The Winner's Column - December 2011

As savvy franchise companies continue to flourish in a volatile 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 Units & Deals

Sears Retail Franchises Signs Two 14-Store Deals
Sears Retail Franchises, which franchises two concepts (Sears Home Appliance Showrooms and Sears Appliance and Hardware), recently signed two multi-unit deals, each for 14 stores. The first 14-store deal is with Sacramento-based Marlu Investment Group, a 73-unit operator of Arby's, Church's Chicken, Jack in the Box, and Little Caesars. Marlu, led by Tony Lutfi, acquired four Home Appliance Showrooms in Dallas in September; three Appliance and Hardware stores in Houston in October; and four Home Appliance Showrooms and three Appliance and Hardware stores in the St. Louis market, also in October.

The second deal, also for 14 stores, was signed with Cornerpost Capital, a private equity firm in Dallas. Cornerpost acquired seven Appliance and Hardware stores in the Cleveland MSA in October, will close on the sale and takeover of the remaining three Appliance and Hardware stores in the St. Louis market, and was set to close on four Home Appliance Showrooms in the Minneapolis-St. Paul MSA in November. Cornerpost also plans to take over six additional stores in Washington, D.C., and two Home Appliance Showrooms in Charlotte, N.C., in early February. Since March 2011, Sears has grown its franchise system from 26 franchised locations to 63 today. Sears started franchising Home Appliance Showrooms in April 2009 and the Appliance and Hardware concept in April 2010.

Schlotzsky's Signs 30-Unit Tri-Brand Deal for Philadelphia Area
Schlotzsky's has signed a deal to bring 30 new restaurants to the Philadelphia metro area that will also house Cinnabon and Carvel franchises. The new tri-branded restaurants will result in a total of 90 franchise agreements. "This is by far the largest franchise deal in our company history," said Schlotzsky's President Kelly Roddy. It's also the third major development agreement for the company in the past five months. In June, Schlotzsky's announced a deal to open 25 tri-branded locations in New Jersey and Texas. Schlotzsky's, Carvel, and Cinnabon are all part of parent company Focus Brands. The three brands began partnering early last year to open tri-branded locations.

The newest deal was signed with Philadelphia-based multi-unit franchise group Prayosha Philly, which owns hotel franchise concepts in the tri-state area, as well as several Dunkin' Donuts and Moe's Southwest Grill locations. The agreement includes growth into Philadelphia and in Bucks, Mercer, Montgomery, Chester, Burlington, Gloucester, Camden, and Delaware counties. "With the success we were experiencing with Moe's Southwest Grill, our team began researching its sister brands and ways we could expand our portfolio with tri-branded locations," said Chirag K. Patel, principal of Prayosha Philly. The first restaurant under the deal is scheduled to open in the first quarter of 2012, with several more to open by year-end. Founded in 1971, Schlotzsky's has more than 350 locations worldwide and is targeting 700 by 2015. Focus Brands operates and franchises more than 3,300 Carvel, Cinnabon, Schlotzsky's, Moe's Southwest Grill, and Auntie Anne's locations and Seattle's Best Coffee on certain military bases and in international markets.

Lucille Roberts Expands to Florida and Georgia with 50-Unit Deal
Lucille Roberts has signed an agreement with franchise veterans Jerry Cohn and David Tannen to develop more than 50 women's health club franchises in Florida and Georgia. The brand has almost 50 company-owned clubs in New York, New Jersey, and Pennsylvania. "Florida and Georgia are priority growth markets, and we're excited to expand the brand's footprint beyond the Northeast for the first time in the company's more than 40-year history," said Kevin Roberts, president of Lucille Roberts Health Clubs Franchising. Based in Boca Raton, Cohn and Tannen, with a track record of successful franchise development with Century 21 Real Estate and more than 250 Pak Mail locations in the Southeast, are looking to start in South Florida, Tampa-St. Petersburg, Orlando, and Atlanta. Prospective franchisees can be active owner/operators or passive investors looking to diversify their portfolio. "Our secret to success over the last 35 years in franchising is partnering with business-minded franchisees who provide a high-level of customer service to their guests every day," said Tannen.

Corner Bakery Cafe Inks 32-Unit Deal for SF Bay Area
Corner Bakery Cafe has entered Northern California with a bang, signing a 32-unit, 7-year development agreement for the San Francisco Bay area with Buon Hospitality. Buon is led by franchising veteran Sam Hirbod, CEO and president of Pacific Convenience & Fuels, which operates more than 500 fuel, restaurant, and convenience businesses in 7 states. Its restaurant franchise brands include Wendy's, Subway, and Baja Fresh, half free-standing and half integrated into convenience stores. The first two Corner Bakery restaurants under the agreement are slated to open by mid-2012. "Given our success in Southern California, we've always been interested in finding the right franchise partner for Northern California, and Sam and his team at Buon Hospitality definitely fit the bill," said John LaBarge, vice president of franchise business at Corner Bakery. The territory includes San Francisco, San Jose, East Bay, Marin Country, and Napa Valley. The 32 planned locations bring the total number of committed franchise locations for the Dallas-based brand to more than 200. Corner Bakery Cafe opened its first location in 1991 and operates 124 locations across the U.S. The brand is owned and operated by CBC Restaurant Corp., which was acquired by Roark Capital Group in June 2011. Buon Hospitality is an offshoot of Pacific Convenience & Fuels, based in Pleasanton, Calif. Hirbod bought his first service station in 1997 in Menlo Park, Calif.

Tossed Signs 20-Unit Deal for Metro New York
Tossed Franchise Corp. has signed a 20-store franchise development agreement that will expand the salad brand's footprint beyond its original Park Avenue location to New York City's five boroughs and Long Island. The deal was signed with New York-based Bolla Corp. Founded by past IFA "National Franchisee of the Year" Harry Singh, Bolla is a privately owned company focused on commercial real estate, construction, and franchise development. Its Bolla Oil subsidiary operates 41 ExxonMobil, Sunoco, and BP service stations in the metro New York area, and is the largest ExxonMobil dealer in the U.S. Jay Singh, vice president of operations for Bolla, will lead the development of the new Tossed locations. "Tossed's new franchise agreement is one of the largest to date for the company, which has embarked on an aggressive expansion strategy over the past year," said Jason Chodash, president of Fort Lauderdale-based Tossed Franchise Corp. Bolla's first Tossed location, set to open in Manhattan in 2012, will feature the company's new store design.

First IHOP Express Opens in San Diego
The 53-year-old IHOP brand has opened its first IHOP Express, a fast casual concept featuring a new design and menu offering traditional IHOP favorites along with new items focused on portable portions. Located in San Diego's Gaslamp District, the restaurant is part of IHOP's strategy to boost customer awareness and increase frequency of visits, as well as capture the on-the-go market. The company continues to expand its traditional IHOP locations, opening of an average of more than one new unit each week in 2011. Aligned with this effort, a line of retail premium frozen breakfast items, IHOP at Home, was launched earlier this year. As of September 30, there were 1,532 IHOPs in 50 states and D.C, as well as in Canada, Guatemala, Mexico, Puerto Rico, and the U.S. Virgin Islands. IHOP restaurants are franchised and operated by Glendale, Calif.-based International House of Pancakes, a wholly owned subsidiary of DineEquity.

Creative Learning Adds Three Bricks 4 Kids in Calgary
Bricks 4 Kidz franchisees Jim and Beth Thompson, who began with two units in Calgary, have added three new territories. As part of the brand's franchise model for North America, an original franchisee is given the first option to purchase more territories within their region at a discounted price. Creative Learning, operating under the trade name Bricks 4 Kidz, offers programs to teach children ages 3 to 12 the basic principles of engineering, architecture, and physics using LEGO bricks. The company currently has 100 franchises and is working to expand its international reach.

Saladworks Opens in Bucks County, Pa.
Saladworks has opened a new location in Feasterville, Pa., north of Philadelphia and west of Trenton, N.J. The new unit is owned and operated by first-time franchisees Victor and Maureen Pulizzano of nearby Doylestown, Pa. Saladworks, now 25 years old, operates 100 locations in 12 states and has more than 60 units in development.

Children's Lighthouse Unveils Expansion Plan
Children's Lighthouse, with 29 units operating and 20 more in development, has announced plans to develop more than 100 new learning centers nationwide in the next 5 years. The brand recently awarded a three-school franchise agreement for northern New Jersey with established multi-unit, multi-brand franchise investors; the first will open in early 2012 in Woodbridge. The company also has opened it first location in Kansas. Additional schools are planned for California, Florida, North Carolina, and Texas. "We're now reaching a very exciting point in our growth," said Mike Brown, CEO of the Fort Worth-based brand, who co-founded the business with his brother Patrick in 1995.

Moe's Southwest Opens in Memphis International Airport
Moe's Southwest Grill has opened a location in Memphis International Airport, the first such location resulting from the brand's recent partnership with HMSHost. Moe's has three additional airport locations in Las Vegas, Oklahoma City, and Atlanta. The partnership aims to place Moe's units in many more airport locations in the U.S. In its 10 years, Moe's has grown to more than 420 locations in 33 states and abroad.

Murphy Business & Financial Shows Growth
Business broker franchisor Murphy Business & Financial Corp. has added 28 franchisees and 5 regional developers in the past two years. The company is targeting between 30 and 50 new offices in 2012. Murphy, which began franchising in 2006, has more than 140 franchisees and nearly 300 broker agents. The franchisor is focusing its growth plans on existing markets and in new markets including Connecticut, New York, Pennsylvania, Indiana, and Illinois through both regional developer and franchisee operating models. Based in Clearwater, Fla., Murphy Business & Financial is a business brokerage firm facilitating business sales, purchases, consulting, valuations, mergers, and acquisitions.

Mooyah Coming to Birmingham
Mooyah Burgers, Fries, and Shakes, part of the emerging "better burger" phenomenon, has signed an agreement for 10 to 12 franchised restaurants in Jefferson, Shelby, Tuscaloosa, Madison, and Montgomery counties in Alabama, its first foray into the state. The franchisees are Denney Barrow, with sons Josh Barrow and Jordan Barrow, all natives of Birmingham, where their first Mooyah's is planned. In addition to the new Alabama locations, Mooyah is opening restaurants in Texas, Tennessee, Louisiana, Arkansas, Kansas, Virginia, Maryland, Connecticut, and Washington, D.C. Based in Frisco, Tex., the company began franchising in 2007.

New Brands Launched

Fireman's Contractors Begins Franchising
Fireman's Contractors has launched its franchise development program. The company provides services such as road improvements, pavement maintenance, seal coating, parking lot striping, pavement marking, asphalt maintenance and repair, and ADA compliance for commercial and government clients. To help get the concept off the ground, the franchisor has retained Franchise Dynamics, a Chicago-based franchise sales outsourcing firm, to oversee the development, implementation, and execution of the program. Fireman's also has retained Cheryl Mullin of Mullin Law, P.C. The company's stated goal is to develop hundreds of new franchise locations in the next two to four years.

Bloop Frozen Yogurt To Open First 2 Stores in Lynchburg, Va.
Bloop, a new frozen yogurt concept, is set to open its first two locations in Lynchburg, Va., one in December and a second in early 2012. Each location will offer more than 10 original flavors at a time, rotating them every month. Bloop also is promoting its "A Cup 4 A Cup" program to bring much-needed water to those who need it worldwide. "Over 30,000 people die from unsafe water and unhygienic living conditions each week - and over 90 percent of those deaths are children," said Daryl Calfee, company co-founder. "Our mission at Bloop is to help change that by offering a cup of clean drinking water for every cup of yogurt sold. A cup for a cup; it's that simple." Bloop is working with charity: water, a nonprofit organization bringing clean and safe drinking water to people in developing nations.

Bagger Dave's Signs First Franchise Agreement
Bagger Dave's Legendary Burger Tavern plans to open its first franchised location in March 2012, in Cape Girardeau, Mo., the first of six franchised units to be developed over five years through an area development agreement with partners Bill Zellmer and Lonnie Griggs. Zellmer and Griggs currently operate six Buffalo Wild Wings restaurants together. This is the first Bagger Dave's location set to open outside of Michigan, where the brand has six corporate locations. Zellmer opened his first franchised Buffalo Wild Wings in Cape Girardeau in 2002. He now owns two locations and co-owns four with Griggs, who is director of operations for all six locations. The brothers-in-law learned about Bagger Dave's through Michael Ansley, president and CEO of Diversified Restaurant Holdings, the owner/operator and franchisor of Bagger Dave's and a 22-unit franchisee of Buffalo Wild Wings. Other locations are planned for Carbondale, Ill., Paducah, Ky., Bowling Green and Evansville, Ind., and Clarksville, Tenn. The Cape Girardeau location is one of up to 24 total locations (either corporately owned or franchised) planned to open over the next five years. Targeted markets for growth include Michigan, Ohio, Indiana, Wisconsin, Kentucky, and Illinois. (Learn more about Michael Ansley and Bagger Dave's.)