DailyFranchiseNews.com

Happy Holidays…Grab a Gift Card!

Instead of braving the crowds the week before, snatch up that perfect holiday gift for yourself early courtesy of First Watch: According to Chain Leader, all 80 First Watch daytime cafe locations will offer patrons $20 in Bonus Bucks for every $100 gift card purchase from November 16th through December 24th.

"Everyone likes to treat themselves and that can be difficult around the holidays. By receiving an extra $20 to First Watch, customers can enjoy coming to our restaurants without spending any more money,” said Chris Tomasso, First Watch’s chief marketing officer. “The gift card program is a great way to boost traffic in the first quarter as a result of the bounce back element inherent in the promotion. Our customers really like the fact that they actually get money 'back' to use at their favorite breakfast, brunch and lunch spot -- it's like a little gift for themselves."

First Watch is the largest and fastest-growing, privately owned, daytime-only restaurant chain in the United States. First Watch specializes in unique breakfast, brunch and lunch creations, all freshly prepared to order. Of its 80 restaurants in 11 states, three are franchised and four are licensed and future growth is expected to come from key multi-unit, regional franchises to experienced restaurateurs in new markets in 35 states throughout the continental U.S. Three additional company-owned restaurants are expected to open in 2009 and by the end of 2012; First Watch expects to grow to 110 restaurants, with about a dozen franchised locations open and more than 30 in various stages of development.

The Triangle Ups its Value

Though many lodging chains have limited or ceased expansion in the past year, Value Place is taking the exact opposite approach.

The News & Observer reported the Wichita-based chain is calling for 500 properties to be built over the next five years – six of which will be in the Triangle area but over the course of 10 years. The first area Value Place will open in Apex in January. That the plans of the Wichita, Kan.-based company have not been scaled back because of the recession speaks to Value Place's no-frills business model. For about $200 a week, plus a $100 damage deposit, Value Place guests get a clean, safe place to stay and not much else. The approach has proven attractive at a time when corporations are slashing travel budgets and more people find themselves in housing limbo because they have relocated but can't sell the home they left behind or simply because they are out of work.

"A lot of apartment dwellers don't want to commit to another year lease because they don't know where there job is going," said Gina McKee, Value Place's vice president of franchise development. McKee said occupancy rates across Value Place's 160 properties have remained about 80 percent during the recession. She also revealed that the Triangle market is attractive because of the large number of business travelers coming for extended visits and because so many people are moving into the area.

Carter Rise, a franchisee in Richmond, Va., who hopes to start construction on a Value Place on Capital Boulevard in Raleigh early next year, said the brand fits the current economic environment. "You get basic, ultra-clean, very safe lodging in a comfortable but not ostentatious room with minimal amenities," he said.

Dry Cleaning Station Gets Martinized

Martinizing has been the gold standard in dry cleaning since its inception in 1949 and is expanding its presence further with the recent acquisition of Minneapolis-based Dry Cleaning Station.

American Drycleaner reported that according to Jerry Laesser, Martinizing’s vice president of marketing and development, it’s anticipated that a combination of 10 Dry Cleaning Station full-service plants will initially convert to the Martinizing brand in four markets, including Denver; Southern California; Tulsa, Okla.; and Minneapolis, with other markets to follow. Martinizing will expand its brand into new markets and rebrand existing Dry Cleaning Station locations as Martinizing centers; stores in markets with existing Martinizing locations will retain the Dry Cleaning Station name.

“People may be cutting back on luxuries, but they will never give up their dry cleaning,” said Laesser. “By joining forces with Dry Cleaning Station, Martinizing is giving its customers the confidence that they will receive the best service possible at all times.”

Photo: Martinizing's Jerry Laesser.

Innovation in Franchising

Did you know that McDonald’s Big Mac and Filet-O-Fish wouldn’t exist today if it weren’t for some creative franchisees? AllBusiness.com did and recently set out to find if franchising and innovation go together like two all beef patties, special sauce, lettuce, cheese, pickles, onions and a sesame seed bun.

“Some franchisees, and some franchise systems, are more effective when franchisees can innovate,” says John Hayes, a franchise consultant, former franchisee and franchisor, and author of several franchise-related books. “More often, however, when franchisees have to search for answers or experiment, the results are likely to be frustrating and quite often the franchisees lose money. Innovation belongs to the franchisor and it's the responsibility of the franchisor.” However, that’s not to say that innovation on the franchisee level hasn’t happened successfully. In fact, franchisee input was the driving force behind the aforementioned McDonald’s menu items as well as Domino's Pizza’s new American Legends pizza line and line of breadbowl pastas which was developed and tested by a Los Angeles franchisee. At WSI, an Internet consulting franchise, innovation is so highly valued that an international excellence and innovation conference is held annually to recognize franchisees who have provided internet marketing solutions in their local markets around the world. In addition, Ron McArthur, president of the franchise, personally meets with the top 30 revenue producing franchises eight times a year to discuss ideas. And 90 percent of the products and services within the WSI e-marketplace have come from franchisees. “New franchisees are trained on the basics of business but innovations are introduced on a quarterly basis to ensure that we are offering the latest and best internet marketing processes to end clients that deliver results,” says McArthur.

There’s an old adage that says two heads are better than one. If that’s true, then it naturally follows that hundreds or thousands of people can make one system run better than just one. But be sure to first research what policy the franchisor has in place for accepting new ideas and then, only after you’ve demonstrated that you can follow the system at hand, introduce your idea. Because, when it comes to innovation, not everyone sees it in the same light.

Photo: Ron McArthur of WSI.

Catering Continues to Create a Buzz

Ladies and gentlemen, the holiday season is officially upon us and with it, an interesting statistic from foodservice consultants Technomic: More than 40 percent of consumers are buying platters or prepared food for holidays and celebrations. QSR reported that while the recession has continued to take its toll on the restaurant industry, Technomic’s study revealed a potentially vibrant market that has gone largely untapped in the quick-service sector – catering – a promising growth opportunity for quick-service outlets both large and small in the coming years. The study suggests there is a shift in consumer behavior, as the home is replacing the restaurant as the central meeting place for social gatherings. And it appears quick-service owners and operators are already beginning to adjust to the trend including Wingstop, Bruegger’s Bakery Café, Jersey Mike’s Subs, Panchero’s Mexican Grill and Cousins Subs.

Panchero’s launched its first catering program in April and has resulted in shifting the responsibilities of workers in an effort to minimize the added stress of taking large, bulk orders. “The biggest challenge for us was that we wanted to keep things the same. We didn’t want managers running around all day trying to deliver catering orders,” says Jay Hochenedel, Panchero’s director of operations. “This meant being a little more organized and shifting responsibilities. That way we didn’t have to bring on more labor to support the concept.”

Larry Weissman, vice president of marketing for Cousins Subs, which offers a full, on-site catering menu, says timing is catering’s most important element. “The big thing is really in the area of delivery,” Weismann says. “When a customer tells you, ‘I need it delivered at 12:30,’ that’s not a joke. They want it there at 12:30. In the end you have to make sure you can execute.” If these various needs can be met, quick-service operators that have experience with catering all say the same thing: The marketing benefits are significant. A catering order means a larger group of people will be snacking on the product, and the likelihood of reaching a new customer in that setting is pretty good.

Extended Stay Chain Expands in Richmond

If you’re between residences, traveling for work or planning to visit family in the Richmond area over the next few months, there will be a new extended stay lodging option to consider when making your plans.

Richmond BizSense reported Value Place will open in Colonial Heights within the next few weeks. The local franchise is owned by Carter Rise, who is also owner of Sandpiper LLC — an apartment company with properties in Harrisonburg. “With Fort Lee and all the growth in Colonial Heights, we saw a need for an affordable extended stay alternative,” said Rise, who lives in Richmond.

Rise hopes to draw military contractors who need temporary housing, as well as people moving to the area in need of a place to live while they look for permanent housing. The Colonial Heights location is the second one for Rise, as he opened his first Value Place in Chesapeake at the end of September. That location is doing well, he said, and is attracting a mix of military contractors, business travelers and people in between homes. Rise said the chain is growing in a down economy because of the price point. Rates at his new location will be $229 per week, with a one-week minimum stay. The hotel’s rates are between $159 and $359 nationwide. The average length of stay is 90 days, according to the company. “It is a high-level value at an attractive price point,” said Rise. “And you’ve got a kitchen in the room, so there is further savings in that.”

The business model of Value Place allows it to keep prices low by cutting out amenities. There is no free breakfast, and daily linen service costs extra. It also operates on a lean staff; Rise plans to hire between six and 10 employees to run the 124-room property. Rise plans to open additional locations in the area, most likely in the West End, Midlothian and near the I-95 corridor north of Richmond, but it won’t be until credit loosens up, he said.

Gina McKee, Value Place’s vice president of franchise development, said that in addition to Rise’s four planned locations, McKee said the company is looking for additional franchisees to develop two more locations in the area.

Catering Counts

While many think adding a catering program is a simple add-on service to boost sales and gain new customers, it takes a significant amount of time, effort and ingenuity for one to become successful. Thankfully, there are experts in place to lead the way.

Nation’s Restaurant News reported that since sales of off-site meals have to be integrated into the whole business plan and not just tacked on as an extra service, several restaurant companies are implementing operations software designed specifically for catering. Many nationally franchised brands turn to Altametrics, a California-based firm whose eRestaurant software suite has a module for catering and event management. Mitesh Gala, co-founder and chief executive of Altametrics, says catering is a natural extension of serving food, but the tactic requires planning. “You have to remember to look at the business holistically,” he said. “If you think catering is this silo that doesn’t impact other parts of the business, it’ll hamper your success. Make sure whatever you’re going to do is going to integrate, otherwise the left hand isn’t going to know what the right is doing.” As operators take orders using Altametrics’ system, the food and labor requirements for those meals flow into those metrics measured for the whole location, automatically coordinating scheduling and purchasing. About 44,000 locations of brands like California Pizza Kitchen, Wendy’s and Rock Bottom Restaurants use the eRestaurant suite, Gala said.

McAlister’s Deli, the fast-casual chain of nearly 300 locations, does healthy catering sales without dedicated software—about 8 percent systemwide—but it plans to test a Web-based catering module in units near its Ridgeland, Miss., headquarters starting in January, said vice president of training Vickie Frisbie. Currently, the brand manages catering orders with a blend of its point-of-sale system and pen and paper, Frisbie said. Catering software would allow McAlister’s to track customer data better and build reliability within those relationships. “By knowing the group you’re delivering to, you can tap further into the broader audience you have,” she said. “That leads you to the sports complex, then the coaches, then the [athletes’] moms, who end up being your social-catering clients.…This lets you segment out your database and market with things that will drive more sales in that area.” McAlister’s already sells lots of sandwich platters and gallons of sweet tea, Frisbie said, but it also will push its side dishes and holiday cookie platters to get more people thinking of the brand as a go-to catering option. “The relationship of catering and the economy today is important,” she said, “and we’re making sure we have reliability and great relationships with our customers. To perform detailed sales and profit analysis is going to be critical to us in 2010 to continue to grasp that market share.”

Photos from top right: Mitesh Gala reviewing eRestaurant results with Applebee's area director Vilma Tawil; a McAlister's Deli location.

Hooray for Heroes!

Good deeds seldom go unnoticed and select Applebee’s Neighborhood Grill and Bar restaurants in California are doing their part to celebrate a job well done: The Clovis Independent reported that from this point forward, 19 restaurants will be offering a 25-percent discount on all entrees to any uniformed police, fire, paramedic and military personnel who dine in at the restaurant.

“This is our way of saying thanks to the people that help make our community special and keep it safe,” said Anand Gala, president and CEO of Gala Corp, the management company behind the participating Applebee’s locations. “These individuals work far beyond the normal 9-to-5 work day and oftentimes their jobs never really stop; this selfless commitment to others will be reflected in our promotion because it, too, will never end.” The heroes discount will be available whenever the restaurant is open but is limited to one entrée per customer.

Photo: Gala Corp's Anand Gala.

He Remembered the Alamo

Sometimes a seemingly innocent conversation can breed an amazing opportunity. Norman Abdallah knows this firsthand and now he’s about to embark upon a new business venture with Alamo Drafthouse Cinemas.

The Austin American-Statesman reported that about two years ago, Alamo Drafthouse came up in a conversation between Abdallah and his son, Geoffrey. Geoffrey was a big fan of the Austin-based cinema-eatery chain and encouraged his dad to look into it further. Abdallah didn’t realize it at the time but that conversation would lead him to grow the Alamo brand in six Texas markets in the coming years with entrepreneur Neil Billingsley-Michaelsen. The pair – who call their operation Triple Tap Ventures LLC – will assume ownership of company-owned locations in Houston and Katy and plan to add theaters in San Marcos, Houston, Corpus Christi and several West Texas communities.

The move marks the first major development in expansion hopes for Alamo. Today, Alamo Drafthouse has seven locations, with two franchise locations slated to open later this year in San Antonio and Winchester, Va., the first out-of-state Alamo. While there are other movie-and-dinner theaters, Alamo is still quite popular and the longest running of its kind: John Martin, president and CEO of Alamo Drafthouse Cinemas, said revenue grew 8 percent last year, the best in the 12-year-old company's history. "For years, we've been out franchising, and trying to find a good fit for the franchise families," Martin said. "Norman Abdallah of Triple Tap definitely fit that mold."

Abdallah, chairman of Triple Tap, has homes in Austin and Seattle and said he would largely run the venture from his West Coast home. Billingsley-Michaelsen, who is the company's president, will run day-to-day operations from Austin. "We want this to be a big success," said Billingsley-Michaelsen, who has worked in corporate finance. "We are in it for the long run." The new group will not add locations in Austin. Today, Alamo Drafthouse expects to open 30 theaters by the end of next year, and 50 within five years, in markets such as Texas, Georgia, Florida, Oklahoma, Arizona and the East Coast.

Photos from top right: John Martin, president and CEO of Alamo Drafthouse Cinemas; Norman Abdallah of Triple Tap Ventures LLC; Neil Billingsley-Michaelsen of Triple Tap Ventures LLC.

West Coast Franchise Expo Still Happening!

Everyone hung around thinking “will people show up?” Yes, they did and although it wasn’t the same heavy crowd as in past years—Friday and Saturday afternoons saw good prospects at the event and real people looking for a franchise. It was hard to compete with Adultcon (porn stars!) in the Hall downstairs and Sunday saw a marathon in the city—but all in all things went well and weather was awesome. What really counts was dinner with the IFA girls who put on another development conference and worked hard to make it fresh this year prior to the show. Of course dinner at Mr. Chow with this blogger in Beverly Hills the night before did NOT hurt!!! See us having a blast in photo.

Arby’s was one of the exhibitors at the event and the boys—Dave and Tim—were working the booth hard. Of course with that brand name and those famous “hats” on a headband—how could they miss?

Photos from top left: The girls of the IFA with this blogger and the lovely Samantha Amato of Sanderson & Associates; Dave Leonardo, director of franchise development for Arby's.