The Winner's Circle, June 2011

As savvy franchise companies continue to flourish in a challenging 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 positive news to eddyg@franchiseupdatemedia.com.

Growth

Jersey Mike's Continues Nationwide Expansion

Jersey Mike's Subs has announced expansion plans in markets including Texas, Colorado, Los Angeles, Chicago, Minnesota, Wisconsin, and Delaware/Maryland, and existing operators are growing in 14 additional territories.

• Current franchisees Bryan Selden and Jeff Worthen of the Lone Star Restaurant Group, with two units open and development agreements for 15 more, have approached the company about opening an additional 11 stores.
• Brad Mouly is opening 10 units in Delaware and the eastern shore of Maryland.
• Two other franchise groups are expanding in the Chicago market, where Jersey Mike's just opened its 20th store in just over 2 years. Jason Corriveau and Bud Patel will open 10 units, and Mac Shimmon and Lisa Furleigh also will open 10 units in the market.

Jersey Mike's, with more than 500 stores open and under development nationwide, started at the Jersey Shore in 1956.

Dickey's Barbecue Pit Coming to NJ

Texas is coming to Hoboken as Dickey's Barbecue Pit plans to open its first franchise in New Jersey. "Being from Texas, I grew up with Dickey's Barbecue," said franchisee Alan Cohen, a graduate of the Kellogg School of Management at Northwestern University. So far in 2011, Dickey's has opened 12 stores nationwide, with 60 set to open by year-end. Based in Texas, Dickey's opened its first store in Dallas in 1941 and began franchising in 1994. The brand, still owned by the Dickey family, has 147 locations in 33 states.

Get In Shape For Women Opens 75th Studio

After five years of franchising, Get In Shape for Women has 75 franchises open in 14 states. Started in 2006 as three fitness studios in Massachusetts, the company grew to 17 franchises by 2009. The newest studio, in Summit, N.J., is operated by multi-unit owner Michael O'Koomian. According to Jeff Elgin, CEO of FranChoice, in an article in entrepreneur.com, franchises experiencing rapid growth in today's economy share three characteristics that are making them successful: low investment, rapid breakeven, and high margins. Start-up costs for the brand can be as low as $64,000 including the initial franchise fee of $15,000, and with studios capped at 1,200 s.f., fixed costs remain down, providing a greater long-term return.

Menchie's Opens 76th Fro-Yo Store

After just 3 years of franchising, self-serve frozen yogurt brand Menchie's has opened its 76th store. Menchie's has more than 70 locations open, with an additional 120 currently in development, and is set to total more than 180 by year-end. Outside the U.S., Menchie's Canadian master franchisor, which began growing the brand a year ago, opened two franchise stores and recently completed agreements to add 38 franchises in Ontario, British Columbia, and Alberta over the next 5 years. Menchie's also has contracts for locations in Mexico, Japan, Australia, Costa Rica, the U.K., Puerto Rico, Morocco, Egypt, Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, India, China, and New Zealand.

Crunch Fitness Sells 9th Franchise

Crunch Fitness has opened its newest franchise location, in Wayne, N.J., taking over the space previously occupied by World Gym Fitness. The 20,000 s.f. gym will be renovated and updated with new machines. Owners Chris Pacifico, Maria Parrella-Turco, and Greg Fuchs plan to open multiple Crunch franchise locations in New Jersey. In total, Crunch has 32 gyms worldwide, including 9 franchise locations. Crunch, owned by New Evolution Ventures, currently has more than 70 others in the works around the globe. Based in Northern California, New Evolution Ventures is a private equity firm co-founded in 2008 by Mark Mastrov, Jim Rowley, and Mike Feeney, and focused on the acquisition, development, management, and operation of fitness, media, and sports entities.

Painting with a Twist Opens 50 Units in Less than 2 Years

In just 2 years of franchising, Painting with a Twist founders Renee Maloney, 42, and Cathy Deano, 57, have opened 50 units. The art entertainment concept provides customers with paint, a canvas, and brushes that lead to a fun evening with friends and a finished piece of art. This "getaway" experience also includes the option to bring a favorite bottle of wine and snacks. "We're in the business of providing people with an environment where they are guaranteed to crack a smile," said Deano. "Especially after Katrina hit, we knew we had to do something to lift people's spirits. It turns out that our concept provided an ideal solution." Based in Mandeville, La., the company was founded in 2007 and began franchising in 2009. Same-store sales have increased year over year.

Bricks 4 Kidz Notches 50th Sale

Bricks 4 Kidz, a 3-year-old children's education and enrichment program that teaches children the principles of engineering and architecture using LEGO bricks in a fun, creative setting, has completed its 50th franchise sale. The new franchisee, Mercedes Diaz, based in Guaynabo, Puerto Rico, was also named director of franchise development for Latin America. This marks the third franchise sold outside the continental U.S. (the other two are in Calgary, Canada and Bahrain). Founded in 2008, Bricks 4 Kidz is operating in 24 states and is planning to open corporate locations in Jacksonville, Atlanta, and London by year-end. The company's flagship Creativity Center is in Coral Springs, Fla. At least nine Creativity Centers will be open by July 1, including locations in Denver, Cleveland, Phoenix, Brentwood, Calif., McAllen, Tex., Breckenbridge and Keystone, Colo., Greensboro, N.C., and Las Vegas.

GrandStay Hospitality Expands with Conversions, New Builds

GrandStay Hospitality opened four conversion hotels early 2011 and has plans for four more, as well as construction of three new hotels. Converted hotels include a Wingate by Wyndham in Appleton, Wisc.; a Wynstar Inn & Suites in Fort Myers, Fla.; a Country Inns & Suites in Stillwater, Minn.; and a Hawthorn Inn & Suites in Baxter, Minn. New construction plans include a GrandStay Residential Suites Hotel in Aberdeen, S.D., and two Crossings by GrandStay Inn & Suites, one in Waverly, Iowa, and another in Chisago City/Lindstrom, Minn. The company's brands include a portfolio of extended-stay and limited service hotels, with 22 properties in California, Florida, Iowa, Minnesota, South Dakota, and Wisconsin.

Fresh Coat Painters Covers the Country

In the six months ending March 31, Fresh Coat Painters announced nine new franchise locations markets across the U.S. And in May, the company added two more franchisees: Jon and Katie Cook in Washington to serve Vancouver and its surrounding Clark area communities; and Frank and Susan Lawrence to serve Lee's Summit, Mo., and other communities southeast of Kansas City. "In a growing economy, people are building homes and businesses, upgrading existing spaces, and/or expanding their square footage," said Fresh Coat founder Ralph Martin. "In a faltering economy, people are selling properties, enhancing current spaces, and/or moving to less expensive locations. In all cases, painting is part of the equation." Franchisees who have launched in recent months say they were also drawn to the brand's low start-up costs, proven business model and lead generator, positive cash flow, estimating technology, corporate training, and ongoing support. Founded in 2004 in Cincinnati, Fresh Coat serves residential, commercial, and governmental customers in more than 100 major cities across the U.S. and Canada.

ColorTyme Debuts in Houston

Houston residents Mike Do and David Rogers have opened the first of what they hope will be many ColorTyme rent-to-own franchises in the area. Founded in 1979, ColorTyme has 189 franchised rent-to-own stores in 32 states, as well as the custom wheels and tires franchise brand, RimTyme, which operates 20 stores in 11 states. ColorTyme, headquartered in Plano, Tex., is a wholly owned subsidiary of Rent-A-Center.

Dogs, Sit Up! Three New Zoom Rooms Set To Open

Three separate franchise agreements will bring new Zoom Room franchises to Denver, Charlotte, and Claremont, Calif. Zoom Room, a dog training center and canine social club specializing in dog agility, was founded in 2007 by expert dog trainer Jaime Van Wye. Kathy Thorpe will open the second Zoom Room in Colorado, in Denver, in early fall; Charlotte is set to open in late summer; and Angela Sousa will open the fourth Zoom Room in California, in Claremont in August. The original Zoom Room opened in Culver City, Calif., in 2007 and converted to the first franchised location in 2009. The company-owned flagship location is in Hollywood.

International

Fastsigns Signs Multi-Unit Deal in Saudi Arabia

Fastsigns has staked a claim in Saudi Arabia, with plans to develop three centers initially, with a minimum of 10 expected to open over the next 10 years. The first is scheduled to open in Jeddah in early 2012. The brand's expansion into Saudi Arabia will be led by Malik Abdul, a vendor for Microsoft, and business partner Abdullah Al-Subiany, owner of several Saudi Arabian-based companies specializing in transportation, advertising, and real estate. The partners will own and operate all centers developed within the franchise agreement. "We expect our success in Saudi Arabia to act as a catalyst for further expansion across the Middle East," said Mark Jameson, senior vice president of franchise development for the brand. Fastsigns, with more than 530 locations worldwide, already has locations in Canada, the United Kingdom, Brazil, Mexico, Australia, and the Caribbean.

Russo's New York Pizza Debuts in Dubai

Anthony Russo, owner of Russo's New York Pizzeria and Russo's Coal-Fired Italian Kitchen, has announced expansion into the United Arab Emirates (UAE), awarding exclusive UAE territory rights to Dubai-based Prime Hospitality, a division of Ghobash Trading & Investment Company. The agreement calls for 26 additional units in the Gulf over the next decade. "Prime was established in 2009 and we carefully select the brands that we add to our portfolio," said Murad Al Nasur, general manager of Prime Hospitality. The first are planned for Dubai and Abu Dhabi later this year. Houston-based Russo began franchising his New York Pizzeria in 1992, and has expanded to 28 locations in Texas and surrounding states. He also has developed Russo's Coal-Fired Italian Kitchen, a more up-market casual dining concept.

Financial

Saxbys Coffee Emerges from Bankruptcy

After more than 20 months in Chapter 11, attributed to lawsuits from franchisees, Saxbys Coffee Worldwide is back from the brink and ready for growth under owners Joe Grasso and Kevin Meakim, who purchased Saxbys in 2007. During bankruptcy proceedings, Grasso and Meakim opened eight additional Saxbys locations, bringing the total to 32 units in 8 states and the District of Columbia. "Bancorp has been instrumental in Saxbys emergence from bankruptcy," said Grasso. "And now that we're out of Chapter 11, their lending arm, which focuses exclusively on franchise lending through the SBA, is going to play an even bigger role in our future. They have half a billion dollars in capital to be invested in franchises, and we've just structured a deal to afford us access to all that they have to offer." During bankruptcy, Meakim said, 25 franchise locations saw consistent same-store year-over-year sales increases. Based in Conshocken, Pa., the brand is shooting for 100 units in the next two to three years.