Dollar Financial is getting about $3.25 million back from the founders of We The People (Ira and Linda Distenfield). Dollar Financial alleges that the sellers of We The People deliberately concealed certain franchise sales breached representations and warranties with respect to a number of undisclosed liabilities and other matters arising from the acquisition. Readers may remember this not-so-flattering review, “We The People, or We The Screwed?” on FranchisePundit.com last year. As an aside, the founders of We The People are now a soon-to-be 20 unit franchisee and (equity owner?) broker of the PR Store, which is a fine concept.

We the People is a paralegal document preparation service.  People typically use their service for simple legal documents and court filings (name change, non-contested divorce, wills, incorporation).  The company provides customers with forms to fill out with a pen, and the franchisee then sends the form off to a processing center located in the state.  One to seven days later (14 days max), the forms are sent back to the franchisee to give to the customer.  The franchisee may also offer to file the forms with the appropriate court for an additional fee.  The processing center takes a 25% cut of the document charge.   No legal training is required.  Franchisees are basically a sales and marketing arm for the processing centers.  Franchisees are not allowed to alter any document or provide any service not performed exclusively by the processing center.   Franchisees are free to set their prices above the mandatory minimum.  For example, restraining orders will run customers $100, a noncontested divorce run $400. (article listing more services and fees) The company was founded in 1996, purchased by a couple in California, and recently sold to Dollar Financial Corp. (NASDAQ: DLLR) in March, 2005.  Dollar plans to also open the store in conjunction with the Dollar Financial stores (like H&R Blocks). The experience for customers is somewhat odd if you have previous experience speaking with a lawyer.  We the People employees can’t recommend a form, can’t point you in the right direction, and can’t discuss specific facts about your problem.  All the employees can do is generally describe a form and offer a form booklet to fill out.  Recommending a form or solution is considered engaging in the practice of law, and it can subject the franchisee to fines, jail, or liability for damages resulting from the …

Chipotle’s new fast mexican asian concept dubbed ShopHouse has only been open a few months in Washington DC. Their menu consists of Banh Mi sandwiches and rice or noodle bowls with meats. The reviews on Yelp vary, with an average of 3 out of 5 stars. On the negative side, comments seem to congregate on the odd combinations of tastes, blandness, and unlikable slaw on too many items. On the positive side, employee helpfulness and value seem to rank high. Many restaurant groups are pursuing this market – Wagamama, Big Bowl, Stir Crazy, Panda Express (and all the indoor mall food court offerings), and Pick up Stix. Technomic claims that sales at limited-service Asian restaurants grew 5.9% in 2010, faster than any other menu category, and in 2011 sales at Asian dining spots are expected to rise 5% compared to 4% for all limited-service restaurants. If you’re a CEO of a restaurant group looking to ride the trends, this is your new market. P.F. Chang’s, who also owns the popular casual restaurant Pei Wei, is creating a “more casual” concept called Pei Wei Asian Market, to compete in this fast service segment. It won’t be the notorious scoop style forged by Panda Express and Chipotle, but what they call a diner style with no table service. It sounds like the same style of Panera Bread but with a few more ready-to-eat packages at checkout. The fast asian fusion segment seems to be one that will have staying power. I like the segment, and there is a place for the Panera of Asian food, a speedy and quality layer above Panda Express. Just like Chipotle forged Mexican cuisine into the weekly rotation of American lunches, the arguably healthy fast asian fusion will also continue to grow and improve. — Franchising …

This McAlister franchisee with 30+ years of restaurant experience from Oklahoma is doing well. The article has some good tidbits: “Our business is actually up,” said Bothwell, attributing that to McAlister’s market positioning and lunch focus, which accounts for 65 percent of its revenue. “People seem to still be eating out for lunch.”Competing for the fast-casual market with such well-established companies as Panera Bread and Jason’s Deli, McAlister’s offers more than 100 menu items for lunch and supper, targeting health-conscious customers. “We have to get more sales to cover our increased operating costs,” he said, noting his average per-person ticket runs $7.85. His firm ended 2007 with revenue of $10 million, his stores averaging $1.5 million per year. With eateries to open this year in Shawnee; Lawrence, Kan., and Joplin, Mo., as well as at 21st and Yale in Tulsa, he projects 2007 revenue of $20 million.McAlister’s restaurants established in existing shopping centers, like his new midtown Tulsa deli, cost about $750,000 to open, said Bothwell. Stand-alone stores can run $1.5 million to get off the ground. Both employ an average staff of 50, now a greater challenge since Oklahoma’s new immigration law further drained the state’s tapped labor pool. UPDATE: May 29, 2008 @ 5:34pm EST UPDATE #2: June 4, 2008 @ 3:14pm EST There was an interesting comment to this post about whether a stand alone location can realistically justify the $1.5 million build out costs, which is double the $750,000 cost for a strip mall location. The short answer is yes. You wouldn’t need twice the sales, but there would be an incremental increase in sales to have the free cash flow to service more debt. Here’s the analysis: The monthly cost of borrowing an additional $750,000 @ 8% with 10-year repayment term is Loan Balance: …

Sports Bars’ Customers Love Their Hometown Teams, Drive Profits Up [Buffalo Wild Wings] Same-store sales since the start of 2006 have jumped from 8% to 13% quarterly. For five straight quarters, profits have grown in double digits. … But rather than “worry if we are going to comp over last year,” the company “needs to make sure we’re executing and operating and giving our guests great value and experience,” she said. Buffalo, N.Y.-style chicken wings are a big part of the guest experience. Though wing prices have risen, Smith locked in prices through the year that are now below market rate. She’s keeping an eye on other costs as well. Buffalo also serves salads, burgers and a variety of specialty items. As a neighborhood sports bar, it serves as a gathering place for friends and family. Guests play trivia games and watch sports and other shows on big-screen TVs. HD screens are replacing many of them. Professional and college football and basketball playoffs are big draws, especially in the company’s core Midwest markets. Ohio stores make up about 20% of the store count. “In Ohio, people are fanatics about their local teams,” Lyon said. I’ve posted previously on the sustainability of chicken wing franchises – most everyone loves good wings, and matched with a large modern sports bar it makes for a solid business with an excellent chance of success, in my opinion.

1) Are You Franchisee Material? We asked franchisors what they want in franchisees, and 4 qualities rose to the top. 2) 2007 Franchise of the Year? (Entrepreneur Mag) #1: Subway #2: Dunkin’ Donuts #3: Jackson Hewitt Tax Service #4: 7-Eleven #5: The UPS Store/Mail Boxes Etc. #6: Domino’s Pizza #7: Jiffy Lube #8: Sonic Drive In Restaurants #9: McDonald’s #10: Papa John’s I’d personally choose in the following order: McDonald’s, 7-Eleven, Papa John’s, Dunkin’ Donuts, Domino’s Pizza. 3) Great comments from a few franchisees and people in the industry. You can listen to the segment with Real Player too. 4) Franchisee rebuffs new product offerings and promotions from Taco Bell. Some notable actions taken by Dalham since the opening of his franchise in 1990: • Refused to expand his menu beyond the basic, non-premium offerings such as the “Taco.” • Used plain white Styrofoam soda cups until the corporation forced him to use branded paper cups during an audit in 1999. • Furnished dining room with squeeze bottles of hot sauce to avoid purchasing branded sauce packets. • Failed to update logo – currently displays the red, green, yellow, and purple logo phased out in the 1990s. • Did not hang promotional posters featuring the talking Chihuahua when the campaign was introduced in 1997. • During the “Head for the Border” campaign, posted a banner that read “Americans Even Do Tacos Better.” Due to franchise regulations, Dalham was forced to adopt certain conformities, such as the display of the words “Taco Bell” on his backlit menu and identifying his restaurant as a Taco Bell in the local yellow pages.

VERY OUT OF DATE.  Do a search instead.  This was manually updated March 21, 2006 Companies Mentioned in Posts (likely incomplete):Automotive 1-800 RADIATORS Oil Butler Lube N’ Go On-Site-Lube Business & Home Services 1-800-WATER-DAMAGE Bartercard Garagetek Help-U-Sell Home Instead Homewatch Caregivers My Girl Friday PropertyGuys.com Sears Carpet & Upholstery Tax Centers of America Cleaning & Maintenance none Computer & Internet (some are listed in “Retail”) Screenz Food and Restaurant Arby’s Auntie Anne’s Blimpies Cheeburger Cheeburger Chipotle Dippin’ Dots Dream Dinners Doc Green’s Gourmet Salad Dominic’s of New York The Dugout Durango Grill Fazoli’s Fire of Brazil Fogo de Chao Goldstar Chili Jamba Juice Jerq’zine Krispy Kream Lenny’s Sub Shops Mauwi Wauwi Original Hamburger Stand Panaderia Taza Papa John’s Pizza Factory Pizza Patron Pretzel Time Quiznos Red Rock Chili San Francisco Soup Co Shane’s Rib Shack Skyline Chili Smoothie King Smotthie Planet Soup Nazi Steak-out Subway Submarina Sub Station II Super Suppers The Soup Box Supercuts Suzanne’s Kitchen We’re Rolling Pretzel Company Wetzel’s Pretzels Z Pizza Zoup! Fresh Soup Co (List all sub franchises) Health & Fitness Curves Liberty Fitness Home Building & Repair Services See “Business and Home Services” above Personnel & Staffing none Pet Retail and Services Camp Bow Wow Doody Calls The Pet Pantry Wag My Tail Interquest Detection Canines Pets Are Inn Retail Franchises Ace Hardware AuctionDrop Battery Plus Best Cuts GNC Educational Outfitters Fantastic Sams Fastframe Foot Solutions Friendly Computers Geeks on Call GNC Hair Cuttery Herman’s World of Sports Imagine This Sold Orbit Drop Play It Again Sports QuikDrop Roosters Men’s Grooming Centers Screenz Snips Its Sports Clips Stone Mountain Carpet Mill Tom’s Foods We the People Categories: eBay drop offs (generally) Hair Travel & Hotel none Industry Lists & Research 2004 Same Store Sales Growth of QSRs (quick service restaurants) Royalty and Advertising …

Today I rented online and watched the movie Act of Valor ($4 on Amazon Instant Video or iTunes). I was humbled and proud to watch the preparation and risks these Navy SEAL heroes take to protect our country. The movie put me in the right frame of mind to reflect on my own priorities and work to eliminate the unnecessary complications in life.  The movie ended with a powerful poem from Native American Shawnee Chief, Tecumseh: So live your life that the fear of death can never enter your heart. Trouble no one about their religion;respect others in their view, and demand that they respect yours. Love your life, perfect your life, beautify all things in your life. Seek to make your life long and its purpose in the service of your people. Prepare a noble death song for the day when you go over the great divide. Always give a word or a sign of salute when meeting or passing a friend, even a stranger, when in a lonely place. Show respect to all people and grovel to none. When you arise in the morning give thanks for the food and for the joy of living. If you see no reason for giving thanks, the fault lies only in yourself. Abuse no one and no thing, for abuse turns the wise ones to fools and robs the spirit of its vision. When it comes your time to die, be not like those whose hearts are filled with the fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song and die like a hero going home. Wise words that I plan to keep close to my heart.

I loved this list. One of the United Kingdom’s most successful entrepreneurs, Luke Johnson, shares 21 lessons he’s learned in business: 1. The world is in love with the romance of start-ups. But all other things being equal, I believe it can sometimes be better to buy a business than start one. 2. Never demand a certainty: if you wait for that, you will be on the sidelines for ever. 3. Leave behind the notion of the big idea and just do what most successful entrepreneurs do: copy and improve. Imitate first, and then devote yourself to constant incremental improvement. 4. Whenever you can, make sure a name has some underlying meaning. Don’t copy the example of Diageo; one of the world’s biggest drinks manufacturers. “Diageo” means nothing. It’s not even easy to spell, or to Google. For everything that’s bad about high-concept names, look no further than Diageo’s own toe-curling explanation: “The word Diageo comes from the Latin for day (dia) and the Greek for world (geo). We take this to mean every day, everywhere, people celebrate with our brands.” I wonder if Diageo’s management realize that having to listen to that sort of rot could well make its staff want to quit and start their own business. 5. Today is a better time to start a business than tomorrow, no matter how today looks. 6. Achievement changes people. Once someone attains status and wealth, their attitude towards sharing the spoils and the glory alters. It slowly dawns on them that actually all the clever moves and breakthroughs were their idea and, in fact, they are the only one who really does any work. 7. When I interview managers, I ask them about their customers and competitors. The high achievers will know them intimately, and can talk for …

If you are in a bind and need a quick gift for someone in the late teens to 30s, I recommend the book BALLSY: 99 Ways to Grow a Bigger Pair and Score Extreme Business Success by Karen Salmansoh.   It is in-your-face, real world advice and inspiration for your career, whatever field you’re in.  It’s the opposite of academic, and gives the advice a wise old CEO would give after a few gin and tonics.  It’s not a long book, it only has a few sentences on each page with pictures, but it focuses on the importance of marketing yourself and your talents, dealing with people, and getting yourself into positions that will eventually lead to more opportunity and “luck”.  I’ve found a lot of it to be true after being in the workforce for 20 years, and would have benefited from this type of advice early in my career. Here’s a some of my favorite samples: Tip #1&2 /  More important than talent, have balls. Sure, talent matters, but if you don’t have balls, your talent won’t matter – because nobody will ever find out about all your swell stuff. Fact: If you’re seeking extreme success, you cannot be afraid to go against the crown, make mistakes, look dumb. If you want ot reach extreme heights in your career, get over your fear of fail.  You must become confident in your abilities to deal with any crisis or obstacle if you plan to pursue your passions with cockiness, vigor and sense of playful adventure need to snag ’em. Tip #3 /  There are no wishy-washy rock stars, no wishy-washy astronauts, no wishy-washy CEOs, no wishy-washy nobel price winners. Be like a cockroach, survive everything nature and man can throw at you for millions of years.  If you …

  What a sad story. Giordano’s is a leader and well-known institution in Chicago’s stuffed crust pizza game. It owns 10 corporate  stores and manages 35 franchised locations in Illinois and Florida.  Somehow this chain, where people (often tourists) stand in long line for an overrated $20 deep dish pizza, owed $45 million to a lender and had to file bankruptcy in February when it stopped paying back a note. Bidders for the company include the parent companies of Gino’s East and Connies Pizza. It sounds like they over-leveraged their real estate acquisitions and didn’t have enough income for debt coverage. Giordano’s was acquired by VPC Capital Partners in Chicago for $52 million.  It’s chairman, Richard Levy, hopes to elegantly apply his legal, bio-pharmaceutical, and energy background into the pizza industry, an obviously natural next step for him and sure to reassure franchisees.  Luckily, the Giordano’s family is going to stick around and collect big salaries to help out.   Don’t the new owners look happy in this picture (pic courtesy of Chicago Tribune) to the right?   They have BIG plans for the brand, hoping to clone the success of Paul Newman’s $200 million grocery business including developing a line of products for grocery stores “similar to what Paul Newman has done for salad dressing” and expanding the restaurant footprint beyond its Chicago and Florida markets.

I didn’t see this one coming. Planet Smoothie is solid brand with a loyal customer base. I hope Planet Smoothie received a significant premium in this acquisition by Tasti D-Lite, and the existing franchisees have some protections. Tasti D-Lite was acquired by a private equity firm in 2007 majority owned by Jim Amos, who promptly appointed himself CEO after the acquisition. Amos was formerly CEO of Mail Boxes Etc before selling to UPS, former CEO of Sona MedSpa and I Can’t Believe It’s Yogurt. I don’t know Amos personally, but from what I have heard he is a classic promoter. He’s likable and has the right persona for a CEO. But, from what I hear he runs his mouth too much and gets into trouble confidently over-promising results and being extremely difficult with existing franchisees. He’s good as selling franchises and controlling the franchisor’s cash flow. He’s had to settle out of court in a dishonesty-related law suits in his previous CEO roles. The hybride ice cream/yogurt pumped by Tasti D-Lite is smooth and creamy thanks to multiple gums and thickeners, but most people only care about the relatively low calories versus full fat ice cream. I understand the strategic benefit for Tasti D-Lite: they can distribute their frozen yogurt through the 100+ existing Planet Smoothie locations, the customer base has a lot of crossover, smoothie recipes can incorporate frozen yogurt, and hopefully per-unit increase sales will increase more than 25%. It looks like the preferred transition option for franchisees is to allow units to co-brand the concept. I’m sure the Planet Smoothie franchise agreement was favorable for Amos. My guess is there is a clause whereby existing franchisees have to at least transition to selling the yogurt menu quite soon, but conversions to dual-branded units probably can’t be …

WorldWide Papa’s is going public on the heels of opening up its 5th store in Russia. But, there are people who claim to have invested with WordWide Papa in Russia but were ignored by the company once they received the investment. The whole story isn’t here, but a company that fails to communicate with its investors in a respectful manner must be avoided. I’ve seen a lot of investment fraud as an attorney, and I still am amazed at how often folks will steal from people they know.

last edited: December 7, 2011, 9pm [added recommendation on beer & wine]; also edited on December 13, 2010, 1:05am [improved a few poorly worded sentences] I’ve noticed several franchised “Urban Flats Flatbread & Wine Co.” closing this year in the southeast, such as Orlando FL, Winter Park FL, Lawrenceville GA,  and Atlanta GA (pictured to the right).  Something clearly isn’t resonating with potential and repeat customers.   Many franchises suffer from this ‘surprise’ problem leaving execs scratching their heads about what is going wrong.    I’ll put on my pundit hat and give you my opinion and recommendations. HOW RESTAURANTS ARE JUDGED BY CUSTOMERS: People will instinctively judge a restaurant on three elements, and to draw repeat business you need to excel in at least two of these (and be at least average in the third) in the eyes of your local customer base: FOOD:  Is the food memorable and superb all around? PRICING: Is the pricing at or below the competition; does it provide value? AMBIANCE/EXPERIENCE:  Is the customer experience superb with a unique and comfortable interior design? A restaurant could succeed by satisfying only two of three criteria.  For example, you could provide an excellent customer experience and have great food, but prices are too high.   Cheesecake Factory and J. Alexanders are examples of this but both still generate excellent sales. HOW URBAN FLATS RATES: According to most of the reviews I’ve read online, Urban Flats rates as follows: FOOD: Average food, flats are minimalistic…not bad but not excellent either PRICING: A bit high – $10 cheeseburger, $8.50 Loaded Potato appetizer, $10 “flats” pizza AMBIANCE/EXPERIENCE: Average, some described it as trying too hard to be cool.   Music is too loud to talk.  If you have to describe your restaurant as hip in advertising, you probably are not. Other …

Leveraging people and assets across multiple operating businesses is what enables most companies to make money, including franchisees.    The leveraging action turns what would otherwise be an individual, high-overhead and high-risk investment into a portfolio of lower-overhead and risk-managed investments. In a previous job I worked for a commercial real estate investment and management company.   The company made money because they were able to use the same employees to manage dozens of leased properties, and leveraging one employee across dozens of properties increased the profit margins. In franchising, a multi-unit operator can leverage skilled managers across multiple units.  And, the $25,000 saved across 50 restaurants adds up quickly to a nice income. A great example of leverage in franchising is Frank Heath and David Paradise of Mississippi-based Mid River Restaurants.   Between them they own: 12 Applebee’s in Louisiana, 26 Hardee’s in West Virginia, North Carolina and Kentucky, 10 Taco Bell restaurants in Louisiana and Mississippi, and 12 IHOP restaurants in Ohio, Indiana, and Kentucky. And, they are in the process of acquiring 33 St. Louis area Applebee’s for the rock-bottom price of $25 million ($757k each, below build out cost).  The seller is DineEquity Inc., the parent company of Applebee’s Neighborhood Bar & Grill and IHOP restaurants. Mid River Restaurants has several advantages over other small and individual franchisees: profit per restaurant is higher than most because of their controllable costs are lower with centralized management, accounting and service teams cash flow is large enough to finance large, well priced acquisitions the greater cash flow also enables them to hire and retain smarter employees who are likely to further enhance the profitability the whole enterprise learns from four very well developed franchise systems, exposing employees to “best of breed” methods Individual franchisees as a group tend to be …

There has been an uptick in self serve frozen yogurt, and I think that is a smart move.  Why pay employees to do a task that customers would get the pleasure of doing, and they’ll pay for whatever they use?  You can run a busy store with two employees, one at the cash register and another cleaning up and refilling toppings. The self service works like this – the customer fills their cup with as much frozen yogurt as they like and put on their own topping, and then proceed to the checkout where the yogurt is weighed and priced at $.30/ounce.  I’ve seen cookie shops in London, UK sell cookies by weight, and it works as people typically will make things a little bigger and end up paying a little more. One player that “looks” good is the almost 100 location Yogurt-land (and it should with a $350k build out cost – see pic ).  They like to move into former Cold Stone Creamery locations, another smart move.  Others are Fiji Yogurt (5 locations), Yogurtini (1 open, 8 about to open). They have a new location in Weston, FL which I saw and it looks great. See my previous post about rolling your own frozen yogurt shop if this concept interests you.