Posted on May 27, 2011
Franchise Fridays for May 27, 2011: Top Franchise and Small Business News of the Week
Jackson Hewitt Files Chapter 11
The Jackson Hewitt Tax Service franchise, the second-largest tax preparer in the US with about 5,956 locations, filed for Chapter 11 bankruptcy protection on Tuesday. The company reported $388.6 million in assets and $444.8 million in debt in its Chapter 11 petition, which it hopes will reduce its heavy debt and interest burdens. The proposed plan calls for secured lenders to trade their debt for a new $100 million term loan and all of the new equity in the restructured company. In addition, shares in the company will be canceled and Jackson Hewitt will become privately owned.
Stock prices have also been woeful this month for Jackson Hewitt. NYSE suspended trading in the company’s shares after Jackson Hewitt's common stock had fallen below the exchange's requirement for a $1 average closing price over a consecutive 30-trading-day period.
Read more about Jackson Hewitt’s Chapter 11 filing.
Ronald McDonald is Here To Stay -- And You'd Better Like It
McDonald's Corp has responded to a letter from 550 healthcare officials who wrote asking McDonald’s to stop marketing its less-than-nutritious fare to children using the world’s most famous clown, and demanding that the company, as one of the world's most famous restaurant franchises, do more to help curb America’s growing obesity epidemic.
McDonald's shareholders strongly rejected calls to assess the impact of the company's food on childhood obesity, and insisted that Ronald McDonald will be used for years to come. According to McDonald’s CEO, “This is about the personal and individual right to choose."
McDonald’s is happy, however, to point out that it is offering healthier menu alternatives these days, including apples, juice, milk, and oatmeal. Ironically, McDonald’s sliced apples come with caramel sauce and one serving of their oatmeal has more sugar than a candy bar.
Read more about McDonald’s response to health advocates' letter.
Subway Opening 2,000 New Stores in 2011
Subway plans to open 2,000 new stores in North America in 2011, according to a recent company press release. A company official said that the sandwich franchise is aggressively seeking out qualified investors for Subway franchise opportunities, and that some 700 new units have been opened in North America since January.
Subway representatives will attend the Global Retail Real Estate Convention on May 23-25 in Las Vegas, to promote its expansion.
Read more about Subway’s plan to open 2,000 stores.
Jamba Juice Drops in Revenue
Jamba Juice -- the iconic smoothie franchise -- recorded a net loss of $7.3 million for the end of the first quarter of 2011. Revenue declined significantly due to fewer corporate stores as part of its now-complete refranchising initiative. However, on a per-unit basis, things are looking up, as same-store sales for both franchised and corporate stores increased.
Jamba Juice also announced an agreement with Canada Juice Corp. to open Jamba Juice locations in Canada for the first time.
Read more about Jamba Juice's first quarter 2011 financial results.
That’s all for this week from the staff at FranchiseHelp.com, the industry’s top independent provider of information on franchise opportunities, business opportunities, franchise documents, and more!
NEXT POST: Your Customers Change, Do You?