Posted on Apr 08, 2011
Franchise Fridays for April 8, 2011: Top Franchise and Small Business News of the Week
Dish Network Corp won the Blockbuster franchise auction, paying $320 million for the former video rental giant. The deal includes at least 1,700 locations along with the rights to stream movies online. Dish is expected to pay $228 million in cash to acquire Blockbuster's assets, which include at least $100 million of receivables and a rental library valued at $175 million.
With the emergence of Netflix, Blockbuster wasn't quick enough to shift strategies and as a result saw it's business model become irrelevant. Blockbuster currently has 1.3 million subscribers to its mail order business, compared to 20 million at Netflix. With the acquisition, it appears Dish Network is planning to take on Netflix head-on.
Let round 2 begin.
The U.S. Senate has repealed the unpopular 1099 tax-reporting requirement included in the sweeping health care legislation, the Patient Protection and Affordable Care Act of 2010. President Obama who has himself labeled the tax law, as “burdensome” will sign the bill.
The 1099 requirement called for small businesses to fill out a 1099 form for every noncredit card business expense over $600 regardless of what the expense was for. Franchisees/franchisors and paper pushers alike have expressed their relief that the time consuming requirement has been repealed.
Read more about the 1099 repeal.
This week is the 50th anniversary of the opening of McDonald’s first training and education facility, also known as “Hamburger University.” Since its opening, more than 275,000 McDonald's franchisees, employees and suppliers have graduated from HU with a degree in burger flipping (okay we made that up). The first university was founded in Illinois, and since then McDonald’s has opened other “universities” in Tokyo, London, Sao Paolo, Sydney, and other cities across the globe. Students attending Hamburger University can take a restaurant manager curriculum, a mid-management leadership curriculum and other programs for executive development.
In other news, unemployment just improved as McDonald’s announced plans to hire 50,000 new employees nationwide, increasing total employment at the golden arches by 7%.
Read more about McDonald’s anniversary.
Ruby Tuesday has blamed the harsh winter for a 10% drop in net income for the third quarter. The company said severe winter weather in its core markets caused the drop. While this may seem like a convenient excuse, it does make sense given 90% of the restaurants locations are in the northeast. Shares of the company fell 12% on the news. The Ruby Tuesday franchise owns and operates 742 restaurants, while franchisees operate more than one hundred.
Read more about the Ruby Tuesday’s earnings announcement.
This week, Fatburger restaurant supported the American Red Cross at Josh Duhamel's Youth Run For Japan. The event had over 2,500 runners and raised over $150,000 for earthquake relief. Fatburger stationed the "Fatmobile" restaurant on wheels, and donated 100% of sales to the American Red Cross. The chairman of the Fatburger franchise expressed his thoughts on the tragedy, saying, “Our thoughts and prayers go out to the people of Japan as they continue to show courage in the face of such unthinkable tragedy.”
Good work Fatburger!
Read more about Fatburger's charitable work.
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