Save BIG and Boost Cash Flow with Cost Segregation

With tax season upon us, Dunkin’ Donuts franchise owners might be interested to know about noteworthy tax-saving strategies. Enter: cost segregation which, depending largely on the scope of a franchisee’s holdings and investments, can yield upwards of $1 million in additional tax deductions.

“Cost segregation studies can benefit franchisees in many ways,” according to CPA Jim Ventriglia. “By accelerating depreciation, it has the effect of lowering the taxable income of property owners, and lower tax liabilities can provide additional cash flow. Cost segregation can work even if you’re a tenant. I encourage clients to explore the benefits. In every instance we have done so, the benefits far outweighed the expense involved.”

J&M Batista Limited Family Partnership, a real estate company involved in developing multiple Dunkin’ Donuts locations, became aware of the remarkable potential benefits and enlisted the services of Bedford Cost Segregation (Bedford), a DDIFO Sponsor. The principals of J&M Batista, along with their affiliates, have developed more than 50 Dunkin’ Donuts locations in Massachusetts, Ohio, New York and Florida. John Batista, founder of J&M Batista, took over the very first franchised Dunkin’ Donuts shop more than 30 years ago and continues to operate that location, which recently underwent a major remodel.

The leadership at J&M Batista engaged Bedford to perform cost segregation studies on six of its Worcester area buildings. While the properties were built between 2002 and 2008, IRS guidelines and tax law allow for retroactive studies that will yield tax benefits in the current year. With the help of J&M Batista’s Director of Construction and Dunkin’ Donuts Franchisee Matt Doyle, Bedford engineers went to work to document the value of specialty components—including select electrical, plumbing, HVAC, millwork, finishes and many outdoor components—eligible for accelerated depreciation (5-year or 15-year rather than 39-year). This resulted in much higher depreciation deductions as well as critical information for the write-down of certain assets when these properties are remodeled in the future. Bedford worked closely with Doyle and with J&M Batista’s CPA to ensure that every tax benefit was realized.

“We feel that 39 years is too long to wait to recoup our investments, and cost segregation is proving to be a great tool to expedite that recovery,” said J&M Batista President and Dunkin’ Donuts Franchisee Rob Branca. “Plus the additional cash flow derived from Bedford’s studies will serve to fuel our growth and remodels without having to go to the bank to borrow.”

The studies generated an increased depreciation deduction of more than $1 million in tax year 2009. In addition to this tremendous year-one benefit, J&M Batista will realize another $400,000 in depreciation over the next four years. Bedford has worked with several other Dunkin’ Donuts-related organizations and has experienced similar success. J&M Batista was so pleased with the return on the initial six studies that the organization has further engaged Bedford to perform studies on several other properties.

“We’re proud to have been selected by J&M Batista to provide this service and are thrilled that it’s worked out so well for them,” said Bedford Director of Business Development Bill Cusato. “We are also excited about our track record with the Dunkin’ Donuts community and encourage franchise owners and operators to contact us to evaluate how we can help them as well.”

Bedford has emerged among the nation’s leading and most experienced providers of engineering-based cost segregation services, having completed more than 5,000 studies throughout the country. The company’s team includes engineers, architects and construction professionals along with tax experts and business development consultants. Bedford’s property reports are second to none, employing a detailed engineering approach and conforming to the highest standards established by the IRS.

There are many times during the life of a property when cost segregation can add value. Basically, if you have bought, built or made significant capital improvements to a building within the last six to eight years, chances are you could benefit from a study.

“Since 9/11, the government has enacted a number of incentive programs to encourage business owners to invest in their operations by helping them to write-off those costs more quickly,” said Cusato. “Cost segregation is a tool that often helps to unlock much of that value by triggering those incentives and, consequently, is a tremendous way for franchisees to sustain and grow their businesses.”

For more information on how cost segregation can help you achieve considerable tax savings and increase your cash flow, contact Bill Cusato at bcusato@bedfordcostseg.com or 978-263-5055. You can also learn more at www.bedfordcostseg.com.

Carmen Caruso Re-Locates to The Chambers in Chicago

Carmen D. Caruso, a nationally known franchisee trial lawyer and a DDIFO Sponsor, re-locates his practice in “The Chambers” — a dynamic suite of trial lawyers in downtown Chicago who operate on a “lean and mean” platform backed up with the best litigation technology and who prepare their cases for trial in a state-of-the-art mock trial courtroom.

For his franchisee/dealer clients, Carmen believes that The Chambers will serve to “level the playing field” against America’s largest law firms who usually represent the franchisor.   In every case, Carmen will be able to assemble the perfect team, such that franchisees and dealers will never again have to fear being out-matched by the franchisor’s resources.

A litigator with over 25 years of experience defending franchises, Carmen is recognized as one of America’s most dedicated advocates for franchisees, dealers and their associations nationwide and has represented clients in more than 100 systems –including Dunkin’ Brands. He has successfully defended Dunkin’ Brand franchisees in federal court cases involving fraud, terminations and post-termination disputes – and has had significant experience in “system-wide” franchising disputes on behalf of franchisee associations and independent groups of owners. 

Among Carmen’s honors and achievements, he is:

• Named to the Illinois Attorney General’s Franchise Advisory Board, where he advocates the franchisee/dealer perspective.

• Named an Illinois Leading Lawyer and a member of the Advisory Board of the Leading Lawyers Network, 2006 – 2010.

• Named an Illinois Super Lawyer by Illinois Super Lawyers magazine and Law & Politics, 2005- 2010.

• Consistently named a “Legal Eagle” by Franchise Times, a Crain’s publication focused on the franchise industry beginning in 2001 and 2005-2010.

• Frequently invited to write and speak on franchise law topics, from the franchisee perspective, by the American Bar Association (Forum on Franchising), the American Association of Franchisees & Dealers, the Asian American Hotel Owners Association, and the Dairy Queen Operators Association.

• Carmen was also named to the Bar Register or Preeminent Lawyers in 2002, and is AV® Peer Review Rated by Martindale-Hubbell; and he has been named to the “Who’s Who Legal Illinois” list by the International Bar Association.

Carmen D. Caruso
Trial & Appellate Lawyer / Business Litigation
Franchise, Dealership & Distribution Law
 
77 West Wacker Drive, Suite 4800
Chicago, Illinois  60601
Phone:  312-606-8640
Fax:      312-276-8646
www.cdcaruso.com

Wilbur Curtis Brews Up Exceptional Customer Service

Have you ever had the feeling you’ve uncovered a well kept secret?  That’s just how some Dunkin’ franchise owners feel once they try the equipment sold by DDIFO Sponsor, Wilbur Curtis.

While the company has been manufacturing coffee brewing and grinding equipment since 1941, they are a relative newcomer to Dunkin’ Brands. Combine that with a company name that bears the name of its founder, “Wilbur Curtis,” but that is commonly referred to as “Curtis”, and you may understand the challenge presented while trying to order Curtis equipment through the DCP.

Curtis VP of Sales, Dan Schneider recognized that DDIFO’s sponsorship programs could provide the additional exposure he needed to promote his equipment. Curtis came on board as a DDIFO Sponsor in July, and wasted no time in getting the word out. They placed an ad in Independent Joe magazine and showcased their equipment at DDIFO’s member meetings in Worcester, MA and Downers Grove. IL. “We’ve found that once owners are aware of our products and how to order them, we are able to cultivate and maintain a long-lasting relationship,” said Schneider.

According to Eric Curry, Director of Operations for Donovan Services, Curtis offers the perfect blend of equipment and customer service. “We have been using Curtis coffee brewing equipment for over 1 1/2 years and we have found the Curtis coffee equipment to be the most consistent and reliable compared to their competitors.  In addition, we have been extremely impressed with the level of customer service provided by the local Curtis representative, along with Curtis Corporate.  There is no question that they have earned my business and it is the only coffee equipment we will put in our locations going forward.  In our book, Curtis = exceptional equipment and stellar customer service.”

Since its founding in 1941, Curtis has remained a family-owned business that is committed to the principles of quality workmanship, personal loyalty and family values. The company has also embraced new innovations and technologies to better meet the needs of an ever-changing market.

Curtis equipment is easy to calibrate and operate, and the company provides on-site training offered by its network of sales team at no cost to the franchise owner. Their products require no start up and include cords, plugs and legs in the equipment pricing. Their national service network, response to customer inquiries and outstanding customer service, are what truly set them apart within the industry.

For more information on Wilbur Curtis equipment, visit the company’s website: www.wilburcurtis.com, or call Dan Schneider at 815-923-2438.

McDonalds, Arby’s, Qdoba, Dairy Queen and Dunkin’ Donuts testing Tetherball’s mobile loyalty system

“The results we’ve seen since launching our mobile rewards program in early July are greater than even our most optimistic projections,” says Brent Higgins of Aztec Partners, one of Qdoba Mexican Grill’s largest franchisees.

TETHERBALL: “Some of the biggest brands in the US have jumped on the mobile marketing bandwagon with us”

Fast food chains including McDonalds, Qdoba Mexican Grill, Arby’s, Dairy Queen and Dunkin’ Donuts are all now testing Tetherball’s contactless sticker-based mobile marketing system. Tetherball is a DDIFO Sponsor.

Qdoba Mexican Grill has been using Tetherball to offer the Qdoba Mobile Rewards program over several holiday festivals. “The results we’ve seen since launching our mobile rewards program in early July are greater than even our most optimistic projections,” says Brent Higgins, director of marketing for Aztec Partners, one of the largest Qdoba franchisees in the US.

“We’re realizing a huge bang for our investment buck and our customers love how simple it is to get offers and save money during this difficult economy,” he added. “The proof is in the numbers — redemption rates for our mobile loyalty program are averaging 16% and, incredibly, we’ve seen specific campaign redemption rates at our university locations as high as 40%! No matter how strong the offer, we’ve never seen these kinds of redemption rates with paper or online coupons. What’s more, we’re seeing explosive loyalty member growth and the cool thing is — once our customers join, they stay with us — our average opt out rate is less than 8%.”

“The results we’re achieving with Qdoba offer further validation of what we’ve been saying all along — mobile loyalty works — it’s the way our on-the-go society likes to communicate,” added Jay Highley, president and COO at Tetherball. “We’ve been at this for more than two years and have developed innovative solutions that consistently deliver outstanding results and eliminate fraud — and some of the biggest brands in the US have jumped on the mobile marketing bandwagon with us such as McDonalds, Arby’s, Dairy Queen and Dunkin’ Donuts.”

“At the end of the day,” says Highley, “it’s all about brands reaching their target audiences in a relevant way and developing a trusted relationship in which there is a real value transfer — mobile loyalty programs do all this and more.”

Consumers who sign up for Tetherball’s service are issued with an RFID tag that they affix to their mobile phone. The tag is activated by the customer by texting the ID number on the tag to a control centre. Then, each time they make a purchase at a participating retailer or food outlet, they are uniquely identified at either a contactless point-of-sale terminal or a dedicated kiosk so that they can gain or redeem loyalty points.

Tetherball’s back office system then also allows them to be sent targeted marketing and promotional offers based on their purchasing history, via either standard SMS text messages or via mobile coupons that are redeemable in-store.

Last month, Tetherball signed a collaboration agreement with Vivotech that will see the latter offering Tetherball technology to its entire installed base of contactless card accepting merchants. And, in September, the company announced an upgraded version of its Mobiquitous platform that includes a number of enhancements to the level of analytics data available and revealed that redemption rates of up to 50% were being experienced at some of its test sites.

Royston LLC Products Designed with a Longer Shelf Life in Mind

Frank Callis of Royston, LLC took a big risk while speaking to a group of franchisees at DDIFO’s member meeting in September.  The theme of the meeting was cost-cutting and improving the bottom line, and while the speakers who preceded him stayed on point citing several short-term money saving examples, Frank took a different tact. He boldly suggested franchisees take a longer view of their cabinetry purchase and invest more upfront in Royston’s modular metal cabinetry. 

The savings, he noted, would be realized over time and in reduced costs for future remodels. While Callis may have seen a raised eyebrow or two from the audience that day, anyone with a remodel on the horizon should give his proposition serious consideration.

Royston became a DDIFO Associate Member in June and is proud to offer modular metal cabinetry as an alternative to typical wood millwork which has the potential to buckle, warp, swell or rot from moisture and general wear and tear. Royston’s products are designed to be durable, flexible, resistant to moisture-damage and coffee stains and reconfigurable, which can provide significant cost savings over time.

Demy Martin, owner of Morningside Venture Group, LLC in Orlando, FL is one Dunkin’ franchise owner who has used Royston and provided this testimonial on Royston’s website: “Royston has been a great partner to work with – they showed up when they said they would, did exactly what they said they would, and installed quality fixtures in my stores. These stores cost a lot to maintain, and as a franchisee, I want to minimize the reinvestment needed to keep my stores’ appearances fresh and new. So these modular metal counters, which look great and work well for years and years, makes investing in Royston products a good long-term decision.”

Royston cabinetry, while affordably priced upfront, brings the owners true savings over the lifetime of the product.  “When it comes time to remodel your store due to changes in operations or a new image refresh,” says Bonnie Padgett, Marketing Manager for Royston, “You can easily cut your reinvestment costs in half or more due to the modular nature of our equipment.  In fact, I recently helped a customer remodel his store after 10 years of using Royston cabinets.  With only a couple new cabinet modules and a few new sections of countertop, we were able to give him a completely new look and layout at less than a sixth of the cost of replacing his entire lineup.  And these cabinets that he kept were 10 years old – they still look and perform just like brand new cabinets!  I don’t know a single millwork cabinet, regardless of quality or manufacturer, that doesn’t need to be replaced after a decade of heavy use.”

While Royston is a relatively new approved vendor for Dunkin’ Brands, they are no stranger to the QSR and convenience store world, having partnered with a variety of retailers over the last 40+ years, including 7-Eleven,  Jack in the Box, Little Caesars, McDonald’s, Chevron and Blimpie. They have also done work for Wal-Mart and Target.

As a vertically integrated supplier, Royston offers cabinetry and shelving manufacturing capabilities, in-house countertop fabrication, delivery, and installation services, and prides itself on the full-service provided to Dunkin’ franchisees. Once a quote is received from Dunkin’ Brands, the franchisee is emailed video links to view product options, and assigned a dedicated customer service representative. Royston’s team of design technicians then prepares drawings to include Dunkin’ Brand’s requirements and reviews for customer flow, operations needs and equipment placement.

Royston has developed a dedicated website just for Dunkin franchisees:  www.roystonfordunkin.com, which includes photos, videos, roduct information, store layouts and testimonials.

To learn more about Royston’s cabinetry and countertop options, visit their website, or call Reeder Burch at (800)-334-1766, extension 3150.

Money-Saving, Profit-Boosting Strategies for Franchise Owners

In light of the current economic recession, Dunkin’ franchise owners are rightfully being even more vigilant about the bottom line. The DDIFO is mindful of this and wants to help its members identify ways to save money and boost profits. DDIFO Sponsor, Performance Business Solutions, LLC (PBS) and its sister company, MS Consultants, LLC offer services in areas franchisees might not be aware of that can make a significant difference in terms of reducing business expenses, particularly in the area of tax savings.

With offices in New England and Buffalo, PBS and MS Consultants provide services nationwide (last year, they provided services in 42 states). The New England branch is located in Hampton Falls, New Hampshire. Director of Business Development Jeff Hiatt said, “We’re proud to say that we are one of the largest independent providers of cost segregation studies in the U.S. and our business is continuing to grow.” Founded in 1996, MS Consultants has completed more than 6,000 studies resulting in more than $200 million in tax deferrals last year alone.

 

Cost Segregation Studies

Through cost segregation studies, MS Consultants help clients accelerate tax depreciation deductions and reduce taxes new and existing buildings they own thereby maximizing a property’s financial return and generating sizeable cash flow savings. Unlike most other companies doing cost segregation, MS Consultants are engineering-based. The staff includes degreed engineers who know where to look and what works in terms of identifying areas for accelerated depreciation.

The IRS default depreciation schedule subjects many commercial buildings to a 39-year depreciable life, but recent changes allow for certain costs to be classified as personal property with a 5, 7, 10 or 15-year depreciable life. Typically, by following through on a cost segregation study, for every million clients have spent on a building, they will reduce their income taxes by $50,000 to $60,000. To give you an idea of what kind of savings you can expect, MS Consultants offer no cost, no obligation estimates of savings upfront.

Cost Segregation Studies can be applied to both new and existing buildings, According to MS Consultants, new buildings under construction, existing buildings undergoing a remodel or expansion, buildings placed in service as far back as 1987, or franchisees who have made leasehold improvements can all realize considerable depreciation deductions.

MS Consultants have been working with Dunkin’ franchise owners for nearly 10 years and have provided services to about 400 shops. This experience provides a knowledge base that gives them a true leg up on the competition and, due to the sheer volume of Dunkin’ clients they have, typically a Dunkin’ franchisee will pay 20 percent less for services than franchisees from other systems.

MS Consultants have found that, for Dunkin’ franchise owners, usually 40 percent of building expenditures can be reallocated and written off in faster depreciable lives. Further, Dunkin’ franchisees typically get a very high return on their investment in these cost segregation studies, realizing a minimum of a 5-to-1 exchange: for every $1 spent on the study, they get back a minimum of $5 in tax savings.

“We enjoy working with Dunkin’ franchise owners and are pleased that we’ve been able to help so many of them achieve marked savings and improved profits,” said Hiatt. “Having worked with so many Dunkin’ franchisees is a huge advantage when it comes to serving new Dunkin’ clients because we already know a lot about the brand.”

MS Consultants can also advise how to write off parts of a building that are literally being thrown away in the remodeling process (e.g., signage, shelving, chair rails) or in a scenario where you have an older HVAC system that fails and has to be replaced, MS Consultants can show you how to write off the old system. These tax savings are above and beyond those achieved through accelerated depreciation of the building and can double or triple the value of the cost segregation study. What’s more, if you ever need it, MS Consultants provide full documentation and audit trails as well as free support in the unlikely event of an IRS audit.

Energy Management/Going Green

From cost segregation, PBS and MS Consultants moved into the realm of energy efficiency and green consulting to help clients become more environmentally efficient while improving bottom line profits. PBS and MS Consultants are well acquainted with the best and most efficient equipment as well as the tax deductions, credits, rebates and incentive programs available. Ultimately, the savings you can realize in this arena not only impact your taxes but also your everyday energy expenses.

“Moving into energy management was a natural evolution for us,” said Hiatt. “We’re always on the lookout for more creative and innovative ways to save clients money, and helping them to manage utility costs and improve energy efficiency has proved to be fertile ground for real savings.”

The first step is to help you get a real picture of your energy usage by analyzing consumption over the past two years. Through this process, you will see precise patterns of energy usage and truly understand how you are consuming gas and electric power. PBS would then advise you about ways to reduce your energy consumption, only recommending those solutions that will improve bottom line profits. In many cases, through tax incentives and credits, utility company programs and power purchasing agreements, you can implement new, more efficient equipment and technologies with little or no out-of-pocket investment. PBS can also analyze your buildings to ensure they are as energy efficient as possible and identify problem areas leading to a plan for reduced consumption.

Once you have worked to reduce usage, PBS will help you participate in reverse energy auctions where gas and electric suppliers bid down your utility rates. By bundling usage purchases for you alone or combined with other clients, you become a desired customer for the big utility companies capable of receiving more competitive rates. At the DDIFO members’ meeting on September 22nd in Worcester, one of the recent auction participants mentioned that so far this year he has saved $20,000 on utilities across all of his shops. It’s relevant to note we’re only nine months into the year and that this franchisee expects by year’s end to be closer to $30,000 in savings.

“It’s been a true pleasure to work with Dunkin’ franchise owners and to see the tremendous savings we can help them achieve,” said Hiatt. “Especially now through our relationship with the DDIFO, we’re eager to help even more Dunkin’ folks moving forward.”

Whether you’re looking to accelerate depreciation on your buildings, cut your energy usage and related costs or identify a myriad of other ways to reduce business expenses and increase profits, PBS and MS Consultants can help. They know how Dunkin’ Donuts shops operate and are ready to put their track record and experience with the franchise to work for you. Please contact Jeff Hiatt toll-free at 888-989-0054 or jdh@revenuebanking.com.

You can also read more about the companies at www.revenuebanking.com or www.costsegstudies.com.

TD Bank Opens Boston Beachhead

Tim McLaughlin writes in the Boston Business Journal that TD Bank (DDIFO Sponsor Member) is rolling out its largest U.S. initiative by opening a full-service bank center in downtown Boston, a move that will fill a big gap in its New England footprint.

The new office is designed to serve commercial lending customers while establishing a beach head for TD Bank to build market share in Boston. The investment comes as the bank rebrands its entire New England operations as TD Bank.

TD Regional President Mark Crandall said the new banking center at 200 State St. will have up to 75 people offering a full range of lending and wealth management services. The bank is taking about 21,000 square feet on the 10th floor of the downtown office building.

Crandall expects the operation to get bigger as TD hires more bankers from rival lenders. Credit turmoil inside large national banks and at regional players such as Sovereign Bank and Citizens Bank has opened the door for stable banks to win new customers.

TD Bank is owned by Toronto-Dominion Bank (NYSE: TD). The Canadian bank and its subsidiaries are collectively known as TD Bank Financial Group, which had $545 billion in assets at the end of July.

TD Bank also is ramping up its plans to open more retail branches in metro Boston. Currently, TD Bank only has a small presence inside the 128 Beltway. For example, the bank had $7.5 billion in Massachusetts deposits, as of June 30, 2008. That put the bank at No. 4 in the state. But in the immediate Boston area, the bank barely registered, given the size of the rest of its operations in New England.

Crandall said TD wants to build its Boston-area deposit base by several hundred million dollars. Ultimately, the goal is to get that total above $1 billion as TD establishes a foothold in the Boston market.

Outside of an acquisition, the Boston initiative is TD’s largest in the United States, said David Glidden, the market president for the bank.

Meanwhile, Glidden and Crandall have taken on more responsibilities as TD Bank further integrates retail and commercial lending operations. Last year, Toronto Dominion bought Cherry Hill, N.J.-based Commerce Bank to combine with TD Banknorth.

The deal created an operation with some $114 billion in assets, with operations that extend from Maine to Florida.

Boston Business Journal

DDIFO Sponsors Provide Lending Options

Amid a sea of uncertainty and confusion in the financing market, not to mention the tightening of credit and lending practices, franchise owners may find themselves adrift when seeking loans and leasing programs. Thankfully, DDIFO has sponsorship relationships with institutions that are actively lending and continuing to provide high-quality service and cost-effective programs.

One such company is Harbour Capital Corporation (HCC) of Newington, New Hampshire. HCC is a recognized leader in the franchise financing industry and specializes in providing creative and cost-effective solutions to small and medium sized businesses in all 50 states and in Canada. HCC finances new and used equipment, store remodels, new store acquisitions, and equipment replacement and upgrades in addition to offering equipment leasing programs.

Senior Vice President for Franchise Financing Frank Phennicie says that HCC has a track record with Dunkin’ Donuts franchise owners and, at any given time, the company has six to 12 transactions in process with Dunkin’ franchisees. He recognizes the challenges that franchise owners are facing in the current financial market: tighter credit windows, a liquidity shortage and even scenarios in which financial institutions have disappeared, leaving franchisees in the lurch. Phennicie proudly affirms that HCC is on solid ground, is committed to expanding its presence in franchise financing and has no intention of abandoning its customers.

“The good news is we still have money to lend,” said Phennicie. “At a time when many financial institutions are vacating the franchise space, we are still making transactions happen and we still have excellent terms and competitive rates.”

HCC is currently offering franchise lending transactions in the range of $5,000 to $750,000. While the company does not finance real estate transactions, it can finance new store acquisitions in terms of equipment and “soft costs,” like construction, including kiosk-type locations (a Dunkin’ shop within another location such as a hotel, grocery store or convenient store). In terms of both new store acquisitions and remodels, HCC can offer loans that consist of 50% equipment costs and 50% soft costs, matching these dollar-for-dollar and covering up to 100% of the total costs. The types of equipment HCC supports – through direct loans for franchisee purchases and through HCC leasing programs – include: display counters, furnishings, POS systems, signage and food process equipment.

Phennicie is eager to call attention to HCC’s one-page “worry free” applications through which qualified franchise owners can apply for up to $100,000 of funding without having to provide financial statements. In addition, HCC can structure flexible payment plans to meet individual franchisee needs including seasonal, skips and “90 Day No Pay” plans. And the company offers fast credit decisions: Depending on the type of transaction, a decision can be made in a matter of hours or a matter of days.

“Even in today’s market, Harbour Capital prides itself on providing consistently good quality and service, including swiftness of decision-making,” said Phennicie. “Why wait around for six months for the SBA to make a determination about your funding when we can typically turnaround a decision in less than a week’s time?”

In terms of financing and leasing alternatives, Harbour Capital offers:

• Loans – Equipment Finance Agreements

• True Lease: purchase the equipment at the end of the term for its then fair market value, re-rent the equipment on a month-to-month basis or return the equipment; offers the lowest monthly payment and least equipment risk

• $1.00 Purchase Option: purchase the equipment for $1.00 at the end of the lease term; benefits of ownership for tax purposes, such as depreciation and interest deductions

• 10% Purchase Option: offers a fixed purchase option of 10% of the original cost; lower payments than the $1.00 purchase option; benefits of ownership for tax purposes

“I believe we bring a valuable service to the market today,” said Phennicie. “While we can’t be all things to all people, we offer a variety of programs and options that can meet the needs of a wide range of franchise owners.”

To discuss the right product and terms for your franchise, you can contact Frank Phennicie at frank@harbourcapital.com or 603-610-6545.

Another DDIFO Associate Member that is actively lending is JenCas Financial, Inc. of Maumelle, Arkansas. JenCas is a business lending company that specializes in franchise financing. With more than 15 years in the commercial financing industry, JenCas has the experience to offer attractive, competitive financial agreements that fit the specific needs of individual customers in all 50 states. According to Senior National Account Representative Eric Dyson, JenCas can fund new stores, remodels, relocations, refinancing and acquisitions for both traditional and non-traditional QSRs.

In spite of the current volatile and stringent credit climate, Dyson says JenCas is ready, willing and able to lend money to qualified candidates.

“Our portfolio is performing well thanks to our years of experience and focus on the franchise sector,” said Dyson. “While other banks, financial institutions and lenders have faltered or dissolved completely, we have weathered the storm and are continuing to remain active in franchise lending”

JenCas may be a newcomer to working with Dunkin’ Donut franchise owners, but they have a proven track record and preferred lender status with such franchise concepts as Subway and CiCi’s Pizza. Always on the lookout for new business relationships, Dyson said he met some Dunkin’ people at a trade show, saw an opportunity for developing business with the franchise concept and contacted DDIFO President Jim Coen. They began to explore options for reaching out to Dunkin’ Donut franchise owners. JenCas became an Associate Member in April of this year and already has a few deals in progress with Dunkin’ Donut franchisees.

“Dunkin’ Donuts is a strong and growing franchise concept,” Dyson said. “We believe with our experience in the franchise finance market we are a good fit with the Dunkin’ brand. We are pleased to be able to offer our finance programs to Dunkin’ Donuts franchisees.”

JenCas can provide up to 100% financing including soft costs. The company can fund all elements of Dunkin’ Donut equipment packages, including POS systems, security systems, signage and food process equipment. JenCas agreements are at a fixed rate and there are no strict limits for loan minimums or maximums. The credit window is determined on a case-by-case basis, depending on several factors, including but not limited to personal credit, financial record and level of experience. Most credit decisions can be made within two to three business days. Dyson stresses that among the advantages JenCas provides is the flexibility of its lending programs and its ability to tailor programs to match specific customer objectives and business goals. The company can even arrange financing to reimburse franchisees for out-of-pocket expenses after the fact.

In general, JenCas strives to make financing as simple as possible. Throughout the process, individual franchise owners work one-on-one with a single point of contact. JenCas does not require a business plan or projections: Typically the company needs just two years of financial information. Further, JenCas offers loan and lease programs with a variety of payment plans, including seasonal, deferred and interest-only, as well as early payoff options.

“We look forward to developing a partnership with Dunkin’ Donuts,” said Dyson, “and providing each franchisee with the financing needed to grow their business.”

To inquire about financing for your franchise, contact Eric Dyson at eric@jencas.com or 877-953-6227, ext. 114.

Fix Labor Problems in Six Months

Shawn Boyer, founder and CEO of SnagAJob.com, (DDIFO Associate Member) an hourly employment Web site, recently released a book, Help Wanted & Help Found, designed to help employers recruit hourly workers—and how to improve their business by doing so. QSR’s Sam Oches spoke with Boyer about the book and how it could help quick-serves lower their turnover rate, especially in a tough economy.

QSR: Why did you write the book? What is your desired result from the book?

Shawn Boyer: The reason behind the book was that we obviously work with a lot of companies that hire hourly employees and then, on the flip-side, lots of hourly job-seekers looking for work. When you look at America’s working population, 60 percent of it is made up of hourly workers, which a lot of people don’t realize. Then you go [to] see what materials are there for employers to help them with that recruitment process. There really isn’t anything. There are a couple out there, but not nearly what there is on the salaried level side. So we felt like, based on our experience … you know we work with a lot of phenomenal companies, we’ve been able to learn a lot around the best practices of how to recruit on those right-fit people, and the importance of being able to do that. So we wanted to kind of fill that void there. And the desired purpose of the book would be to help employers realize the importance of the hourly employee base and getting those right-fit people into those positions.

 It’s not as if we’ve got every single answer, but it’s more of pulling different people’s experiences with how they’ve done it and how they’ve been successful in it, into more of a workbook type of approach. And then prompting people with questions at the end of each chapter around these key objectives, different strategies, specific tactics, and just maybe making them think about things for the first time, or at least helping them think about things a little bit differently. An example of that would be, “What are your top three objectives in your hourly recruitment strategy?” It’s been amazing to us as we’ve asked that question to a lot of different employers how many people have not been able to clearly articulate what their three most important objectives are, and then what the benefits of that would be to the company if in fact they would be able to achieve those objectives.

So it’s a textbook for employers who have hourly employees?

That’s exactly right.

How has this all changed with the economy? Did you start writing this book before the recession or did you write it with the recession in mind?

We started writing it right at about the time everything started to go, so a lot of the writing happened during the course of it. I would hope at least that these are strategies that you’re going to have in place regardless of what’s going on with the economy, and certain aspects of it may be easier in a downturn, and certain elements may be harder when you come out of it. Obviously when you’re in a downturn you don’t have people turning over at quite the rate, or at least voluntarily turning over at quite the rate because they’re nervous of whether or not they can find another job, so they may be less [willing] to not come back to work one day if they get ticked off at the boss. [The economy is] going to force people to be better employees because they know they’re at a higher risk of being laid off, and they’ve got lots of overqualified people applying to certain jobs. So, the economy’s certainly going to have an impact on different elements of it, but I think the fundamental aspects of the book still are worthy regardless of whether or not we’re in a bear market or a bull market.

Do you think the quick-serve industry would benefit especially? There’s the old saying that you’re going to be ‘flipping burgers’; if quick-serves follow these steps, do you think they could rescue that reputation and reformulate what the idea of a quick-serve employee is?

I think so. There is that element. You have companies like [Chick-fil-A] that have bucked that stereotype, so you know it’s possible. I just did a ride-along to five different Burger Kings with some folks from Burger King, and it was amazing to me. You walk in the door of a place that was well-run—and they wouldn’t tell us prior to going into the location what turnover rate they had—you could tell as soon as you walked in the door and you met the manager which ones had bad turnover and which ones had good turnover, because of the way they ran that place and because of that manager’s philosophy on things. At the end of it they’d tell you what the turnover rates were and you’d go, “Well, makes sense.” We went and met with one Burger King, and the manager there was awesome. And he had a turnover rate that was like 40 percent. He knew every single person in his location’s name. He said, “Every single employee here, we celebrate their birthday. Give them a birthday cake.” He said, “For one of our guys here, that’s the first time he’d ever had his birthday celebrated his entire life.” He said, “I tell them, ‘Don’t steal. If you guys need something to eat, fine, come tell me and I’ll give it to you, just don’t steal.’” There are just some real fundamentals that he did and how he went about his recruitment process and his interview process was just a much different approach than what it was in places we went that had a 340 percent turnover.

If a quick-serve operator was interested in approving their business, how long does the process take to go about doing your steps? How long after implementing these things before they start to see some benefits from it?

Three to six months. Three months you start to feel it, six months you start to see it. In fact, this guy I was just mentioning was a great example of that. He had a higher turnover rate a couple of years ago, north of 100 percent … He said it took him six months before that turnover rate started to come down.

QSR.com

Drive Thru Company Here to Help Franchise Owners

R.F. Technologies, Inc. offers affordable state-of-the-art systems for digital drive-thru solutions, POS, wired intercom and digital surveillance.

As one of the DDIFO’s original Associate Members, R.F. Technologies (RFT) is proud of its Dunkin’ Donuts franchise customer base – around 350 active customers – and appreciates the opportunity to gain exposure and develop additional Dunkin’ relationships. While RFT is headquartered in Bethalto, Illinois (across the river from St. Louis) with a Chicago Branch location in Northbrook, it works with customers nationwide. Director of National Accounts Gary Gerst serves as the contact point person for franchisees and is anxious to bring his company’s products and services to more members of the Dunkin’ franchise community.

“RFT has longstanding relationships with numerous Dunkin’ Donuts franchise owners throughout the country, and I look forward to reaching out to and establishing relationships with more franchisees through the DDIFO Associate Member program,” said Director of National Accounts Gary Gerst. “I particularly enjoy attending the DDIFO membership meetings because they offer our company a chance to go to one location and meet with many owners face to face.”

Celebrating its 20th anniversary this year, RFT has established itself as a leader in the field of drive-thru communications by providing cost-effective, high-quality, guaranteed solutions and by expanding products to keep up with the latest technology and offer a variety of selections. The company proudly boasts lower prices, higher quality products and better service and support than its competitors. In fact, RFT guarantees the lowest prices and will meet or beat competitor pricing by 10%. The company offers the longest repair services warranty in the industry: Four months/120 days, which is 33% longer than the industry standard. Further, they do not require a maintenance contract for service and support. And through its buy back program, RFT will credit customers up to $1500 for their current systems.

The RFT line of products and services includes complete drive-thru systems (i.e., digital headsets, belt packs, batteries and chargers, speakers and speaker posts, timer systems), drive-thru replacement parts and drive-thru repairs. Among the company’s featured products are the 3M XT-1 All-in-One Digital Drive-Thru System, Panasonic Attune Digital Drive-Thru System and Fast Track Drive-Thru Timer and Information System. With its easy-to-use monitoring and tracking capabilities, the Fast Track System is just one example of how RFT can help franchise owners improve customer service and boost the bottom line. Fast Track visual displays allow staff to monitor drive-thru service in real time, and the related reporting module provides historical tracking so franchisees can easily trace progress over time.

Beyond drive-thru communications, RFT offers POS monitors and printers; music from XM Radio; wired intercom systems for in-house communications; and Big Dog digital surveillance systems. A division of RFT, Big Dog Surveillance Systems offer the latest in surveillance technology and can be customized to fit a variety of needs. Designed to reduce theft, control inventory and boost safety for employees and customers, customizable features include POS register integration, motion detection, alarms and notifications, remote access, drive-thru lane and window monitoring, and video archiving.

RFT offers various bundle packages that allow customers to mix and match products at a savings. All of the company’s products are enhanced by free access to factory-trained technicians who can help troubleshoot and rectify problems.

“Whenever we have units that need to be fixed, we just stop in the Northbrook office and they are fixed within an hour. The service is always wonderful,” said an owner of 23 Dunkin’ stores in the Chicago area.
In connection with its 20th anniversary, R.F. Technologies is offering a number of sales and special promotions. Franchise owners interested in more information are encouraged to contact Gary Gerst at 1-800-598-2370 or garyg@rftechno.com. You can also read more about RFT at www.rftechno.com.

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