http://www.bluemaumau.org/frontpagestories en Franchisee's Fraudulent Misrepresentation Claims Dismissed because of Franchise Contract Disclaimer http://www.bluemaumau.org/14958/franchisee%E2%80%99s_fraudulent_misrepresentation_claim_dismissed_based_disclaimer <!-- google_ad_section_start --><p><img alt="" src="http://www.bluemaumau.org/sites/default/files/resize/021016_2057_Franchisees1-330x315.jpg" style="float: right; height: 315px; width: 330px; margin-left: 5px; margin-right: 5px;" width="330" height="315" />CHICAGO - A district court in Illinois granted a franchisor's motion to permanently dismiss a franchisee's counterclaim that he was given bogus financials related to how much he could expect to make in purchasing a franchise.</p> <!--break--><!--break--><p> The judge ruled that because he had agreed to the franchisor&#39;s disclaimer that no oral or written financial statements had been made by company officials, a requirement of the franchise agreement, the franchisor was protected from any impending fraud claims.</p> <p>In <em>Fantastic Sams Salons Corp. v. PSTEVO, LLC</em>, franchisee Jeremy Baker alleges that he met with the vice president and regional director. At the meeting he was given various financial disclosure documents that showed he would only need three months of working capital to open a franchise, and that he could expect the franchise to be profitable thereafter. The shop owner affirmed that the disclosure documents were consistent with oral representations made by Fantastic Sams&#39; agents and with statements published on its website. He alleges that the company executives, Tom Boitz and David Boitz knew the statements were false and that it would take longer than the three months for the salon to become profitable. Baker claims the misrepresentations were material in that his company relied on them in deciding whether to enter into the franchise agreement.</p> <p>Fantastic Sams argued that the franchisee&#39;s claims are barred by two disclaimers in the agreement and signed by both parties. Those disclaimers stated: (1) &quot;No oral, written or visual claim or representation which contradicted the disclosure document was made to me, except,&quot; and (2) &quot;No oral, written or visual claim or representation which stated or suggested any sales, income, or profit levels was made to me, except.&quot; After each disclaimer, the franchise owner wrote the word &quot;none&quot; and initialed his response.</p> <p>Baker does not dispute that he wrote &quot;none&quot; by the disclaimers. Rather, he argues that the disclaimers do not apply to the particular misrepresentations alleged. Specifically, he says they do not apply to the particular misrepresentations alleged. &quot;In other words, the alleged misrepresentations made by Boitz and Fantastic Sams&#39; website were consistent with, rather than contradicted by, the disclosure documents,&quot; the judge stated. He agreed that the first disclaimer does not bar the franchisee&#39;s fraudulent misrepresentation claim.</p> <p>Regarding the second disclaimer, Baker argued that it does not preclude his fraudulent misrepresentation claim because his claim is premised on &quot;minimum viability,&quot; not guaranteed income. The court disagreed saying Baker&#39;s fraud counterclaim is clearly premised on the assertion that Fantastic Sams misrepresented projected profit levels that he could expect to be profitable three months after opening his salon.</p> <p>The court found that the first disclaimer was not effective to bar the franchisee&#39;s claims because the alleged misrepresentation made by Fantastic Sams&#39; agents and contained on its website was consistent with, rather than contradicted by, the disclosure documents. However, Fantastic Sams successfully argued that the second disclaimer expressly disclaimed the representation on which Baker had allegedly relied, and the court dismissed the claim with prejudice.</p> <p>Fantastic Sams was represented by Cheng Cohen in Chicago. Jeremy Baker and PSTEVO, LLC were represented by Katina S. Haloulos.</p> <hr /> <p>Case: <a href="http://www.leagle.com/decision/In%20FDCO%2020160115S17/FANTASTIC%20SAMS%20SALONS%20CORP.%20v.%20PSTEVO,%20LLC" target="_blank">Fantastic Sams Salons Corp.v. PSTEVO, LLC, Jeremy Baker</a> Leagle.com&nbsp;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14958/franchisee%E2%80%99s_fraudulent_misrepresentation_claim_dismissed_based_disclaimer#comments Legal judgment & dispute resolution franchise contract trap franchisor disclaimers fraudulent misrepresentation integration clause Wed, 10 Feb 2016 20:58:04 +0000 Janet Sparks 14958 at http://www.bluemaumau.org Restaurant Delivery Grows by Double Digits http://www.bluemaumau.org/14955/restaurant_delivery_grows_doubledigits <!-- google_ad_section_start --><p>CHICAGO &mdash;Food delivery traffic, outside of pizza delivery, has grown by 33 percent since 2012, according to foodservice researcher the NPD Group. Meanwhile, traditional quick service restaurant (QSR) pizza delivery is on the decline. Foodservice delivery options outside of pizza are still relatively small, with roughly six million delivery-related visits in the past year. But there is little doubt that the growth rate for delivery categories outside of QSR pizza will continue on a strong growth path. All types of restaurants are increasingly partnering with delivery services, such as Eat24, Grub Hub, DoorDash and small Nashville-based franchisor Doorstep Delivery.</p> <p>As UberEATS and Amazon Prime Now restaurant delivery continues to roll out nationally, delivery will see significant growth. NPD forecasts that off-premise foodservice will continue to outpace overall restaurant industry traffic growth over the next decade.</p> <p>&quot;Consumers want the &#39;dining out&#39; experience of quality food, but they&#39;re saving money and time by having food delivered to their homes,&quot; says Bonnie Riggs, NPD&#39;s restaurant industry analyst. &quot;Similar to the consumer value online direct-to-door shopping fulfills, there is the appeal of being in the comfort of their own homes, and not having to deal with the &#39;hassle&#39; of the outside world.&quot;</p> <p>In-home meal kits, whether meals to cook from scratch or just assembled and brought to the home, are a more recent offering than foodservice delivery. These kits appeal to consumers wanting fresh, authentic food, and control over what they&#39;re eating, says NPD. Small franchisor Dream Dinners is one such example. Other franchisors have come and gone. Meal kit delivery services tend to be placed in urban areas. They are not nearly as mainstream as foodservice deliveries.</p> <p>&quot;I don&#39;t believe we&#39;ll see mainstream adoption of home meal kits, like we&#39;ve seen with foodservice delivery,&quot; says Darren Seifer, NPD&#39;s food and beverage industry analyst. &quot;Meal kit consumers have more expendable income and primarily live in major metro areas. There is definitely a market for these services; it&#39;s just not nearly as big as foodservice delivery.&quot;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14955/restaurant_delivery_grows_doubledigits#comments trends Tue, 09 Feb 2016 19:16:48 +0000 Don Sniegowski 14955 at http://www.bluemaumau.org Franchise Employment Doubles the Pace of Small Business; Leisure Loses http://www.bluemaumau.org/14948/franchise_employment_doubles_pace_small_business_leisure_loses <!-- google_ad_section_start --><div class="photoright"><img alt="McDonald's franchise hiring" src="https://c2.staticflickr.com/4/3887/14781369725_515df1691c_c.jpg" style="width: 330px; height: 160px;" /></div> <p>ROSELAND, NJ&mdash; Private-sector jobs in American franchised establishments increased by 20,000 in January of 2016, according to the ADP National Franchise Report. </p> <!--break--><!--break--><p> Those figures show January as being somewhat weaker in franchise hirings compared to December of last year. However, over the past twelve months franchise establishments have hired at double the pace of small businesses, and over double the rate compared to all U.S. nonfarm private employment. Total U.S. nonfarm private sector employment was up a robust 205,000 for the month.</p> <p>Despite snowstorms <a href="http://www.autonews.com/article/20160202/RETAIL01/160209973/snowstorms-drive-sales-down-0-4-saar-rises-to-17-55-million">pushing auto sales down by 0.4 percent in January</a> compared to a year before, auto and parts dealers&#39; employment numbers were up for the month.</p> <p>&quot;Franchise employment growth, though not as strong as the previous month, remained at double the pace of the labor market overall for the past twelve months,&quot; said Ahu Yildirmaz, vice president and head of the ADP Research Institute. &quot;Auto Parts and Dealers and Restaurants, two segments that help signal consumer spending trends, added the most jobs.&quot;</p> <p>As far as total year-over-year growth rate, personal service is the fastest growing sector for hiring, growing 10 percent. At the bottom of the list are leisure franchises, such as fitness centers, bowling alleys and other recreational centers, which shrank by 4 percent in employees hired over the past twelve months. For the month of January, business services and education, which includes learning centers, dropped the most at -0.6 and -0.4 percent compared to the month before.</p> <p>&quot;Job growth remains strong despite the turmoil in the global economy and financial markets,&quot; said Mark Zandi, chief economist of Moody&#39;s Analytics, about the overall economy. &quot;Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust. The U.S. economy remains on track to return to full employment by mid-year.&quot;</p> <hr /> <h2>The numbers:</h2> <p>January 2016</p> <table> <tbody> <tr style="height: 40px; background: #9bbb59"> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>Industry</strong></span></td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>Monthly Employment Change</strong></span></td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>Employment Level (x1000)</strong></span></td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>Monthly Growth Rate (%)</strong></span></td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>Contribution&nbsp;<br /> Growth %</strong></span></td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"> <p><span style="color:white"><strong>Year-Over-Year Growth Rate (%)</strong></span></p> </td> <td rowspan="2" style="padding-left: 7px; padding-right: 7px; border-top: solid 2.25pt; border-left: none; border-bottom: solid 2.25pt; border-right: none"><span style="color:white"><strong>12 Month Average Growth Rate (%)</strong></span></td> </tr> <tr style="height: 21px"> </tr> <tr style="height: 60px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Total U.S. NonFarm Private Employment *</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>205,000</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>121,063</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>&nbsp;&nbsp;</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>2.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> </tr> <tr style="height: 40px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Small Business (1-49 Employees)</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>79,000</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>50,740</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>&nbsp;&nbsp;</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>2.2%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> </tr> <tr style="height: 40px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Total U.S. Franchise Employment</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>20,000</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>8,795</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>100%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>4.4%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.4%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Restaurants</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>18,840</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>4,506</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.4%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>94%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>5.0%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.4%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Auto Parts and Dealers</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>3,810</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>1,377</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.3%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>19%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>7.9%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.6%</p> </td> </tr> <tr style="height: 40px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Gasoline Stations and Auto Repair</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>1,960</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>430</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>10%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.3%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.0%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Personal Services</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>650</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>120</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>3%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>10.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.8%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Food Retailers</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>440</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>186</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>2%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>4.2%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.3%</p> </td> </tr> <tr style="height: 40px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Building Material and Garden Equipment</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>240</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>50</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>1%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>6.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Professional Services</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>150</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>127</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.1%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>1%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>2.8%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Manufacturing</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>120</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>23</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>1%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.4%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.0%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Real Estate</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>80</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>92</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.1%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>1.9%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.2%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Rental</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-10</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>35</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>3.3%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.3%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Personal Care Retailers</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-20</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>71</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.0%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>5.6%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.5%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Leisure</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-180</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>88</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-0.2%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-1%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-4.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-0.3%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Education</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-280</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>65</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-0.4%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-1%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-2.3%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-0.2%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Other</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-470</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>432</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-0.1%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>-2%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>1.0%</p> </td> <td style="padding-left: 7px; padding-right: 7px"> <p>0.1%</p> </td> </tr> <tr style="height: 20px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none"> <p><span style="color:white"><strong>Accommodations</strong></span></p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-2,480</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>714</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-0.3%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>-12%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>1.0%</p> </td> <td style="background: #d8d8d8; padding-left: 7px; padding-right: 7px"> <p>0.1%</p> </td> </tr> <tr style="height: 21px"> <td style="background: #9bbb59; padding-left: 7px; padding-right: 7px; border-left: none; border-bottom: solid 2.25pt"> <p><span style="color:white"><strong>Business Services</strong></span></p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>-2,820</p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>479</p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>-0.6%</p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>-14%</p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>2.6%</p> </td> <td style="padding-left: 7px; padding-right: 7px; border-bottom: solid 2.25pt"> <p>0.2%</p> </td> </tr> </tbody> </table> <p><center><img alt="<br /> U.S. Added 20,000 Franchise Jobs in January, According to ADP National Franchise Report<br /> " border="0" height="1598" src="http://www.adpemploymentreport.com/2016/January/NFR/images/infographic/main/NFRJanuary2016_infographic.gif" width="598" /></center></p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14948/franchise_employment_doubles_pace_small_business_leisure_loses#comments The Economy Thu, 04 Feb 2016 19:00:06 +0000 Don Sniegowski 14948 at http://www.bluemaumau.org When Chipotle Was Down, Young Adults Upped Their Visits http://www.bluemaumau.org/14941/when_chipotle_was_down_young_adults_increased_visits <!-- google_ad_section_start --><p><img alt="" src="https://c2.staticflickr.com/6/5811/22584598482_8b51fba54f_n.jpg" style="width: 329px; height: 219px; float: right; margin-left: 5px; margin-right: 5px;" />CHICAGO&mdash;Chipotle&#39;s recent series of food safety outbreaks rattled its customers and visits declined. But the chain&#39;s strong base of teens and young adult customers continue to support the fast casual chain. </p> <!--break--><!--break--><p> In the quarter ending in December, during which several of the outbreaks occurred, total visits to Chipotle were down 5 percent compared to a 19 percent traffic gain the same quarter a year ago, finds the NPD Group&#39;s ongoing foodservice market research. However, teens and young adults increased their visits to the Mexican fast casual chain by double-digits last year.</p> <p>&quot;Young adults represent the largest share of Chipotle&#39;s overall traffic,&quot; says Bonnie Riggs, NPD Group&#39;s restaurant industry analyst. &quot;Their willingness to overlook any food safety concerns to eat at Chipotle could be a result of unabashed loyalty or lack of awareness.&quot;</p> <p>NPD Group continually tracks U.S. consumer awareness and concern about food safety outbreaks. It often sees heightened awareness and concern of an outbreak that corresponds with heavy news coverage of the incident. After the news cycle quiets down, awareness and concern over the outbreak declines.</p> <p>As for those Chipotle customers who have deserted the brand, they appear to have scattered to various quick service or fast casual outlets for their food. There is no particular outlet or chain that is the clear recipient of the chain&#39;s former customers, based on an analysis using NPD Group&#39;s receipt harvesting service, Checkout Tracking. Chains with the most units, like McDonald&#39;s, Burger King or Wendy&#39;s, had the opportunity to attract more customers from among those who had turned their backs on Chipotle.</p> <p>&quot;What our research tells us is that Chipotle has a strong loyal base from which to build its business back up relatively quickly,&quot; says Riggs. &quot;To win back the trust of their former customers, Chipotle will need to continually communicate all of the ways in which they are preventing any future outbreaks and prove to them that they able to deliver on their &#39;food with integrity&#39; promise.&quot;</p> <hr /> <p><strong>Related reading</strong>:</p> <p><a href="http://bluemaumau.org/chipotle_better_safe_sorry" target="_blank">Better Safe than Sorry, Chipotle</a></p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14941/when_chipotle_was_down_young_adults_increased_visits#comments food Mon, 01 Feb 2016 16:13:47 +0000 Don Sniegowski 14941 at http://www.bluemaumau.org Area Developer Claims Tilted Kilt Caused $20M in Damages http://www.bluemaumau.org/14933/area_developer_claims_titled_kilt_caused_20m_damages <!-- google_ad_section_start --><p><img align="right" alt="" src="http://www.bluemaumau.org/sites/default/files/012816_2322_AreaDevelop1.jpg" width="396" height="297" />CHICAGO &ndash; An area developer of Tilted Kilt Pub &amp; Eatery is striking back at the chain by claiming it was making unlawful financial performance representations to prospective franchisee, asking the court to terminate its development agreement.</p> <p>The Rolling Meadows, Illinois-based company, 1220 LLC, filed its counterclaims against the franchisor on January 13. It alleges that because Tilted Kilt has undermined its ability to perform as an area developer &quot;in practically every possible way,&quot; it had caused it to suffer more than $20 million in damages. In court documents 1220 LLC states, &quot;Tilted Kilt has evaded the spirit of the bargain, lacked diligence, and defeated 1220&#39;s justifiable expectations.&quot; The developer also asserts that the franchisor has been arbitrary, capricious and unreasonable, and has abused its power under the terms of their contract.</p> <p>1220 LLC is owned and operated by the Baroud brothers&ndash;Robert, Emil, Anthony and Peter&ndash;who signed a 25-year development agreement on July 2, 2007, requiring them to pay $150,000 for an initial franchise fee. Under their agreement they were allowed to sell and develop franchises in northern Illinois, southern Wisconsin and northwest Indiana in return for revenue through various franchise-related fees, and were entitled to a 10-year renewal contract. The brothers state in legal documents that Tilted Kilt has breached its development agreement &quot;through a scheme to terminate its business, coveting the strong revenue stream it is entitled to.&quot;</p> <p>Tilted Kilt filed a complaint against the Baroud brothers and 1220 LLC on November 17, 2015 through attorney Fredric &quot;Ric&quot; Cohen of Cheng Cohen. They allege the development firm repeatedly violated both state and federal law in connection with the offer and sale of Tilted Kilt franchises within their territory. The company claims two partners of 1220 LLC made the unlawful financial performance representations to prospective franchisees to induce them into signing franchise agreements, all in order to collect part of the development fee and ongoing royalties paid by the franchisees. That business deal in Wisconsin led to the new franchise owners opening locations in Gurnee, Vernon Hills and Kenosha, causing them to &quot;sustain significant losses.&quot; Tilted Kilt blames the area developer for giving the bogus earnings claims.</p> <p>Tilted Kilt asked the court to allow it to terminate its development agreement and for relief consistent with the declaratory judgment sought, including an award for damages it has incurred as well as liquidated damages and attorney fees.</p> <p>In its memorandum in support of its motion to dismiss the lawsuit, the area development firm argues that Tilted Kilt and 1220 LLC had agreed that the franchisor could only have the right to terminate their agreement for breach of contract under 11 defined circumstances. Tilted Kilt would then give 1220 LLC notice of breach and an opportunity to cure. But the breach the company is claiming is not one of the 11 circumstances and, therefore, it has no right to assert the claim. The parties also agreed that in the event of a breach by 1220 LLC, Tilted Kilt could terminate the contract, but only if the area developer does not correct the violation within a 30-day period and after written notice is delivered.</p> <p>Represented by franchise attorney Carmen Caruso, the Baroud brothers filed their counterclaims on January 13, 2016, stating Tilted Kilt Franchising Operating is subject as a matter of law to an implied covenant of good faith and fair dealing. That prohibits either party from engaging in a variety of conduct that may be characterized as involving &quot;bad faith&quot; because they violate community standards of decency, fairness or reasonableness.</p> <p>The counterclaims assert that Tilted Kilt made grossly unreasonable or bad faith decisions as to the &quot;products, services, equipment and supplies that franchisees are required to purchase, resulting in the franchisees experiencing higher costs and receiving less value for their money.&quot; It also claims the company abused vendor rebates, placing franchisees at a severe competitive disadvantage. And, documents state, Tilted Kilt has failed to develop, implement or enforce effective advertising programs at the national or local levels, which their development agreement dictates.</p> <p>Attorney Caruso said he has not had any precedent in getting the receiver appointed in a franchising case, that this would be a first for him. But he said, &quot;I think it falls under recognized equitable principles. It would spring from a recognition that franchisees and area developers have vested interests in goodwill of the brand and we should be able to protect the brand from dissipation of goodwill.&quot;</p> <p>Franchisor attorney Cohen did not return a phone call to give comment or answer questions about the case.</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/#1 Complaint for Declaratory Judgment and Further Relief (002).pdf">#1 Complaint for Declaratory Judgment and Further Relief (002).pdf</a></td><td>173.78 KB</td> </tr> <tr class="even"><td><a href="http://www.bluemaumau.org/sites/default/files/#7 Memorandum in Support of Motion to Dismiss.pdf">#7 Memorandum in Support of Motion to Dismiss.pdf</a></td><td>2.51 MB</td> </tr> <tr class="odd"><td><a href="http://www.bluemaumau.org/sites/default/files/Tilted.Kilt_.Counterclaim.01.13.2016.pdf">Tilted.Kilt_.Counterclaim.01.13.2016.pdf</a></td><td>2.5 MB</td> </tr> </tbody> </table> http://www.bluemaumau.org/14933/area_developer_claims_titled_kilt_caused_20m_damages#comments Legal claim & allegation area developer Baroud brothers Carmen Caruso lawsuit Tilted Kilt Thu, 28 Jan 2016 23:22:55 +0000 Janet Sparks 14933 at http://www.bluemaumau.org Marriott Says 2015 Looks Strong http://www.bluemaumau.org/14929/marriott_says_2015_looks_strong <!-- google_ad_section_start --><p>BETHESDA, Md.&ndash; Marriott International, Inc. (NASDAQ: MAR) said yesterday that 2015 was an outstanding year for the franchisor, with contracts signed for hotels totaling 104,000 rooms during the year.</p> <p>From the franchisor&#39;s perspective, it opened 300 hotels worldwide in 2015, accounting for nearly 52,000 rooms. This includes 9,600 rooms through its acquisition of Delta Hotels &amp; Resorts.&nbsp;</p> <p>&quot;The contracts we signed in 2015 encompass more than $15 billion of investment by our owners, and represent a tremendous vote of confidence in Marriott&#39;s brands,&quot; said Arne Sorenson, Marriott&#39;s president and chief executive officer. &quot;Marriott&#39;s new signings reflect broadly distributed growth across the company&#39;s global hotel portfolio, and demonstrate the extraordinary appeal of Marriott&#39;s brands to customers, industry-leading innovation, significant scale, highly effective systems, and the best associates in the business &ndash; all of which attract hotel owners and lenders to our portfolio.&quot;</p> <p>In November 2015 Marriott signed a binding agreement to acquire Starwood Hotels &amp; Resorts Worldwide (&quot;Starwood&quot;) through a merger transaction. Marriott expects to close the transaction in mid-2016.</p> <p>Marriott will release its fourth quarter earnings for 2015 on Thursday, February 18.</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14929/marriott_says_2015_looks_strong#comments hotel Wed, 27 Jan 2016 11:58:55 +0000 Don Sniegowski 14929 at http://www.bluemaumau.org IFA Takes Fight against Seattle Wage Hike to U.S. Supreme Court http://www.bluemaumau.org/14925/ifa_takes_fight_against_seattle_wage_hike_us_supreme_court <!-- google_ad_section_start --><div class="photoright"><img alt="Seattle minimum wage" src="https://c2.staticflickr.com/4/3680/12059302904_ca4c03434c_c.jpg" style="width: 330px; height: 186px;" /> <div class="caption">Seattle march for $15 wage on ML King Day in 2014. Photo/<a href="https://www.flickr.com/photos/pnwbot/12059302904" target="_blank">pnwbot</a></div> </div> <p>WASHINGTON &ndash; The International Franchise Association announced yesterday that it had now taken its argument against Seattle&#39;s new $15 an hour minimum wage hike to the <a href="http://www.franchise.org/sites/default/files/IFA%20Petition%20for%20Cert.pdf" target="_blank"><span style="color:#003b6e; background-color:white"><strong>U.S. Supreme Court</strong></span></a> because it discriminates against franchise owners.</p> <!--break--><!--break--><p>The IFA filed its lawsuit against the city in June of 2014, with five Seattle franchisees also named as plaintiffs. It was seeking to block portions of the city&#39;s law, arguing that it was treating franchisees as large, national companies rather than small, locally-owned businesses.</p> <p>The association lost. After a federal judge denied the association&#39;s first request for the injunction last March, Seattle&#39;s first mandatory minimum wage increase went into effect on April 1, 2015.</p> <p>The new law states that businesses with fewer than 500 employees will have seven years to reach $15 for all workers. But large businesses and franchises would only have three years and an additional one-year grace period if they provide health insurance to their workers. The judge explained that the IFA &quot;did not raise serious questions going to the merits on any of its claims, nor did it show that an injunction is in the public interest.&quot;</p> <p>&quot;The controlling Supreme Court precedent and the conflict among the decisions of the federal circuit courts have proven that a Supreme Court review of the Ninth Circuit&#39;s decision is the appropriate next step,&quot; said IFA President &amp; CEO Robert Cresanti. &quot;Our appeal has never sought to prevent the City of Seattle&#39;s wage law from going into effect.&nbsp; Our appeal to the Supreme Court will be focused solely on the discriminatory treatment of franchisees under Seattle&#39;s wage law and the motivation to discriminate against interstate commerce.&quot;</p> <p>IFA said yesterday that the Employment Policies Institute issued a&nbsp;<a href="https://www.epionline.org/studies/whats-in-a-brand-name/?utm_content=buffer32f88&amp;utm_medium=social&amp;utm_source=twitter.com&amp;utm_campaign=buffer" target="_blank">report last week</a>&nbsp;showing that raising the minimum wage to $15 an hour will hurt franchise businesses disproportionately compared to non-franchise businesses.&nbsp;The association said, &quot;The survey found that 64 percent of franchise businesses would likely reduce hours compared to 46 percent of non-franchise businesses. The EPI survey concluded that there is no rationale behind treating franchise businesses differently than other small businesses. More than half of those surveyed, 65 percent of franchise businesses, said would likely need to reduce staff in response to a $15 minimum wage.&quot;</p> <p>News reports today stated that Seattle Mayor Ed Murray, a Democrat who championed the wage hike, made this comment: &quot;Rather than investing in lawyers to prevent workers from earning higher wages, it is time for these large businesses to begin investing in a higher minimum wage for their employees.&quot;</p> <p>Seattle is not the only city making a change to minimum wage laws. Boston&#39;s mayor now says he backs the $15 an hour minimum wage. &quot;We&#39;re starting to see the momentum going that way, so I felt it was the appropriate time,&quot; he stated. New York Governor Andrew Cuomo also made his decision. &quot;Last year, I proudly raised the minimum wage for airport workers to $10.10 per hour and this year, I&#39;m fighting for $15. Now the Port Authority must get on board and do the same,&quot; Gov. Cuomo declared. And in California, Long Beach and Santa Monica have also made the move to the higher wage.</p> <p>IFA said it expects the U.S. Supreme Court to decide in the spring whether it would take the case.</p> <hr /> <p><strong>Related Reading</strong>:</p> <ul> <li><span style="color:#7a7a7a; background-color:white">&nbsp;<a href="http://www.franchise.org/sites/default/files/IFA%20Petition%20for%20Cert.pdf" target="_blank"><span style="color:#003b6e"><strong>IFA Petition for a Writ of Certiorari</strong></span></a></span> <strong> </strong></li> <li><a href="http://www.bluemaumau.org/14703/ifa_appeal_rejected_again_seattle%E2%80%99s_15_minimum_wage_law" target="_blank">IFA Appeal Rejected Again on Seattle&#39;s $15/Hour Wage Law</a></li> <li><a href="http://www.seattletimes.com/business/economy/franchise-group-appeals-seattle-wage-law-to-supreme-court/" target="_blank">Franchise Group Appeals Seattle Labor Law to Supreme Court</a></li> </ul> <!-- google_ad_section_end --> http://www.bluemaumau.org/14925/ifa_takes_fight_against_seattle_wage_hike_us_supreme_court#comments Legal claim & allegation Fast-food worker strikes Seattle minimum wage $15 an hour SEIU U.S. Supreme Court Tue, 26 Jan 2016 23:29:12 +0000 Janet Sparks 14925 at http://www.bluemaumau.org California Court Orders Arbitration of Franchisee’s Employment Claims http://www.bluemaumau.org/14920/california_court_orders_arbitration_franchisee%E2%80%99s_employment_claims <!-- google_ad_section_start --><p>A federal court in California granted last December a franchisor&#39;s motion to compel arbitration in a putative class action lawsuit filed by one of its franchisees. In <italics><em>Jacobson v. Snap-on Tools Co</em>.</italics>, Jacobson argued that his work was so closely regulated by Snap-on Tools, a franchisor of automotive and shop equipment, that he should be treated as an employee under California law, rather than as an independent franchisee. </p> <!--break--><!--break--><p> He also argued that Snap-on Tools failed to properly pay him for employment-related expenses, overtime, and meal and rest breaks. Snap-on Tools responded by moving to compel arbitration of the dispute based on the arbitration clause in its standard franchise agreement, which provided that any controversy relating to the franchisee&#39;s business or the performance of the agreement would be subject to binding arbitration.</p> <p>The court held that the arbitration clause was valid and enforceable, and it ordered Jacobson to pursue his claims for violation of California employment laws and unfair business practices in arbitration. Jacobson had argued that the arbitration clause was procedurally and substantively unconscionable because he had not read it, it was hidden, and Snap-on Tools failed to make him aware of it. The court rejected each of those arguments, finding that the arbitration provision was clear and visible and that Snap-on Tools was not required to call the provision to Jacobson&#39;s attention. The court did, however, find merit in Jacobson&#39;s argument that the fee-splitting provision contained in the franchise agreement was unconscionable under the circumstances of this case because it only obligated Snap-on Tools to pay &quot;expenses up to $7,500 for demands less than $75,000.&quot; The court also exempted Jacobson&#39;s representative claim under the Private Attorneys General Act from arbitration because the franchise agreement specifically exempted class actions from arbitration.</p> <p>Case:&nbsp;Jacobson v. Snap-on Tools Co., 2015 WL 8293164 (N.D. Cal. Dec. 9, 2015). Source: GPMemorandum (Gray Plant Mooty)</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14920/california_court_orders_arbitration_franchisee%E2%80%99s_employment_claims#comments Legal judgment & dispute resolution 2015 WL 8293164 (ND Cal.) arbitration clause California employment law franchise putative class action Jacobson v Snap-on Tools Co. Snap-on Tools Tue, 26 Jan 2016 03:57:54 +0000 Janet Sparks 14920 at http://www.bluemaumau.org Jamba Names Pace as CEO; Federico as Chair http://www.bluemaumau.org/14911/jamba_hires_pace_ceo_names_federico_chair <!-- google_ad_section_start --><div class="photoright"><img alt="Jamba new CEO Dave Pace" src="http://www.bluemaumau.org/sites/default/files/resize/DavePace-330x330.jpeg" style="width: 330px; height: 330px;" width="330" height="330" /> <div class="caption">Jamba&#39;s new CEO,&nbsp;Dave Pace. photo/jamba</div> </div> <p>EMERYVILLE, Calif.&mdash; Jamba Juice (NASDAQ:JMBA) announced this morning that it has named David A. Pace as the company&#39;s new chief executive officer. He will begin on March 14. Jamba has also appointed existing director Richard L. Federico to chairman of the board. He will remain an independent director on the board.</p> <!--break--><!--break--><p>The change of the guard for the franchisor of 720 franchised fruit smoothie quick service restaurants in the United States comes after its former CEO James White retired in October and after the overextended company announced two weeks ago that <a href="http://www.bluemaumau.org/14843/jamba_forced_downsize_credit_uses_franchisee_ad_funds_collateral" target="_blank">Wells Fargo Bank had downsized its line of credit</a>.</p> <p>New CEO Pace has served as a director on the board of Jamba since 2012. He has been&nbsp;president of Carrabba&#39;s Italian Grill, one of the holdings of Bloomin&#39; Brands, and&nbsp;was also chief resource officer, where he was in charge of real estate development and human resources. He has held executive positions with Starbucks, PepsiCo and Yum&nbsp;Brands. Pace graduated with a Bachelor of Science in industrial and labor relations from Cornell University.</p> <p>&quot;Dave emerged from a deep pool of highly skilled candidates as the clear choice to serve as Jamba&#39;s next CEO,&quot; said Andrew Heyer, lead independent director of the board. &quot;His strong track record of financial and operational success, most recently helping Carrabba&#39;s solidify its position as Casual Dining&#39;s #1 Italian restaurant concept, will prove vital in Jamba&#39;s continued quest to create extraordinary value for our customers, shareholders and employees.&quot;</p> <p>Regarding its new chairman Federico, lead independent director Heyer said, &quot;Rick&#39;s reputation as one of the most well respected executives in the restaurant industry, along with his intimate knowledge of Jamba&#39;s operations and strategic goals were instrumental in the board&#39;s unanimous decision to have him serve as the company&#39;s chairman.&quot;</p> <!-- google_ad_section_end --> http://www.bluemaumau.org/14911/jamba_hires_pace_ceo_names_federico_chair#comments Leadership change chief executive officer corporate governance Jamba Juice NASDAQ:JMBA succession Fri, 22 Jan 2016 15:41:18 +0000 Don Sniegowski 14911 at http://www.bluemaumau.org Denny’s Franchisees Manage Purchasing through Their Supply Chain Oversight Committee http://www.bluemaumau.org/14898/denny%E2%80%99s_franchisees_work_control_supply_chain <!-- google_ad_section_start --><p><img alt="Distribution, trucks. photo by don sniegowski" src="https://c1.staticflickr.com/1/673/23468316052_44a4e8706c_n.jpg" style="width: 330px; height: 220px; float: right; margin-left: 5px; margin-right: 5px;" />DOVE CANYON, Calif. &ndash; Craig Barber, chairman of the Denny&#39;s Franchisee Association, an independent group that is owned and operated by Denny&#39;s franchisees to represent their interests, explains to Blue MauMau how Denny&#39;s franchisees manage the oversight of their supply chain.</p> <!--break--><!--break--><p>By way of background prior to getting into the interview with Mr. Barber, franchisees and their groups have been known to go to battle with franchisors in order to be in control of purchasing, distribution and the entire supply chain for a brand. That&#39;s because the promise of lower costs through economies of scale of a restaurant chain can be circumvented by a greedy franchisor that can easily benefit from large, hidden kickbacks from vendors. If a franchisor manages the supply chain, its kickbacks typically do not need to be reported to franchisees.</p> <p>So how do franchisees control national food purchasing to take away the natural temptation of hidden kickbacks to a franchisor? Through the years franchisees have&mdash;with typically strong resistance from franchisors&mdash;come up with answers.</p> <p>For example, Subway franchisees created an Independent Purchasing Cooperative, a franchisee-owned supply management company that directs and is liable for the chain&#39;s purchasing and logistics for some 30,000 franchisees. Lately it has added information technology infrastructure services for the chain.</p> <p>Burger King franchisees created their supply chain cooperative in 1991 with their Restaurant Services Inc. company.</p> <p>In 2009 competitor IHOP created a franchisee purchasing cooperative, The Centralized Supply Chain Services LLC. In the 2014 annual report of DineEquity, the parent company of IHOP, CEO Julia Stewart touted the franchisee-owned cooperative to shareholders, saying the franchisee-owned and operated company &quot;has enabled our franchisees to realize approximately $215 million in total net savings and cost avoidance since its inception in 2009.&quot;</p> <p>Denny&#39;s chairman speaks about their solution to the supply management question. While IHOP franchisees have their own company to control national purchasing, Denny&#39;s, with its 1,599 franchises in the United States, has advisory councils, which offer advice from franchisee delegates to a willing-to-listen franchisor. However, in addition to advisory councils that most other franchise systems also have, Denny&#39;s franchisees have a Supply Chain Oversight Committee (SCOC). It is being funded for a time by the franchisor so it is not a franchisee-owned cooperative. Nonetheless Denny&#39;s franchisees have a six to one seat over their franchisor in directing purchasing and logistics.</p> <p><strong>BMM: Do Denny&#39;s restaurant owner-operators own a national cooperative of any kind &ndash; e.g. advertising, purchasing, technology?</strong></p> <p><strong>DFA Chairman Craig Barber</strong>: The Denny&#39;s brand does not own a national cooperative. We had some consideration of that approach but chose a different direction.</p> <p>We have a Supply Chain Oversight Committee that was developed through the joint cooperation of the DFA and Denny&#39;s Inc. in an effort to address the rising cost of goods and equipment to the system, as well as a desire to provide franchisees more input into the procurement and supply chain process. In addition, as part of a broad range of considerations, Denny&#39;s Inc. would fund the SCOC for seven years.</p> <p>The SCOC&#39;s role is to oversee and coordinate through Denny&#39;s Inc. purchases of food, goods and supplies from manufacturers and suppliers for sale to Denny&#39;s franchisees (and Denny&#39;s corporate-owned stores) and the distributor who supplies Denny&#39;s stores. Franchisees sign an FPA [franchise purchasing agreement] and designate the SCOC as its purchasing agent and agree to abide by and fulfill the purchase commitments made by the SCOC on franchisees behalf.</p> <p>As the agent for each member, the SCOC works to obtain the lowest possible prices by making or arranging volume purchase commitments and by assuming other purchasing functions and risks on behalf of SCOC member franchisees and Denny&#39;s corporate stores. As the purchasing agent, the SCOC will arrange purchases on each member&#39;s behalf. However, the members remain liable to each vendor and/or distributor to pay for the purchases arranged by the SCOC. As a disclosed agent, the SCOC is not liable for the purchases. SCOC volume purchase commitments allow suppliers to reduce their costs since they can more effectively plan their production, purchasing and inventory levels, and this savings is passed on to SCOC members.</p> <p>In addition the SCOC provides oversight, review and collaboration with Denny&#39;s Inc. in the coordination of logistics and freight, the negotiation and ongoing monitoring of distribution arrangements, and other supply chain functions including cooperation with Denny&#39;s brand management function. The SCOC also provides oversight, review and endorsement of the terms of renewal or replacement to the current MBM distribution agreement.</p> <p>It is a unique approach that avoids unnecessary administrative costs normally associated with cooperatives while allowing franchisees substantive input to supply chain management. As a point of reference, the SCOC has seven members with six being franchisees appointed by the DFA Board and the other member being Denny&#39;s head of procurement.</p> <p>I hope this helps address your question. I would be remiss not to mention that, in addition to the SCOC, the Denny&#39;s brand has three brand advisory councils focused around operations, marketing and development comprised of corporate and franchisee leadership. Their focus is in collaboration, alignment and healthy discourse for their respective areas of discipline. They have been in place since 2011 and are part of the &quot;secret sauce.&quot;</p> <p>The engagement and interaction within our brand is truly unique which is a big part of our success.</p> <hr /> <p><strong>Related reading</strong>:</p> <ul> <li><a href="http://www.bluemaumau.org/14895/denny%E2%80%99s_restaurants_hit_grand_slam_2015"><em>Denny&#39;s</em> restaurants hit a grand slam in 2015</a> | Blue MauMau</li> <li><a href="http://www.thestreet.com/story/13424575/1/denny-s-ceo-says-stronger-economy-has-boosted-results.html"><em>Denny&#39;s</em> CEO says stronger economy has boosted results</a> | The Street</li> <li><a href="http://www.bluemaumau.org/ceo_steller_dennys_says_franchisees_are_our_customers">Denny&#39;s CEO says, &quot;Franchisees are our customers&quot;</a> | Blue MauMau</li> <li><a href="http://www.bluemaumau.org/11111/denny’s_cultivates_collaborative_leadership" target="_blank">Denny&#39;s serves up collaborative leadership </a>| Blue MauMau</li> <li><a href="http://www.bluemaumau.org/dennyrsquos_franchisees_officially_support_management_secretly_grumble">Denny&#39;s franchisees in 2010 officially supported management but stealthily changed it</a> | Blue MauMau</li> <li><a href="http://nrn.com/corporate-news/black-eyed-pea-owner-files-chapter-11" target="_blank">Black-eyed Pea owner files Chapter 11</a> | Nation&#39;s Restaurant News</li> </ul> <!-- google_ad_section_end --> http://www.bluemaumau.org/14898/denny%E2%80%99s_franchisees_work_control_supply_chain#comments manage franchisee cooperatives Wed, 20 Jan 2016 14:52:24 +0000 Don Sniegowski 14898 at http://www.bluemaumau.org