Investing In A New Franchise / Concept

My client owns a successful restaurant . He does not have the funds to develop a franchise system so I proposed I would invest my fees in return for a one-third equity in the franchise system ( not including any ownership in his restaurant ). He agreed and I began my work.
Within two weeks of our first meeting he withdrew from our agreement. He insists on keeping 100 % of the equity . The result is he has 100 % of what I call ” The Big Shinny idea” – but nothing more of what could have been be a franchise / chain of successful businesses.

I believe that the reason small business remains small is that type of small thinking. What do you think?

Franchise Your Business

A new emphasis for my business consulting work.

 

Email me if this can assist you – no cost or obligation .

 

McDonald’s Thankful GOP Millionaires To Battle Minimum Wage Hike

House Salad at Buffalo Wild Wings

House Salad at Buffalo Wild Wings (Photo credit: Tojosan)

MCD : NYSE :

US$94.00
You pay for what you get.

The world’s largest restaurant chain was the biggest hit to the Dow on Wednesday, after President Barack Obama announced a plan to raise the minimum wage. The blizzard that lashed the U.S. Northeast at the end of last week possibly hurting the company’s sales, and Buffalo Wild Wings’ (BWLD) report on Tuesday that same-store sales are declining this year, may also be affecting McDonald’s stock, but most analysts agreed Obama’s call to raise the federal minimum was the main driver.

Obama called for a federal minimum wage increase to $9 an hour, from $7.25; he also proposed tying the minimum wage to the cost of living. The current minimum wage has been in effect since 2009. McDonald’s and its franchisees don’t disclose what they pay their restaurant workers. Its franchisees, as well as other restaurant chains, such as Wendy’s (WEN) and Jack in the Box (JACK), spend money lobbying against minimum-wage increases.

McDonald’s, which has about 14,000 U.S. locations, has been vying with other eateries to lure cash-strapped Americans. Earlier this month, the chain reported that U.S. same-store sales gained 0.9% in January as it advertised its Dollar Menu and tested new items to help boost sales.

KFC vs. Popeyes

Popeyes Chicken & Biscuits biscuits

Popeyes Chicken & Biscuits biscuits (Photo credit: Wikipedia)

Oct 27

KFC Is Fighting To Stop Archrival

Popeyes From Buying Up Its

Bankrupt Restaurants

 

Popeyes is buying up 28 former KFC locations, mostly in the Minneapolis-St. Paul area

 

This all happened because the KFC franchisee went bankrupt, and there are 21 more restaurants that it has closed down. Popeyes is currently trying to get approval to purchase the rest.

Carol Tice at Forbes calls it “a move that sums up the ascendance of one surging brand and the decline of another.”

But KFC’s not going to lie down and get beaten by Popeyes. The statement the company gave Tice is evidence that it’s going to try to put up a fight:

KFC Corporation is intimately involved and intends to make every effort to see that as many restaurants as possible continue to operate as KFC restaurants with the same employee teams but under new ownership.”

Popeyes CEO Cheryl Bachelder made it abundantly clear in an interview with us in October that KFC’s not her prime concern. She wants to compete with the whole top five of the fast food segment, including McDonald’s and Wendy’s.

But, at their hearts, the bone-in chicken chains will always be archrivals, and Popeyes’ grab of all these dead KFCs has to be hitting a nerve.

Dunkin’ Brands Upbeat – This Early In The Morning !

Dunkin' Brands Logo

Dunkin’ Brands Logo (Photo credit: Wikipedia)

October 26

Dunkin’ Brands (DNKN : NASDAQ : US$31.37)

Despite my personal choice of McD ‘s coffee – America runs on…

Dunkin’ Brands was in the green following a solid third quarter as management was able to cut costs to offset slowing growth. Earnings came in at $0.37 per share on revenue of $171.7 million while analysts were expecting $0.35 on $168 million. System-wide sales grew by 4.7% with higher selling prices and increased traffic contributing to the gain.

Growth at its Dunkin Donuts locations outpaced Baskin Robbins in the U.S., while Baskin was the stronger international performer.Management expects to add 280 to 300 net new restaurants in F2012 and sees revenue growing between 6% and 7%, down form its previously forecasted range of 7% to 8%.

While some were disappointed with the reduced top line forecast, most remained focuses on the bottom line beat, and management’s affirmation of its in-line $1.25-1.27 EPS guidance. Additionally, the company declared a $0.15/share quarterly dividend, in line with its previous payout, implying a yield of roughly 1.95%.

 

Sonic Soars – Burgers Fly

English: The Jr. Deluxe Burger from Sonic Driv...

English: The Jr. Deluxe Burger from Sonic Drive-In. Contains a beef patty, lettuce, pickles, onion, tomato and mayonnaise on a bun. (Photo credit: Wikipedia)

Sonic (SONC : NASDAQ : US$10.38

October 18

and shareholders grow fat and happy ..

Shares of Sonic jumped after the company reported an 18% increase in net income, helped by tighter cost control at their restaurants.

The Oklahoma City company’s earnings beat Wall Street expectations, reporting net income of $14.5 million, or $0.25 per share, in the three-month period that ended August 31. That compares with $12.3 million, or $0.20 per share, in the year-ago quarter.

Sonic, which has more than 3,500 drive-ins across the country, said revenue at restaurants open at least a year rose 2.3% for the quarter. The measure is a key indicator of health because it excludes the impact of newly opened or closed stores.

Cliff Hudson, Chairman and CEO, noted, “In fiscal 2013, we expect to build upon our fiscal 2012 initiatives with a continued focus on new and differentiated products combined with iconic creative and a layered day-part promotional strategy to drive consistent same-store sales growth. This in turn is expected to drive further margin expansion. In addition, with the strength and flexibility of our business model, we are able to generate sufficient free cash flow to invest in our business, pay down debt and repurchase shares to enhance shareholder value.

 
 

McDonald’s Rises On Value Menu

English: A Big Mac combo meal with French frie...

English: A Big Mac combo meal with French fries and Coca-Cola served at a McDonald’s in Louisvile, Kentucky. (Photo credit: Wikipedia)

Sept . 12

Disclosure : Yes that’s me every morning for coffee at MCDs

McDonald’s (MCD : NYSE : US$91.20),

S&P 500? I’m lagging it.

 The real burger king said same-store sales rose 3.7% in August, as the fast-food chain emphasized the  value of its menu offerings amid the challenging global economy. McDonald’s strongest performance came from the region encompassing Asia, the Middle East and Africa, with revenue at stores open at least 13 months up 5.7%.

The company said the increase in that region was fuelled by a shift in the timing of Ramadan, which ran from late July to mid-August this year. It had fallen entirely in August last year. In Europe, which is McDonald’s biggest market and accounts for 40% of its business, the figure rose 3.1% on strength in the U.K., France and Russia. The company said its sponsorship of the London Olympics helped  results.

Another strong contributor was its Coca-Cola (KOglass promotion, in which customers got a free glass and wristband when they bought an extra value meal or premium salad.

Analysts caution, however, that despite being off about 8% for the year-to-date and lagging the S&P 500 by more than 20 percentage points, McDonald’s still looks too pricey. Shares currently sport a forward P/E of 15.4, up from 14.4 a month ago. That’s currently in line with the stock’s own five-year average, despite entering a period of what looks to be slower earnings growth.

 

 

 

 

IMAX – JV +Short Squeeze + Profits Rise with BATMAN Blockbuster

Interior of an IMAX Dome control room Science ...

Interior of an IMAX Dome control room Science Centre OMNI-Theatre, Republic of Singapore (Photo credit: Wikipedia)

IMAX Corporation  july 17

IMAX : NYSE : US$24.11 Buy , Target US$32.00

Two sizable JV deals signed; install guidance set to rise; reiterate BUY rating and US$32.00 target

Investment highlights

Two separate deals for 15 JVs signed yesterday: IMAX announced two sizable JV deals yesterday – with AMC Entertainment in the US and then TGV Cinemas in Malaysia for a total of 15 JVs (with upside for an additional 10 theatres). Of the 15 JVs confirmed, at least five will be installed in 2012, which means further upside to the installation guidance which currently sits at 95-100. Based on these two announcements, as well as the mini surge in new signings we saw in the latter half of June, we can say that we expect the install guidance (out of backlog) to be raised by at least 15 theatres.

New signings maybe up to 75 YTD: Based on the recent signings as well as comments made on investor day, we estimate that total new signings are now up to 75 thus far in 2012. This is a strong signings number considering we are only halfway through the year. Recall our longer-term projections for IMAX (basis for our DCF) assumes only 100 new signings a year.

Expect strong Q2 call on July 26: We believe all this sets the stage for a strong  Q2/12 call on July 26. As we highlighted in our preview note for the quarter (July 3, 2012), we are expecting an 81% EBITDA growth quarter

We  anticipate a sizable upward revision to installation guidance.

Historically, the stock has responded well to increases in installation guidance and upticks in new signings.

Short positions at record highs:

 We have been surprised to see that  short positions in IMAX have risen sharply in recent times. Short positions have risen from a low of 2.7 MM (shares) in mid-October 2011 to 4.8 MM by the end of 2011, to 10.9 MM currently. Given the positive catalysts we expect in July and August, together with the fact that negative angles on the story seem to have been losing ground, we expect these positions to unwind, providing a further tailwind to the stock.

We value IMAX by using a DCF analysis, to arrive at our target of US$32.00 per share. We use a discount factor of 9.5%.

Franchising Your Great Idea ?

Project Franchise

Project Franchise (Photo credit: Wikipedia)

Franchising Your Business ?

Thinkig of creating a franchise from your successful business ?  This can be  very rewarding – but  it can also be a costly and time consuming task. We can help smooth the path from planning to completion, training and financing. We will provide the model agreements and manuals. If the cost is too great and preventing you from expanding to multiple sites as a franchise system consider our no cost alternative.

We will partner with you and contribute our time and expertise. Call 604-858-3202 or e-mail info@jackbassteam.com to arrange a free no obligation meeting and review.

You can view our full consulting website at www.jackbassteam.com

Check our client testimonials there and also review  the full Profile there or at Linkedin ( John Bass ) .

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