1. The world is in love with the romance of start-ups. But all other things being equal, I believe it can sometimes be better to buy a business than start one.

2. Never demand a certainty: if you wait for that, you will be on the sidelines for ever.

3. Leave behind the notion of the big idea and just do what most successful entrepreneurs do: copy and improve. Imitate first, and then devote yourself to constant incremental improvement.

4. Whenever you can, make sure a name has some underlying meaning. Don’t copy the example of Diageo; one of the world’s biggest drinks manufacturers. “Diageo” means nothing. It’s not even easy to spell, or to Google. For everything that’s bad about high-concept names, look no further than Diageo’s own toe-curling explanation: “The word Diageo comes from the Latin for day (dia) and the Greek for world (geo). We take this to mean every day, everywhere, people celebrate with our brands.” I wonder if Diageo’s management realize that having to listen to that sort of rot could well make its staff want to quit and start their own business.

5. Today is a better time to start a business than tomorrow, no matter how today looks.

6. Achievement changes people. Once someone attains status and wealth, their attitude towards sharing the spoils and the glory alters. It slowly dawns on them that actually all the clever moves and breakthroughs were their idea and, in fact, they are the only one who really does any work.

7. When I interview managers, I ask them about their customers and competitors. The high achievers will know them intimately, and can talk for hours about the strengths and weaknesses of their rivals.

8. I tend to respect actual experience in a line of work, or a specific trade qualification, over an MBA.

9. It can be better to take a bad decision and correct it later than procrastinate and sit on the fence.

10. Anyone who employs talented people knows that talent is a rare commodity. The entrepreneur should move heaven and earth to hire it. Yet at the same time, no company should ever be in thrall to its stars.

11. Football clubs are essentially charities run for the financial benefit of staff, as are most investment banks.

12. It’s a sad fact that if an entrepreneur employs enough people, sooner or later there will be a thief on the payroll.

13. The most common personal issue I’ve encountered among associates has been the male mid-life crisis, with the classic accoutrements: mistress, motorbike, drugs, long hair, and even cosmetic surgery.

14. The very utterance of the letters HR should strike fear into the heart of every self-respecting entrepreneur. Human resources are like many parts of modern firms: they are a pure expense and a burden on the backs of the productive workers.

15. The life of a self-made man is not always pleasant. Driving hard bargains, dealing with litigation, juggling creditors, making staff redundant, fighting for customers – these are all part of the craft of running your own show. Managing a business can have a brutalizing influence on your character.

16. Hugely successful entrepreneurs probably don’t make for tranquil life companions as a rule.

17. The greatest ritual of all is, of course, the “meeting”. This is a magnificent engine of bullshit of all kinds. It gives the participants the feeling they are making progress with their project, whatever it may be.

18. It soon becomes apparent that some angel networks are run by people with no obvious record of great success themselves. 19. Robert Frost put it best: “A bank is a place where they lend you an umbrella in fair weather and ask for it back again when it begins to rain.”

19. The most fertile period for innovation is when people are in their twenties: from Nobel Prize winners, to entrepreneurs, to composers, to writers, real breakthroughs and greatest works tend to be the province of the young.

20. A complaint that’s well handled often leads to repeat business. The fascinating thing is that good service does not necessarily cost a firm more to deliver than shoddy service.

21. Beyond a certain point, the trappings of wealth are merely a game to keep boredom at bay.

At first I thought Burger King delivery was a dumb idea.  But, after thinking about it a while, it may prove to be a smart move – in the right locations and for the right premium.

Burger King is using custom packaging for the fries that won’t trap steam to make them soggy, but it will trap the emitted heat.  The delivery bags probably have a heating element too.

I could see delivery being a surprise hit with customers. There no reason pizza should be the only popular delivery food.  Jimmy Johns owes a lot of its success to delivery.

If burger ads are enhanced, what about the materials and representations you get as prospective franchisee?  Is that material “prettied up”?

for more humorous analysis of ads, see here.

It sounds like a great way to reach out to franchisees.  Hopefully it will help.

It is in-your-face, real world advice and inspiration for your career, whatever field you’re in.  It’s the opposite of academic, and gives the advice a wise old CEO would give after a few gin and tonics.  It’s not a long book, it only has a few sentences on each page with pictures, but it focuses on the importance of marketing yourself and your talents, dealing with people, and getting yourself into positions that will eventually lead to more opportunity and “luck”.  I’ve found a lot of it to be true after being in the workforce for 20 years, and would have benefited from this type of advice early in my career.

Here’s a some of my favorite samples:

Tip #1&2 /  More important than talent, have balls.

Sure, talent matters, but if you don’t have balls, your talent won’t matter – because nobody will ever find out about all your swell stuff.

Fact: If you’re seeking extreme success, you cannot be afraid to go against the crown, make mistakes, look dumb.

If you want ot reach extreme heights in your career, get over your fear of fail.  You must become confident in your abilities to deal with any crisis or obstacle if you plan to pursue your passions with cockiness, vigor and sense of playful adventure need to snag ‘em.

Tip #3 /  There are no wishy-washy rock stars, no wishy-washy astronauts, no wishy-washy CEOs, no wishy-washy nobel price winners.

Be like a cockroach, survive everything nature and man can throw at you for millions of years.  If you get sprayed with a lethal dose of negativity, you must quickly wipe off your antennae, find your bearings and keep going for all those goodies!  Indeed, you must use each spray as a spirit strengthener to build up a strong tolerance for dealing with future sprays of negativity…and thrive against all odds.

Tip #4 /  Mom was wrong, it is okay to talk to strangers

• Start friendly conversations often.  Schmooze.  Network.  Join organizations.  Go to parties.  Go to galas.  Go to soup kitchens.  Never have cold feet about cold calling anyone you want to meet.  Depend on the kindness of strangers.
• Every person you talk to = 3 degrees of separation from someone you might want to talk to.  The more people you know, the luckier you’ll be.

Tip #39 /  Whenever possible, play with people who are better than you.

TIp #73 / Learn Under a Substitute Teacher

• When faced with a problem, substitute someone you trust and respect as being in your place – and imagine what they would do.

Tip #90 / It’s better to communicate difficult stuff sooner than to try to fix a really difficult problem later.

Always squoosh a work problem when it’s a mini.  The longer you wait, the bigger and scarier problems get.

• Perkins
• Marie Callender’s
• Old Country Buffet
• Real Mex Restaurants
• Giordano’s
• Cork and Olive
• Dial-a-Mattress
• Bally Total Fitness
• Friendly’s
• Souper Salad
• Sbarro
• Dippin’ Dots
• The Little Gym
• Fatburger (A little controversial -Fatburger parent company not part of bankruptcy, but the two subsidiaries accounted for 72% its total revenue in 2008. The bankruptcy came under pressure from G.E. Capital Business Asset Funding, which Fatburger owed $3.9 million for defaulted loans.)
• Mrs. Fields / TCBY

A bit older bankruptcies.  It shows that some brands can recover quite well, especially Denny’s, Day’s Inn, 7-Eleven and Church’s Chicken:

• Bennigan’s – 2008
• Baker’s Square – 2008
• Roadhouse Grill – 2007
• Ground Round -2004
• Boston Market – 1998
• Denny’s – 1997
• Church’s Chicken – 1991
• Sizzler’s – 1996
• Krystal – 1995
• Day’s Inn – 1990
• 7-Eleven – 1990

What a sad story. Giordano’s is a leader and well-known institution in Chicago’s stuffed crust pizza game. It owns 10 corporate  stores and manages 35 franchised locations in Illinois and Florida.  Somehow this chain, where people (often tourists) stand in long line for an overrated $20 deep dish pizza, owed $45 million to a lender and had to file bankruptcy in February when it stopped paying back a note. Bidders for the company include the parent companies of Gino’s East and Connies Pizza.

It sounds like they over-leveraged their real estate acquisitions and didn’t have enough income for debt coverage.

Giordano’s was acquired by VPC Capital Partners in Chicago for $52 million.  It’s chairman, Richard Levy, hopes to elegantly apply his legal, bio-pharmaceutical, and energy background into the pizza industry, an obviously natural next step for him and sure to reassure franchisees.  Luckily, the Giordano’s family is going to stick around and collect big salaries to help out.   Don’t the new owners look happy in this picture (pic courtesy of Chicago Tribune) to the right?   They have BIG plans for the brand, hoping to clone the success of Paul Newman’s $200 million grocery business including developing a line of products for grocery stores “similar to what Paul Newman has done for salad dressing” and expanding the restaurant footprint beyond its Chicago and Florida markets.

Average block cheese prices continued to drop last week on the Chicago Mercantile Exchange, averaging $1.77 from $1.81 the previous week.

Cheese reached its 3-month high of $2 on Nov. 15, but continues to drop on slowing demand.

Wheat

Wheat prices fell again last week on the Minneapolis Grain Exchange, averaging $8.43 from $8.54 the previous week. Two weeks ago, wheat was as high as $9.26. The current multi-month low is the result of a larger-than-expected grain output from China, and a positive jobs report from the U.S.

Pizza company stocks

Pizza stocks were boosted by lowering commodity prices and an upward trending stock market the past week.

Pizza Hut parent Yum! Brands Inc. closed last week at $56.25, up nearly $4 from the previous week, which closed at $52.72. The company hit its 52-week high in August when shares were $56.72. Yum! traded as low as $46.40 in January.

Domino’s closed last Friday at $33.56 up from $30.51 the previous week. DPZ hit its 52-week high earlier in the day on Friday, trading at $33.81. Shares remain substantially higher over this time last year when the company traded at $14.72. The company has a P/E ratio of 30.8, above the average leisure industry P/E ratio of 22.4 and above the S&P 500 P/E ratio of 17.7

Papa John’s closed last week at $37.25, up from $35.50 the previous week. PZZA hit its 52-week high earlier in the week, at $38.18. PZZA’s 52-week low was last December when it traded at $25.83.

CEC Entertainment Inc., parent company of Chuck E. Cheese restaurants, closed out last week at $33.17, up from $32.35 the previous Friday. CEC hit its 52-week low of $27.42 in September. The company hit its 52-week high of $41.75 in July.

Pizza Inn closed at $6.28 Friday after hitting a new 52-week high of $6.60 earlier in the day. The company closed at $5.30 last Friday. PZZI traded as low as $1.88 in November 2010. Domestic same-store sales increased 2.7 percent for the first fiscal quarter compared to the prior fiscal year driven by a 3.2 percent increase in same-store sales for the buffet-style concept.

Most notable, and what I find most interesting, is the success of their new “Pie Five” concept. Pie Five offers 9′ pizzas for $6.50 baked in 5 minutes, with a target demographic of mid-to-upper income. In the first quarter of 2011, the first Pie Five Pizza Company generated $230,000 in sales and $50,000 in operating income before taxes.

– Ryan Knoll
FranchisePundit.com

I understand the strategic benefit for Tasti D-Lite: they can distribute their frozen yogurt through the 100+ existing Planet Smoothie locations, the customer base has a lot of crossover, smoothie recipes can incorporate frozen yogurt, and hopefully per-unit increase sales will increase more than 25%.

It looks like the preferred transition option for franchisees is to allow units to co-brand the concept. I’m sure the Planet Smoothie franchise agreement was favorable for Amos. My guess is there is a clause whereby existing franchisees have to at least transition to selling the yogurt menu quite soon, but conversions to dual-branded units probably can’t be forced until the franchise agreement is up for renewal.

I hate to say this but I think the acquisition, all things considered, is probably good for Tasti D-Lite. I haven’t seen a concept work where frozen yogurt was a secondary offering, so Planet Smoothie franchisees may be the ones losing some return on their investment following the conversion.

I’m very interested to see how this situation progresses over the next year.

From press releases:

Earlier this year, the first drive-thru Tasti D-Lite location opened in Columbia, Mo., and the first on-campus store was opened at Duke University. In addition, Tasti D-Lite introduced its first self-serve model to the brand’s long-time full-serve model, and also introduced its first “store-within-a-store” location on Las Vegas Boulevard.

“This acquisition presents an opportunity to combine two iconic brands to create a winning combination for both the customer and the franchisee,” Amos said. “The consumer profiles of Tasti D-Lite and Planet Smoothie are very similar, so combining the two complementary brands will provide both brands an opportunity to increase the scale of the combined store network as well as sales at the store level.”

Following this transaction, Tasti D-Lite plans to offer new franchisees the option to own and operate in a co-branded store concept, which fully integrates both brands into a unique customer experience.

Many restaurant groups are pursuing this market – Wagamama, Big Bowl, Stir Crazy, Panda Express (and all the indoor mall food court offerings), and Pick up Stix. Technomic claims that sales at limited-service Asian restaurants grew 5.9% in 2010, faster than any other menu category, and in 2011 sales at Asian dining spots are expected to rise 5% compared to 4% for all limited-service restaurants. If you’re a CEO of a restaurant group looking to ride the trends, this is your new market.

P.F. Chang’s, who also owns the popular casual restaurant Pei Wei, is creating a “more casual” concept called Pei Wei Asian Market, to compete in this fast service segment. It won’t be the notorious scoop style forged by Panda Express and Chipotle, but what they call a diner style with no table service. It sounds like the same style of Panera Bread but with a few more ready-to-eat packages at checkout.

The fast asian fusion segment seems to be one that will have staying power. I like the segment, and there is a place for the Panera of Asian food, a speedy and quality layer above Panda Express. Just like Chipotle forged Mexican cuisine into the weekly rotation of American lunches, the arguably healthy fast asian fusion will also continue to grow and improve.

— Franchising Options —

Most of the good concepts aren’t franchising at this time – Chipotle, ShopHouse, Pei Wei, Wagamama, Panda Express.

IF I wanted to pursue this segment going the franchise route, I’d probably look to Noodle & Company. The branding seems strong, the familiar chinese and thai menu works well for lunch and dinner crowds, and most importantly they seem to successfully attract lines throughout the week. A highly viewable location in a new, upper scale shopping plaza, in a dense residential community would be a strong location for this concept. A warning is there have been store closures in Portland and elsewhere, and at those locations people have complained about the quality of food. In contrast to busy open locations, people seem to praise the food dishes, so there seems to be variance in the quality of the food based on skilled preparation.

There are a good number of other franchises in this asian segment, but most are the “orange and bourbon chicken” joints that belong in an indoor mall. For example, Pick Up Stix in California is akin to Panda Express, but I wouldn’t be a buyer of the Pick Up Stix franchise.

Q. What have you learned about doing business in those neighborhoods?

A. When we open a restaurant and are interviewing, we will have guys show up with their pants hanging below their crotch, their hat on sideways, answering our questions antagonistically. Our recruiters will say to them, ‘If you’re here for a job, go home and get dressed like you’re applying for a job and then come back.’ Many will go home, change and come back.

I give Applebee’s credit for not axing him from the system, and instead learning to work with him.

One company who is bucking that trend is Swisher Hygiene, acquired in 2004 for less than $20 million by Steven Berrard and Wayne Huizenga…the team behind AutoNation, Blockbuster and Waste Management. While their business haven’t all been models of success except for AutoNation, they have grown business fast and made a lot of money. Berrard was also CEO of Jamba Juice.

You probably have never heard of Swisher Hygiene. The company sells low cost chemicals and cleaning services to business, especially foodservice and restaurants, such as the 3-compartment sink systems where EcoLab has traditionally dominated. In 2004, it was making an average of $17 per week per customer, with a base of about 30,000 clients. They feel the opportunity in this $9 billion market is in increasing sales to each existing customer and acquiring new ones. Swisher also was an amalgamation of 93 franchisees all working out of their trucks. Now, they acquired most of their franchisees, most recently their Chicago franchisee.

The stock has fluctated greatly in the past year when it went from $2 to $10 per share, now it’s back down to about $5 per share.

I don’t know if they will succeed, but it will make for an interesting case study one day. Hopefully the franchisees who took a buyout with stock will be better off than they were as franchisees.

This is not just happening in the USA, but also in Australia where giant Fitness First is seeing a decline in membership. Fitness First has turned flat to negative, with increased competition from Anytime Fitness, personal trainers and low cost rivals.

It’s a tough industry where you have franchises like Planet Fitness offering a no-frills membership for $10/month.

On a similar note, I had a new son born a few months ago which has absorbed most of my spare time. I will resume regular posting in mid-August. Thank you for your patience and loyalty.

I’ve seen a lot of investment fraud as an attorney, and I still am amazed at how often folks will steal from people they know.

Sales were reported in a broker’s sheet to be in excess of $3 million for the past three years. The asking price is $2.75 million plus a transfer fee.

Read more: Graeter’s Northern Kentucky franchisee puts stores on the block | Business Courier

For you non-Cincinnatians, Graeter’s ice cream is a local marquee brand in the Ohio Valley.

1. Washington, D.C.
2. San Francisco
3. New York City
4. Boston
5. San Diego
6. San Jose/South Bay
7. Baltimore
8. Philadelphia
9. Seattle
10. Pittsburgh

I would agree with Washington, D.C. being number 1. I’ve spoken to several small operators, that are expanding to Washington, D.C. One take and bake pizza concept expanded there and within a year it was their best performing store in the system of about 20.

As a rule, franchisees should try to keep their rent 5-9% of gross sales except indoor malls where you’ll be at about 15%. Recently I was evaluating lease rates in the Chicago downtown loop area, and for a nice spot between 1,200-2,000sf you’ll be paying around $50+sf NNN. Compare that to suburbs of Orlando where you’ll easily grab prime shopping center space for $20-25sf with lots of incentives.