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Franchise Columns

GE Financing Standards for 2010

Member | jagsd01 | Mar 19 | franchising

I attended the 2010 UCLA sponsored Chain Restaurant Operators Conference yesterday. The GE Capital Finance representative indicated with me the change of GE's 2010 game rules in financing restaurants. GE has earmarked $1 billion for restaurant financing. That's way down from prior years. The lender's primary interest is in selecting leading, name brand QSR franchisees, of at least 5 units or more to look at. And, secondarily, independent chains of 30-40 units, with multiple regional success demonstrated, with at least $5M in EBITDA. Significant equity (30% plus cash) and tough loan covenants are routine requirements, now.

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Shrink: Small Hits at POS, Big Hits on Loading Dock

Expert | Paula Rosenblum | Mar 17 | manage, retail

When retailers were asked about the areas of the enterprise that provide the best opportunities to combat shrink, respondents to a survey we conducted pointed decidedly toward employee areas: namely the checkout stand. Closely behind are the stock room and back room, while the third greatest opportunity resides in receiving areas and loading docks. When viewed by performance and revenue, top retailers show an added measure of faith that they have in their workforce. These winners and large retailers maintain more of a concerned focus toward “outside” crime – ORC in particular. Winning retailers report vigilance in efforts to secure vulnerable areas. Through monitoring activity and the use of technology and auditing procedures, these retailers are constantly...

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Do the Radisson Franchisees Agree?

Expert | Stan Turkel | Mar 16 | hotel

Carlson Hotels Worldwide recently unveiled their five-year program to separate the Radisson brand into two distinct products: Radisson Blu, which will fit into the upper-upscale segment, and Radisson Green, which will fit into the upscale segment. This Radisson makeover is part of a billion-dollar program, a centerpiece of Carlson’s so-called “Ambition 2015” campaign- a program designed to expand Carlson’s global portfolio by at least 50% to more than 1500 hotels by 2015. Since 93% of the Radisson properties in North America are franchised and 7% are managed or owned, more than $900 million of the required $1 billion for this proposed program must come from Carlson franchise owners. I looked but could not find any agreement from the Radisson Franchise...

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Free tips on how To get paid in your online home business.

Member | Enterprisetaker | Mar 12 | Advice

Would you like to know on how to make money in your online home business and make more of it. First, you must understand that you needed cost and time to look for genuine prospects and most of the times your prospects are never going to buy your products on become distributors. Especially if your sole goal is to build a downline, that means you are only tapping into very little of your potential income despite all your efforts So if you do not go all out and find a way to monetize the other majority that said no, than you are probably going to go out of business. We already know that most people are lazy, and would rather learn how to do something than actually do it, so why don’t we tap into that psychology and give them what they want… Instead of immediately...

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The Franchise Industry Benefits as the Economy Begins Its Recovery

Member | Gus | Mar 11 | buy, trends, franchising

In the midst of an economic crisis, it’s no longer easy to get credit. Americans are beginning to live within their means. Unnecessary expenses are being cut by families and corporations. All of this adds up to big effects on the franchise industry. Some business categories are being profoundly hurt by the current economy while other categories are actually benefitting. For example, outsourced business service providers have seen an increase in revenues as companies opt to outsource versus pay an employee. Hope for all is in sight as the latest stimulus package begins to help the economy nationwide and sectors of the franchise industry will feel direct benefits right away. Helping Our Children With $53.6 billion of the stimulus package going towards education budgets, early-...

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Wesfarmers To Acquire Bakers Delight?

Reporter | Deanne de Leeuw | Mar 11 | food

A rumour has been floating around for some time that Australia's Bakers Delight franchise is in financial trouble. That its business model does not work; too many of its franchisees were going broke. A few weeks ago other rumours emerged. This time the quiet talk was that Bakers Delight was being bought by Coles Supermarkets – that Bakers Delight bakeries were to be opened inside Coles supermarkets. Coles is owned by Wesfarmers, one of the largest public companies in Australia. Bakers Delight has a well recognised brand, that is true, but it is a brand that has been dogged by bad media, allegations of misconduct, an ACCC investigation, and litigation. One wonders why Wesfarmers would deal with a company with such a poor reputation and damaged brand. By Tuesday this...

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Current Problems with Arbitration Clauses in Franchise and Other Agreements – PART 1

Expert | RaymondMcKenzie | Mar 9 | legal

I frequently tell my franchise and business clients to be wary of automatically including an arbitration clause in a franchise agreement or other contract they execute. Several years ago it was savvy for a business owner or franchisor to include mandatory arbitration in their agreements. Now, many of the reasons that supported the inclusion of arbitration clauses have been diminished, making the inclusion of mandatory arbitration in many contracts a questionable strategy at best. I now advise my business and franchise clients against arbitrating disputes for the following reasons: 1. Arbitrations are not “cost-savers” like they used to be thanks to the multiple fees associated with the process. Unlike judges, arbitrators are paid by the parties on an hourly basis. It is...

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Franchise Negotiations: I've Looked at Life from Both Sides Now

Expert | Jerry Wilkerson | Mar 5 | Advice

After spending more than three decades within the business of franchising, I have expanded my insight to see more clearly both sides now in the franchise relationship. I realize there truly is an art to franchise negotiations for both parties to succeed.  And both sides had better be ready for the other in this transforming economy. A fellow named Herb Cohen, put it this way, "If you want to persuade people, show the immediate relevance and value of what you're saying in terms of their needs and desires. Successful collaborative negotiation lies in finding out what the other side really wants and showing them a way to get it, while you get what you want." That advice is so relative to franchising. As the song by Joni Mitchell goes, "I've...

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Franchisee Training and Support

Member | Ray Borradale | Feb 26 | Advice

The intention of this blog is to open a conversation amongst franchisees, lawyers, consultants, franchisors and other industry participants to challenge prospective investors to more easily identify and eliminate problematic franchise offerings to encourage investment in thorough investigation of more feasible franchises. Perhaps consider this as stage 1 to real due diligence in the hope that more people actually perform stage 2 rather than simply make often regretable and uninformed decisions. Most that visit BMM regularly would hopefully all appreciate that due diligence prior to signing a franchise contract needs to involve a true understanding of risk and the broad and sometimes complex considerations that many fail to appreciate including the many considerations that...

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Lack of Burger King Visibility Noted by Franchisee

Member | jagsd01 | Feb 25 | manage

Carrols Restaurant Group (TAST) reported earnings today, with a much cooler and undefined outlook on its Burger King business. Carrols operates 312 Burger Kings, 91 Pollo Tropicals and 156 Taco Cabanas, and is a publicly traded franchisee/franchisor, in multi-states. For the quarter ending January 3 2010 its Burger King same store sales were down 3%, but the trend for the first six weeks of the Q3 was –8. Of course negative winter weather was present, but BK was noted to be more negative. Some sales and traffic gains were noted in October and November 2009, but then falloff thereafter. Carrols executives noted their concern that the BKC focus on “extreme affordability” had turned consumers into “extreme bargain seekers”, and that they felt the current strategy put the classical barbell...

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