World Franchising
January 2007 Newsletter
 
Einstein Bros. Bagels Spotlight
 
 
From in-store environments that ooze warmth and eccentricity to sandwiches stuffed with mind-bageling ingredients, Einstein Bros promotes the concepts of originality, craveability, and hospitality. With its new franchising program, Einstein Bros. invites you to join a leader in the quick casual bakery segment that offers craveable cuisine at breakfast, lunch or anytime.
 
 
Earnings Claim Hall of Fame: Relax the Back
 

Source Book Publications has long argued (with very modest success) that all franchisors should be required to submit an earnings claim statement (Item 19) in their UFOC. Given that submission of an Item 19 is entirely voluntary, only 20% of franchisors choose to do so. The reasons for non-submission range from the ludicrous to vaguely plausible.

To us, it seems entirely one-sided to ask a prospective franchisee to invest in excess of $200,000 (on average) to “buy” a franchise without providing him or her with a clear understanding what he or she might earn from the investment. Although there are numerous variables that preclude franchisors from coming up with an exact projection of future Net Operating Income, the franchisors clearly have the ability to determine the historical sales and related expenses for operating units currently within their system. At a minimum, they can work backwards from royalty payments to come up with a gross sales figure. To the extent that they closely monitor and support their franchisees, they should have a good sense of average operating costs as well. Given this information and the latitude they have to provide as much detail as they see fit, they can break out summary operating data for those franchisees or company-owned units that have been around for say 5 years, 10 years, etc.

Our sense is that the FTC will ultimately acknowledge the need for a mandatory Item 19. Given the difficulty from industry to industry to provide a workable template for the submission of information, the FTC will continue to allow franchisors to provide as much or as little information as they deem necessary. Those franchisors that do in fact provide real, in-depth information will clearly enjoy a competitive advantage over those that do not. At any rate, those franchisors that go to the trouble of including an Item 19, even if only cursory, should be acknowledged and applauded.

As an on-going feature of future newsletters, World Franchising will publish an exemplary Item 19 each month. This month, we honor Relax the Back for the exceptional detail that they provide in their Item 19. My guess is that the rapid growth and success of their system has a great deal to do with the forthrightness with which they celebrate the success of their existing franchisees. To view their Item 19, please click here.

Those companies who feel they provide exceptional disclosure in their Item 19s are free to submit their Item 19 electronically for consideration in subsequent newsletters.

 
 
Industry Focus: Coffee
 
Any member of the working population can appreciate the necessity for a good, strong cup of coffee. The fact of the matter is, this social segment includes the majority of society. For this reason, coffee franchises are some of the most successful food and drink related franchises on the market today.
 
 
 
Source Book Publications Video Feature

Prompted by the increasing importance of Web 2.0 media and the desire to keep all of us from becoming too serious, we thought we would add a monthly feature that highlights an incredible new on-line video each month.

This initial video lasts only a minute and is one of the most poignant we have seen. To view, click here.

 
 
Source Book Publications
1814 Franklin St., Suite 815, Oakland, CA 94612

(510) 839-5471; Fax (510) 839-2104; www.worldfranchising.com

In This Issue
Einstein Bros. Spotlight
Earnings Claim Hall of Fame
Industry Focus
 
Franchise Spotlight


Einstein Bros. Bagels is taking our award-winning concept into the franchise arena for the first time. Beginning in the Southeastern U.S., we are bringing our established brand and loyal customer base into new markets with a spiffy new neighborhood store prototype. Join a leader in the quick casual bakery segment that offers craveable cuisine at breakfast, lunch or anytime. Start today by visiting our website at www.einsteinbros.com/franchising.


Meineke has been offering superior automotive repair services at discount prices for over 30 years. We are a nationally-recognized brand with a proven system. Brand recognition, comprehensive training and on-going technical and operational support are some of the benefits enjoyed by Meineke franchisees.


The HoneyBaked Ham Co. & Cafe is a truly exciting franchise opportunity with 50 years of experience building a strong brand. We are the original (and the world's largest) specialty retailer of high quality spiral-sliced glazed hams, turkeys and other special occasion center-of-the-table products complemented by a full service cafe.



PostNet's franchise opportunity offers a proven method of marketing products and services, which consumers and businesses need on a daily basis. The opportunity to get in on the ground floor of a rapidly expanding business is a rarity -- PostNet's domestic and international franchisees have the opportunity to tap into the world market, offering personal and business services including UPS, FedEx, DHL Shipping, B/W and color copy services, private mail boxes, fax, printing and much more.


With 3,700 hotels worldwide, Accor is the industry leader. With three well-established brands, Accor has a quality product, proven operational results and is easy to operate. Many open markets are available.

 
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