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Those improvements include high-density tables so customers can customize orders and workers can move products through more quickly. Thirty years ago, attorney Michael Daigle of Cheng Cohen advised emerging franchisors to tackle all four corners of the U.S. Tabletop ordering systems have long offered hope they can bring back some of the customers casual-dining chains lose to fast-casual concepts at lunch because their service takes too long. The new year will see a new chairman of the Federal Reserve, Janet Yellen, and she’ll start her new job by walking a tightrope. Usually, restaurants need to prove themselves with a few locations before they attract the attention of a big-time investor. Fifteen years ago when Franchise Times published its first edition, our top story covered the brouhaha caused by a splinter group of franchisors who didn’t want the International Franchise Association to allow franchisees in as members.
Critics say Darden has too many brands (it also owns LongHorn Steakhouse, The Capital Grille, Yard House and several other smaller concepts) and have been pushing for major changes, including a split of the company and even franchising.
Sentinel Capital Partners exceeded its $1.1 billion target when it raised money for Fund V, closing last August and becoming one of a handful of quick fund-raising efforts last year, where firms with strong track records were able to close new pools of capital in record time. Well, hundreds of random items (we reporters are super-curious and often struggle to focus), but we’ve boiled them down to 20 notable people, companies and trends expected to make news. Last September, California passed a law that will raise its minimum wage to $10 an hour by 2016.
The Middle East is the new hot spot for franchising, thanks to government programs in the UAE and Saudi that encourage both small business ownership and existing local companies to franchise, says Mark Siebert, CEO of iFranchise. Franchise Times will unveil the smartest-growing brands in franchising in March, using a proprietary formula and the best database in the business to create a unique ranking. As of now there are no federal regulations for how e-cigarettes are made or how they’re marketed. Small chains and independents and startups have mostly implemented these systems, which have generally received good ratings from restaurant owners. Five of the fastest-growing restaurants in the country serve chicken as their main product. The Dallas-based organization had taken its own advice and elevated one of its most popular leaders to the CEO spot, Fritzi Woods, only to lose her when she died unexpectedly last September.
Darden doesn’t franchise in the United States, though it does franchise in international markets. We’re watching Sentinel and many other private equity firms as they look to deploy all that capital raised, and compete with each other to do so. Sentinel is best known for spectacular exits in recent years, most notably its sale of Massage Envy in October of 2012. Meanwhile, 10 states and several cities already have such provisions on the books, and in November, Target, the nation’s second-largest retailer, announced it would no longer place that check-off box on its applications. And it plans to limit the slow pace of some limited-time offers while marketing core items more heavily.
But the ordinary masses who have fewer and fewer places where they can light up make the most promising target. But expect a firefight this year, especially as anti-smoking experts worry over marketing to kids. Those were the days of communicating via fax machines and expensive overseas flights, he says. Based on our conversations with experts and forward-looking franchise operators, this is the year to act. That should change this year, or at the very least we’ll find out whether that potential is real.
They’ve increased sales of drinks and desserts because consumers can order right from their table without having to flag down a server. The Fed has been aggressively buying bonds for more than a year as a way to keep down long-term interest rates, which encourages borrowing and, in theory, stimulates the economy. The California-based concept is one of a handful of chains hoping to make fast- casual pizza the Next Big Thing in the restaurant industry. Scott Chorna has made every trade mission the past three years since Franchise Times became involved, except the last one to China.
Darden, which typically outperforms other casual-dining companies, has been struggling for the past two years. The Equal Employment Opportunity Commission filed two well-publicized lawsuits in 2013 claiming race-based discrimination against Dollar General and BMW Manufacturing Co., and seeks to ensure the criminal history question should not be used as an automatic bar to employment. The restaurant industry, naturally, is against such proposals, but they look unlikely to go away. We’ll identify the franchise systems performing above their peers for three years running, and tell how their leaders make it happen. So the company plans to delay some remodels scheduled for next year, and instead plans to spend that money on the kitchen and other areas to speed up service.
The effort could help usher in an era in which the major QSR concepts, including Wendy’s and Burger King, start competing not on price but on customer service.
Next has come a research phase to test various hypotheses about the ideal mix for improving unit economics. VaporSmith is just one of many brands, promoted to those who own convenience stores, gas stations or smoke-free hotels, bars and restaurants as a way to generate new revenue. Users have the choice of filling their device with flavored liquids that may or may not contain nicotine.
To help people figure out how, we offer a new 10-part series, debuting in this issue, called Healthcare SOS, which lays out action plans for franchisors and franchisees to deal with the new law. Chili’s, the Dallas-based casual dining chain, is adding tabletop ordering systems in all of its restaurants. So anybody that has used low-interest loans to buy a franchise or expand one can thank that program, at least in part.
And stores have already been sold to some of the largest and most highly regarded operators in the country. Roz Mallet, co-founder of PhaseNext Hospitality, a multi-brand franchise company that is a franchisee of Smashburger, Corner Bakery Cafe and Buffalo Wild Wings, is heading up the search committee. Its stock price had been stagnant this year until activists began targeting the company—even though restaurant stocks in general have been up this year, with several trading at all-time highs. But there is no question  the company would sell the Red Lobster restaurants if it decided to take that step. Supporters of Ban the Box say 65 million people in the United States have criminal convictions, and their prospects for gaining employment after serving time is dismal.
The result will be a must-read ranking of those powerhouse players that truly set the pace. For example, the new prototype store unveiled in August, a corporate-owned store, was 2,500 square feet. Technology, plus social media, plus an affinity overseas for American brands all add up to enormous opportunity for the patient franchisor. Consider it one more way we at Franchise Times strive to be of service to you, dear readers.
As such, many expect these chains to be popular because they enable customers to eat pizza for lunch. We see Chorna as an example of the new international expert who wants more than just a paycheck—the chance to excel at a big job and a reward at the end of the run.
She was also on the National Restaurant Association’s search committee a few years ago that elevated Dawn Walker into its CEO position (a past 20 to Watch).
Another boon to this trend is more good partners are available, as foreign companies that cut their teeth on the larger franchisors and are now looking to add emerging brands to their portfolio. And all of them are remaking the market for quick-service chicken, wresting market share from traditional leader, KFC. In the interim, Anna Mason, general manger and vice president of operations, is handling the day-to-day duties for the nonprofit.
For another example, the average eyeware store carries more than 3,000 frames; Pearle is testing a version with about 1,000. It opened three units right off the bat, and the company quickly gained a reputation in Southern California. One estimate says 1,914 funds are targeting $797 billion worth of deals in franchised brands. If so, be careful to follow the requirements and procedures under the law,” warns an update from law firm Bradley Arant Boult Cummings. They’ll keep testing for the next six months, refranchising many corporate-owned stores along the way.
The refranchising has been in such demand it sparked rumors that the locations are fetching abnormally high multiples.
Then when Kumar believes the unit economics are optimal, they’ll start adding new franchisees.
That distinction belongs to Atlanta-based Chick-fil-A, which has grown steadily in unit count and same-store sales to become the Chipotle of the South.
Its CEO, Sally Smith, personally visited PizzaRev as a customer before her company decided to invest in the chain. Meanwhile, Popeyes Louisiana Kitchen has been improving sales and ruffled some feathers when it took over multiple KFC locations in Minneapolis. The chicken-finger chain Zaxby’s has enjoyed booming growth and now has system sales over $1 billion. Charlotte-based Bojangles and Baton Rouge-based Raising Cane’s can also claim strong growth numbers.
It plans to be the franchisee for locations that open early this year in Minneapolis, near its company headquarters.

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