http://www.bluemaumau.org/frontpagestories en Large Majority of Employers Affected by Bad Hires http://www.bluemaumau.org/16255/large_majority_employers_affected_bad_hires <!-- google_ad_section_start --><p>Hiring the wrong person is expensive, according to a recent CareerBuilder survey, but losing a <em>good</em> employee is <em>twice</em> as expensive.The average cost of one bad hire averages nearly $15,000, but the average cost of losing a good worker is almost $30,000. Nearly three in four employers (74 percent) say they&#39;ve hired the wrong person for a position.</p> <!--break--><!--break--><p>&quot;It&#39;s important to note that there&#39;s a ripple affect with bad hires. Disengagement is contagious&mdash;poor performers lower the bar for other workers on their teams, and their bad habits spread throughout the organization,&quot; said Rosemary Haefner, chief human resources officer at CareerBuilder. &quot;The best thing hiring managers can do is put in the time and effort on the front end to make sure they have the best available pool of applicants for every job opening. And, just as importantly, have good procedures in place for evaluating candidates.&quot;</p> <p>When asked how a bad hire affected their business in the last year, employers cited less productivity (37 percent), lost time to recruit and train another worker (32 percent) and compromised quality of work (31 percent).</p> <p><strong>What Factors Influence a Bad Hiring Decision?</strong></p> <p>When asked what led them to make the wrong hiring decision, employers said:</p> <ul> <li>While the candidate didn&#39;t have all the needed skills, they thought the hire could learn quickly: 35 percent</li> <li>Candidate lied about his/her qualifications: 33 percent</li> <li>Took a chance on a nice person: 32 percent</li> <li>Pressured to fill the role quickly: 30 percent</li> <li>Had a hard time finding qualified candidates: 29 percent</li> <li>Focused on skills and not attitude: 29 percent</li> <li>Ignored some of the warning signs: 25 percent</li> <li>Lacked adequate tools to find the right person: 10 percent</li> <li>Didn&#39;t do a complete background check: 10 percent</li> <li>Didn&#39;t work close enough with HR: 7 percent</li> </ul> <p><strong>What&#39;s the Definition of a Bad Hire?</strong></p> <p>Here&rsquo;s how employers categorize someone as a bad hire:</p> <ul> <li>The worker didn&#39;t produce the proper quality of work: 54 percent</li> <li>The worker had a negative attitude: 53 percent</li> <li>The worker didn&#39;t work well with other workers: 50 percent</li> <li>The worker had immediate attendance problems: 46 percent</li> <li>The worker&#39;s skills did not match what they claimed to be able to do when hired: 45 percent</li> </ul> <p><strong>Many Workers Disappointed As Well</strong></p> <p>On the opposite side of the interview desk, 66 percent of workers say they have accepted a job and later realized it was a bad fit. While half of these workers (50 percent) have quit within six months, more than a third (37 percent) have stayed with the job. Workers who said they had taken a job only to realize it was a bad fit said their regret was based on toxic work culture (46 percent), boss&#39;s management style (40 percent), job didn&#39;t match what was described in the job listing and interviews (37 percent), and a lack of clear expectations around the role (33 percent).</p> <p><strong>It Pays to Hang onto Good Workers</strong></p> <p>While the cost of hiring the wrong person can be high, the cost of letting a good worker go is even higher. According to employers, the average cost of losing a good hire was $29,600 this year. And while 75 percent of workers say they&#39;re loyal to their current employer, only 54 percent say they feel their company is loyal to them. Almost a third (31 percent) say they will probably change jobs in the next year.</p> <p><strong>Survey Methodology</strong><br /> This survey was conducted online with U.S. respondents by Harris Poll on behalf of CareerBuilder among 2,257 hiring and human resource managers ages 18 and over (employed full-time, not self-employed, non-government) and 3,697 workers ages 18 and over (employed full-time, not self-employed, non-government) between August 16 and September 15, 2017 (percentages for some questions are based on a subset, based on their responses to certain questions). With a pure probability sample of 2,257 and 3,697, one could say with a 95 percent probability that the overall results have a sampling error of +/- 2.06 and +/- 1.61 percentage points, respectively. Sampling error for data from sub-samples is higher and varies.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16255/large_majority_employers_affected_bad_hires#comments Managing Fri, 15 Dec 2017 07:27:20 +0000 BMM 16255 at http://www.bluemaumau.org MTY Food Group Buys Imvescor Restaurant Group for US$193M and The Counter for US$25M http://www.bluemaumau.org/16254/mty_food_group_buys_imvescor_restaurant_group_us193m_and_counter_us25m <!-- google_ad_section_start --><div class="photoright"><img alt="Scores restaurant" src="/sites/default/files/u9/Scores_restaurant.jpg" style="width: 320px; height: 213px; margin-top: 3px; margin-bottom: 3px; float: left;" width="320" height="213" /> <div class="caption"><a href="https://en.wikipedia.org/wiki/File:Scores_restaurant.jpg" target="_blank">Henrickson</a> photo</div> </div> <p>On December 12 Montreal-based MTY Food Group Inc. [TSX:MTY] announced that it has entered into yet another acquisition deal. Earlier this month it completed the acquisition of The Counter and in October it acquired Dagwoods Sandwiches and Salads. This time it is acquiring fellow Eastern Canada-based franchisor Imvescor Restaurant Group Inc. for C$248 million, which at current exchange rates is US$193 million. Imvescor will have one nominee on MTY&rsquo;s board of directors.</p> <!--break--><!--break--><p>Imvescor franchises family and casual dining restaurants in Eastern Canada under five brands &mdash; Baton Rouge, Pizza Delight, Scores, Toujours Mikes, and Ben &amp; Florentine. The combination of MTY and Imvescor creates a multi-brand franchising firm with a combined portfolio of 75 brands with 5,700 locations, accounting for nearly US$2.26 billion (C$2.9 billion) in system-wide sales from which to draw royalties and revenue.</p> <p>What MTY sees in Imvescor is a scalable multi-brand franchised network and high EBITDA margins that can be converted into free cash flow to pursue growth initiatives and more acquisitions.</p> <p>Fran&ccedil;ois-Xavier Seigneur, chairman of the board of directors of Imvescor said, &quot;Joining forces with MTY creates an opportunity for Imvescor shareholders to realize immediate value and participate in a faster pace of growth, with less risk. Today&rsquo;s Transaction fully recognizes the value of our portfolio of restaurant brands and rewards investors for their patience as we have successfully executed our turnaround strategy.&rdquo;</p> <p>Stanley Ma, chairman of the board of directors, president and chief executive officer of MTY, said: &ldquo;This is an important day in the history of MTY as we add many great brands to MTY&rsquo;s existing portfolio. The combination of the two companies&rsquo; portfolios and expertise will produce tremendous opportunities for North American growth. Further, Imvescor&rsquo;s suite of full service restaurants will be highly complementary to our existing business and is expected to enable significant top-line synergies for our existing full service restaurant brands as well as for the newly acquired brands. Imvescor&rsquo;s expertise for retail operations combined with MTY&#39;s significant range of products is expected to produce great opportunities in the future.&rdquo;</p> <h3><strong><span style="color:#800000;">MTY also buys The Counter and Built Custom Burgers</span></strong></h3> <p>MTY announced earlier in the month, December 1, that it had completed the acquisitions of California-based franchisors CB Franchise Systems LLC and sister firm Built Franchise Systems LLC, doing business as The Counter and Built Custom Burgers.</p> <p>Built Custom Burgers is the fast-casual version of The Counter. Both systems operate 41 franchised and 3 company-owned restaurants.</p> <p>The deal is worth US$24.6 million, which includes US$0.9 million in working capital adjustment. A total of US$22.3 million was paid on closing and US$2.3 million was retained as holdback on the transaction. The consideration paid on closing was paid in cash, financed from MTY&#39;s cash on hand.</p> <p>Ms. April Fogle, under the leadership of Mr. Jeff Smit, will lead both the The Counter and Built Custom Burgers companies. Franchising conglomerate MTY expects to move the Los Angeles headquarters of The Counter and Built Custom Burgers to MTY&rsquo;s US headquarters in Scottsdale, Arizona, where its Kahala Brands subsidiary is located. Kahala franchises and manages such brands as Cold Stone Creamery, Blimpie, Pinkberry, Tasti D-Lite and Baja Fresh.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16254/mty_food_group_buys_imvescor_restaurant_group_us193m_and_counter_us25m#comments Mergers & Acquisitions Thu, 14 Dec 2017 13:54:22 +0000 Don Sniegowski 16254 at http://www.bluemaumau.org Ruth’s Hospitality Completes Acquisition of Hawaii Restaurants http://www.bluemaumau.org/16252/ruth%E2%80%99s_hospitality_completes_acquisition_hawaii_restaurants <!-- google_ad_section_start --><div class="photoright"><img alt="Ruth&#039;s Chris Waikiki 2017" src="/sites/default/files/u9/Ruth%27s%20Chris%20Waikiki%202017.jpg" style="width: 320px; height: 175px; margin-top: 3px; margin-bottom: 3px; float: right;" width="320" height="175" /> <div class="caption">Setting up for Christmas 2017 at Ruth&#39;s Chris Waikiki</div> </div> <p>Winter Park, Florida-based Ruth&rsquo;s Hospitality Group Inc. (RHGI) (NASDAQ: RUTH) announced on Tuesday that it has completed its previously announced acquisition of six Ruth&rsquo;s Chris restaurants in Hawaii from its longtime franchisee, Desert Island Restaurants, for approximately $35 million in cash. </p> <!--break--><!--break--><p> The acquisition includes&nbsp;a new location opened in early November on the island of Kauai, as well as area development rights for the balance of the state.&nbsp;The company has over 150 company-owned and franchisee-owned restaurants worldwide. The acquisition was funded with debt through the company&rsquo;s senior credit facility.</p> <p>Hawaii&#39;s biggest industry is tourism, making it a good setting&nbsp;for restaurant traffic. Last year <a href="http://files.hawaii.gov/dbedt/visitor/visitor-research/2016-annual-visitor.pdf" target="_blank">9 million people</a> visited Hawaii, a state with a population of <a href="http://worldpopulationreview.com/states/hawaii-population/" target="_blank">1.4 million</a>.</p> <p>Mike O&rsquo;Donnell, chairman and chief executive officer of Ruth&rsquo;s Hospitality Group, stated, &ldquo;We believe the acquisition of our Hawaiian franchise locations presents a significant opportunity for us. Since 1994, Randy Schoch [Desert Island Restaurants founder and CEO] and the local teams have built an award-winning group of restaurants leveraging our founder Ruth Fertel&rsquo;s successful recipe: sizzling prime steaks and legendary hospitality, together with the aloha spirit of Hawaii. I&rsquo;m pleased to officially welcome these impressive restaurants and their outstanding teams into the Ruth&rsquo;s Hospitality Group family. We are proud of their achievements and we are committed to supporting their success. Randy will maintain a leadership relationship with RHGI and together we will work to ensure a seamless transition for team members and guests.&rdquo;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16252/ruth%E2%80%99s_hospitality_completes_acquisition_hawaii_restaurants#comments Mergers & Acquisitions Wed, 13 Dec 2017 18:56:11 +0000 BMM 16252 at http://www.bluemaumau.org Independent Franchisee Association Supports Roark Acquisition of Buffalo Wild Wings http://www.bluemaumau.org/16247/independent_franchisee_association_supports_roark_acquisition_buffalo_wild_wings <!-- google_ad_section_start --><p><img alt="BWW at night" src="/sites/default/files/resize/u9/BWW-320x109.jpg" style="width: 320px; height: 109px; margin-left: 5px; margin-right: 5px; float: right;" width="320" height="109" />Buffalo Wild Wings franchisee owners are speaking up in favor of private equity firm Roark Capital acquiring their publicly&nbsp;traded franchisor (NASDAQ:BWLD) to take it private. Roark Capital&#39;s subsidiary Arby&#39;s Restaurant Group Inc. agreed to buy Buffalo Wild Wings Inc. for $157 per share. On December 4&nbsp;independent franchisee association Franchise Business Services, which Buffalo Wild Wings&#39; franchise owners created to represent their interests some 15 years ago, announced that it is endorsing the acquisition.</p> <!--break--><!--break--><p>Arby&#39;s announced November 28 that its chief executive Paul Brown will take over the position of Buffalo Wild Wings&nbsp;exiting CEO Sally Smith. The $2.9 billion deal is expected to be finalized during the first quarter of 2018.</p> <p>&ldquo;Buffalo Wild Wings is a major player in the casual dining sector, leading the segment in many performance indicators,&rdquo; said Wray Hutchinson, chairman of the franchisee association&rsquo;s board of directors and an owner of 65 Buffalo Wild Wings franchises himself. &ldquo;We&rsquo;ve been aware of Brown&rsquo;s hands-on leadership style for some time, and we&rsquo;re looking forward to continuing to move the brand forward under his leadership.&rdquo;</p> <p>FBS members, who invested in restaurant units under the Buffalo Wild Wings logo, have extending their support to the new leadership. Years ago the franchisee association was created to defend the interests and profits of Buffalo Wild Wings franchisees. Independent associations such as theirs exist in the franchise industry because the interests of small business and multiunit franchisee capitalists do not always match the interests of franchising firms or Wall Street. Entrepreneurs in various brands have banded together to form independent franchisee associations to protect their direct business investments.</p> <h3><span style="color:#800000;"><strong>Hot times become mild</strong></span></h3> <p>Buffalo Wild Wings saw years of lifting sales and rising wealth to shareholders even when other casual dining chains and the sector as a whole began to drop in visits and sales. Prices for large televisions had significantly dropped to where consumers could watch games with friends in their man caves as opposed to sports bars and casual dining restaurants filled with large screens. A long rise in share prices ended for Buffalo Wild Wings at the end of 2015.</p> <p>Smith had a message to shareholders that changes had been made, but that it was important&nbsp;to stay the course. Good sailing was ahead.</p> <p>Activist hedge fund firm Marcato Capital Management disagreed. The activist argued that the company&rsquo;s officers and board members thought more like management and not enough as shareholder investors. It argued that Buffalo Wild Wings was sitting on a gold mine of company-owned restaurants that could be franchised for a massive infusion of cash to the franchisor, thus maximizing the wealth of the franchisor&rsquo;s shareholders.</p> <p>Buffalo Wild Wings&rsquo; franchisee association came to the defense of CEO Sally Smith, the franchisor&rsquo;s board of directors and the existing strategic direction of Buffalo Wild Wings against the shakeup efforts of the activist firm.&nbsp;Franchisees feared that the hedge fund firm&#39;s refranchising goal (the selling of company-owned units to become franchises) would negatively change the nature of the Buffalo Wild Wings system that franchisees had invested in. In essence, the franchise owners argued that Buffalo Wild Wings would lose its edge and skin in the restaurant business if it sold most of its company units for others to operate.</p> <p>Shareholders ended up voting in favor of Marcato to shake things up at Buffalo Wild Wings. CEO Sally Smith promptly announced she would step down by the end of the year.</p> <h3><strong><span style="color:#800000;">Franchisee association optimistic</span></strong></h3> <p>The news about the acquisition of Buffalo Wild Wings is welcomed by the franchisee association. What these restaurateurs see in Roark Capital is a conglomeration of over 60 franchisor and multiunit brands in its portfolio, including Massage Envy, Arby&rsquo;s, Auntie Anne&rsquo;s, Carl&rsquo;s Jr, Carvel Ice Cream, Wingstop and&nbsp;Meineke Car Care. The franchise owners expect that the new franchisor owner will be more long term in its approach.</p> <p>&ldquo;FBS is proud to join an already highly recognized restaurant company, and more than anything, our franchisees are optimistic about the opportunities available within the multi-brand restaurant company,&rdquo; says Mark Jones, vice chairman of Franchise Business Services (FBS).</p> <p>&ldquo;The casual-dining industry is evolving,&rdquo; said association chairman Hutchinson. &ldquo;Franchisees across the country are committed to ensuring consumers continue to receive the same distinctive quality they&rsquo;ve come to expect from Buffalo Wild Wings, and this deal will only strengthen that commitment.&rdquo;</p> <p>With speculation and then news of the acquisition, share prices for Buffalo Wild Wings have recently climbed again.</p> <hr /> <p><strong>Related reading</strong>:</p> <p><a href="http://http://bluemaumau.org/16223/roark_capital_buys_buffalo_wild_wings_29_billion">Roark buys Buffalo Wild Wings for $2.9 billion</a></p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16247/independent_franchisee_association_supports_roark_acquisition_buffalo_wild_wings#comments Mergers & Acquisitions Mon, 11 Dec 2017 16:05:45 +0000 Don Sniegowski 16247 at http://www.bluemaumau.org Franchisee Closes Two of Six Stores after Suing Tim Hortons for $50M http://www.bluemaumau.org/16244/franchisee_closes_two_six_stores_after_suing_tim_hortons_50m <!-- google_ad_section_start --><p>A franchisee closed two of his six stores in St. Louis, Missouri over the Thanksgiving Day holiday weekend, issuing a statement on his company website that the closings are directly related to the failure of the franchisor, Tim Hortons USA&nbsp;Inc., to meet its obligations in its franchise agreements.</p> <!--break--><!--break--><p>St. Louis News reported that the franchisee entity, Show Me Hospitality, sued Tim Hortons and its parent company Restaurant Brands International (RBI), controlled by 3G Capital, an investment group in Brazil that also owns Burger King, last July in U.S. District Court for the Southern District of Florida. The complaint alleges Tim Hortons new owner failed to honor the original franchise agreement after a new deal with the franchisor went sour. The company &quot;failed to provide branding and advertising at a critical time when the franchisee company was entering the St. Louis market, withheld approval of new partners and necessary capital investment, and said that if Show Me Hospitality did not commit to the 200-restaurant program, Tim Hortons would terminate the area development agreement.&quot; St. Louis News reported that &quot;the franchisee is asking for more than $50 million to compensate for the loss of a business opportunity they claim was projected to have been worth more than $125 million in 10 to 15 years.&quot;</p> <p>Attorney for Show Me Hospitality, Scott Korzenowski of Dady &amp; Gardner, said RBI demanded that his client sign a new franchise agreement requiring him to put up an additional investment of $20 million and a commitment to develop more than 200 new locations in 10 years. A report in St. Louis News said, &quot;That would be one restaurant per every 15,000 people in the St. Louis territory. Korzenowski stated, &quot;To put this into perspective, McDonald&#39;s has approximately 130 restaurants in the St. Louis region, which it built over several decades.&quot;</p> <p>Show Me Hospitality refused to sign the new contract, opting to stick with the original franchise agreement. Korzenowski said because the new owners of Tim Hortons were not willing to honor all the terms of the original agreement they made the decision to file the lawsuit. The franchisee claims when they refused to sign the new document, RBI also began charging unreasonable markups on equipment, and refused to approve kiosk locations in three areas of St. Louis.</p> <h3><span style="color:#800000;"><strong>Litigation growing inside Tim Hortons system </strong></span></h3> <p>Show Me Hospitality is only one North American franchisee suing Restaurant Brands. There are two class action lawsuits seeking approximately $1.5 billion in damages.</p> <p>Last September Restaurant Brands International accused Tim Horton franchisees of leaking confidential corporate information to a Canadian news journal, Globe and Mail. The Great White North Franchisee Association (GWNFA) said that their board members had been served with notices of default because of the leaking incident, which they stated was false. GWNFA said that in its view, the sole purpose of the notices of default was to continue the pattern of conduct of TDL Group Corp., a subsidiary of Tim Hortons&#39; legal division, to intimidate the franchisee association in order to advance their interests consistent with their rights under the <em>Arthur Wishart Act.</em></p> <p><span style="color:#232121; font-family:Arial; font-size:10pt">The GWNFA said the TDL Group is actively and in bad faith interfering with franchisees&#39; right to associate and directly or indirectly penalizing or threatening franchisees who choose to associate.&nbsp; &quot;That pattern of conduct will no longer be tolerated and we are in the process of directing our counsel, Himelfarb Proszanski, to take appropriate legal action to restrain such conduct including a claim seeking damages,&quot; the association stated. </span></p> <p><span style="color:#232121; font-family:Arial; font-size:10pt">Restaurant Business reported yesterday that Tim Horton has also &quot;sued large franchisees in Minnesota and Missouri this month over unpaid royalty fees, putting a pair of key markets in jeopardy at a time the company is eager to grow its business in the U.S.&quot; The report says the franchisor has also sued a seven-unit operator in the Minneapolis area just 18 months after the brand entered the market with a 14-year development deal.</span></p> <hr /> <p><strong>Related Articles: </strong></p> <ul> <li><a href="https://www.stl.news/legal-dispute-behind-closing-2-stl-tim-hortons/47094/">Legal Dispute behind the Closing of Two St Louis Stores</a><span style="color:#0563c1"> </span></li> <li> <div><a href="http://www.bluemaumau.org/16109/franchisor_accuses_tim_hortons_franchisee_board_members_leaking_confidential_data" target="_blank"><span style="color:#0563c1">Franchisor Accuses Tim Hortons Franchisee Board Members of Leaking Confidential Data </span></a></div> <p>&nbsp;</p> </li> </ul> <p>&nbsp;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16244/franchisee_closes_two_six_stores_after_suing_tim_hortons_50m#comments Foodservice Sat, 09 Dec 2017 13:06:26 +0000 Janet Sparks 16244 at http://www.bluemaumau.org Massage Envy CEO Responds to Media Frenzy Nightmare regarding Sexual Assault Claims at Franchisee Spas http://www.bluemaumau.org/16240/massage_envy_ceo_responds_media_frenzy_nightmare_regarding_sexual_assault_claims_franchisee_spas <!-- google_ad_section_start --><p><img alt="" src="http://www.bluemaumau.org/sites/default/files/resize/120817_0025_MassageEnvy1-320x180.jpg" style="height: 180px; width: 320px; float: right; margin-left: 5px; margin-right: 5px;" width="320" height="180" />A major media frenzy last week exposing 180 sexual assault lawsuits, police reports and state board complaints by customers against the Massage Envy chain, alleging therapists crossed the line into molestation while performing massages, prompted the franchise company to retort in an effort to protect its brand. Some question why the company did not respond immediately. </p> <!--break--><!--break--> <p>An in-depth report by <a href="https://www.buzzfeed.com/katiejmbaker/more-than-180-women-have-reported-sexual-assaults-at?utm_term=.ch1djXxzX">BuzzFeed News</a> had revealed the litigation and complaints by spa clients across the country at some of the franchisor&#39;s 1,100 locations.&nbsp; Massage Envy, a billion-dollar firm, is the largest chain of massage parlor franchises and operates under the umbrella of the Roark Capital private equity firm. The report stated that one victim who had filed suit against the massage spa chain told the reporter that the franchisee and employees took no action on her complaint. After she reported the incident to the police, the therapist admitted to the crime of assaulting her and nine other customers and was indicted.</p> <p>When the franchisee was later questioned by attorneys regarding the spa&#39;s reaction to the complaint of sexual assault, she said she was following the policy of Massage Envy, and therefore she thought her decision was appropriate.</p> <p>Joseph C. Magnacca, CEO Massage Envy Franchising&nbsp;LLC, sent out an email to spa clients last week saying, &quot;I, like so many of you, continue to be sickened and so disheartened by the stories that have recently been published about sexual misconduct at Massage Envy franchise locations.&quot; He then apologized stating, &quot;We have zero tolerance for this type of behavior and to those who suffered, I am deeply sorry.&quot;</p> <p>Magnacca explained that his company chose not to immediately respond to the media reports, but instead talked directly to victims and victim rights groups, industry associations, and sexual violence experts to help define a plan going forward. He said Massage Envy will soon share the details of a &quot;comprehensive and transparent path&quot; it will be taking, to make meaningful change to its industry. The CEO said they have to do it &quot;thoughtfully and we cannot do it alone.&quot; He added that, thankfully, there are many others that feel like Massage Envy does and they are anxious to help.</p> <p>At the same time of Magnacca&#39;s apology, <a href="http://adage.com/article/cmo-strategy/massage-envy-brand-crisis-amid-assault-allegations/311462/?utm_source=CMO%20Strategy&amp;utm_medium=feed&amp;utm_campaign=Feed:+AdvertisingAge/CMO%20Strategy">Adage.com reported</a> that following the bombshell news report of sexual assault lawsuits within the company, Massage Envy is now facing a dire marketing crisis. On November 29, the Illinois attorney general initiated an investigation into the complaints, which include lawsuits and police reports, &quot;as consumers advocated for boycotts of the Scottsdale, Arizona-based chain&#39;s 1,150 franchise locations,&quot; the report said.</p> <p>Ad Age stated that &quot;Aside from issuing a statement to various news outlets that it does not comment on legal cases and that it &#39;holds franchise owners accountable&#39; to its policies, Massage Envy has largely kept silent.&quot; The publication said the franchise company did not respond to its request for comment, adding, &quot;Such failure to address the issue in its consumer-facing communication, especially during a week when prominent figures, including Matt Lauer, have joined the list of those under fire for sexual harassment, is a mistake, experts say.&quot;</p> <h3><span style="color:#800000;"><strong>Massage Envy new action plan </strong></span></h3> <p><a href="https://www.massageenvy.com/our-commitment-to-guest-safety-amidst-alleged-sexual-misconduct/">CEO Magnacca&#39;s letter </a>revealed his company&#39;s first step in its <a href="https://www.massageenvy.com/our-commitment-to-guest-safety-amidst-alleged-sexual-misconduct/">commitment to safety</a>, updated on December 5:</p> <ul> <li>Each location was required to review, recommunicate and, in no uncertain terms, recommit to our safety and reporting policies.</li> <li>We have just completed an additional review of all massage therapist files to ensure they have a completed background check and professional reference checks as well as to ensure their licensure/certification is current and annual training requirements have been met.</li> <li>Our accredited third-party background screening company has begun rescreening each and every one of the 20,000 licensed massage therapists within the Massage Envy network.</li> </ul> <p>The letter states, &quot;Let me be clear: this is just the start and these first steps are not the complete answer. We are taking a hard look at ourselves and at the additional changes we must make. Next week, we will announce those changes and begin to put them into action. We will never stop working to earn your trust.&quot;</p> <h3><span style="color:#800000;"><strong>Massage Envy action plan viewed as a little too late </strong></span></h3> <p>Gene Grabowski, a partner at Washington, D.C.-based PR firm Kglobal, was quoted by Ad Age saying, &quot;They [Massage Envy administration] obviously don&#39;t have a crisis communication plan.&quot; He explained, &quot;When you think of a company that&#39;s touching people for a living not having a plan, frankly, from a legal perspective, I don&#39;t understand how that&#39;s possible.&quot; The PR executive said other franchise operators, like McDonald&#39;s, hold franchisees liable to strict quality standards. His suggestion, in addition to issuing an apology, was to &quot;take responsibility by requiring all franchisees and their employees to take a requalification program.&quot; He said that should include a provision promising to notify law enforcement of any complaints of inappropriate behavior.</p> <p>Adage.com pointed out that in Massage Envy&#39;s Twitter post&nbsp;earlier that week, the day BuzzFeed published its article, suggested that customers should recover from the Thanksgiving Day holiday weekend &quot;by taking time for yourself.&quot;</p> <p>Cindy Gallop, a diversity advocate, tweeted her post saying, &quot;Women everywhere, please boycott <a href="https://twitter.com/MassageEnvy"><span style="color:#3b94d9; font-family:Helvetica">@<span style="text-decoration:underline">massageenvy</span></span></a> IMMEDIATELY. Cancel your subscriptions. Use your economic power to force the company to take sexual assault seriously and eradicate it once and for all.&quot;</p> <p>PR expert Grabowski said that Massage Envy now has people reluctant to go into their stores. &quot;You don&#39;t know if the brand&#39;s going to survive this&mdash;I&#39;m not going to send my wife or daughter or anyone close to me for a massage.&quot;</p> <hr /> <p><strong>Related Articles: </strong></p> <ul> <li><a href="http://adage.com/article/cmo-strategy/massage-envy-brand-crisis-amid-assault-allegations/311462/?utm_source=CMO%20Strategy&amp;utm_medium=feed&amp;utm_campaign=Feed:+AdvertisingAge/CMO%20Strategy" target="_blank">Massage Envy Brand in Crisis amid Assault Allegations</a></li> <li><a href="http://www.businessinsider.com/massage-envy-ceo-open-letter-after-sexual-assault-claims-2017-11">Massage Envy CEO Open Letter after Sexual Assault Claims</a></li> <li><a href="http://www.bluemaumau.org/16224/massage_envy_chain_gropes_client_sexual_assault_lawsuits" target="_blank">Massage Envy Chain Gropes with Client Sexual Assault Lawsuits</a></li> <li><a href="https://www.buzzfeed.com/katiejmbaker/more-than-180-women-have-reported-sexual-assaults-at?utm_term=.rjdQMoLVq#.ipzgqRPWA">More than 180 Women Have Reported Sexual Assaults at Massage Envy</a></li> </ul> <!-- google_ad_section_end --> http://www.bluemaumau.org/16240/massage_envy_ceo_responds_media_frenzy_nightmare_regarding_sexual_assault_claims_franchisee_spas#comments Legal claim & allegation CEO Joseph C Magnacca commitment to safety Massage Envy litigation Roark Capital sexual assault Fri, 08 Dec 2017 00:26:03 +0000 Janet Sparks 16240 at http://www.bluemaumau.org Franchise Employment Robust in November http://www.bluemaumau.org/16239/franchise_employment_grows_robustly_november_2017 <!-- google_ad_section_start --><p><img alt="Franchise hiring, interviews on Tuesday" src="https://c1.staticflickr.com/9/8533/29016898162_c2ca80d90c_c.jpg" style="width: 320px; height: 180px; float: right; margin-left: 5px; margin-right: 5px;" />Hiring by franchised establishments increased by a robust 28,300 jobs from October to November, according to the ADP National Franchise Report that was released yesterday. That follows October&#39;s 16-month high of 31,100 hires for franchised businesses. These high employment increases show a continuing positive trend, but it also represents a labor market that has become considerably tighter for employers seeking talent.</p> <!--break--><!--break--><p>Franchised restaurants and car dealerships, which are the first and second largest sector of franchised businesses, increased the most in the raw number of hires. Hotels, or what ADP categorizes as accommodations, increased a modest 100 jobs after three months of job cuts.</p> <p>The nation&rsquo;s overall private sector employment had good news as well. It grew by 190,000 jobs from October to November, according to the employment report produced by the ADP Research Institute in collaboration with Moody&rsquo;s Analytics. The report is derived from ADP&rsquo;s actual payroll data.</p> <p>Mark Zandi, chief economist of Moody&rsquo;s Analytics, said, &ldquo;The job market is red hot, with broad-based job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology, brick-and-mortar retailing being the best example. There is a mounting threat that the job market will overheat next year.&rdquo;</p> <p>Private sector small business employment, which are businesses with under 50 employees, grew by 50,000 jobs in November. However, the goods-producing sector of small businesses dropped in hires by 3,000.</p> <p>&ldquo;The labor market continues to grow at a solid pace,&rdquo; said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. &ldquo;Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase, it will become increasingly difficult for employers to attract and retain skilled talent.&rdquo;</p> <hr /> <p class="rtecenter"><img alt="U.S. Added 28,300 Franchise Jobs in November, According to ADP National Franchise Report " src="http://www.adpemploymentreport.com/2017/November/NFR/images/infographic/main/NFRNovember2017_infographic.gif" style="border-width: 0px; border-style: solid; width: 598px; height: 789px;" /></p> <!-- google_ad_section_end --> http://www.bluemaumau.org/16239/franchise_employment_grows_robustly_november_2017#comments The Economy Thu, 07 Dec 2017 15:05:29 +0000 Don Sniegowski 16239 at http://www.bluemaumau.org Potbelly Recruits New CEO, Anticipates Franchisee Changes http://www.bluemaumau.org/16234/potbelly_recruits_new_ceo_anticipates_changes_franchisees <!-- google_ad_section_start --><p><img alt="Potbelly" src="https://c1.staticflickr.com/1/681/22427075515_196c1f6d51_n.jpg" style="width: 320px; height: 213px; float: right; margin-left: 5px; margin-right: 5px;" />Potbelly Corporation [NASDAQ: PBPB] announced last Friday that it has appointed Alan Johnson to be its president, chief executive officer and member of its board of directors. </p> <!--break--><!--break--><p> Johnson replaces interim CEO Michael Coyne, who will continue to serve as the company&rsquo;s chief financial officer.</p> <h3><span style="color:#800000;"><strong>Anticipates type of franchisees at Potbelly to change</strong></span></h3> <p>The Chicago-based company, which has 426 of its own sandwich shops and has franchised 56 locations, has been down on its luck. After another bad quarter, Potbelly announced in May that CEO Aylwin Lewis would leave the company in August. In his place, Michael Coyne took the helm as interim CEO. After a poor showing in its second quarter, the firm announced that it would consider various strategic alternatives, which included finding a buyer to acquire the chain of sandwich shops.</p> <p>In October&nbsp;activist Joseph Boehm of Ancora Advisors&nbsp;LLC was added to Potbelly&rsquo;s board of directors to accelerate refranchising. That is to say, to push Potbelly to sell the chain&rsquo;s many company-owned stores to franchise owners, getting cash to buy back stock, driving up share prices.</p> <p>In its third quarter that ended September 24, 2017, Potbelly had a net loss and company-operated comparable store sales decreased 4.8 percent.</p> <p>There seems to be change in the air on the nature of owners in the small but increasing number of franchises in the Potbelly system. One analyst, observing&nbsp;that Potbelly is now&nbsp;&ldquo;shifting into more franchise-driven development,&rdquo; wanted to know&nbsp;how existing franchisees are accepting the new store prototype that Potbelly is developing. Interim CEO Michael Coyne indicated that there were two franchisees who wanted to be the ones to pioneer the prototype when it was done. He added that he expects a change in the type of franchise owner at Potbelly. He and others at Potbelly had been speaking with franchisee groups, franchise brokers and lenders in hopes of finding franchise buyers for their company stores. The franchisor wants to do larger deals, presumably speaking of larger multiunit franchisees. &ldquo;We have talked to our existing franchisees, which may be a different profile of those that we talk to in the future,&quot; said Potbelly&#39;s Coyne.</p> <h3><strong><span style="color:#800000;">Johnson has led BevMo, Pizza Hut and other firms</span></strong></h3> <p>Now comes the firm&#39;s newest CEO, Alan Johnson. He has experience leading restaurant operations, finance and international expansion. Johnson served as CEO of BevMo, a specialty retailer of alcoholic beverages. He was chief operating officer and chief financial officer for PepsiCo&rsquo;s eastern Europe restaurant division and international strategic planning director for Pizza Hut International. He&nbsp;was also the COO of Regal Theaters (formerly known as Hoyts Cinemas) and senior vice president and general manager for Walt Disney Parks &amp; Resorts.</p> <p>The incoming chief executive indicated that he wanted to hear from franchisees about the franchisor&rsquo;s future. &ldquo;I am enthusiastic about supporting the board&rsquo;s evaluation of strategic options to maximize shareholder value and look forward to engaging with our shareholders, employees, franchisees, and customers as we chart the optimal future course for Potbelly,&rdquo; said Johnson.</p> <p>The chairman reassured shareholders and employees that Johnson is the right person for the job ahead. &ldquo;I am confident Alan&rsquo;s exceptional analytical and leadership skills make him an ideal choice for Potbelly, its shareholders, and employees,&rdquo; said Pete Bassi, chairman of the board of Potbelly Corporation. &ldquo;He is a great cultural fit for our company and the Potbelly brand. Mike Coyne&rsquo;s material contributions as interim CEO have been invaluable and we look forward to having Alan partner with Mike to build value for our shareholders.&rdquo;</p> <p>Potbelly expects its stores to continue to decrease in same-restaurant sales in the &ldquo;mid-single digit&rdquo; range for the entire year. However, it expects to increase in net number of restaurant units.</p> <hr /> <p>Related reading:</p> <ul> <li><a href="http://www.bluemaumau.org/15925/potbelly_corporation_ceo_leave">Potbelly CEO Lewis to Leave</a> | BMM May 31</li> <li><a href="http://www.bluemaumau.org/16025/potbelly_q2_comps_drop_considers_selling_firm">Potbelly considers selling the firm as Q2 shop comps drop</a> | BMM Aug 7</li> <li><a href="https://www.thestreet.com/story/14334364/1/odds-of-potbelly-sale-increase-with-activist-appointment.html">With activist appointment, Potbelly&rsquo;s strategic review committee could push for a sale</a> | The Street</li> </ul> <!-- google_ad_section_end --> http://www.bluemaumau.org/16234/potbelly_recruits_new_ceo_anticipates_changes_franchisees#comments Leadership change Tue, 05 Dec 2017 19:09:50 +0000 Don Sniegowski 16234 at http://www.bluemaumau.org