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Posted on Mar 18, 2011

Franchise Fridays for March 18, 2011: Top Franchise and Small Business News of the Week

Circle 'round as we run through the best (i.e., most relevant, most interesting, or plain weirdest) franchise and small business news to come out during the week ended March 18, 2011.

Subway is King

subway passes mcdonalds

This past week, Subway overtook McDonald’s as the world’s largest restaurant chain in terms of total units. The numbers are in and Subway has 1,012 more units than McDonald’s (33,749 vs. 32,737, to be exact).

With high unemployment and a saturated industry within the U.S, both giants are focusing on foreign markets, particularly in Asia. Subway expects to have more than 500 restaurants in China by 2015, more than doubling the 199 restaurants it currently operates in that country.

Subway can thank opening stores in unorthodox locations for its rapid growth. Showrooms, a ferry terminal, goodwill stores and even a high school host outlets where you probably wouldn't expect to find a Subway restaurant (or any restaurant for that matter), but as Don Fertman, Subway's Chief Development Officer, explains, “The non-traditional is becoming traditional.”

Why the long face, Ronald?

Read more about Subway overtaking McDonald's.

Burger King CEO Inserts Foot Into Mouth

burger king in trouble

As reported by nerdy snitches the student paper for the University of Chicago, while delivering a lecture to students at the university, Burger King franchise CEO Bernardo Hees wasn't shy about ripping into what remains of Britain's claims of decent food and women. Hees informed his audience that during his MBA studies at the University of Warwick, he was able to observe the "terrible" cuisine and "not very attractive" women of the U.K. firsthand.

Richard Branson and his Virgin Atlantic flight attendants couldn't be found for immediate comment, but British chaps, lassies, ladies, and fellows everywhere have been up in (figurative) arms on account of Hees' revealing their secrets to the world.

Read more about Burger King CEO Bernardo Hees hating on the British.

Agreement on the Sale of Blockbusterblockbuster bankruptcy

An agreement on the sale of Blockbuster Video has been reached between the former entertainment giant and its creditors. The bankruptcy court's ruling allowed Blockbuster to avoid Chapter 7 liquidation filing. Creditors had previously rejected a $290 million bid from Cobalt Video, which was rejected by a judge who called the bid too "aggressive." With the new agreement, creditors would receive more money in advance in addition to a share of any offer.

Since Blockbuster filed for Chapter 11 protection at the end of September, it has been speculated that it would be forced to enter Chapter 7 liquidation.

Read more about the sale of Blockbuster out of bankruptcy.

H&R Block Chairman to Step Down

Richard C. Breeden, Chairman of tax services franchise H&R Block, plans to leave his current post to focus on his hedge fund, Breeden Capital Management.

“I am looking forward to having more time to work on some of Breeden Capital’s more recent investments,” the activist hedge fund manager said in a statement.

Breeden, the former head of Securities and Exchange Commission, and onetime senior adviser to past presidents, was elected chairman of H&R Block in 2007. Since then he has helped the company refinance $500 million in bridge loans, and guided the company through the recent recession.

Breeden is proud of the work he has done over the last 4 years, and believes it's the right time to move on: “I feel truly confident in saying ‘Mission Accomplished.’”

Read more about H&R Block Chairman Richard Breeden moving on.

Rise in Illegal Alien Crackdowns Hits Popular Restaurant Franchises

The Chipotle Mexican Grill franchise is currently under investigation by Immigration and Customs Enforcement (ICE) over questions regarding the immigration status of many of its employees. Chipotle, however, is hardly alone in its predicament: Immigration violation crackdowns across have been on the rise across the restaurant industry, with recent high-profile raids performed at Sizzler, Krispy Kreme and McDonald’s franchise locations.

Read more about the ICE investigation of Chipotle.

Olympus Partners Sells Taco Bell

olympus partners sells taco bell

Olympus Partners have sold their stake in K-Mac Holdings, the third-largest Taco Bell franchisee in the United States, to buyers that include Brentwood Associates (a Los Angeles PE firm) and other unnamed acquirers. K-Mac operates 167 Taco Bells, the majority in the Southwest.

It was a spicy deal for the private equity shop: by selling its majority stake in K-Mac Holding, Olympus earned an eight-time return on its investment. No word yet on how many quad steak burritos that pile of cash could buy.

Read more about Olympus Partners selling their stake in Taco Bell franchisee K-Mac Holdings.

That's all for this week from the staff at FranchiseHelp.com, the industry's top independent provider of franchise opportunities, franchise documents, and franchise information.

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