Pinkberry serves up lawsuits to six yogurt shops
Pinkberry is accusing the businesses of deliberately emulating its highly distinctive branding.
Tiffany Hsu of the LA Times, reports Pinkberry Inc. is seeking to freeze out imitators filed six lawsuits this week against what it contends are copycat frozen yogurt shops.
Pinkberry is accusing Yoberry in Ft. Lauderdale, Fla.; Yoberry in Washington; Yogiberry in Olney, Md.; Pingo Yogurt in Alhambra; Monkee’s Teriyaki in Venice; and Peachberry in Long Beach and Gardena of deliberately emulating its “highly distinctive branding.”
The businesses were either reproducing Pinkberry’s fruit-shaped swirl logo, duplicating the minimalist layout of its stores or filching parts of its name, said Mark Friedman, the company’s vice president and general counsel.
Some of Pinkberry’s promotional material was doctored with another store’s name, one lawsuit alleges. Another claims that photos belonging to Pinkberry were altered and displayed.
“Our brand and our logo really caught on,” Friedman said. “These businesses are copying Pinkberry’s success in order to ride our tailcoats.”
Ever since Pinkberry opened in 2005, it has developed a cult following with its simple menu of yogurt. Its three flavors – original, green tea and coffee – can be paired with assorted toppings such as blueberries, strawberries and coconut flakes.
Friedman says he hears about possible knockoffs about four times a week. There’s Pinksweetberry and Razzleberry in Japan, Myberry in France and others in locales including Taiwan, Singapore and Vancouver, Canada, he said.
Imitators are often discovered when customers ask if Pinkberry is affiliated with a similar-looking business, or when people send the company congratulatory notes for opening in an area where Pinkberry has no store, Friedman said.
The privately held company has 65 stores in California and New York.
Franchise Brands buys HomeVestors
It was reported in the Dallas Business Journal that Franchise Brands LLC has bought majority ownership of HomeVestors of America Inc., the company behind the “We Buy Ugly Houses” billboards.
Franchise Brands has been accumulating a franchise systems for its portfolio since it was formed in 2005 with support from the founders of Subway restaurants. The company provides investment capital to companies in a number of industries, including food and beverage, retail, consumer products and business services.
The accumulation of franchise brands is a trend that does not seem to be letting up. Franchise Brands, Raving Brands, Yum Brands, Focus Brands, Kahala, ServiceMaster , Service Brands, Next Cen and many others are accumulating franchise brands at a steady rate.
Founded in 1989, Dallas-based HomeVestors sold its first franchise in 1996 and has grown to a national franchise that specializes in buying homes that need repair. HomeVestors’ network includes more than 230 franchised offices in 35 states. The company said its franchisees sell most of the houses to other investors and first-time home buyers.
“We’re delighted that Franchise Brands recognizes the potential of our franchise network and decided to acquire a majority interest,” said John P. Hayes, president and chief executive of HomeVestors, in a statement.
“The past 12 months have proven to be challenging for most real estate related businesses, including HomeVestors, but when the real estate market completes its correction and begins to expand again, HomeVestors will be perfectly situated to continue expanding, too,” said Hayes. “Our company, and especially our franchisees, will gain from the support of Franchise Brands.”
In 2007, Milford, Conn.-based Franchise Brands, which owns several other franchise companies including: BAJIO Mexican Grill, and Mama DeLuca’s Pizza invested several million dollars in HomeVestors’ operations.
Ben & Jerrys has left a sour taste for some franchisees
But Other Franchisees Tell Newsweek That a Vocal Minority of Unsuccessful Owners are Attacking the Company for Their Own Failures
Suzanne Smalley reported in NEWSWEEK that some ailing franchisees of Ben & Jerry’s say the ice-cream maker isn’t nearly as sweet as its image.
Rainforest Crunch. Cherry Garcia. Peace Pops. Perhaps no other consumer brand’s image is so entwined with hippie-inspired idealism and social causes as Ben & Jerry’s. Among the ice-cream maker’s crusades: saving the endangered family farm by supporting farmers’ cooperatives and fair-trade initiatives. The message is unmistakable: by buying pints and cones, consumers are helping Ben & Jerry’s stick up for the little guy.
But when it comes to its own “little guy,” Ben & Jerry’s may not be quite so generous, to hear an increasingly embittered group of the company’s shop owners tell it. In interviews with two dozen current and former franchisees, some of these mom-and-pop entrepreneurs say the company misled them into investing their life savings in stores that were doomed to failure, and did little to help them stay afloat. They tell of ice-cream shipments weighing less than what they paid for and delays in restocking popular flavors. They say big buyers like Costco and Wal-Mart were given comparable wholesale prices by Ben & Jerry’s, undercutting individual scoop shops. They claim headquarters didn’t market their stores adequately or provide business advice, as a national franchise is typically expected to do. Ben & Jerry’s says the complaints are either exaggerated or just plain wrong, and don’t represent the experience of most of its franchisees.
Opening your own business—even a branch of a well-established brand—is always risky. That’s something many would-be owners forget as they imagine the gilded pot at the end of the golden arches. “We want success for all of our franchisees,” says Debra Heintz, director of retail operations for Ben & Jerry’s. “Unfortunately, not all will succeed.”
Alan Sherman and his wife, Shannon, are among the unsuccessful ones. The couple opened their shop in Blacksburg, Va., in 2004. They say they built their business plan based on information in a 2004 Ben & Jerry’s franchising circular, a disclosure document sent to prospective new owners. The circular stated that the average Ben & Jerry’s store would bring in $364,892 in gross sales. But the Shermans soon realized their shop wouldn’t ring up nearly that amount. They say they’ve already lost a half-million dollars, and will likely lose thousands more as they continue pumping cash into the business to avoid defaulting on loans. “We feel we’ve been abandoned,” he says. They say they plan to sue.
Ben & Jerry’s is already fighting a suit filed by one California franchisee, Mehrdad Porghavami, who alleges the company’s financial projections were false and misleading (Ben & Jerry’s has sued him for allegedly breaching his franchising agreements). Bekki Ramsey and her husband, Aaron Richardson, who shuttered their shop outside Phoenix this year, blame Ben & Jerry’s for not differentiating in the circular between average sales for neighborhood stores like theirs, and for higher-volume locations such as casinos and airports. “We opened the worst type of store in the worst region Ben & Jerry’s had,” says Ramsey, noting that she’s lost $220,000 of her elderly parents’ retirement savings. Company officials say they stand by the average-sales claims they’ve published in the past. But they also acknowledge removing the figure from their most recent franchising notice, a decision Heintz says she made after talking to franchisees and realizing they were confused by it.
Leaving shop owners with a sour taste in their mouths hardly jibes with the peace-and-love vibe the company’s founders created. Ex-hippies Ben Cohen and Jerry Greenfield opened their first shop in Burlington, Vt., in 1978, making a point of using milk and cream from local farmers. By 1988, their company had committed to donating 7.5 percent of its pretax profits to philanthropic causes like protecting the environment, fighting AIDS and battling sweatshops. But in 2000, the pair, who declined to comment for this story, cashed in, selling to consumer-products giant Unilever.
Disgruntled franchisees say not long after, the trouble started as Unilever began rapidly expanding its newly acquired brand. Chief executive Walt Freese says that when the expansion started in 2003, the market for ice-cream shops looked strong. Between 2003 and 2006, the number of stores Ben & Jerry’s competes with tripled. Other brands, including Cold Stone Creamery and Marble Slab, flooded the marketplace. But overall ice-cream sales remained relatively flat. Last year 38 of Ben & Jerry’s 456 North American shops, or about 8 percent, closed their doors. That compares with 71 Cold Stone Creamery shops that shut down, or about 5 percent of the total.
Many Ben & Jerry’s franchisees have no complaints, and say that a vocal minority of unsuccessful owners are attacking the company for their own failures.
Meantime, Ben & Jerry’s officials say they are taking measures to help struggling shop owners stay in business by waiving royalty fees, helping to renegotiate store leases and increasing marketing support. “It is Ben & Jerry’s ethic,” CEO Freese says, “how we believe in treating each other.” Lesson to “socially conscious” companies: charity begins at home.
Entree Vous is one of the leaders in Easy Meal Preparation franchises
Karla Ward reorts in the Kentucky Herald-Leader that the owners of Entrée Vous have found that consumers are paying more than lip service to the meal-assembly industry.
The Lexington, KY., based chain is the fastest-growing easy meal prep franchise in the country.
The chain had nine stores open at the end of last year. It now has 40 open and development agreements with franchisees for 100 more.
“I think it’s because of our food,” said majority owner and Chief Executive Officer Harriet Dupree, who started the company four years ago out of her catering kitchen on Delaware Avenue.
At Entrée Vous and similar businesses, customers place their orders online, then go to the store to assemble meals made from ingredients that have already been chopped, diced, seared or otherwise pre-prepared. The meals can then be frozen at home and cooked when needed.
Dupree said her company, and others like it, are succeeding because “women want to have a hand in making dinner” but they don’t have the time to come home from work and make a meal from scratch.
“People are just more food savvy and interested in trying new things than they were 10 or 20 years ago,” said Dupree, who trained at the Le Cordon Bleu Cooking School.
Five years ago, there were four stores throughout the nation offering meal-assembly services. Last month, there were 1,371 in the United States.
Bert Vermeulen, founder and president of the Easy Meal Prep Co., which provides consulting services to the industry, said the growth has begun to slow.
Some consolidation is expected in the coming years.
“The cream is going to rise to the top,” Dupree said.
Vermeulen calls it “professionalization of the industry.”
Many of the companies are run by independent operators with only one or two stores, but Vermeulen said more and more successful meal prep companies are being bought by people who have successfully owned and operated other franchises, such as fast-food restaurants.
Dupree has tapped two former Yum Brands executives Bill Fry and Paul Martino to help build her franchise. Fry is chief operating officer; Martino does consulting.
After they joined Dupree a few years ago, she said, “we started developing the business to handle fast growth and lots of stores.”
“These guys knew how to grow a food franchise.”
No restaurant headaches
Fry said meal prep businesses offer several benefits to owners that restaurants don’t.
“We’ve tried to take all the rotten things out of the restaurant business,” Fry said. “We know in advance what people are going to buy. It takes the guesswork out of it. It takes the waste out of it.”
He said the stores can also be run with just a few employees. And the fact that orders are usually paid for in advance with credit cards means fewer headaches at the cash register.
Vermeulen said the revenues meal prep businesses bring in vary widely.
On the lower end of the scale are stores with monthly revenues of less than $6,000 or $7,000. But some of those stores, he said, are successful, because they combine a meal prep business with something else, such as a café or grocery.
The top 10 percent of stores, Vermeulen said, bring in more than $60,000 or $70,000 a month.
Entrée Vous did not provide average store revenues. Franchise fees are $35,000 for the first store; the total investment to open a store runs from $250,000 to $300,000.
Dupree said locations that work best are in higher-end shopping centers with a major grocery store.
However, there has been some push-back from grocery stores that don’t like the competition. Kroger has tried to keep Entrée Vous out of a shopping center out West, Dupree said. “To me, that’s a good sign,” she said.
Publix Super Markets Inc. announced earlier this year that it was trying out its own make-ahead meal outlets.
Seeking bigger piece of pie
The largest meal-assembly chain is Washington-based Dream Dinners, which is credited with starting the trend. Another fast growing company is Entrees Made Easy.
The company opened its first store in 2002 and now has 228 locations, including one on Todds Road in Lexington.
There is room for more growth, Vermeulen said, noting that one meal in 1,000 is made at a meal-assembly store.
“Primarily, what we’re dealing with is a market education situation,” he said. “The potential for this business is dependent on marketing.”
But Bob Goldin, executive vice president of Technomic, a Chicago-based food industry research and consulting firm, said that while the assembly chains seem to be doing “reasonably well on a return-on-investment basis,” he believes they will probably “remain on the fringes” of the industry.
“I’m lukewarm on the whole segment,” he said. “I … question the consumer benefit.”
An eye to the future
To survive, Vermeulen said easy meal prep companies will have to be tuned in to changing consumer desires.
“The staying power of the concept is dependent upon the evolving power,” he said.
For one thing, he said consumers are going to begin demanding that the meals be assembled for them by staff. By the end of the year, he said more than half the meals sold at meal prep companies will be pre-assembled by staff.
Entrée Vous recently rolled out its “fresh take & bake” service, where customers can pop into the store after work and leave with a pre-assembled meal to be cooked at home for that night’s dinner.
That’s also a trend that Suzanne’s Kitchen, an easy meal prep business developed by former Gov. John Y. Brown Jr. and represented by actress Suzanne Somers, may try to tap into.
The store had a short-lived flagship store in Tates Creek Centre but closed in April, just five months after opening. Brown promised that the concept would return in an “even more convenient” format, possibly focused on home delivery.
“That’s one to continue to watch,” Vermeulen said of Suzanne’s.
Vermeulen said Entrée Vous shows promise as a franchise because it has focused on the quality of the food and made sure that the first stores it opened were successful.
“That created a good reference point” for would-be franchisees, he said.
Franchise revolt at Wendy’s
Jay Hancock of the Baltimore Sun reports that: ‘Mismanagement,’ silly ad campaigns have many asking: Where’s the beef?
The characters in the newest Wendy’s ads are transvestite parodies of the hamburger chain’s adorable little-girl mascot. Wendy’s summery fruit salad - introduced two years ago in the depth of winter - flopped. Around the same time a hoaxer put a severed finger in an order of Wendy’s chili.
McDonald’s and Burger King are eating Wendy’s lunch.
No wonder Wendy’s shareholders got mad. But at least they can sell their stock. Breaking up isn’t so easy for Wendy’s franchisees. They are joined at the hip to a company that hasn’t gotten it right since founder Dave Thomas died, and have finally decided to turn up the heat.
“Twenty years ago it was a partnership” between Wendy’s parent and its operators, says David Norman, executive vice president of Crofton-based DavCo Restaurants Inc., employer of 6,000 and the biggest Wendy’s franchisee. “Today it’s strictly a business, as with everything else.”
And not a cordial one. The trials of DavCo are an object lesson for entrepreneurs: In franchising, there’s no such thing as divorce when things go wrong.
“For the past several years, the franchise community has watched with mounting concern the slow decline of our brand due to mismanagement and an apparent lack of concern or even oversight by the board of directors of Wendy’s International,” opens a bombshell letter signed last month by Norman and other top franchisees. The letter was obtained by The Wall Street Journal and posted on its Web site.
Franchisees accused Wendy’s management of an “autocratic style of decision-making,” “insufficient, incomplete or inaccurate” communication, forcing them to cut the size of products and portions.
That Wendy’s appears to be up for sale isn’t making anybody feel better.
Corporate raider Nelson Peltz is looking at Wendy’s books with an eye to buying it.
Peltz, who owns the Arby’s chain, started acquiring Wendy’s shares after the finger-in-the-chili fraud, which hurt sales and furnished late-night joke fodder for what must have seemed to company executives like forever. (Leno: “Instead of a spoon, they serve it with nail clippers.”) Peltz owns about 10 percent.
Also reportedly considering bids are Wendy’s franchisee David Karam and a private-equity consortium. Wendy’s says it would consider strategic alternatives other than a sale, but those seem unlikely.
The auction caps several years of foolishness. Thomas, a high-school dropout who built Wendy’s into a national chain in the 1970s, died of liver cancer in 2002. His disappearance deprived the company of its most effective spokesman and one-man franchisee support team, and ushered in what DavCo’s Norman calls “the corporate bureaucrats.”
The awful “Mr. Wendy” ad campaign lasted less than a year in 2004. (The character was “an anonymous bozo,” says Norman, prompting “very contentious” reactions from franchisees.)
This year’s ads, with men wearing pigtailed Wendy fright wigs, are worse. Sales went through months of decline before stabilizing and rising again this year, but in June Wendy’s had to lower profit forecasts. Where’s the beef?
Peltz was the first to put big pressure on Wendy’s headquarters in Dublin, Ohio, forcing the company to sell off its Baja Fresh and Tim Hortons chains and pushing for seats on the board. But the franchisees weren’t far behind.
Wendy’s had always been known for good restaurant relations, thanks to Thomas’ steady hand and frequent field visits. But in April 2006, DavCo and other franchisees declared war by forming the first-ever franchise association. “It was basically symptomatic of a franchisee revolt,” said Norman. Among the rebels: Pamela Thomas Farber, Dave Thomas’ daughter.
Days later, Wendy’s CEO Jack Schuessler resigned.
“I would respectfully disagree with Mr. Norman that it is contentious” says Wendy’s spokesman Denny Lynch. “Wendy’s has done everything possible to increase contact and communication with the franchisees and his made it a priority to listen to their input.”
Unfortunately, Schuessler replacement Kerrii B. Anderson is another corporate bureaucrat. She has a CPA, an M.B.A. and has never run a restaurant. “I’m not an operator. I didn’t grow up in the business,” she told USA Today last year. “But leadership is about passion. And I love the Wendy’s brand.”
Wendy’s needs more than love and pep. Peltz or another smart buyer can probably revive the parent company, and the likelihood of a buyout has already propped up the stock.
Making franchisees happier is a bigger job. Store operators are leery of Wendy’s renewed interest in selling breakfast, an idea that bombed 20 years ago.
Profit margins at DavCo, majority owned by Citicorp Venture Capital since the 1980s and operator of 160 stores, fell nearly 4 percentage points in the course of a year because of higher energy costs, Norman says.
Unlike most franchisees, DavCo can still expand in its Mid-Atlantic territory, but it faces high real estate and labor costs. Eventually it’ll probably either acquire another franchisee or sell out to somebody else, he says.
But first it needs Wendy’s to commission a decent ad campaign and reinvest in the brand. That might get the parent and franchisees reading from the same menu again.
A New Culture to Yogurt Franchises
Valerie Killifer reports in Fast Casual The culturization of yogurt when a little-known frozen yogurt shop opened in West Hollywood in 2005, Californians from the Valley to the Hills (Beverly Hills) couldn’t get enough.
Pinkberry unsettled an otherwise quiet neighborhood and gave health-minded patrons the ability to indulge. It also reinvigorated consumers’ taste for frozen yogurt.
Since the launch of the TCBY franchise more than 25 years ago, frozen yogurt has experienced a pop-culture roller-coaster ride of popularity. But with the launch of several new frozen-yogurt concepts, and the success of existing custard franchises such as Culver’s, the segment has completed its latest uphill climb and is once again ready for accelerated growth.
Pinkberry’s owner told the Los Angeles Times on Aug. 4, 2007, that she understands the consumer desire for low-calorie, healthy food. And she’s not alone.
Concepts such as TCBY and Beautiful Brands International are banking on that same mentality for the success of and launch of their premium and frozen yogurt franchise concepts, Yovana and FreshBerry, respectively.
Yovana brand manager Rob Hanson said the concept was created in response to consumer health trends and features proprietary premium and frozen yogurt offerings in addition to yogurt-based smoothies.
“Yovana took TCBY’s expertise in yogurt beyond frozen yogurt and presented a healthier alternative to consumers,” Hanson said. “I think it fits very well with where consumers are going.”
Yovana has four open locations, two in airport locales and two standalones, but Hanson said the concept is still in the test phase.
“Really, we’re refining the concept,” he said. “We’re making sure the menu is right and everything operationally flows the way it should.”
FreshBerry as well is in its infancy.
The first location is slated to open in October after sitting in concept development for about a year.
“The public is ready for a reinvention of frozen yogurt,” said Carolyn Archer, senior vice president of operations for Beautiful Brands. “FreshBerry is the antithesis of the yogurt shops of the 1980s and 1990s. The whole idea is light, refreshing and really healthy. It’s the new wave of yogurt shops that’s going to hit the country.”
The berry of it all
If the success of Pinkberry is any indication, consumers are more than ready for a frozen-yogurt resurgence — and healthful toppings are leading the way.
While ice cream and gelato shops offer toppings such as gummy worms and candy bar crumbles, yogurt concepts such as Yovana, FreshBerry and Washington, D.C.-based Sweetgreen are capitalizing on fruit, nut and granola toppings trends.
Hanson said Yovana’s most popular topping is fresh fruit, which fits with the trend Beautiful Brands is seeing, too.
Darren Tristano, executive vice president for Chicago’s Technomic Information Services, said yogurt concepts are successfully capitalizing on healthful toppings instead of ones bogged down with preservatives and sugary syrups.
Unique flavors also are driving the segment.
Pinkberry only offers two flavors — plain and green tea — but there is plenty of room for innovation, Archer said.
“The Italians have been doing gelato in herbal flavors for decades,” she said. “And that’s coming over into the U.S. People are more adventurous in trying new flavors.”
Tristano also believes Korean-style yogurt concepts, such as Sweetgreen and Pinkberry, will continue to spread across the United States.
“We’ll see more of them and they’ll branch out more from the West Coast and areas popular with smoothies and ice cream and traditional frozen custard,” he said.
Pinkberry alone has 21 locations in California and New York, with plans for 50 more by the end of 2007. And another concept, Red Mango (with more than 130 locations in South Korea), made its U.S. debut this fall in Los Angeles.
Risqué hair salon franchise enters the ring in Boston
Knockouts, a full-service salon franchise that would make Floyd the barber blush, is busting into New England.
Naomi Kooker reports in the Boston Business Journal that Neko Corp., headed by Bing Yeo of Lexington, bought the rights to franchise the salons that have been dubbed the “Hooters of haircutting,” where a scantily clad “specially chosen staff of female stylists” provides professional grooming services, including haircuts, coloring, waxing, manicures, pedicures and massages for men.
Yeo purchased the rights in June to develop the franchises or sub-franchise the stores in Massachusetts, Maine, New Hampshire and Vermont. He plans to open his first store in Greater Boston by the end of this year or early 2008. He is looking in Allston-Brighton, among other areas, to open the first store, though no lease is signed.
The franchise agreement gives him 15 years to roll out 20 stores; but Yeo, a business consultant, said his goal is to roll out that many in five years, focusing on the eastern Massachusetts and southern New Hampshire markets.
Yeo did not disclose the cost of his agreement. Knockouts’ one-time franchise fee is $20,000 per location, with a 6 percent royalty fee thereafter. A 1 percent national advertising fee is also implemented after a store opens.
To date, some Knockouts franchisees have reported brisk business and profit margins exceeding 20 percent.
The concept comes at a time when other salon chains geared toward men are entering Greater Boston. For example, Floyd’s 99 Barbershop opened in Boston earlier this year.
However, none require the stylists’ uniforms that Knockout does.
“I wouldn’t deny the sex appeal,” said Yeo, who lists his wife, Winnie Yeo, as the director of the company on his Web site. “It’s certainly part of the branding.”
Yeo confirmed that the stylists, all women, are professional and certified, yet need to be friendly and attractive. He conceded the short-shorts worn by Knockouts stylists in Texas may not go over well in New England, and he’s deciding on an alternative such as dresses that are worn by stylists in Atlanta. “That outfit works in terms of the girls willing to wear those, and the customers really appreciate them,” he said.
Yeo said the target demographic for customers is men, ages 18 to 55, though women and children are welcome.
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The stores, with a boxing theme, are 1,000 square feet to 1,500 square feet and feature eight to nine haircutting stations surrounded by a boxing ring. Each station has a medium-size flat-screen TV. In other states customers are offered a free beer, but Massachusetts’ stringent liquor laws prohibit that service. Complimentary nonalcoholic beverages will be offered instead.
Most haircuts cost $25 or more and include two washes, consultation and head and shoulder massages; other services cost between $3 for a beard trim to $90 for a massage.
Build-outs, which include the lease and remodeling, cost between $15,000 and $40,000. Total startup costs, including equipment, are between $90,000 and $190,000. Each store employs five to seven people.
Retailing expert and lecturer Rick Segel, based on Cape Cod, called the concept “inevitable” given the growth in the adult entertainment industry and extensions of it, such as establishments like Hooters. “If it’s done right and done professionally and tastefully … they’re a huge success. The old line, sex sells — it really does.”
“We’ve done an excellent job of not crossing the line,” said Tom Friday, CEO of Knockouts Management Company LLC, the chain’s parent company, based in Irving, Texas. He founded the concept when he opened the first store in Addison, Texas, in 2003.
Knockouts has nine locations nationwide with 123 franchises, including Yeo’s, slated to open over the next few years.
Texas-based Sports Clips Inc., another sports-themed haircutting chain geared toward men, is Knockouts’ main competitor. It currently has 447 franchised stores nationwide; it employs men and women stylists and does not require them to wear skimpy outfits.
Sign a Rama First Franchise to Win U.S. Presidential E Award for Exporting Success
Sign-A-Rama, the world’s largest retail sign franchise, has been awarded the United States Department of Commerce’s Presidential “E” Award. Sign-A-Rama is the first franchise company to ever win the award.
Commerce Secretary Carlos M. Gutierrez joined President Bush at the White House to present Sign-A-Rama , along with ten other organizations, with the “E” Award for excellence in exporting. The company’s export sales increased 700% in three years, growing from $1.5 million in 2002 to $12 million in 2005.
In attendance were president and founder Ray Titus and his wife Andrea. Also in attendance was Tony Foley. Foley is president of World Franchisors which has assisted Sign-A-Rama and countless other franchisors for many years with their global expansion goals. World Franchisors is comprised of an advanced team who helps other franchisors quickly and cost effectively sell master licenses and establish a strong presence outside the United States.
Also assisting the franchise with their success in export sales is the U.S. Commercial Service. This government agency is the trade promotion unit of the International Trade Administration and works with companies to help get them started in exporting and increasing their sales to new global markets. The Fort Lauderdale, Florida office was instrumental in Sign-A-Rama ’s export success and subsequently their being honored with the “E” Award.
The President’s “E” Award is the highest honor the federal government can give to an American exporting company. The award serves to recognize U.S. firms for their competitive achievements in world markets and their part in increasing U.S. exports abroad. This marks the 45th anniversary of the Presidential “E” Award created by President John F. Kennedy in 1961.
“Winning this award was a great honor for our company coupled with the privilege of meeting President Bush in the Oval Office,” says Ray Titus, president of Sign-A-Rama . “Since we began more than 20 years ago, we have grown to over 850 locations in 50 countries. We are extremely proud and honored to have the opportunity to have helped so many people over the years achieve their dream of becoming their own boss.”
Sign-A-Rama , headquartered in West Palm Beach, FL, uses cutting-edge industry software programs to provide a full range of comprehensive sign and graphic services to both the private and commercial segments of the business community.
Brusters Ice Cream franchise warms to idea of cobranding with Nathans Hot Dogs
After growing a successful franchise selling desserts, Bruster’s Real Ice Cream is ready to serve up a full meal.
Tim Schooley reports in the Pittsburgh Business Times, that the Bridgewater, PA, based ice cream chain recently began a strategy to co-brand its stores with The Nathan’s Famous Corp., the publicly traded New York-based hot dog chain known for its nationally televised Fourth of July hot dog-eating contests.
So far, six of Bruster’s 260 locations have become two-in-one Bruster’s/Nathan’s stores, including the region’s first in Dormont, said Dave Guido, vice president of concept development for Bruster’s. Two more area locations are slated for conversions, said Guido, estimating that 15 to 20 Bruster’s could operate jointly with Nathan’s by the end of the year.
While Bruster’s only began testing the co-branding strategy in February, and the Dormont location was the pilot store, Guido sees broad potential from early sales tallies, which he declined to disclose. “The results are going to tell the tale. But early on, we’re very, very happy with how it’s gone,” said Guido, adding the company is considering co-branding with other franchises, although he declined to name them.
“If we continue to get favorable results, it will be an option for everyone who is an existing store.”
Randy Watts, vice president of operations for Nathan’s, sees the co-branding franchising effort as a way for Nathan’s to reach new markets through Bruster’s territory, which extends throughout the eastern United States.
“It seemed like a natural synergy for the two brands to use their real estate a little better,” Watts said. “We’re the No. 1-selling all-beef premium hot dog in the world. We definitely think they have a real top-quality ice cream brand.”
Co-branding is nothing new for Nathan’s, which also owns Kenny Rogers Roasters. Nathan’s also operates joint locations with Subway in Wal-Mart locations, Sbarro and Pizza Hut, among others.
Bruster’s began considering teaming with Nathan’s because it wanted a daytime component to add to its made-from-scratch ice cream, which sells better at night.
Adding Nathan’s to established Bruster’s locations has not been complicated.
Besides adding a fryer and a few other pieces of cooking equipment, as well as new signage, Bruster’s expanded its menu to include hot dogs, french fries, chicken tenders and lemonade.
Co-branding in franchising is an increasingly popular formula employed by such companies as Yum! Brands, which often operates its Pizza Hut, Taco Bell and KFC restaurants out of single locations.
“The advantage is you save money in management and personnel,” said Gary Garda, principal of Downtown-based TLC Brokers/Garda Realty, and formerly an area supervisor for Pizza Hut.
“With Yum! Brands, you have one manager managing three concepts in one location.”
Garda also said rising real estate costs made it increasingly difficult for a fast-food chain to exist on a single-menu item alone.
IHOP to acquire Applebee’s franchise for $1.9B
Pancake Restaurant Franchisor IHOP to Acquire Applebee’s for About $1.9B
IHOP Corp., best known for its franchise of blue-roofed pancake restaurants, said Monday it has agreed to buy the bar-and-grill chain Applebee’s International Inc. for about $1.9 billion in cash.
The move comes as Wall Street analysts are expecting a difficult second-quarter earnings season in the restaurant sector as soaring commodity costs are hurting restaurant profits and consumers facing high gas prices are thinking twice about going out for a meal.
Under the deal, IHOP will pay $25.50 per share for Applebee’s, which has been under pressure from shareholders for a slumping performance. The price being offered is a 4.6 percent premium over Applebee’s closing price on Friday.
Applebee’s had 74.7 million shares outstanding as of April 30; the two sides pegged the total value of the deal at $2.1 billion.
IHOP said it would franchise out most of Applebee’s 500 company-owned stores. Applebee’s has 1,943 restaurants overall worldwide, including those operated by franchisees.
But same-store sales are down more sharply this year for Applebee’s company-owned restaurants than for its franchise locations.
Virtually all of IHOP’s 1,319 restaurants are now owned by franchisees.
“We look forward to applying the same focus and discipline to Applebee’s that we have employed at IHOP over the last several years,” said IHOP Chairman and Chief Executive Officer Julia Stewart. “We have successfully restructured our own company, and in the process, re-energized our brand, improved our operational performance and maximized the development of franchise restaurants.”
IHOP said it expects to continue paying a dividend and said the deal should add to earnings starting in 2008.
Source: QSR.com
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