http://www.bluemaumau.org/frontpagestories en Panera Sues Ex-Technology VP, Papa John’s for Conspiring on Its Trade Secrets http://www.bluemaumau.org/15303/panera_sues_extechnology_vp_papa_john%E2%80%99s_conspiring_its_trade_secrets <!-- google_ad_section_start --><p><img alt="" src="https://c1.staticflickr.com/9/8755/27846694804_8586c49974_c.jpg" style="height: 348px; width: 669px; margin-left: 5px; margin-right: 5px; float: right;" />SAINT LOUIS, Missouri&nbsp;&ndash;&nbsp;On Monday&nbsp;Michael R. Nettles, Panera Bread&#39;s&nbsp;former&nbsp;vice president of architecture&nbsp;in its&nbsp;Information Technology department,&nbsp;accepted a position with Papa John&#39;s pizza chain. </p> <!--break--><!--break--><p> On Tuesday&nbsp;Panera Bread filed a lawsuit against Nettles and&nbsp;Papa John&#39;s, seeking&nbsp;injunctive relief&nbsp;and damages to compensate for Nettles&#39; breach of confidentiality and non-compete agreement&nbsp;citing the two conspired in confiscating Panera&#39;s proprietary data.&nbsp;</p> <p>The&nbsp;complaint,&nbsp;filed in&nbsp;Missouri&nbsp;federal court,&nbsp;states&nbsp;that&nbsp;Nettles&nbsp;had&nbsp;access to the company&#39;s &quot;highly-sensitive confidential&nbsp;information and trade secrets.&quot; It further asserts that the information he obtained included Panera&#39;s thought processes and visions for its technology systems, architectural drawings and specifications for all of its master technology systems, and all schematics used in the development of technology systems to support and drive the company.&nbsp;</p> <p>&quot;Allowing Nettles to use this confidential information for the benefit of Papa John&#39;s provides&nbsp;the pizza chain&nbsp;with an unfair competitive advantage, and would allow Nettles to unlawfully compete with Panera,&quot; the document explains. It states that to allow such conduct &quot;would fly directly in the face of the clear, reasonable, and valid agreement that Nettles voluntarily signed,&quot; where he agreed not to compete with Panera for a one-year period following the end of&nbsp;his employment.&nbsp;&nbsp;</p> <p>The company stresses,&nbsp;&quot;Panera&#39;s very right to compete fairly in the market place is threatened.&quot;</p> <p><strong>Facts of the case&nbsp; </strong></p> <p>While the two franchise companies, one pizza and&nbsp;the other&nbsp;bread, sandwiches and soup,&nbsp;are not necessarily competing in the same restaurant category, the competition issue goes deeper. Panera&#39;s complaint states that it is a leader in the food service industry in integrating technology into its customers&#39; experience, and has developed a clear vision as to how it will capitalize on technology to continue to stay at the top of the industry over the next five years and beyond.&nbsp;&nbsp;</p> <p>Panera prides itself on being several steps ahead of the game in developing its technological systems, which ultimately drives a guest&#39;s experience with Panera.&nbsp;It states that it has made substantial investments initiating and implementing various digital and technology strategies and systems such as digital ordering and payments. The company has also enhanced its technology-based kitchen display and food production systems. Panera understands that in order to succeed and appeal to customers in such a competitive industry, it must have talented employees who can implement its clear vision for the future.</p> <p>&nbsp;While employed by Panera,&nbsp;Michael&nbsp;Nettles&nbsp;in his various&nbsp;roles&nbsp;for almost five years&nbsp;had privileged access to Panera&#39;s most highly proprietary technology-based initiatives, and was involved in every aspect of developing Panera&#39;s technology systems. And he has insider information into Panera&#39;s plans and strategies in implementing its initiatives that focus on improving customer experience.</p> <p>&nbsp;Nettles signed a confidentiality and non-competition agreement in 2012, which also listed specific competitors that Panera identified as companies that certain high-level executives could not work for within a certain period of time. Nettles also signed a revised agreement in 2013, stating that if he did not sign the agreement he would not be allowed to continue his employment.</p> <p>&nbsp;The complaint alleges that&nbsp;when&nbsp;Papa John&#39;s extended an offer of employment to Nettles&nbsp;in June 2016,&nbsp;Papa John&#39;s was aware that Nettles had signed the non-compete agreement that forbid him to work for its pizza chain, but it extended the offer anyway.&nbsp;Nettles sent Ron&nbsp;Shaich, CEO of Panera, a lengthy email&nbsp;on June 8, 2016&nbsp;stating that he wanted to accept the&nbsp;pizza firm&#39;s job offer,&nbsp;asking&nbsp;Shaich&nbsp;to release him from the non-compete agreement&nbsp;so he could accept the position. Nettles expressed a desire to move to Kentucky where he could begin a new chapter in his life.&nbsp;Shaich&nbsp;informed the executive that he could not do so because he had a responsibility to Panera shareholders, franchisees and employees to protect Panera&#39;s confidential information and ways of thinking.&nbsp;</p> <p>The suit&nbsp;states that in being sympathetic to Nettles desire to move,&nbsp;Shaich&nbsp;offered to help Nettles locate another job as long as it was not for a competitor of Panera Bread. Instead, a month later Nettles gave the company his resignation notice&nbsp;and told of his acceptance of Papa John&#39;s employment offer.&nbsp;</p> <p>According to the court document,&nbsp;Papa John&#39;s was aware that Panera declined to release Nettles from his obligations under his agreement, but did not withdraw its offer of employment. Instead, Papa John&#39;s encouraged Nettles to begin work for Papa John&#39;s immediately and leave Panera with no other choice but to bring its lawsuit.&nbsp;The complaint states that Nettles began working at Papa John&#39;s on Monday, July 18, 2016, &quot;in direct breach of the agreement that Nettles signed with Panera.&quot;&nbsp;</p> <p><strong>Nettles use of&nbsp;personal laptop&nbsp;in storing Panera&#39;s confidential&nbsp;data&nbsp;and trade secrets&nbsp; </strong></p> <p>Panera&#39;s complaint further alleges that Nettles refused to allow Panera limited access to his personal devices and instead deleted all information relating to Panera from those devices. The company has reason to believe that he created a back-up copy of all Panera-related proprietary&nbsp;data and trade secrets before pushing the delete button.&nbsp;Panera&nbsp;believes&nbsp;Nettles plans to share the information, if he has not already done so, with Papa John&#39;s.</p> <p>&nbsp;In light of this information, Panera brings&nbsp;six charges against Nettles and Papa John&#39;s, individually and together, including breach of contract, tortious interference with contractual relations, violation of Missouri Uniform Trade Secrets Act and Missouri Computer Tampering Act.&nbsp;&nbsp;Under Civil Conspiracy against both Nettles and Papa John&#39;s, the complaint states that Papa John&#39;s was aware of the intimate knowledge and involvement Nettles had in developing Panera&#39;s trade secrets in the technology space. And that Papa John&#39;s knew that Nettles had signed the non-competition agreement with Panera, forbidding him to share confidential information with competitors for a certain period of time following his resignation.</p> <p>In short, the lawsuit claims that based on Panera&#39;s information and belief, Papa John&#39;s conspired with Nettles to breach his non-competition agreement with Panera, which will inevitably lead to the misappropriation of Panera&#39;s confidential trade secrets. Because Nettles stored the data on his personal devices and refused to turn them over to the company, Panera believes he still has access to its proprietary information.</p> <p>Panera is asking for a preliminary injunction and, after trial, a permanent injunction, ordering Nettles to abide by the terms of the agreement he signed as a condition of employment.&nbsp;The conditions of the injunctions are spelled out in the court document. The company asks the court to award Panera its costs and attorney fees, and other relief that appears proper.&nbsp;</p> <!-- google_ad_section_end --><table id="attachments" class="sticky-enabled"> <thead><tr><th>Attachment</th><th>Size</th> </tr></thead> <tbody> <tr class="odd"><td><a href="http://www.bluemaumau.org/sites/default/files/Panera Bread Papa JohnsE.D.Mo_._null_null_0.pdf">Panera Bread Complaint</a></td><td>298.42 KB</td> </tr> </tbody> </table> http://www.bluemaumau.org/15303/panera_sues_extechnology_vp_papa_john%E2%80%99s_conspiring_its_trade_secrets#comments Legal claim & allegation CEO Ron Shaich civil conspiracy confidentiality agreement injunctive relief Michael R. Nettles Missouri Computer Tampering Act Missouri Uniform Trade Secrets Act non compete agreement trade secrets Panera Bread lawsuit Papa John's litigation Fri, 22 Jul 2016 00:53:03 +0000 Janet Sparks 15303 at http://www.bluemaumau.org Delivery Eats into Drive-Thru Service http://www.bluemaumau.org/15302/delivery_eats_drivethru_service <!-- google_ad_section_start --><p><img alt="Jimmy John's delivery" src="https://c2.staticflickr.com/8/7629/27840020694_ab3c173d8e_c.jpg" style="width: 320px; height: 180px; margin-left: 6px; margin-right: 6px; float: right;" />CHICAGO&mdash;Foodservice delivery is the ultimate in dining convenience and is winning visits at the expense of restaurant drive thru. Over the past four years, delivery has grown by 69 million orders, while drive thru traffic fell by 128 million visits from May 2012 through May 2016, according to a recently released report by foodservice researcher The NPD Group.</p> <!--break--><!--break--><p>The growth in foodservice delivery is even greater when pizza delivery is taken out of the equation. Pizza delivery still makes up over 60 percent of foodservice delivery visits, but traffic has declined by double-digits over the last four years. Consumers instead are ordering delivery from a variety of restaurants, including quick service Asian and burger, full service, and fast casual, states The NPD Group in its report, Delivery: A Growth Opportunity on the Horizon.</p> <p>Foodservice delivery options are especially important to Gen Z and Millennials. Currently, these two groups represent 51 percent of the U.S. population, a large target group who will drive the growth in delivery far into the future. These consumers want to eat their favorite foods when they want it, regardless of where they are, as well as order and pay for it with the click of a button.</p> <p>&quot;If delivery fits a restaurant operator&#39;s business model and is operationally feasible, now is the time to consider adding it as an option for customers,&quot; says Bonnie Riggs, NPD Group&#39;s restaurant industry analyst. &quot;It&#39;s one way to stay competitive and relevant in a low growth foodservice environment. However, before moving ahead with a delivery program, it is important to understand the growth opportunity along with the potential barriers to use that might exist from the consumer perspective.&quot;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15302/delivery_eats_drivethru_service#comments Trends Thu, 21 Jul 2016 18:26:00 +0000 Don Sniegowski 15302 at http://www.bluemaumau.org Appeals Court Dismisses Franchisee Claims against Franchisor in Disclosing Confidential Settlement in FDD http://www.bluemaumau.org/15300/high_court_dismisses_franchisee_claims_against_franchisor_disclosing_confidential_settlement_fdd <!-- google_ad_section_start --><p>AUSTIN, Texas - A U.S. Appeals issued a decision this month upholding the dismissal of claims brought by a franchisee who alleged she was entitled to liquidated damages in the amount of $20 million because the terms of her confidential settlement with franchisor Keller Williams Realty were published in the company&#39;s Franchise Disclosure Document.</p> <p>Keller Williams had settled the 2013 lawsuit brought by former Indiana franchisee Jana Caudill, who later became a regional director for the company. The settlement was subject to a confidentiality provision that specifically covered the amount paid to the franchisee plaintiff. The confidentiality term of the settlement agreement also contained a liquidated damages provision stating that damages for breach of confidentiality would be difficult to quantify precisely, so any violation would entitle the other party to an award of $10,000. <em> </em></p> <p>Three months after the settlement in the case, <em>Caudill v. Keller Williams Realty, Inc</em>., Texas-based Keller Williams filed its required Franchise Disclosure Document, FDD, which eventually went to some 2,000 existing or potential franchisees and others, disclosing the information about the settled case and the amount that was paid to the franchisee.</p> <p>In Caudill&#39;s subsequent lawsuit, she contended that Keller Williams in broadcasting the settlement terms in its FDD was a breach of confidentiality, and she sought $10,000 in liquidated damages per recipient of the FDD, for a total of $20 million. Applying Texas law, the district court dismissed the case because liquidated damages cannot be awarded unless the amount established in the provision is a &quot;reasonable forecast of just compensation.&quot; The lower court believed any non-actual-damages amount would be punitive, and punitive damages are not allowed in contract cases. The Seventh Circuit agreed there was no evidence that $20,000,000 (or even $10,000 per violation) reasonably approximated the plaintiff&#39;s damages. In fact, the plaintiff had not tendered any evidence that she was damaged by any one of the 2,000 people having seen the FDD. The Seventh Circuit said that while actual damages may be conceivable for an inappropriate disclosure, there was nothing other than speculation on which to base an award in this case.</p> <p><strong>DLA Piper 2014 analysis of <em>Caudill</em> after lower court decision </strong></p> <p>The DLA Piper law firm presented the <em>Caudill v. Keller Williams Realty, Inc. </em>case in its March 2014 webinar as one of its Top 13 Franchise Cases for 2013, presenting to clients the question, &quot;Can You Breach a Confidentiality Provision by Disclosing a Settlement in an FDD?</p> <p>Attorney John Hughes explained that the Keller Williams confidentiality provision stated that the conditions of the settlement (including the settlement amount, the settlement itself, and the parties&#39; allegations) will be held in strict confidence and could only be disclosed &quot;to tax professionals to the extent needed for tax advice, to the parties insurance carriers, attorneys who represented the parties in the Lawsuit, underwriters and reinsurers, the mediator, and to governmental agencies or regulatory authorities as required by law, and then only to the extent necessary and required to be disclosed by law, by lawful subpoena, or otherwise.&quot;</p> <p>Hughes listed the franchisee&#39;s claims: Keller Williams breached the confidentiality provision in the settlement agreement by disclosing the terms of the settlement in the FDD; Caudill derived business from referrals in the real estate industry from many of the recipients of the FDD; Caudill suffered damages, including the loss of professional opportunities, future income, embarrassment and reputational harm; and Caudill sought compensatory damages (liquidated damages) and injunctive relief.</p> <p>Keller Williams had filed a motion to dismiss the claims. The franchisor argued that it did not breach the confidentiality provision because the settlement agreement did not prohibit disclosure to employees who act on or behalf of Keller Williams. The company also said it was required by law to disclose certain terms of the settlement, and it was not required to instruct recipients of the FDD to maintain the information&#39;s confidentiality.</p> <p>The law firm states that the lower court denied the motion to dismiss because of fact existed: Purported unintentional drafting error in the settlement agreement; who received the FDD; in which states those recipients resided; and the applicable state franchise law.</p> <p>DLA Piper gave practice pointers to its franchisor clients saying they should expressly provide in confidentiality provisions in settlement agreements that the terms of the settlement can be disclosed to anyone when required by law, including any applicable franchise disclosure regulations. It noted that this provision in <em>Caudill</em> carved out the disclosure &quot;to governmental agencies or regulatory authorities as required by law, and then only to the extent necessary and required to be disclosed by law.&quot;</p> <p><a href="http://cases.justia.com/federal/appellate-courts/ca7/15-3313/15-3313-2016-07-06.pdf">Seventh Circuit Ruling in Caudill v Keller Williams</a></p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15300/high_court_dismisses_franchisee_claims_against_franchisor_disclosing_confidential_settlement_fdd#comments Legal claim & allegation breach of contract Caudill v. Keller Williams Realty Inc. liquidated damages Wed, 20 Jul 2016 22:43:44 +0000 Janet Sparks 15300 at http://www.bluemaumau.org Buffalo Wings & Rings AUV Up in Q2 http://www.bluemaumau.org/15299/buffalo_wings_rings_auv_q2 <!-- google_ad_section_start --><p>CINCINNATI, Ohio&mdash;Buffalo Wings &amp; Rings announced today that the average unit volume for its 70 affiliated restaurants increased by 2.9 percent in the second quarter of 2016 compared to the same period last year.</p> <p>The Cincinnati-based franchisor stated that it added two new franchises in the quarter. Its year-to-date systemwide sales, nearly half a year, are up 11.4 percent. It did not disclose same-restaurant sales or traffic.</p> <p>&quot;There isn&#39;t another sports restaurant brand that comes close to matching our store experience, food quality and service,&quot; boasted Nader Masadeh, CEO of Buffalo Wings &amp; Rings. &quot;We&#39;ve proven that our model works, and as our successful second quarter suggests, we&#39;re going to continue to expand at impressive rates.&quot;</p> <p>Founded in 1984, Buffalo Wings &amp; Rings plans to add 14 more corporate restaurants and net another 50 franchise units to its total network within the next five years.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15299/buffalo_wings_rings_auv_q2#comments Foodservice Wed, 20 Jul 2016 19:10:46 +0000 Don Sniegowski 15299 at http://www.bluemaumau.org Franchisee Association and McDonald's Support 5 Hispanic Scholars http://www.bluemaumau.org/15293/mcdonald%E2%80%99s_franchisee_association_donates_500k_5_hispanic_scholars <!-- google_ad_section_start --><p>OAK BROOK, Ill.&mdash;With the exclusive support of McDonald&#39;s Hispanic franchisee association, the Ronald McDonald House Charities will award each of five college-bound Hispanic high school seniors a $100,000 national scholarship as part of the Hispanic American Commitment to Educational Resources scholarship program.</p> <p>The five scholars are Darinelle Merced-Calder&oacute;n of Florida, Gianfranco Filice of California, Helena Silva-Nichols of Arizona, Sarah Jackson of California and Elizabeth Manero of Virginia. All five scholarship recipients will be paired with a McDonald&#39;s mentor, who will offer support and guidance throughout the students&#39; college years. Scholarship recipients have attended prestigious universities, including Stanford and Harvard University, and continued on to pursue careers in medical, engineering, business and other fields.</p> <p>Ana Madan, vice chair of the McDonald&#39;s Hispanic Owner-Operator Association, explained how proud her organization was of the scholarship recipients and how the mentoring system should help the students. &quot;Knowing they are often the first to go to school and leave home, providing a support system for them will make the transition into school and the business world a bit easier for them. We are very excited to have such wonderful students to mentor and look forward to seeing them grow throughout their career,&quot; said franchisee Madan.</p> <p>The scholarship was founded in 1985 by McDonald&#39;s franchise owner Richard Castro of El Paso, Texas. Castro, a former educator, established the scholarship after noticing increasing school drop-out rates among Hispanic students due to financial difficulties. He called upon his fellow franchisees, McDonald&#39;s Corporation and the community to help remove the financial barrier of attending college.</p> <p>In 2008 the national scholarship was added, offering four $100,000 awards to Hispanic students. Last fall McDonald&#39;s increased its annual donation to RMHC, adding a fifth scholarship to the existing four $100,000 awards.</p> <p>&quot;With the support of McDonald&#39;s, we&#39;re able to provide hardworking, determined Hispanic students across the country opportunities to continue building promising futures,&quot; said Sheila Musolino, president and CEO of Ronald McDonald House Charities.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15293/mcdonald%E2%80%99s_franchisee_association_donates_500k_5_hispanic_scholars#comments People Tue, 19 Jul 2016 18:10:34 +0000 Don Sniegowski 15293 at http://www.bluemaumau.org Tropical Smoothie Café Grows Comparable Sales and Restaurant Units in First Half of 2016 http://www.bluemaumau.org/15289/tropical_smoothie_caf%C3%A9_grows_comparable_sales_and_restaurant_units_first_half_2016 <!-- google_ad_section_start --><p><img alt="" src="http://www.bluemaumau.org/sites/default/files/resize/071816_2235_TropicalSmo1-320x321.png" style="float: right; height: 321px; width: 320px; margin-left: 5px; margin-right: 5px;" width="320" height="321" />ATLANTA&mdash;In an announcement earlier today, Tropical Smoothie Caf&eacute; revealed a rise of 6.4 percent in same-restaurant sales in its system for the first half of 2016 compared to the same period last year. </p> <!--break--><!--break--><p> The franchisor says that buyers have signed franchise agreements that commit them to developing 80 new caf&eacute;s from Atlanta to Dallas.</p> <p>&quot;In 2015, we experienced a record-setting year thanks to our ongoing menu innovation and unwavering commitment from our franchisees and employees. We started this year with the same vigor and have already achieved tremendous success as we hit the half-way mark,&quot; said Mike Rotondo, CEO of Tropical Smoothie Cafe. &quot;With a strong franchise development pipeline, enticing limited-time menu items and evolving technology with continued use of our new mobile ordering and payment app, we&#39;re on track to reach our goal of exceeding 550 restaurants this year and further establishing Tropical Smoothie Cafe as a leader in the marketplace.&quot;</p> <p>Tropical Smoothie hopes that its system will exceed 550 restaurants nationwide this year. According to its 2015 Franchise Disclosure Document that was filed in April, the system had 465 restaurants at the end of last year. One of those is a company-owned restaurant.</p> <p>The fast food franchisor states that for 2015 its franchises had an average unit volume of $634,007 (see chart). The median unit volume, not to be confused with average, was disclosed as $613,657.</p> <p><strong>Troubled past</strong></p> <p>However, Tropical Smoothie has a number of troubling and significant litigations in its history regarding its disclosures that date back to 2007. Maryland and Virginia securities commissioners concluded in separate cases that the franchisor violated the law by selling franchises without being registered to do so. In addition, Tropical Smoothie misled buyers by failing to include required disclosure to franchise buyers of its troubling history with the state.</p> <p>There are other litigations as well.</p> <p>Tropical Smoothie Caf&eacute; is backed by venture capital firm BIP Capital, which invested in the brand in 2010. The franchisor says that BIP Capital has invested $250 million in emerging, high-growth brands across the franchising, software, technology and consumer products industries. Its portfolio includes Tin Drum Asian Kitchen, which has 11 locations in Georgia.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15289/tropical_smoothie_caf%C3%A9_grows_comparable_sales_and_restaurant_units_first_half_2016#comments Foodservice Mon, 18 Jul 2016 22:25:07 +0000 Don Sniegowski 15289 at http://www.bluemaumau.org Captain D’s Same-Store Sales Up, Nets One Outlet http://www.bluemaumau.org/15288/captain_d%E2%80%99s_samestore_sales_nets_one_outlet <!-- google_ad_section_start --><p><img alt="Captain D&#039;s franchised versus company-owned restaurant count from the end of 2011 to 2015" src="/sites/default/files/resize/CapnDsStoreCount2015-320x320.png" style="float: right; height: 320px; width: 320px; margin-left: 5px; margin-right: 5px;" width="320" height="320" />NASHVILLE, Tenn.&mdash;Captain D&#39;s announced today a rise of 3.1 percent in same-restaurant sales, its 19th consecutive quarter of positive comparable sales.</p> <!--break--><!--break--><p>During its second quarter Captain D&#39;s promoted new limited-time-offer items such as D&#39;s Jumbo Coconut Shrimp as well as summer-themed fried green tomatoes and fried pickles. It also launched a &quot;Who was Captain D?&quot; TV campaign.</p> <p>Regarding the brand&#39;s success, Phil Greifeld, CEO and president of Captain D&#39;s, said, &quot;Our talented franchisees and company operators are the backbone of Captain D&#39;s, and their dedication to our passionate guest-centric culture has been a driving force behind our company&#39;s year-after-year compounding success. We are also highly enthused about the strong success that our new restaurants openings are experiencing.&quot; The CEO added, &quot;At D&#39;s, our success is driven by our team&#39;s dedication to innovation and continually evolving our brand while staying true to our guest-centric roots. We are thrilled by the consistent growth we&#39;ve experienced as a result.&quot;</p> <p><strong>Seafood chain nets an outlet in first half </strong></p> <p>The privately held seafood kitchen chain says it is experiencing a &quot;surge of new franchise and corporate growth.&quot; Its latest Franchise Disclosure Document reports that it was a 513 restaurant chain at the end of 2015 with 241 franchises and 272 company-owned outlets. That is a unit down from 2014. The franchisor says it now has 514 restaurants in 21 states, giving it a net gain of one restaurant for the first half of 2016. That is&nbsp;back to its level at the end of 2014.</p> <p>The franchisor credits its new restaurant beach design as also contributing to the brand&#39;s success. It reports a round number of 50 percent of all its restaurants have been reimaged to the brand&#39;s new coastal design, with another 50 locations to be remodeled by the end of this year.</p> <p>Centre Partners acquired Captain D&#39;s in 2013 from Sun Capital Partners. Centre Partners is a private equity firm with a wide portfolio of companies, including dental supplier Den-Mat Holdings, gourmet food specialist Stonewall Kitchens and military talent firm Orion International.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/15288/captain_d%E2%80%99s_samestore_sales_nets_one_outlet#comments Foodservice Mon, 18 Jul 2016 20:08:43 +0000 Don Sniegowski 15288 at http://www.bluemaumau.org Quiznos Appoints Another CEO, Lintonsmith http://www.bluemaumau.org/15283/quiznos_appoints_another_ceo_lintonsmith <!-- google_ad_section_start --><p><img alt="Susan Liptonsmith" src="http://www.bluemaumau.org/sites/default/files/resize/071516_1655_QuiznosAppo1-320x320.jpg" style="float: right; height: 320px; width: 320px; margin-left: 5px; margin-right: 5px;" width="320" height="320" />DENVER&mdash;Quiznos [QCE Finance LLC] announced Thursday the appointment of Susan Lintonsmith as the franchisor&#39;s new chief executive officer. She is replacing Katie Scherping, CFO and interim president &amp; CEO, who is leaving the company to pursue other opportunities.</p> <!--break--><!--break--><p>&quot;On behalf of the board, we thank Katie for her leadership throughout the financial transition of our business over the last several years,&quot; Benham stated. &quot;We wish her all the best in her new endeavors.&quot;</p> <p>Lintonsmith joined Quiznos as its chief marketing officer in 2012. The company feels that under her leadership, its brand, which filed bankruptcy in 2014, has been revitalized with a stronger focus on quality ingredients, menu changes and simplification to re-energize store level growth and economics.</p> <p>But Quiznos&#39; franchise units have fallen in numbers like a rock (see chart).</p> <div class="photoleft"> <table border="0" style="border-collapse:collapse; background: #e2efd9"> <colgroup> <col style="width:263px" /><br /> </colgroup> <tbody valign="top"> <tr> <td style="padding-left: 7px; padding-right: 7px; border-top: solid 0.5pt; border-left: solid 0.5pt; border-bottom: solid 0.5pt; border-right: solid 0.5pt"> <p>Quiznos&#39; new CEO every 5+ quarters</p> <p>Jul 2016&mdash;<strong>Susan Lintonsmith</strong></p> <p>Jun 2016&mdash;<strong>Katie Scherping</strong> (interim)</p> <p>Jan 2015&mdash;<strong>Doug Pendergast</strong></p> <p>2014&mdash;<a href="http://www.bluemaumau.org/13706/quiznos_bankrupted">BANKRUPTCY</a></p> <p>Jul 2012&mdash;<strong>Stuart Mathis</strong></p> <p>Oct 2010&mdash;<strong>Greg MacDonald</strong></p> <p>Mar 2009&mdash;<strong>Rick Schaden</strong></p> <p>Jan 2007&mdash;<strong>Greg Brenneman</strong></p> </td> </tr> </tbody> </table> </div> <p>For years, the franchisees&#39; independent associations had pleaded with the franchisor to work with them to lift the profits of its franchised restaurants. But again, there is no evidence that the franchisor even collects franchise-level profit data, let alone knows how to lift it. At one time it published top line revenues, which it needs to know to calculate royalty payments. Its 2014 Franchise Disclosure Document declared that traditional average gross sales for the top 25 percent of its franchises was $441,382 for the year. Its franchises that fall in the middle 50 percent had $285,623 and the bottom was $167,220.</p> <p>The franchisor no longer does so. Its declaration of store-level revenue to franchise buyers was eliminated last year in its latest disclosure document filing.*</p> <p>In one of the industry&#39;s biggest lawsuits, franchise owners had successfully settled with Quiznos that franchisees were to audit the system&#39;s supply chain. Franchisees are naturally concerned about kickbacks to the franchisor from vendors because such markups inflate their product costs and depress store profits.</p> <p>But there is no evidence that the auditing terms of the settlement were ever complied with.</p> <p>Despite having a franchisee advisory council that gives advice to their franchisor, Quiznos franchisees expressed that they felt as if they were talking to a wall. Franchisees wanted a permanent say in brand strategy with the franchisor&#39;s board of directors. After the bankruptcy, franchisee representatives actually met with the new owners and board members. But nothing happened.</p> <p><img alt="Number of Quiznos outlets in the U.S." src="http://www.bluemaumau.org/sites/default/files/resize/071516_1655_QuiznosAppo2-220x219.png" style="float: right; height: 219px; width: 220px; margin-left: 5px; margin-right: 5px;" width="220" height="219" /><strong>Lintonsmith, key leader</strong></p> <p>The company says that Lintonsmith was a key leader in starting up the new franchise concept, Quiznos Grill, the brand&#39;s effort to push into premium sandwiches and the quickly growing fast-casual segment.</p> <p>&quot;Susan has a real passion for the restaurant industry and has been a vital contributor to Quiznos successful brand evolution over the last four years,&quot; said Quiznos&#39; chairman, Doug Benham. &quot;During her tenure, Susan has consistently translated menu and marketing innovation into operational value.&quot;</p> <p>New CEO Susan Lintonsmith replied, &quot;I look forward to working alongside the management team, team members and franchisees to add value to the entire Quiznos system by serving our guests and creating sustainable growth.&quot;</p> <p>Quiznos named Christina Maxwell as its newest chief financial officer. Maxwell joined Quiznos in 2012 as SVP of Finance and Accounting. She has more than 20 years of experience in financial analysis, strategic planning and process flow improvements.</p> <hr /> <p><em>*<span style="font-size:11px;">Note: Quiznos&#39; latest Minnesota <a href="https://www.cards.commerce.state.mn.us/CARDS/security/search.do?method=showPoup&amp;documentId={F22C1512-011E-4BCD-A307-15E1A287234D}&amp;documentTitle=1479-201603-05&amp;documentType=4" target="_blank">red-lined FDD for 2015</a>, filed in the spring of 2016</span></em></p> <p><strong>Related reading</strong>:</p> <ul> <li><a href="http://www.bluemaumau.org/14782/former_quiznos_investors_continue_battle_against_schaden_group" target="_top">Former&nbsp;Quiznos&nbsp;Investors Continue Battle against Schaden Group</a></li> <li><a href="http://www.bluemaumau.org/14061/avenue_capital_investors_sue_quiznos_former_ownership_team_alleging_fraud">Avenue Capital Sues Quiznos Former Ownership for Fraud</a></li> <li><a href="https://www.google.com/url?q=http://www.bluemaumau.org/13996/quiznos_says_it_has_exited_bankruptcy_court_says_different&amp;sa=U&amp;ved=0ahUKEwjjjcbJ3PXNAhXCsh4KHcOcD9UQFggaMAc&amp;client=internal-uds-cse&amp;usg=AFQjCNEW7u8a9Ty2iM_xqLYj0LCln3ywFw">Quiznos&nbsp;Says It Exited Bankruptcy; Court Says Differently</a></li> <li><a href="http://www.bluemaumau.org/14004/franchisee%E2%80%99s_hopeless_cry_quiznos_bankruptcy_rubble">Franchisee&#39;s Hopeless Cry from Quiznos Bankruptcy Rubble</a></li> <li><a href="http://www.bluemaumau.org/14367/quiznos_franchisee_group_expresses_optimism_after_bankruptcy">Quiznos Franchisee Group Expresses Optimism after Bankruptcy</a></li> <li><a href="http://www.bluemaumau.org/11587/quiznos_franchisee_ass%E2%80%99n_speaks_about_new_brand_initiatives">Quiznos Franchisee Ass&#39;n Speaks about New Brand Initiatives</a></li> <li><a href="http://www.bluemaumau.org/14052/quiznos_settles_8year_lawsuit_canadian_franchisees_275k">Quiznos Settles 8-Year Lawsuit with Canadian Franchisees for $275k</a></li> <li><a href="http://www.bluemaumau.org/9221/quiznos_settlement_finalized_among_highest_penalties_franchising">Quiznos&#39; Settlement of $206 Million for Sold-but-Not-Opened Store Scam among Highest Penalties in Franchise History</a></li> </ul> <!-- google_ad_section_end --> http://www.bluemaumau.org/15283/quiznos_appoints_another_ceo_lintonsmith#comments Leadership change Fri, 15 Jul 2016 16:55:16 +0000 Don Sniegowski 15283 at http://www.bluemaumau.org