The Winner's Circle, July 2011

As savvy franchise companies continue to flourish in a changing economy, FUSR continues to bring you good news each month, highlighting brands that are adding units, increasing comp store sales, striking deals with investors, innovating, and continuing to grow, whether domestically or overseas. To be considered for next month's Winner's Column, please send your good news to eddyg@franchiseupdatemedia.com.

New Growth

Welcomemat Services Sells First Franchise
Welcomemat Services has signed a franchise agreement with Thomas Gardo of Hilton Head, S.C. The company's first franchise will serve Hilton Head and Bluffton, as well as greater Savannah. Founded in 2003, Welcomemat began franchising last December after building 12 successful corporate-owned locations. The marketing strategies and technology concept provides local businesses with access to new customers in their communities through a combined digital and print marketing program. Gardo is a former journalist and decorated Vietnam veteran who has worked in marketing communications and PR for more than 35 years. The brand's national expansion plan calls for 200 locations to open during the next 5 years in high-profile, transient markets. In 2010, Welcomemat received nearly $2 million in capital investment from private investors to propel franchise expansion nationwide.

Friendly's Refranchises 32 in NY Tri-State Area
J&B Restaurant Partners of NYDMA, an existing Friendly's franchisee, has purchased an additional 32 company-owned restaurants, bringing its total to 65. The 32 restaurants, in New York, Connecticut, and New Jersey, will be remodeled and refreshed. J&B also committed to build 19 new restaurants over the next 7 years. J&B, based in Ronkonkoma, N.Y., operates national-brand franchises throughout Long Island and has been a Friendly's franchisee since 2001.

Friendly's also announced that Will Haiback has purchased two additional restaurants in New Jersey, in Morris Plains and Clark. Haiback, a franchisee since 2004, already operates Friendly's in New Providence and Old Bridge. As part of the agreement, Haiback will remodel those restaurants and open two new units by December 31, 2013.

Friendly Ice Cream Corp., based in Wilbraham, Mass., is a 75-year-old brand that operates more than 500 corporate and franchised family restaurants with reported system-wide sales of $700 million and distributes products through more than 4,000 retail locations.

Firehouse Subs Signs Former Franchise COO for 80 Units in Dallas
Ryan Franklin, former COO of Lone Star Steakhouse and Texas Land & Cattle Steakhouse, has signed on with Firehouse Subs as an area representative. Franklin has agreed to develop 80 restaurants over the next several years, with the first set to open by year-end. He will own and operate one restaurant, which will be used as his training restaurant. Currently, Firehouse Subs operates 18 restaurants across Dallas, which Franklin now oversees. Firehouse Subs, founded in Jacksonville, Fla., by former firefighting brothers Chris Sorensen and Robin Sorensen, is a 432-unit fast casual restaurant chain.

Smashburger Signs Five Franchisees for 63 New Units
Smashburger has added five new franchisees for a combined commitment of 63 new franchise units. The signings bring the "better burger" brand's total franchise pipeline to 463. With 100 stores nationwide, Smashburger plans to open 85 new restaurants in 2011, with a year-end target of 175 units. The company is targeting more than 500 stores in the next few years. Its restaurants are half company-owned and half franchised. The five new agreements are in:

• Queens and Westchester, N.Y., and Fairfield, Conn. - Rich Greenstein, Ronnie Portnoy, and Howie Novick signed to open 24 restaurants over the next 6 years. The partners are longtime Dunkin' Donuts franchisees.
• Cincinnati - Scott Snow signed to open 12 new restaurants in Cincinnati. He is a Buffalo Wild Wings franchisee.
• Jacksonville, Fla. - Jim Crossen of American Food Services Group signed to open seven restaurants over the next four years in Duval County.
• New Orleans and Birmingham, Ala. - Compleat Hospitality Management plans to open 10 restaurants. He also is a Buffalo Wild Wings franchisee.
• Charlotte, N.C. - Craig and Peter Cunningham signed a 10-unit agreement. Craig Cunningham previously served as regional area director for Mimi's Café.

Denver-based Smashburger was developed and is owned by Consumer Capital Partners, a private investment and concept development firm focused on multi-unit retail businesses, primarily in the restaurant, liquor, food, and leisure industries.

DineEquity Refranchises 66 Applebee's to Apple American
Apple American Group has agreed to buy 66 Applebee's restaurants from DineEquity. The restaurants are in Massachusetts, New Hampshire, Maine, Rhode Island, Vermont, and New York. DineEquity expects to net $49 million from the sale. The purchase agreement is the third refranchising deal by San Francisco-based Apple American since DineEquity acquired Applebee's Neighborhood Grill & Bar in 2007. Apple American, a portfolio company of GS Capital Partners and Weston Presidio, operated about 270 Applebee's locations in 11 states before the sale. Apple American has agreed to remodel all of its New England restaurants by the end of 2012. Since buying the chain, DineEquity has sold more than 250 corporate Applebee's restaurants. In a prepared statement, Julia Stewart, DineEquity's chair and CEO, said, "Since the closing of the acquisition of Applebee's, we have refranchised more than half of Applebee's company-operated restaurants, enabling us to leverage free cash flow to pay down debt and focus on enhancing the Applebee's restaurant experience through comprehensive marketing, menu, operations and remodel strategies." Based in Glendale, Calif., DineEquity operates or franchises 2,011 Applebee's and 1,504 IHOP locations.

Criterion Capital Partners Buys 10 Fatburgers
Criterion Capital Partners (CCP), a Los Angeles-based merchant bank, has acquired 10 Fatburger franchise restaurants from Fatburger Restaurants of California, a subsidiary of holding company Fatburger Corp. CCP outbid other parties when the franchises were put up for auction in a bankruptcy sale in late March. CCP acquired ownership through a §363 sale, which transfers the acquired assets free and clear of any liens. The 10 units are in Greater Los Angeles and Southern California. The purchse is part of an aggressive acquisition and investment strategy by the merchant bank, which owns or has significant interests in other fast casual restaurants, sporting apparel manufacturers, and entertainment, technology and e-commerce companies.

Tossed Signs Agreement for Five New Boston Locations
Tossed, a salads, crepe wraps, and sandwiches concept, has signed an agreement for five new locations in the Boston area. Franchisee Brian Hanseth, a former Wall Street t rader, is looking to open his first store by year-end. Tossed opened its first Boston restaurant in 2007 in the Prudential Center. In the past year, Tossed signed franchise development agreements in Washington, D.C., and California. The brand will also expand outside the U.S. for the first time this summer with the opening of a Canadian location in Vancouver, B.C. Tossed Franchise Corp., which opened its first unit in Manhattan in 1998, is based in Fort Lauderdale.

Smiling Moose Deli Opens in Boulder
Smiling Moose Deli planned to open a new location in Boulder in early June, around the corner from the company's new corporate offices. The new deli is among 22 open or soon-to-be opened restaurants, including Midland, Tex., Bozeman, Mont., Evansville, Ind., Gillette, Wyo., and Dallas/Ft. Worth. The company recently developed mobile ordering apps for the iPhone and Android-based phones and is ramping up its catering business.

Schlotzsky's Signs 2 New Franchisees for 75 Multi-Brand Sites
Two new franchisees have signed on for 25 new stores featuring the Schlotzsky's, Cinnabon, and Carvel brands under one roof. Company executives said the restaurants will begin to open in New Jersey and Texas during the next 6 to 12 months. The first agreement was signed with New Jersey-based Better Bunz LLC for 17 tri-brand locations (a total of 51 agreements) throughout New Jersey. Anthony and Lama Dalleggio of Better Bunz will own the new restaurants, and their daughter, Lea, will oversee operations.

Texas-based Sac-N-Pac inked the second deal, for 8 tri-brand locations (a total of 24 agreements) in Houston, San Antonio, and Central Texas. Sac-N-Pac, a family-owned and operated fuel and grocery retailer, will open non-traditional interstate/convenience locations along major highways and travel plazas. Each restaurant will share a building with the fuel/convenience retail store and have its own entrance, a separate drive-through, and a connected pass-through inside the building.

"Together, these agreements represent the largest in Schlotzsky's history," said Kelly Roddy, president of Schlotzsky's. He said Schlotzsky's plans to have upwards of 700 locations by 2015. The company has more than 350 worldwide today. Founded in 1971, Schlotzsky's is owned by Focus Brands, the franchisor and operator of more than 3,300 Carvel, Cinnabon, Schlotzsky's, Moe's Southwest Grill, and Auntie Anne's locations, as well as Seattle's Best Coffee on certain military bases and in international markets.

Marijuana Hydroponics Franchise, weGrow, Enters Arizona
Arizona's first 21,000 sq. ft. weGrow store, a hydroponics supply and educational concept, has opened a 21,000 sq. ft. store in Phoenix on June 1st. Earlier this year, the company opened a 10,000 sq. ft. store in Sacramento. "We're not talking tomatoes," said Arizona's first weGrow Franchisee Sunny Singh. The growing chain does not actually sell any marijuana itself, just everything needed to grow it. The company originated in Oakland as a small warehouse store named iGrow.

The Rock Debuts in Oregon
The Rock, Wood Fired Pizza & Spirits, has opened its first restaurant in Oregon, in Gresham. The brand also plans to open up to seven new locations in the Vancouver, Wash. and Portland, Ore. markets in the next few years. The new franchise unit is owned by Hot Stone LLC, which also owns The Rock location in Vancouver. Hot Stone brings more than 25 years of multi-restaurant ownership experience, including Taco Del Mar in Portland, Ore., and Papa Murphy's in the Greater Seattle area. Brad Loucks is the operating partner of Hot Stone. The Rock currently has 10 restaurants in Washington, one in Red Deer, Alberta, and has plans to open up to 30 new restaurants around the country in partnership with the H. Katz Capital Group. The Rock first opened in 1995 in Tacoma, Wash.

Nature's Table Café To Open Three New Restaurants
Nature's Table Café, a 75-unit brand focused on health-conscious dining, has signed two new franchise agreements to open restaurants in California and in North or South Carolina. The chain also will be opening its fourth corporate location, in an office building in Maitland, Fla. "Our office building prototype especially has attracted multi-unit developers looking to saturate a market with both traditional fast-casual locations and non-traditional sites," said company founder and CEO Dick Larsen. In addition to the new corporate restaurant, Nature's Table has also signed agreements for two new franchised locations. Paul Lau, an experienced restaurant entrepreneur, has bought the rights to open in Orange County. Lau's restaurant will be the second California location for the brand. Plans for a Nature's Table Café in either North or South Carolina are also under way for new franchisee Christina Long, a real estate professional.

Nature's Table, a family-owned company founded in 1977 in Orlando, has formed a partnership with franchise developer Fransmart to help develop the fast-casual concept in traditional and non-traditional locations, both domestically and overseas. Fransmart also has development partnerships with chains such as Boardwalk Fresh Burgers & Fries, Elevation Burger, Mazzio's Italian Eatery, and ZPizza.

Capriotti's Opens in Tempe, Pahrump
The third Arizona location for Capriotti's Sandwich Company is open for business in Tempe. Another new store was scheduled to open at the beginning of June in Pahrump, Nev. Capriotti's is set to open at least five more locations in the next few months. The brand, which celebrated its 35th anniversary in June, has more than 70 company-owned and franchised locations in 11 states. The first Capriotti's opened in Wilmington, Del.

Mooyah Burgers Heads To Hartford
First-time Mooyah franchisees Matt Rusconi and David Vorchheimer opened a lunchtime only (11 a.m. to 2 p.m., Monday to Friday) restaurant in Hartford's State House Square, the first Mooyah location in the state. Rusconi and Vorchheimer have also signed a lease to open a second Mooyah location later this year in West Hartford, which will be open for lunch and dinner. Mooyah, based in Frisco, Tex., began franchising in 2007. Restaurants are currently opening in Texas, Tennessee, Louisiana, Arkansas, Kansas, Virginia, Maryland, Connecticut, and Washington, D.C.

International

Jamba Signs Master for 80 in Canada
Jamba Inc. has signed a master development agreement with Canada Juice Corp. to develop 80 stores across Canada over the next 10 years. The first Canadian locations are expected to open in late 2011. Canada Juice has 1,200 stores in 25 countries under several brands including Yogen Früz, Yogurty's, I Can't Believe It's Yogurt, Swensen's Ice Cream, Bresler's Ice Cream and Ice Cream Churn. This agreement represents the latest step in Jamba's international franchise store growth and supplements the recent expansion into South Korea and the Philippines. Founded in 1990, Jamba Juice has 742 locations in the U.S., 435 franchised and 307 company-owned.

Wendy's Opens 2nd Unit in Russia
Wendy's, which opened its first restaurant in Russia on June 14 in Moscow, has quickly opened a second, part of the company's goal to launch at least 180 restaurants, franchises, and subfranchises in Moscow and the Russian regions over the next 10 years. The new restaurant will offer an American menu of hamburgers, cheeseburgers, salads, and roast beef sandwiches. The average bill is expected to be 250 rubles ($9), $3 to $4 more than in the U.S. The franchisee, Wenrus Restaurant Grou,p projects annual revenue of $1.5 million to $1.6 million per store, roughly 40 percent higher than at a U.S. store. McDonald's, which opened in Russia in 1990 and had 275 units at the end of 2010, opened 31 restaurants last year and 40 more this year. Burger King opened its first restaurant in Russia in January 2010.

Quiznos Goes to Brazil
Quiznos has signed a master franchise agreement with Brazil Best Food (BBF) to open its first locations in Brazil. BBF has been involved in fine dining and retail and has been a major franchisee of several different concepts in Brazil. Expansion plans call for developing 200 Quiznos restaurants in the North, Northeast, and Midwest of Brazil over the life of the agreement. Seven Quiznos units will open in Brazil by year-end, with the first set to open this fall. Now in its 30th year, Denver-based Quiznos plans to grow the brand's international footprint to more than 40 countries and territories, with target markets in Central and South America, Europe, the Middle East, and Southeast Asia. The company recently announced expansion into Southern India and Kuwait.

DineEquity Brings IHOP to the Middle East
DineEquity Inc. reached a deal with international franchise operator M.H. Alshaya Co. to develop 40 IHOP restaurants in the Middle East over the next five years, marking the restaurant chain's first major expansion outside North America. M.H. Alshaya operates international franchises for more than 55 global brands including Starbucks and Office Depot. Restaurants are planned for nine Middle Eastern countries including Kuwait, Saudi Arabia, Jordan, Lebanon, and Egypt.

WSI Signs Master in Morocco
WSI has opened a new master franchise office in Casablanca. The office will be operated by Ahmed Laassri and Grant Erasmus, who will be responsible for developing a network of single-unit franchisees in the region and providing ongoing training and support. In addition to Morocco, Toronto-based WSI also has master franchises in the Baltics, Cyprus, United Arab Emirates, Qatar, Bahrain, Brazil, Spain, Egypt, France, Czech Republic, Slovakia, and Portugal.

Teriyaki Expands in Puerto Rico and Panama
Teriyaki Experience announced two new international franchise agreements, one in Panama and one in Puerto Rico. This summer, the brand will open two new restaurants in San Juan, its first in Puerto Rico, part of a growth initiative to develop 12 locations there over the next five years. In Panama, the brand opened in April at the Tocumen Airport, part of a plan to expand and develop in airport terminals internationally. The Tocumen Airport location was opened by master franchisee QSR International of Costa Rica and its franchisee, International Meal Company, a multi-brand operator in Latin America. The brand is already established in Kuwait International Airport and has contracted plans to open another location in Puerto Rico's Luis Muñoz Marín International Airport. "There is a growing trend of international travelers concerned with healthy eating options in airports," said Nik Jurkovic, Teriyaki Experience's vice president of development. Founded in 1986, Teriyaki Experience has more than 135 operating locations and more than 475 additional restaurants committed to open throughout the United States, Canada, the Middle East, Europe, South and Central America, South Africa, and the Caribbean.