why?” Doesn’t a corporation also have a responsibility to its other stakeholders: employees [and franchisees] and customers and the communities within which it thrives? More importantly, can we take these other stakeholders into consideration without sacrificing corporate profits? Retailers as diverse as The Container Store, Zappos, Whole Foods Market, Starbucks and Costco have...
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Too Big to Fail

Expert | Jeff Johnson | Jan 23 | buy, franchising
As the founder of the Franchise Research Institute, I am sometimes asked why mega-franchises like McDonalds and Subway don't seem to rely on franchisee satisfaction surveys to market their franchise opportunities, when it proves to be such a valuable tool for other franchisors, not only for marketing purposes but also for key internal decisions. It's my opinion that these brands have reached the almost mythic status of being "too big to fail." What anyone who is considering becoming a franchisee needs to ponder is this:  A mega-brand may have reached the critical mass which allows it seemingly unstoppable momentum In the marketplace, but that doesn't assure franchisee success.  Our mission is to provide real data which tells the "back story...
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Hotel Managers Labor to Control Labor

Expert | Robert Mandelbaum | Jan 23 | hotel, trends
Coming out of lodging industry recessions, we have historically observed fairly significant increases in hotel operating expenses.Since the initial revenue recovery is typically driven by occupancy, variable expenses naturally rise with the increased volume of rooms occupied and guests served. In addition, hotel managers desire to reinstate the services and amenities that were discontinued during the downturn contributes to above-average expense growth. On the revenue side, the industry recovery observed in 2010 was "typical". In aggregate, the participants in PKF Hospitality Research's (PKF-HR) 2011 Trends® in the Hotel Industry survey saw their rooms revenue (RevPAR) rise 5.3 percent, the result of a 6.2 percent increase in the number of rooms occupied and a 0.9...
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