The Winner's Column - June 2012

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

Domestic

Hurricane Grill & Wings Signs Agreements for 28 New Units
Five development agreements will add 28 new locations in four states to Hurricane Grill & Wings' existing 46 locations in six states. The new commitments are to open restaurants in four new states (Colorado, Maryland, Delaware, and Minnesota) and add units in Hudson Valley, N.Y. The brand now has a total of 266 commitments and is on track to open its 60th location by the end of 2012, according to Martin O'Dowd, president of Hurricane Grill & Wings. In Colorado, the Fortus Hospitality Group will develop three units, with a commitment to open an additional 23. In Minnesota, Torgerson Properties has signed on to develop 17 units. Torgerson, which manages 28 hotel properties and 9 restaurants in Minnesota and Florida, will open its first location in October in Burnsville, Minn. IZZ, LLC has committed to open three locations, two in Delaware and one in Maryland. The group's first location will open in Elkton, Md., later this year (Glenn Gustafsson is the area developer for the Mid-Atlantic region). In New York, Angelo Viscoso and Brad Nagy of Hurricane of Poughkeepsie, LLC will open five new locations. The first is set to open in Poughkeepsie by September. The original Hurricane Grill & Wings opened in Fort Pierce, Fla., in 1995.

Sears Expands Appliance & Hardware and Home Appliance Stores
Multi-unit franchisee Chirag Patel, of Prayosha Holdings (profiled in Multi-Unit Franchisee magazine last month), inked two deals with Sears recently, with more possibly on the way. In March, Patel took over seven Sears Appliance & Hardware stores in Glassboro, N.J., and Easton, Huntingdon Valley, Kennet Square, Quakertown, Trexlertown, and Warrington, Pa. In April, he assumed ownership of five more Sears Appliance & Hardware stores in Newark Del., and Collegeville, Fairless Hills, Norristown, and Phoenixville, Pa. According to Scott Nichols, director of franchise business development for the company, Sears was also talking with Patel about franchising four Sears Home Appliance Showrooms in New Jersey and six more Appliance & Hardware stores in Northern New Jersey. Sears has 78 Sears Home Appliance Showrooms (41 franchised) open in major metropolitan markets in the U.S.; and 96 Sears Appliance & Hardware stores (60 franchised) open in most major metro markets in the Northeast and Midwest. Nichols says this compares to a grand total of two franchises this time last year.

Mama Fu's Signs 18-Unit Deal for Houston
Mama Fu's has signed a franchise agreement for 18 units in the Houston market, the brand's largest single deal to date. The franchisee is Steve Chappelear of Schapp's MF Holdings, LLC, who has more than 15 years operating eight Buffalo Wild Wings franchise units in Houston. The brand is already developing restaurants in San Antonio, El Paso, West Texas, Central Texas, and Austin. The newly signed deal is part of a nationwide development plan to open 8 to 10 new stores in the next 12 months. The Austin-based Murphy Adams Restaurant Group purchased Mama Fu's Asian House from Raving Brands in March 2008. The company currently has 13 locations open and operating, with 49 stores in various stages of development.

Penn Station East Coast Subs Inks 15-Unit Deal for Michigan
Penn Station East Coast Subs has signed a development agreement for 15 franchised locations in the Detroit area over the next 8 years, the largest agreement the brand has signed in years. The franchisees are Elliott Baum, Mike McKinley, Michael Horowitz, and managing partner Stewart Napier. Napier started working at Burger King when he was 15 as an hourly employee. He moved up the ladder to hourly manager, assistant manager, restaurant manager, and district manager before he became director of operations for a local Burger King franchisee for almost 13 years. Their first restaurant will open this fall in a former Blockbuster Video space in Plymouth, with the second on track to open in the first quarter of 2013 in Taylor. The group is targeting Livonia, Royal Oak, Warren, Troy, and several other cities in the metro Detroit area for their next locations. Founded in Cincinnati in 1985, Penn Station has more than 235 restaurants in 13 states, all but two franchised. Company projections call for the opening of 30 restaurants in 2012, increasing to 40 in 2013, and 45 in 2014. Target markets include Kansas City, Richmond, Chicago, Detroit, Nashville, and North and South Carolina, as well as existing markets.

Yumz Gourmet Frozen Yogurt Plans To Add 100 Units in 2 Years
Yumz Gourmet Frozen Yogurt has announced plans to add 25 locations in the greater Chicagoland area over the next two years, and 75 in other U.S. markets. The expansion plans include more than 30 stores already in the works in markets such as Madison, Milwaukee, Scottsdale, Salt Lake City, Las Vegas, and Spokane. The newest locations will join the brand's original two stores, founded by owners Matt and Lori Thelander and John Barnes. Yumz opened its first Chicago store in Crystal Lake in November 2010 and its second in Lake in the Hills in July 2011.

Wingstop Plans To Double Chicago Presence
Ten years after opening its first Chicago location, Wingstop has announced plans to double the company's presence in the area, adding more than 25 locations, including five new restaurants scheduled to open this year. Wingstop has 18 locations open in Chicago with another 26 in various stages of development. To support the expansion effort, Wingstop has formed an advertising cooperative and named Prime Time Marketing (PTM) as its agency of record for the Chicago DMA. PTM, a Chicago-based marketing and media firm, will spearhead advertising for the area franchisees, including television, online, social, and print campaigns. Founded in 1994 and based in Richardson, Texas, Wingstop has more than 500 restaurants open across the U.S. and Mexico, and has recorded more than eight consecutive years of same store sales increases. In 2010, Wingstop was acquired by Roark Capital Group.

Bricks 4 Kidz Opens 145th Franchise
Creative Learning Corp., owner and developer of Bricks 4 Kidz, has opened its 145th franchise, in Bourg, La., outside of New Orleans. Creative Learning now has franchises in 29 states plus the District of Columbia, Puerto Rico, and four foreign countries.

Valpak Expands in Fresno and Madera Counties
Valpak has signed a franchise agreement with Jeff Gomes to expand in Fresno and Madera counties in California. Gomes has more than 15 years of experience in sales, advertising, and manufacturing. Valpak is owned and operated by Cox Target Media, a subsidiary of Atlanta-based Cox Media Group. With almost 170 franchises throughout the U.S. and Canada, Valpak's Blue Envelopes reach nearly 40 million households each month.

Instant Imprints To Expand in Washington
Instant Imprints has signed an agreement to expand the brand across the state of Washington. Under the agreement, Gagan Bhathal, who has successfully owned and operated multiple Instant Imprints centers in Vancouver, British Columbia, and the surrounding suburbs since 2008, will market the franchise opportunity in Washington. Bhathal is currently the area franchisee for the Canadian province of British Columbia, where he is experiencing significant growth. Expansion into Washington is part of the company's aggressive North American development plan, which calls for more than 500 new centers throughout the U.S. and Canada. CEO Ralph Askar and a group of shareholders first purchased the master license for Instant Imprints Canada, then completed ownership of Instant Imprints in May 2011. Instant Imprints has been franchising since 2002.

Yogurtini Opens First Nebraska Location
Yogurtini has expanded into Nebraska with the grand opening of its 22nd frozen yogurt franchise. Roger Clark and Beth Jillson-Clark are the franchisees in Lincoln. Yogurtini was started in 2008 in Tempe, Ariz., by sisters Natasha and Chelsey Nelson.

International

Papa John's Plans To Increase U.K. Units
Papa John's Pizza plans to expand its U.K footprint from 185 to more than 200 units by year-end. Nine new stores have already opened there this year. Dave Galvin, U.K. franchise sales manager at Papa John's, said the company is on target to reach the 200-plus goal by year's end. During its most recent earnings call, Papa John's reported the most net new units in a quarter (50) since 2000. Papa John's currently has more than 3,900 stores worldwide and is expanding in 33 markets.

Domino's Overseas Units Outpace Domestic; Boosts Mobile Apps
In a sign of the global times, Domino's Pizza's now has more units outside the United States than domestically for the first time in its history. As of March 25, there were 4,898 total franchised and company-owned Domino's stores in the U.S., and 4,912 international stores. Results for the first quarter (ended March 25) included a net store growth of 77 units internationally, with same-store sales growing 4.7 percent compared with the same period the year before, marking the company's 73rd consecutive quarter of same-store sales growth from its international division.

In the U.S., where Domino's continues to expand its digital and mobile services, the brand launched its Android app during the first quarter. Along with its iPhone app, launched last year, 7 percent of total U.S. sales now come from mobile devices (these two apps plus the company's mobile website). Online sales in the U.S. have passed 30 percent of total U.S. sales, about 5 percent more than this time last year.

Subway To Open 1,000 Stores in India by 2015
Subway announced plans to operate 1,000 stores in India by 2015 through franchising. The initiative reportedly will involve an investment of nearly $60 million to provide training and technical assistance to its Indian partners. Subway already has a presence in 50 Indian cities with 263 franchisee-run restaurants. India is projected to add about 500 million people to its urban population by 2050, according to a United Nations report, creating a huge opportunity for the QSR segment in the country

McDonald's Plans To Nearly Double Its Employees in China
McDonald's Corp. announced plans to hire 70,000 people in China this year, almost doubling its current workforce of around 80,000, according to a company spokesperson, who added that the brand will open up to 250 locations in China this year, compared with 200 in 2011. Late last month, all 1,400 McDonald's stores in China were primed to set up recruitment tables and invite people to apply for jobs. McDonald's generated about 22 percent of its worldwide revenue from the Asia/Pacific, Middle East, and Africa region last year. McDonald's has more than 33,500 restaurants worldwide.

Pollo Tropical Opens Third Franchise in Venezuela
Pollo Tropical has opened its third franchised restaurant in Caracas, Venezuela, at the Sambil Shopping Center, the fourth largest mall in South America. The new unit is the third in a 10-unit development agreement with Restaurantes Internacionales C.A., the Venezuelan-based franchisee that opened the other two Pollo Tropical restaurants in the country, beginning in 2010. "Venezuela is one of Latin America's largest economies so it makes sense that we would partner with a strong restaurant operator to build out this market quickly," said Marc Mushkin, senior vice president of international development at Pollo Tropical. Mushkin said the brand is seeking additional international franchise partners for multiple-unit development agreements in Canada, Brazil, Chile, Colombia, Mexico, and the Caribbean. The brand also has initiatives under way in the U.K., India, and other Asian markets. Pollo Tropical owns and operates nearly 90 locations in the U.S. (Florida and Georgia), has more than 30 international franchised locations in Puerto Rico, the Bahamas, Ecuador, Honduras, Trinidad, Venezuela, and Costa Rica, and has agreements in place for additional franchise restaurants in Panama, Tobago, Aruba, Bonaire, and Curacao. The first Pollo Tropical restaurant opened in 1988 in Miami. Pollo Tropical is part of Fiesta Restaurant Group, which also owns the Taco Cabana restaurant chain. Taco Cabana has more than 150 restaurants in Texas, Oklahoma, and New Mexico.

New Brands

StearClear Offers Designated Driver Franchises
A new "designated driver" concept that aims to make money by saving lives, is now offering franchises. A smartphone app connects customers with the service, which sends a car with two drivers to pick them up. One drives the customer's car, and the other follows to provide the designated driver a ride back. On the franchisee side, the brand's turnkey offering, based on an iPad app, provides everything a franchisee needs to run their business (managing employees, payroll, customers, pickups, drop-offs, fares, drive team locations, financial transactions, and payments). The app also allows franchisees to communicate with their drive teams and respond to urgent requests or emergencies. The company has hired James Banahan, a 20-year franchising veteran, to lead their business development efforts.

BedBug Chasers Franchises Its Bedbug-Killing Business
BedBug Chasers - a provider of heat remediation services and manufacturer of U.S.-made heat remediation equipment to eliminate bedbugs and other insects in commercial, residential, and industrial environments - has begun franchising its service business. Featuring an entry cost ranging from $37,500 to $125,250, the concept boasts that it is a 100% chemical-free and green enterprise. The franchise program features exclusive access to the company's patented BedBug Chaser heaters, the BedBug Chasers nationwide rental fleet, and training on the company's proprietary process. Franchises are being offered through the BedBug Chaser Franchise Corp.