A Drive Thru Becomes a Drive On

SUV ends up on top of car at Starbucks

 CHEEKTOWAGA, N.Y. (WIVB) – An SUV appeared to be going through the drive thru at Starbucks on Walden Avenue in Cheektowaga and ended up on a car.

Channel 4 Newstracker, Denise Halor captured these shocking pictures!

No word on names or conditions of those involved.

See More photos at: WIVB

Quiznos Could Pay Millions in Settlement

Alan J.   Liddle reports at Nation’s Restaurant News that a judge has granted preliminary approval for the settlement of four class-action lawsuits filed by Quiznos Sub franchisees against their franchisor that could significantly alter the relationship of the feuding parties and cost the franchisor up to $100 million.

The proposed settlement could impact more than 6,900 individuals now associated with the Denver-based Quiznos system “and several thousand who have closed their franchises,” attorneys for franchisees indicated in court documents.

The cases revolve around the system’s supply chain and food costs, marketing and advertising funds and disputes among franchisees that agreed to but did not open locations and whether royalties are owed. The parties will return in June to U.S. District Court in Chicago for hearings to determine the fairness of the provisions in the proposed settlement.

Quiznos has denied all claims made in the lawsuits, which date back to 2006, and the settlement agreement involves no finding or admission of liability.
“This settlement is very good news for Quiznos,” said Ellen Kramer, a spokeswoman for Quiznos. “Litigation is a time-consuming process that shifts valuable time and resources away from our most important focus – great-tasting food, franchise owner profitability and customer satisfaction.”

The settlement is “the culmination of several years of contentious litigation and reflects what we believe is a positive step for the future of the Quiznos system,” said Justin M. Klein, one of the plaintiffs’ attorneys.

Klein’s firm, Marks & Klein LLP of New York and Red Bank, N.J., is representing the plaintiff franchisees along with the firm of Kravit, Hovel & Krawczyk SC of Milwaukee.

If left unchanged, the settlement would require Quiznos to change franchisor policies and provide concessions to franchisees. It could cost the sandwich-chain parent at least $23.6 million in franchisee payouts and forgiveness of unpaid royalties and advertising and marketing fees, according to court filings.

The settlement, as proposed, would require the following from Quiznos:

• To offer credits against the purchase of food or equipment to an estimated 2,300 operators who acquired franchises but never opened restaurants. The credits would equal the price of a franchise fee, which is typically $25,000, if the operators remain in the Quiznos system and open their locations. That tally could total $57.5 million for Quiznos. If the franchisees elect to leave the system, they would receive a refund of between 5 percent and 32.7 percent of the price of their franchise.
• To pay $19.4 million in contributions to the chain’s advertising and marketing trust funds through Dec. 31, 2012.
• To make additional payments of nearly $14 million, including up to $11 million for plaintiffs attorneys’ fees.

Quiznos has agreed not to oppose the relief sought in the settlement, the motion indicates.

The lawsuits span cases in Illinois, New Jersey and Wisconsin, and involve claims of violations of U.S. racketeering and corruption statutes, as well as transgressions of various state regulations. The charges are refuted by Quiznos.

Additional settlement provisions include:

•An agreement by Quiznos to drop all of its claims against individuals who did not open restaurants, but had agreed to in the past.
•Agreement by Quiznos to forfeit claims of sales royalties and advertising and marketing fees owed it by current and former franchisees and franchisees who have not opened restaurants. This concession, attorneys for the plaintiffs estimated, has a value of $5.7 million.
•Quiznos’ recognition of an independent association of franchisees, to which it will also contribute startup money. A franchisee advertising advisory council also will be established.
•The creation of a formal dispute resolution process for addressing franchisee grievances; the formation of a formal program to assist franchisees who want to sell their stores and aid franchisees who want to acquire more locations; and the promise of financial aid to cover franchisee costs associated with future mandates to take part in a national sandwich delivery program, if any.
•An annual third-party audit of the prices Quiznos charges franchisees for mandatory food products and supplies; the creation of a formal program that standardizes the process for approval to use products or services other than those mandated by the chain; and a reworking of the franchise disclosure document that clarifies the role of franchisor-owned entities in the system’s supply chain.
•The creation of a retraining program to help franchisees better understand the requirements of running a Quiznos restaurant; the creation of a program for considering franchisee requests for waivers of the chain’s maximum pricing; the creation of a system for monitoring the backlog of franchisees who have not yet opened a restaurant and for helping them locate sites for their restaurants.

Quiznos had 2008 U.S. systemwide sales of about $1.7 billion from 4,381 restaurants.

Read more: http://www.nrn.com/breakingNews.aspx?id=376194#ixzz0YGwAOGuK

Realted reading at DDIFO.org: Quiznos Settles 4 class-action Suits by Franchisees

Franchisees Exert Pressure on Burger King Board

The fight between Burger King franchisees and corporate management continues to escalate. Franchisees want the board of directors to intervene.

Elaine Walker reports in the Miami Herald that Burger King’s franchisees say they no longer “trust” or “have confidence” in current management, so they’re going directly to the company’s board of directors with their complaints.

That was the message in a letter sent by the National Franchisee Association last week to Burger King’s board of directors. The board needs to take action to repair the relationship with franchisees, which has disintegrated to a level unheard of even for Burger King, the letter said.

“Your management team has pushed the franchise community to the brink,” said the letter signed by 27 franchises, including the NFA board and the heads of 21 regional franchisee associations. “We are taking this extraordinary and historic action to communicate our concerns directly to the board.”

The letter is another salvo in a battle between Burger King and its franchisees that erupted last week after the NFA filed its second class-action lawsuit against the chain in the last six months.

The NFA represents more than 80 percent of franchisees.

The suit argues that Burger King does not have the authority to “dictate maximum pricing.” The motivation for the suit is Burger King’s decision to require franchisees to sell the double cheeseburger for $1.

The NFA also sued Burger King in May to stop the chain from getting its hands on a portion of the millions of dollars in annual rebates that franchisees receive from soda companies.

In the letter to the board, franchisees characterize management’s actions on these issues as “reckless and dangerous.”

“There has been a comprehensive failure by BKC Management to develop a competitive menu necessary for our business to be successful,” the letter states.

Burger King management issued a statement to The Miami Herald saying the letter “mischaracterizes” the double cheeseburger promotion and the company’s performance. The company claims the cheeseburger has been “delivering a solid performance,” in line with the increased traffic and profitable sales during an 18-month test.

Management points to achievements like its six years of worldwide same-store sales increases and addition of more than 800 net new restaurants.

“BKC takes great pride in our franchise system and the actions we have taken to enhance our competitive position,” the statement said.

Miami Herald

Related reading at DDIFO.org: Burger King’s $1 Double Cheeseburger Upsets Franchisees

Largest BK Franchisee Staying Loyal to the King

Other Related Reading at AllBusiness.com:  How Burger King Cooked Up a Franchise Rebellion

Other Related Reading at Blkue MauMau: Burger King Franchisees Take Complaints Directly to Board of Directors

Dunkin’ Donuts Launches Program to Thank Local Heroes in Phoenix

Yourwestvalley.com reports that starting Nov. 24, Dunkin’ Donuts will launch “Thanks to You,” a special program recognizing local everyday heroes who keep the Valley running.

The program, which will run through April 2010, will acknowledge five distinct groups of people dedicated to bettering our community – firefighters, police, teachers, nurses and active military personnel. 

Each month, one specific group will receive a free medium hot or iced coffee every Tuesday of that month in recognition of their service. The offer is good at any Dunkin’ Donuts location throughout the Valley.

Dunkin’ Donuts is kicking off the program by recognizing Valley firefighters for the bravery, commitment and dedication that they show to our community throughout their careers.

“Thanks to You” recipients are as follows:

• Nov. 24 – December 2009 – Firefighters
• January – Police
• February – Teachers
• March – Nurses
• April – Active Military

In order to redeem the promotion, customers must show valid ID or proof of employment in that month’s benefitting profession.

Post Commencement Lease Negotiations Presentation at DDIFO Members Meeting in Chicago

The biggest mistake tenants make is that they sign their lease and put it in the filing cabinet and don’t look at it again until it is time to renew.

This National Retail Tenants Association (NRTA) presentation at the DDIFO Members Meeting in Chicagoland on December 3rd, 2009  will include how to identify opportunities that occur after a lease is executed, recognizing potential needs that can be leveraged to obtain concessions that can benefit both the Landlord and Tenant.  NRTA will also discuss how to evaluate the relative position of Landlords and Tenants when considering post commencement lease restructuring.

National Retail Tenants Association: The National Retail Tenants Association (NRTA) formed in 1997 is a vital, profit building education foundation for the commercial lease administration industry.  Its broad appeal extends to all business and legal specialists concerned with the management of commercial leases. Its purpose is to improve a retailer’s occupancy cost (generally the 2nd or 3rd highest cost center) and bottom line results.

NRTA Presenters:

Paul Kinney: Paul is the Executive Director of the National Retail Tenants Association  responsible for the day-to-day management of the association. He is a co-founder of the NRTA and has served as President, and co-chair of the 2004/05 Conference Curriculum Committee. Prior to his role of Executive Director he was employed by Friendly Ice Cream Corporation as Director of Real Estate Services with more than twenty years experience in real estate lease administration.

Andrew Jacobson:  Andrew is a partner and the head of Real Estate Group at Maslon Edelman Borman & Brand, LLP in Minneapolis, Minnesota.  His practice covers a broad range of commercial real estate issues, with particular focus on commercial and retail leasing, land use, telecommunications as well as design and construction related agreements.  Andy is a frequent author and speaker on real estate subjects and teaches Real Estate Transactions at the University of St. Thomas School of Law.  A graduate of Boalt Hall School of Law at the University of California, Berkeley, Andy is also a registered architect, having earned his Bachelors of Architecture from California Polytechnic State University and practiced architecture prior to attending law school. Andy is a member of both the Minnesota and California bars.

Obama wants $100M more to carry small-business programs

The Obama administration is strongly urging Capitol Hill to add new funds to a popular small-business loan program that is nearly out of money.

As part of the $787 billion fiscal stimulus package earlier this year, lawmakers included $375 million to support Small Business Administration (SBA) programs to spur lending through higher guarantees and reduced fees.

The administration credits the programs with helping to rejuvenate lending for small businesses. Loan volumes under the program had crashed during the financial crisis last fall and winter. But the programs have been so popular this year that they are running out of money several months early.

Supporters are now requesting a little more than $100 million to carry the program through mid-February 2010. The administration is working on a transition system so borrowers can still apply for the loan program.

“At a time when we are all focused on job creation, small businesses are the engine of economic growth in communities across the country and we are confident that members don’t want to go home to their districts for the holiday and inform them that there is no more funding for this vital program,” an administration official said on Friday.

According to the SBA, the program has supported nearly $15 billion in small business loans since the stimulus package was signed into law in February.

The push is part of the administration’s broader effort in recent weeks to help small businesses weather the bleak economy. Treasury Secretary Timothy Geithner and SBA Administrator Karen Mills held a forum on ways to help small businesses.

But the calls are running into a packed schedule on Capitol Hill, where lawmakers are working on overhauling healthcare and possibly adopting new measures before Christmas to boost the economy. Meanwhile, Republicans have stepped up their criticism of the stimulus package after the nation’s unemployment rate hit a 26-year high of 10.2 percent.

The administration and a range of private economists credit the stimulus package with blunting the impact of the recession. Specifying the exact number of jobs created or saved by $787 billion program has been a persistent challenge for the administration.

Neither the House nor the Senate has appropriated additional money for the SBA programs, but lawmakers in both chambers are starting to work on the issue.

“The higher guarantee and fee reductions have encouraged an increase in small business lending,” said Nydia Velasquez, chairwoman of the House Small Business Committee. “I will continue working with my colleagues to find a way to extend funding that supports these important initiatives.”

Sen. Mary Landrieu (D-La.), chairwoman of the Senate Small Business Committee, is also looking for ways to boost the program.

“The fact that the funding is already running out is a testament to the program’s success,” Landrieu said. “The Recovery Act allowed for $14 billion in loans to more than 37,000 small businesses nationwide. To ensure small businesses have access to the credit they need, I am working to increase the loan limits on SBA loans and am exploring options to extend the Recovery Act provisions.”

The push for more money has also found support among some financial lobbying groups.

KFC Grilled Chicken Tops List of Memorable New Products, McCafe Second

Stuart Elliot reports in the New York Times that a two-piece Kentucky Grilled Chicken meal at a KFC location in Louisville, Ky. An annual survey of memorable new products gave the top honor for 2009 to the Kentucky Grilled Chicken menu item, which was introduced by the KFC unit of Yum Brands.

Five of the top 11 most-remembered new products (there was a tie for 10th place) were fast-food items, reflecting the perilous state of the economy this year. In 2007 and 2008, technology products dominated the list.

The grilled chicken landed atop the eighth annual Most Memorable New Product Launch Survey, conducted by Schneider Associates, IRI and Sentient Decision Science. Consumers are asked to name a product introduced during the year; if they are unable to, they are provided a list of 50 products in a process known as aided recall.

Underlining just how difficult it is to bring out new products is the fact that 51 percent of survey respondents could not remember a single new product that came out in 2009. As high as that figure was, it was lower than the 69 percent who could not recall a new product in 2008.

These are the four other fast-food products that scored the highest in 2009: the McCafe coffees from the McDonald’s Corporation, No. 2; the Torpedo sandwich from Quiznos, No. 6; the Angus Deluxe, also from McDonald’s, No. 7; and Taco Bell Volcano Nachos, from another unit of Yum Brands, No. 8.

The rest of the list: the Beatles Rock Band video game, No. 3; the Snuggie, No. 4; the Blackberry Storm, from Research in Motion, No. 5; the T-Mobile Google G-1 phone, No. 9; and in that two-way tie for 10th place, Samsung L.E.D. TV sets and the Off Clip-On insecticide from S.C. Johnson & Son.

At KFC, the reason for the popularity of Kentucky Grilled Chicken is that “it hits a sweet spot in the market,” said Javier Benito, chief marketing officer at KFC in Louisville, Ky. He added that consumers considered it to be “a great-tasting product that’s good for you at a great price.”

The new menu item was tested for four years before being introduced in April, he added.

Usually, about 7 percent of customers of fast-food restaurants try a new menu item, Mr. Benito said, but in this instance the grilled chicken was tried by 13 percent — a figure that rose to 19 percent after a fuss over too much demand for coupons that had been promoted on an episode of “The Oprah Winfrey Show.”

“You can imagine no one expected” the demand for the coupons, Mr. Benito said. “It was crazy.”

For 2010, KFC intends to keep trying to build consumer awareness for the grilled chicken because “over 80 percent” of those who try it buy it again, he said.

In conducting the survey, Schneider Associates said it found several trends at work, among them the increasing importance of word-of-mouth marketing to the success of a product and the rising number of information sources used by consumers to learn about products.

But some things do not change. The survey found that 92 percent of respondents said that free samples are the most influential source of information to make purchase decisions.

Will Wendy’s bite into Krispy Kreme?

Dan Gearino reports in THE COLUMBUS DISPATCH that Wendy’s/Arby’s has indicated it would like to buy another restaurant company, a possible target has emerged: Krispy Kreme.

The rumor surfaced on Breifing.com and then was reported by Barron’s.

Such an alliance would be familiar territory for Wendy’s, which bought doughnut and sandwich maker Tim Hortons in 1996 and then spun it off in 2006. Wendy’s was acquired by the parent of Arby’s last year to form Wendy’s/Arby’s.

Regarding the reports about Krispy Kreme, Bob Bertini, spokesman for Wendy’s/Arby’s Group, said: “We do not comment on rumor or speculation.”

Previously, Wendy’s/Arby’s had indicated that it was looking to add a brand, which is one reason that the industry news media and analysts aren’t dismissing the rumor.

But that doesn’t mean the prospective deal is a good idea.

“The question of whether (Krispy Kreme) would add value long term is tied directly to the strategy post-acquisition,” said Paul Huffman, managing director for Hadley Partners Inc., an investment bank.

If a new owner wanted to expand Krispy Kreme, it would have to be mindful of how overexpansion affected the brand in recent years, he said.

The doughnut chain, with nearly 550 locations around the world, saw its share price plummet from a high of nearly $50 in 2003 to a low of $1.15 earlier this year. Shares closed Wednesday at $3.25, giving the company a market capitalization of only $219 million.

Huffman thinks the greatest return for Wendy’s/Arby’s is to focus on its existing business.

“Given the size and scale of Wendy’s/Arby’s, even small improvements to margins, costs, revenue, etc., have a major dollar impact to the business,” he said.

Wendy’s/Arby’s might be better off looking in other places for acquisitions, said Peter Romeo, who covers restaurant chains for trade publications and on his blog. “There have got to be a lot of younger, fresher and more premium brands out there,” he said.

Among the possibilities are beverage chains such as Jamba Juice and regional chicken or pizza brands, he said.

The mere existence of merger rumors shows that credit markets are improving, said Morgan McGowan, associate economist at Moody’s Economy.com. “Now we’re in a position where economic conditions are still weak, but credit conditions are easing,” he said.

That combination of factors makes this fertile ground for mergers.

Related reading from the Deal.com: Does Wendy’s really need a doughnut?

Main Street’s Credit Crunch

Treasury Secretary Tim Geithner spent most of the day Wednesday with small-business owners and bankers, discussing ways to ease the credit crunch that’s stifling economic recovery on Main Street.

Geithner and Karen Mills, head of the Small Business Administration, hosted the Small Business Financing Forum, fulfilling a promise President Barack Obama made when he announced initiatives last month to boost lending to small businesses.

Neither of these initiatives have been implemented yet. Under the president’s plan, the Treasury Department would tap TARP funds to provide low-cost capital to community banks, which they would use for small-business loans. Obama also called for increasing the size limit on SBA loans to help healthy small businesses expand as the economy recovers.

The Treasury Department is working on the final terms on the low-cost capital program, and that could be up and running in early December. Community banks may be leery about participating in the program, however, because of conditions Congress has imposed on recipients of TARP funds.

Congress, meanwhile, hasn’t passed legislation to increase the size limits on SBA loans. The House did pass a bill that overhauled all of SBA’s loan programs, including a loan-size increase that’s less than what Obama requested. But that bill included several controversial provisions and isn’t going anywhere in the Senate.

The Obama administration also supports legislation that would extend provisions in the economic-stimulus bill that increased the SBA’s guarantee on 7(a) loans, its main loan program, to 90 percent and reduced or eliminated fees on 7(a) loans and 504 loans, which primarily are used for real estate. These provisions led to a rebound in SBA lending, but the money for these enhancements will run out in December.

At Wednesday’s forum, small-business owners and SBA lenders agreed these provisions need to be extended. Congress, however, hasn’t managed to get this done either.

Congress also could solve the problems associated with taking TARP money by exempting banks that use the money for small-business lending from these restrictions. Geithner, however, may be asking the impossible: He wants Congress to give small-business lenders “the confidence that if they take capital today from our new programs, they will not face a change in our rules tomorrow.”

Small Biz Wants Loan Breaks Reinstated

Small business groups and lenders urged Congress to reinstate the 90 percent government guarantee and fee reductions on SBA loans.

The economic stimulus bill provided the SBA with $375 million to increase the loan guarantee on the agency’s flagship 7(a) business loans to 90 percent and reduce or eliminate fees on 7(a) loans and 504 loans, which primarily finance real estate. That money, however, has run out.

Beginning Nov. 23, borrowers and lenders faced a choice: They could be put on a waiting list to get the higher guarantee and lower fees on their loans if additional money becomes available; or they could apply for a regular SBA loan. The SBA normally guarantees 75 percent to 85 percent of the loan amount.

The higher guarantee helped bring 1,200 lenders back to the SBA’s loan programs, and the lower fees made the loans more affordable to borrowers. SBA lending, which had slowed to a crawl last fall and winter, rebounded as a result of these breaks. Through Nov. 20, the number of 7(a) loans approved by the SBA this fiscal year, which began Oct. 1, was up 80 percent over the same period a year earlier. Total dollar volume jumped 147 percent.

Realted Reading at Buffalo Business First: SBA seeks to extend higher 7(a) loan guarantee

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