Consumer Trends

The Week in Franchising, March 6

A roundup of developments affecting franchisees and franchisors.

CiCi’s to fund franchisees’ growth

Cici’s Pizza said it will help selected franchisees open at least five more stores each by paying $100,000 for a minority stake in the operators’ first additional locations.

When the franchisee can buy back the equity, Cici’s will reinvest the $100,000 principal in the operator’s second store. The process will be repeated until all five restaurants are open and operating.

The franchisor said it has earmarked $5 million to fund the program.

Unique to franchise Pizza Fusion, too

Unique Pizza and Subs indicated that it will continue to franchise its namesake brand while expanding Pizza Fusion, the eco-friendly franchise concept it has agreed to buy for an undisclosed amount. James Vowler, president of the nine-unit Unique chain, explained that “Pizza Fusion and Unique Pizza's menus and concepts are so different, we would be able to coalesce our experience and help grow both.”

The announcement also suggested that Pizza Fusion CEO Vaughan Lazar will likely remain with the company formed through the combination of the two franchise brands.

Pizza Fusion’s website lists nine locations currently in operation.

Separately, Unique granted master franchisee rights for its core brand in Michigan and southern California to Henry Kassab, whose family has worked in the restaurant business for some time. The 30-year deal calls for Kassab to open at least 20 pizzerias in his two regions.

Wendy’s puts a price on franchise renovations

Emil Brolick, the CEO of Wendy’s, revealed this week that the chain’s ongoing re-imaging campaign will cost $750,000 to $850,000 per store, with an ROI forecast at 15%. He noted that 50 units will get facelifts this year, including the stores of three to five franchisees. The new look comes in four variations.

Brolick also noted that Wendy’s breakfast test, which has been underway through the tenure of at  least three CEOs, will be extended into the Northeast for a true trial by fire (he cited that area as an intense battleground for morning customers.) Operational challenges and acceptance by the consumer have already been proven, he said. “The area that we still are working on with our franchise partners is in the financial area,” Brolick commented.

Quiznos inks Russian deal

Quiznos, which has been scrambling to put its domestic house in order, announced that it’s chosen the brand’s master franchisees for Russia. QSR Russia Ltd., headquartered in the Russian city of St. Petersburg, agreed to open 20 units in and around its home base by 2014.

Co-branded trucks to be franchised to military personnel

UFood is using its partnership with Euro Café to veer into the food-truck market. The two quick-service brands announced they’ll start up a co-branded truck in Washington, D.C., no doubt hoping to catch the eye of military authorities. The partners call their “mobile café” a test, but the announcement notes that franchisees are being sought. A particular target, it says, are retired military personnel whose trucks could serve as additional feeding choices on military bases.

Dunkin’ turns to franchise vets for Colo. push

Dunkin’ Donuts awarded a seven-unit territory in Colorado to father-daughter franchisees Doug and Katy Redman. The elder Redman has been a franchisee of 140 Subway stores and two Taco del Mars. They will develop their Dunkin’ units in the Fort Collins area between 2013 and 2018.

Chili’s pulls franchise rights from Alaskan operator

The Chili’s units in the Alaskan cities of Anchorage, Wasilla and Fairbanks were closed after franchisor Brinker International pulled franchise rights to the stores from Duke Investments. A spokesman from Brinker told local media that the company is evaluating options for returning to those markets. 

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