Once upon a time, the only matter left to the discretion of a restaurant franchisee was the route he or she drove to work. Exact conformity to a chain’s procedures, design and menu were enforced with a vigor that had Third World dictators muttering, “Whoa. Those dudes are serious.”
Contrast that with some recent chain-restaurant openings. At the new Burger King in Ionia, MI, you’ll be served a thicker French fry and coarser cut bacon. Further north, on the other side of the border, your options include two new poutines, or sauced fries.
At the new Johnny Rockets in Sunrise, FL, you can play arcade games or watch pro sports on TV in the bar. It’s also the only restaurant in the chain to offer pizza.
The newest franchised Johnny Rockets in Cincinnati lets patrons get wine and beer to go. Breakfast is also available.
The list goes on and on. Clearly iron-fisted conformity is out, and adaptation to the realities of a local market, even an individual block, is the smarter business mindset that’s replacing it.
That’s partly due to the growing militancy of franchisees. No longer can the home office dictate how their businesses will run. When the franchisor tries, it’s likely to end up in court, as Burger King, Wendy’s and KFC have learned.
But it’s also smarter business. Patrons in downtown Miami might not want the same choices as the snowbirds staying by the choice or the trendinistas roller-blading through South Beach.
One of the trends that’s subtly helped fast-food in recent years has been the embrace of market-by-market pricing, which is really a version of yield management. Chains still advertise a chainwide bargain to get the most from their ad budgets, but they do it more selectively.
Another other factor is the undeniably increase in importance of franchisees. Chains have mothballed the rule of thumb that one-third of the system should be franchisor-operated to keep the home office focused on day-to-day functions.
But perhaps the main impetus is the realization that franchisees are the best consumer sales force a chain can have. No one knows the business and customer preferences like the ones who are immersed in the field every day.
No wonder headquarters are loosening the reins. It one of the most positive after-effects to emerge from the Great Recession.
Showing posts with label franchising. Show all posts
Showing posts with label franchising. Show all posts
Wednesday, October 12, 2011
Friday, October 7, 2011
A-ha's that might've slipped past you
You can’t miss a wave that’s reshaping the restaurant business. Harder to spot are the ripples that could swell into powerful forces. Consider these recent developments, for instance:
‘Menu disclosure’ is redefined. The term was once synonymous with posting calorie counts and other nutritional metrics so consumers could make an informed choice. Now we’re seeing a secondary designation.
Amid all the hoopla over the opening of Chipotle’s ShopHouse Southeast Asian Kitchen was a little-noticed detail brought to light by the Washington Post: Not everything on the menu was what it purported to be. Two of the sauces for vegetarian were actually made with fish stock, a huge no-no to the more orthodox non-flesh-eaters.
As the Post subsequently reported, ShopHouse quickly rectified the situation by adding an asterisk to the menu listings, alerting customers that the sauces are non-vegetarian.
It must’ve been déjà vu all over again for the concept’s parent. About a week beforehand, a tweeter with a large following voiced 140 characters’ worth of indignation that Chipotle’s pinto beans were flavored with bacon. Co-CEO Steve Ells called the tweeter (he’s an editor of Maxim, the breasts-and-beer magazine), apologized, and explained that the menu description had been corrected.
Meanwhile, Wendy’s drew fire because of its switch to buttered hamburger buns for the new Dave’s Hot ‘n Juicy line. Websites pointed out that the butter could be a hazard to consumers who are allergic to dairy products, and faulted the chain for not flagging the newfound danger more clearly on its website.
Franchisors could be seriously ding’d by the tax man. It slipped past almost unnoticed, but KFC lost a landmark court decision this week that should worry every franchisor. The U.S. Supreme Court rebuffed an attempt by the Yum! Brans holding to keep Iowa from assessing it for state income taxes.
The franchisor pointed out that it doesn’t operate a single restaurant in the state; all the units there are franchise stores. It doesn’t even have a single employee.
But the Supreme Court rejected the appeal. KFC will have to pay the $250,000 that Iowa says it’s due in income taxes on the franchise royalties and fees that were channeled to chain headquarters in Kentucky.
Two days, two bankruptcies of Sun Capital holdings. Are economic realities catching up to the private-equity raiders?
No PE investor gobbled up as many restaurant brands before and during the Great Recession as Sun, whose portfolio extends from Captain D’s to Bar Louie. The acquisitions included stakes in Friendly’s and Real Mex, parent of the Chevys, El Torito and Acapulco chains, both of which are now being run under the scrutiny of a bankruptcy court. Sun is undoubtedly the owner of more concepts than any other entity in the business, and is likely one of the bigger operator-franchisors as well.
It’s become an industry parlor game to speculate about what Sun will do with those holdings. An IPO for a select chain? Or for several, packaged together? How about a sale to other PE companies? Or to a strategic buyer? Maybe some will be crunched up and sold piecemeal for their locations, the way an auto is sold for parts.
It’s safe to say that Sun didn’t buy anything with a hope of seeing it go bankrupt. What does that portend a company with that much vulnerability to a restaurant downturn on its books?
Looks as if the parlor game has just been updated.
‘Menu disclosure’ is redefined. The term was once synonymous with posting calorie counts and other nutritional metrics so consumers could make an informed choice. Now we’re seeing a secondary designation.
Amid all the hoopla over the opening of Chipotle’s ShopHouse Southeast Asian Kitchen was a little-noticed detail brought to light by the Washington Post: Not everything on the menu was what it purported to be. Two of the sauces for vegetarian were actually made with fish stock, a huge no-no to the more orthodox non-flesh-eaters.
As the Post subsequently reported, ShopHouse quickly rectified the situation by adding an asterisk to the menu listings, alerting customers that the sauces are non-vegetarian.
It must’ve been déjà vu all over again for the concept’s parent. About a week beforehand, a tweeter with a large following voiced 140 characters’ worth of indignation that Chipotle’s pinto beans were flavored with bacon. Co-CEO Steve Ells called the tweeter (he’s an editor of Maxim, the breasts-and-beer magazine), apologized, and explained that the menu description had been corrected.
Meanwhile, Wendy’s drew fire because of its switch to buttered hamburger buns for the new Dave’s Hot ‘n Juicy line. Websites pointed out that the butter could be a hazard to consumers who are allergic to dairy products, and faulted the chain for not flagging the newfound danger more clearly on its website.
Franchisors could be seriously ding’d by the tax man. It slipped past almost unnoticed, but KFC lost a landmark court decision this week that should worry every franchisor. The U.S. Supreme Court rebuffed an attempt by the Yum! Brans holding to keep Iowa from assessing it for state income taxes.
The franchisor pointed out that it doesn’t operate a single restaurant in the state; all the units there are franchise stores. It doesn’t even have a single employee.
But the Supreme Court rejected the appeal. KFC will have to pay the $250,000 that Iowa says it’s due in income taxes on the franchise royalties and fees that were channeled to chain headquarters in Kentucky.
Two days, two bankruptcies of Sun Capital holdings. Are economic realities catching up to the private-equity raiders?
No PE investor gobbled up as many restaurant brands before and during the Great Recession as Sun, whose portfolio extends from Captain D’s to Bar Louie. The acquisitions included stakes in Friendly’s and Real Mex, parent of the Chevys, El Torito and Acapulco chains, both of which are now being run under the scrutiny of a bankruptcy court. Sun is undoubtedly the owner of more concepts than any other entity in the business, and is likely one of the bigger operator-franchisors as well.
It’s become an industry parlor game to speculate about what Sun will do with those holdings. An IPO for a select chain? Or for several, packaged together? How about a sale to other PE companies? Or to a strategic buyer? Maybe some will be crunched up and sold piecemeal for their locations, the way an auto is sold for parts.
It’s safe to say that Sun didn’t buy anything with a hope of seeing it go bankrupt. What does that portend a company with that much vulnerability to a restaurant downturn on its books?
Looks as if the parlor game has just been updated.
Thursday, August 25, 2011
A 5.5 on the restaurant Richter scale
We had an earthquake this week in New York City, but the restaurant business likely felt a few tremors of its own, judging from recent developments.
In short order, we had the most significant executive change in years; further proof the business can be one big hurt for the unwary; and a strong reminder of why you should always wear clean underwear while dining out in the city, if you wear any at all.
Temblor 1: First, the personnel shift. It wasn’t shocking that California Pizza Kitchen named a new CEO after being acquired by a private-equity firm. The surprise was the selection: G.J. Hart, the longtime range boss at the Texas Roadhouse casual chain.
I always figured he owned too much Roadhouse stock to leave. The only way he’d exit would be if a P.E. firm took the company private and installed its own honcho.
Turns out Hart only holds 289,000 shares, or less than 1% of shares outstanding, according to last year’s proxy.
Which will undoubtedly work in CPK’s favor. Roadhouse was a standout among the crowded field of casual faux-honkytonks, a group that also includes LongHorn, Lone Star and at least seven or eight strong regional chains.
The other national brands went through some significant retrenchment. Roadhouse has been the steady ride in the field, the result of what strikes me as a customer as an intense focus on operations and the integrity of the brand. You have a sense of what the concept is all about.
Sometimes when I visit a CPK, I feel as if I’m in a Sbarro with waitress service. Is it a pizza place, a casual restaurant, an Italian dinnerhouse, a café? Hart’s skills will likely play directly into the chain’s needs.
Temblor 2: The MaggieMoo’s mix-in ice cream chain is led behind the barn. The concept will be absorbed into its sister brand (and what most observers cite as the originator of the format), Marble Slab.
Moo’s wasn’t exactly an industry powerhouse. But it did have its moments of interest as a franchise option, particularly when arch-rival Cold Stone Creamery was growing so quickly.
That wouldn’t be such a big deal on it’s own. But there’s also…
Temblor 2.5: A new flurry of media reports about Quiznos financial plight. The Wall Street Journal reported some time ago that the chain was struggling under a whopper of debt. New coverage, including in the Journal, suggest that the problem hasn’t eased at all.
Quiznos is no MaggieMoo’s. It made a splash in the sandwich market, both by growing at head-turning speed and undercutting competitors on price. It was also one of the franchise chains that everyone seemed to be talking about.
Franchise relations within the chain soured long ago. Not the operators are watching a train-wreck of a situation, and one that many of them predicted when the advertised price of sandwiches left crumbs for margins.
The moral here: Restaurant franchising has stepped up appreciably in recent years as franchisors sold off company stores, displaced white-collar workers decided to start their own businesses, and fast-casual emerged as a hot area of growth. Activity increased, but the risk didn’t decline.
Choosing the wrong franchise can still be disastrous, even though the emphasis today is on finding experienced operators who might already have other chain concepts in their brand portfolios.
Temblor 3: New Yorkers have turned their city’s exalted restaurants into one big orgy, according to a story in the most believable tabloid this side of The Onion, the New York Post.
“Tableside naughtiness is so widespread, the issue’s no longer whether you’ve had a dalliance at an NYC eatery; it’s when, where and how,” reported the Ruppert Murdoch-owned daily.
Bragging about where you’ve had sex is now as much of a status setter as being able to namedrop where you ate, or what celebrity works out at your gym, according to the piece.
My favorite quote, from Joseph Couture, the author of a book on public sex: “The only thing people drop faster than their inhibitions after a bottle of wine is their pants.”
Which makes you wonder how many restaurant patrons took the earth moving beneath their feet this week as a completely routine experience.
In short order, we had the most significant executive change in years; further proof the business can be one big hurt for the unwary; and a strong reminder of why you should always wear clean underwear while dining out in the city, if you wear any at all.
Temblor 1: First, the personnel shift. It wasn’t shocking that California Pizza Kitchen named a new CEO after being acquired by a private-equity firm. The surprise was the selection: G.J. Hart, the longtime range boss at the Texas Roadhouse casual chain.
I always figured he owned too much Roadhouse stock to leave. The only way he’d exit would be if a P.E. firm took the company private and installed its own honcho.
Turns out Hart only holds 289,000 shares, or less than 1% of shares outstanding, according to last year’s proxy.
Which will undoubtedly work in CPK’s favor. Roadhouse was a standout among the crowded field of casual faux-honkytonks, a group that also includes LongHorn, Lone Star and at least seven or eight strong regional chains.
The other national brands went through some significant retrenchment. Roadhouse has been the steady ride in the field, the result of what strikes me as a customer as an intense focus on operations and the integrity of the brand. You have a sense of what the concept is all about.
Sometimes when I visit a CPK, I feel as if I’m in a Sbarro with waitress service. Is it a pizza place, a casual restaurant, an Italian dinnerhouse, a café? Hart’s skills will likely play directly into the chain’s needs.
Temblor 2: The MaggieMoo’s mix-in ice cream chain is led behind the barn. The concept will be absorbed into its sister brand (and what most observers cite as the originator of the format), Marble Slab.
Moo’s wasn’t exactly an industry powerhouse. But it did have its moments of interest as a franchise option, particularly when arch-rival Cold Stone Creamery was growing so quickly.
That wouldn’t be such a big deal on it’s own. But there’s also…
Temblor 2.5: A new flurry of media reports about Quiznos financial plight. The Wall Street Journal reported some time ago that the chain was struggling under a whopper of debt. New coverage, including in the Journal, suggest that the problem hasn’t eased at all.
Quiznos is no MaggieMoo’s. It made a splash in the sandwich market, both by growing at head-turning speed and undercutting competitors on price. It was also one of the franchise chains that everyone seemed to be talking about.
Franchise relations within the chain soured long ago. Not the operators are watching a train-wreck of a situation, and one that many of them predicted when the advertised price of sandwiches left crumbs for margins.
The moral here: Restaurant franchising has stepped up appreciably in recent years as franchisors sold off company stores, displaced white-collar workers decided to start their own businesses, and fast-casual emerged as a hot area of growth. Activity increased, but the risk didn’t decline.
Choosing the wrong franchise can still be disastrous, even though the emphasis today is on finding experienced operators who might already have other chain concepts in their brand portfolios.
Temblor 3: New Yorkers have turned their city’s exalted restaurants into one big orgy, according to a story in the most believable tabloid this side of The Onion, the New York Post.
“Tableside naughtiness is so widespread, the issue’s no longer whether you’ve had a dalliance at an NYC eatery; it’s when, where and how,” reported the Ruppert Murdoch-owned daily.
Bragging about where you’ve had sex is now as much of a status setter as being able to namedrop where you ate, or what celebrity works out at your gym, according to the piece.
My favorite quote, from Joseph Couture, the author of a book on public sex: “The only thing people drop faster than their inhibitions after a bottle of wine is their pants.”
Which makes you wonder how many restaurant patrons took the earth moving beneath their feet this week as a completely routine experience.
Thursday, April 7, 2011
Easy way to get loans for franchisees?
The International Franchise Association didn’t over-promise in pitching its Small Business Lending Summit as an opportunity to hammer out solutions to restaurant franchisees’ capital crunch. A packed room of attendees heard repeatedly today that lenders would extend loans more readily if applicants’ franchisors provided detailed data about the brand’s overall performance.
Bank representatives said the rusted machinery would be greased significantly if brand headquarters shared such nitty-gritty info as long-term sales plans, what failed stores are fetching when they’re sold, and what HR support is available to franchisees.
Several noted that medical-related small businesses are having an easier time than restaurants and other franchised businesses in securing growth capital. “The reason is there’s a tremendous amount of data available in that sector,” said Joe DiNicola of Bank of America.
“Today’s underwriting is different than yesterday’s underwriting. When the story can be supported with the franchisor’s data, that story becomes stronger,” he asserted.
The discussion prompted one member of the audience to grab a microphone and suggest that franchisors put systems into place and standardize the information they pass along to potential sources of licensee loans.
The give-and-take grew out of what panel moderator and celebrity business journalist Geoff Colvin called a “giant disconnect between lender and borrower.”
He noted that the conference was convened because franchisees are starved for financing. Yet lenders on the program attested that they not only are willing to lend more money to franchisees, but are aggressively prowling for those sorts of deals.
Ironically, they asserted that a major part of the problem is insufficient demand.
“We’re seeing a lot of hesitancy,” said Mary Navarro, a senior EVP for the Midwest’s Huntington Bank. “A low sales volume might be part of that hesitancy, and [franchisees] have learned to do more with less.”
The discrepancy between franchisees’ complaints and lenders assertions had Colvin scratching his head. He asked Navarro, “What explains the perception that franchisees can’t get credit?”
After some give-and-take, lenders acknowledged that they’re using different criteria post-Great Recession to decide who gets money. They’re looking for a convincing track record and far more detailed information about the ventures they back.
“Document, document, document,” advised Tony Wilkinson, CEO of the National Association of Government Guaranteed Lenders.
Banks are also looking for an on-going relationship, not a one-off transaction. Her company is loath to make one-shot loans because it wants to lend money on an ongoing basis with businesses in the neighborhood.
A representative of Regions Financial Corp. suggested that franchisors choose a dozen banks nationally, educate those institutions about their concept, and then work exclusively with then.
Pens were scribbling furiously as she spoke. I bet the notation was starred and underlined a few times.
Bank representatives said the rusted machinery would be greased significantly if brand headquarters shared such nitty-gritty info as long-term sales plans, what failed stores are fetching when they’re sold, and what HR support is available to franchisees.
Several noted that medical-related small businesses are having an easier time than restaurants and other franchised businesses in securing growth capital. “The reason is there’s a tremendous amount of data available in that sector,” said Joe DiNicola of Bank of America.
“Today’s underwriting is different than yesterday’s underwriting. When the story can be supported with the franchisor’s data, that story becomes stronger,” he asserted.
The discussion prompted one member of the audience to grab a microphone and suggest that franchisors put systems into place and standardize the information they pass along to potential sources of licensee loans.
The give-and-take grew out of what panel moderator and celebrity business journalist Geoff Colvin called a “giant disconnect between lender and borrower.”
He noted that the conference was convened because franchisees are starved for financing. Yet lenders on the program attested that they not only are willing to lend more money to franchisees, but are aggressively prowling for those sorts of deals.
Ironically, they asserted that a major part of the problem is insufficient demand.
“We’re seeing a lot of hesitancy,” said Mary Navarro, a senior EVP for the Midwest’s Huntington Bank. “A low sales volume might be part of that hesitancy, and [franchisees] have learned to do more with less.”
The discrepancy between franchisees’ complaints and lenders assertions had Colvin scratching his head. He asked Navarro, “What explains the perception that franchisees can’t get credit?”
After some give-and-take, lenders acknowledged that they’re using different criteria post-Great Recession to decide who gets money. They’re looking for a convincing track record and far more detailed information about the ventures they back.
“Document, document, document,” advised Tony Wilkinson, CEO of the National Association of Government Guaranteed Lenders.
Banks are also looking for an on-going relationship, not a one-off transaction. Her company is loath to make one-shot loans because it wants to lend money on an ongoing basis with businesses in the neighborhood.
A representative of Regions Financial Corp. suggested that franchisors choose a dozen banks nationally, educate those institutions about their concept, and then work exclusively with then.
Pens were scribbling furiously as she spoke. I bet the notation was starred and underlined a few times.
Wednesday, March 30, 2011
Dirt and dish from the RLC
Here’s some of the gossip from the RLC. It’s bad journalism (no attribution or verification of most points), but some interesting reading:
ITEM: The U.S. Department of Commerce is bringing representatives from 13 American restaurant chains to India to interest local operators there in developing the concepts.
ITEM: If Mayor-elect Rahm Emanuel makes good on his promise to legalize truck restaurants in Chicago, look for one of the city’s most respected operators to hit the streets with a bao or dumpling concept.
ITEM: Mark Levy of Levy Restaurants fame is expected to make a splash in Chicago’s already-crowded steakhouse market with his entry, Chicago. It’s going into the downtown space formerly occupied by Wolfgang Puck’s Spago. Michael Jordon’s namesake beef house is also returning to the Windy City. Game on.
ITEM: Among the upstarts snagging attention from concept scouts was Los Angeles’ Veggie Grill. Ditto for Texas’ Twin Peaks and Phoenix’s Wildflower Bread Co.
ITEM: Chain restaurateurs were griping incessantly a few months ago about not being able to calculate an ROI on social media. Now benchmarking research is pouring into the marketplace (including from Restaurant Business; see our Social Media 50 report on MonkeyDish.com starting tomorrow). I hope to do a roundup on the other sources in this space sometime next week.
ITEM: The U.S. Department of Commerce is bringing representatives from 13 American restaurant chains to India to interest local operators there in developing the concepts.
ITEM: If Mayor-elect Rahm Emanuel makes good on his promise to legalize truck restaurants in Chicago, look for one of the city’s most respected operators to hit the streets with a bao or dumpling concept.
ITEM: Mark Levy of Levy Restaurants fame is expected to make a splash in Chicago’s already-crowded steakhouse market with his entry, Chicago. It’s going into the downtown space formerly occupied by Wolfgang Puck’s Spago. Michael Jordon’s namesake beef house is also returning to the Windy City. Game on.
ITEM: Among the upstarts snagging attention from concept scouts was Los Angeles’ Veggie Grill. Ditto for Texas’ Twin Peaks and Phoenix’s Wildflower Bread Co.
ITEM: Chain restaurateurs were griping incessantly a few months ago about not being able to calculate an ROI on social media. Now benchmarking research is pouring into the marketplace (including from Restaurant Business; see our Social Media 50 report on MonkeyDish.com starting tomorrow). I hope to do a roundup on the other sources in this space sometime next week.
Tuesday, April 7, 2009
Happy anniversary to an American icon
Growing up in the New York area during the 1960s and ‘70s, there were two absolutes to life: The Yankees were a much cooler team than the Mets, even when they stunk, and nothing was funnier than a dead-on Tom Carvel impression.
Those of you exposed to the spots are undoubtedly aping Carvel’s unique voice right now. His plugs for Fudgie the Whale, Cookie Puss, Tom the Turkey and a surreal Christmas cake are indelibly stamped into your memories. But for the sake of those who were cursed to live outside the cult of the spinning Carvel cone, let me explain.
Carvel was the founder and longtime chairman of a soft-serve ice cream chain that was integral to life in the New York suburbs. Carvel’s signature products were cones—15 cents for a small, 25 cents for a large, which was big enough to feed all of Paraguay for a year. Yet Tom would come on the air to push his higher-ticket cakes—most of which were made from the same mold. Somehow, the shape of a chocolate whale could be reconfigured into a big-cheeked Santa Claus around Christmas. The spots were our equivalent of Cal Worthington or Earl Scheib commercials, or any number of late-night local station ads. They were downright campy from the get-go.
Yet you couldn’t help but regard Tom as sort of an eccentric uncle, because his business was an integral part of our lives. My father would usually treat us to a Carvel visit ever Sunday night. We’d park in front of a walk-up window with the spinning giant cone atop the building, then get out to ogle the Brown and Cherry Bonnets. When my 8th Grade baseball team pulled out a big win, the coach took us to a Carvel. And every birthday or other special occasion was celebrated in grade school with a box of Carvel Flying Saucers, the chain's take on the ice cream sandwich.
We, of course, never comprehended that Tom Carvel was a pioneer of the restaurant business, a true trailblazer in franchising. Unfortunately, part of his legacy was a lawsuit that forever determined that franchisors couldn’t force franchisees to buy particular products from the home office. He might’ve also been the consummate example of a concept founder who should’ve been more open to new ideas. By the time he passed away, Carvel had to do a lot of catching up with the times. It also had a heap of problems with franchisees, many of whom were second or third-generation owners.
The concept was eventually sold to Focus Brands, which today also owns Moe’s Southwest Grill, Schlotzsky’s and Cinnabon. It’s corrected much of the neglect that was visited upon the brand under the later years of Tom Carvel’s stewardship, and is growing the business again.
All of this comes to mind because this is Carvel’s 75th anniversary. For those of us who cheered the Yankees and booed the Mets, this is an important occasion. I might celebrate by having a whole Fudgie the Whale on my own.
For the rest of you, trust me when I say that this is an occasion to salute a true American icon. Let’s hear it for Tom, Carvel, and of course Cookie Puss.
Those of you exposed to the spots are undoubtedly aping Carvel’s unique voice right now. His plugs for Fudgie the Whale, Cookie Puss, Tom the Turkey and a surreal Christmas cake are indelibly stamped into your memories. But for the sake of those who were cursed to live outside the cult of the spinning Carvel cone, let me explain.
Carvel was the founder and longtime chairman of a soft-serve ice cream chain that was integral to life in the New York suburbs. Carvel’s signature products were cones—15 cents for a small, 25 cents for a large, which was big enough to feed all of Paraguay for a year. Yet Tom would come on the air to push his higher-ticket cakes—most of which were made from the same mold. Somehow, the shape of a chocolate whale could be reconfigured into a big-cheeked Santa Claus around Christmas. The spots were our equivalent of Cal Worthington or Earl Scheib commercials, or any number of late-night local station ads. They were downright campy from the get-go.
Yet you couldn’t help but regard Tom as sort of an eccentric uncle, because his business was an integral part of our lives. My father would usually treat us to a Carvel visit ever Sunday night. We’d park in front of a walk-up window with the spinning giant cone atop the building, then get out to ogle the Brown and Cherry Bonnets. When my 8th Grade baseball team pulled out a big win, the coach took us to a Carvel. And every birthday or other special occasion was celebrated in grade school with a box of Carvel Flying Saucers, the chain's take on the ice cream sandwich.
We, of course, never comprehended that Tom Carvel was a pioneer of the restaurant business, a true trailblazer in franchising. Unfortunately, part of his legacy was a lawsuit that forever determined that franchisors couldn’t force franchisees to buy particular products from the home office. He might’ve also been the consummate example of a concept founder who should’ve been more open to new ideas. By the time he passed away, Carvel had to do a lot of catching up with the times. It also had a heap of problems with franchisees, many of whom were second or third-generation owners.
The concept was eventually sold to Focus Brands, which today also owns Moe’s Southwest Grill, Schlotzsky’s and Cinnabon. It’s corrected much of the neglect that was visited upon the brand under the later years of Tom Carvel’s stewardship, and is growing the business again.
All of this comes to mind because this is Carvel’s 75th anniversary. For those of us who cheered the Yankees and booed the Mets, this is an important occasion. I might celebrate by having a whole Fudgie the Whale on my own.
For the rest of you, trust me when I say that this is an occasion to salute a true American icon. Let’s hear it for Tom, Carvel, and of course Cookie Puss.
Monday, March 16, 2009
Obama set to encourage restaurant lending
I’ve slipped on my thick plastic glasses with the tape on the nosepiece because it’s Geek Time. With the possible exception of insurance policies and nuns—wait, scratch nuns—nothing is less sexy than the Small Business Administration and its loans process. Tax forms read like porn in comparison.
Yet the White House is expected to make an announcement today about the SBA that’s of crucial importance to restaurants, and that needs to be noted. Press reports that hit in a flurry yesterday say President Obama will channel some $375 million from the stimulus spending kitty into the SBA’s loan program, a pipeline regularly used by restaurant franchisees. Indeed, the restaurant business is reportedly the most frequent user of SBA loans, which are channeled to small enterprises through designated local banks.
In the world of grassroots restaurant financing, this is hot. Angelina Jolie hot.
Lending to small businesses would also be helped by the infusion of $10 billion in stimulus funds into the secondary credit market. The planned injection is intended to encourage the flow of capital to small businesses by increasing lenders’ confidence they can sell the loans on the so-called secondary market, thereby turning that deal into cash they can then use to make another loan.
Unfreezing capital for restaurant expansion or renovation would be a tremendous boon to the industry. Obama appears to have a blowtorch in one hand, the match in the other.
Yet the White House is expected to make an announcement today about the SBA that’s of crucial importance to restaurants, and that needs to be noted. Press reports that hit in a flurry yesterday say President Obama will channel some $375 million from the stimulus spending kitty into the SBA’s loan program, a pipeline regularly used by restaurant franchisees. Indeed, the restaurant business is reportedly the most frequent user of SBA loans, which are channeled to small enterprises through designated local banks.
In the world of grassroots restaurant financing, this is hot. Angelina Jolie hot.
Lending to small businesses would also be helped by the infusion of $10 billion in stimulus funds into the secondary credit market. The planned injection is intended to encourage the flow of capital to small businesses by increasing lenders’ confidence they can sell the loans on the so-called secondary market, thereby turning that deal into cash they can then use to make another loan.
Unfreezing capital for restaurant expansion or renovation would be a tremendous boon to the industry. Obama appears to have a blowtorch in one hand, the match in the other.
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