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Posted on Mar 25, 2011

Franchise Fridays for March 25, 2011: Top Franchise and Small Business News of the Week

Burrito Standoff

burrito standoffA Texas man began shooting at police and started a 3.5 hour “Burrito Standoff” after becoming enraged by a 50 cent price increase by Taco Bell.

The man, whose name was not released, ordered seven Beefy Crunch Burritos at $1.49 (used to be $0.99), and then pulled out a BB gun and fired at the restaurant manager before fleeing into the parking lot.

The man then pulled out a handgun and an assault rifle from his car but took off when police arrived. He then barricaded himself in a hotel, which led to a SWAT team using tear gas to flush the man out of the hotel. "The weird thing is, he was here a week ago around the same time last Sunday," the Taco Bell manager said. "He yelled at me then, too."

Unfortunately, with food prices continuing to climb, fast-food BB gun violence could be on the rise.

Read more about the Texas Standoff at Taco Bell.

Big Deal for Five Guys

President Obama Five Guys FranchiseGE Capital, Franchise Finance, a leader in franchise financing, has poured $100 million in debt financing into Five Guys Holdings Inc. (franchisor of Five Guys Burger and Fries).

The mega deal includes a $55 million term loan and a $45 million revolver, which will be used to finance the growth of the fast food chain.

The Five Guys Burger and Fries franchise was founded in 1986. Over the last three years, 375 restaurants have opened resulting in more than 600 franchise locations and 100 corporate-owned locations throughout the U.S. and Canada.

Read more about the Five Guys debt financing.

Bucking the Froyo Trend

16 handles franchiseThe 16 Handles frozen yogurt franchise is planning to open five additional locations in the Northeast, doubling its current locations.

Frozen yogurt production fell by 5% in 2009,  with competitors like the Red Mango franchise closing stores across the country. However, 16 Handles’ sales have steadily increased, according to founder Solomon Choi.

“The frozen dessert retail business in the Northeast is a very risky proposition," said Andrew Moger, chief executive of restaurant development firm BCD.  Mr. Choi believes that his success is due to the self-serve option for customers in a hurry. “People here tend to be in a rush,” he said. “When it comes to something like treating yourself, they don't like to wait if they don't have to.”

I say, "Let them eat yogurt."

Read more about the expansion plans of 16 Handles.

So Good it Hertzhertz car rental

The Hertz franchise recently announced that it will more aggressively expand its franchisee network, with the intent of increasing its presence in the airport and off-airport car rental market.

CEO Mark Frissora said, “Hertz is expanding its franchisee network to accelerate growth in certain key US car rental markets, which, we believe, can happen faster under entrepreneurial, local ownership.” Franchisees will have the ability to acquire staff, facilities, and vehicle fleets, among other assets.  This represents a significant announcement for the industry, as Hertz is the leading airport car rental brand at more than 25% of market share.

Read the whole Hertz press release.

Franchise Lending Expected to Fall Short

franchise loansA study commissioned by the International Franchise Association (IFA) found that bank-lending activities are expected to come up 20% short of industry demands.   This amounts to a $2 billion lending shortfall, likely as a result of balance sheets continuing to be strained by the housing crisis.  The good news is that this shortfall is an improvement from the 23% gap that took place in 2010.  The bad news is that the shortfall will result in 8,000 fewer units being opened, costing some 82,000 jobs, according to the study.

Read more about the IFA franchise lending study.

That’s all for this week from the staff at, the industry’s top independent provider of franchise opportunitiesfranchise documents, and franchise information.

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