Posted on Apr 29, 2011
Franchise Fridays for April 29, 2011: Top Franchise and Small Business News of the Week
Iconic California smoothie franchise Jamba Juice announced this week that Venus Williams, one of the most dominant athletes in women’s tennis, will partner with the brand to spearhead their entry into the nation's capital. Under the Williams-Jamba Juice agreement, Williams is expected to open five franchised units in the next two years, with the first store scheduled for a summer 2011 opening.
Though the deal doesn't make Williams an official spokesperson for the smoothie chain, it's hard to deny the benefits a health-conscious brand like Jamba might reap from an association with the 7-time Grand Slam winner. This could be a PR match made in heaven, though with other pro athletes' track record of business dealings less than outstanding, let's just hope Williams' move turns out less athlete investment blunder than athlete franchise success!
Read more about Venus Williams joining Jamba Juice.
The Starbucks coffee chain has surpassed fast-food giants Burger King and Wendy's to become the #3 restaurant system in the United States (based on domestic sales) -- the latest sign of the dramatic change in the lifestyle and dining preferences of today's American consumer. For years, the top 3 had been the exclusive territory of traditional fast-food restaurants, but times have changed (kind of): Starbucks sits at #3 behind -- who else -- McDonald’s and runner-up Subway. Starbucks VP of Food, Sandra Stark, credited the coffee giant's success to shifting American diets and a growing consumer awareness of the importance of eating foods without artificial ingredients. (Starbucks was one of the restaurant chains to eliminate artificial ingredients from its products.) Not all is sunshine and rainbows for everyone's favorite caffeine-addled mermaid, however: rising supply costs, including coffee beans and milk, have forced Starbucks to increase the price of their offerings. Read more about Starbucks’ achievement.
Dominos Pizza UK & IRL plc has purchased 75% of Intergrowth Enterprises Limited, the master franchisee for Dominos in Germany, from UK-based Briskas, Ltd., in an all-stock transaction valued at some $5.66 million. Control of the entity will be governed by a shareholders agreement struck between Dominos and Briskas (an affiliate of the Grand City Hotels Group). Dominos pursued the transaction to effect a broader expansion into Germany, Europe’s biggest economy, following the pizza brand's success in penetrating the U.K market, where there are now more than 700 Domino's Pizza franchise units in operation. Read more about Dominos expanding into Germany.
Fatburger Restaurants of California Inc. and Fatburger Restaurants of Nevada Inc., both of which filed for Chapter 11 bankruptcy protection last spring, sold off a collective 25 corporate-owned units in an auction last week, garnering $7.4 million in proceeds -- nearly 50% better than what had been anticipated when the assets were put up for sale. Private Equity firm Criterion Capital Partners LLC -- best known for its ownership of social media site Bebo (acquired from AOL in a summer 2010 fire sale) -- led a syndicate of investors that gobbled up ten of the Fatburger franchise units in California. The success of the auction is welcome news for Parent entity Fatburger Corp., which, although not itself subject to the bankruptcy filings, is fighting off 8 lawsuits filed by unsecured creditors who have charged the company with fraudulent transfer of company assets prior to its subsidiaries' bankruptcy filings. Read more about Fatburger’s bankruptcy auction.
Two 7-Eleven franchise operators in Australia have been fined $150,000 for bilking six international students from Zimbabwe and India out of thousands of dollars of rightful pay. The store operators were cited for failing to meet workplace laws pertaining to proper recording and payment of earned wages, and were scolded for willfully exploiting a particularly vulnerable segment of society. This is not the first time 7-Eleven has suffered a black eye in the land down under: a 2010 audit of 56 7-Eleven units in Australia identified some $32,000 of unpaid wages due to 62 workers. Read more about the 7-Eleven Australia fines. That’s the franchise news roundup for this week from the staff at FranchiseHelp.com, the industry’s top independent source for franchise opportunities and franchise documents for industry pros as well as investors looking to find a franchise.
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