WDFA Gets to Roots of Best Marketing Practices

With its turnkey solutions, experience supporting franchises and grassroots approach, DDIFO Sponsor WDFA Marketing (WDFA) stands apart from the competition. No matter the size of your budget, WDFA can help you make the most of every marketing dollar. The firm’s products and services are designed to meet today’s challenges for immediate sales results and efficient, low-cost production.

 WDFA prides itself on fearless innovation, ethical responsibility and exceptional service all focused on maximizing your return on investment. Each and every campaign is designed for measurable impact. WDFA’s staff works to evaluate a campaign’s effectiveness and make adjustments to increase value and success. While the company happily offers traditional marketing services like direct mail and door-hangers, it also specializes in non-traditional tactics.

 “As far as our tactics go, the possibilities are endless. We start with acquiring the best data that is available on the target customer, and then work tirelessly until we find the best way to drive them to your door,” said WDFA Marketing Executive Vice President Jason Fordley. “Whether it’s traditional print media, direct-to-door, cultural marketing or more innovative guerrilla tactics we can handle it all. We find that on the franchise level, micro-targeting within the community is a reliable way to ensure that we’re staying where your customers are, so that we don’t waste any of your budget, but we’ve also done full zip code saturations.”

 Under the umbrella of micromarketing, WDFA’s guerilla marketing campaigns often involve street teams – called brand ambassadors – who connect directly with your customers in the neighborhood or at community events. WDFA retains only the most reliable and passionate people who are able to drive more customers to your shop and boost your bottom line.

 Here are just two examples of successful WDFA strategies:

Sending brand ambassadors to a community event (e.g. movies in the park, a local outdoor concert) with “jet packs” of complimentary coffee or Coolatas: As they entice a consumer with free beverage samples, they simultaneously offer a flyer or coupon designed to bring that person into your store. Depending how close the event is to your shop, the brand ambassadors can even use sidewalk chalk to visually lead customers to your doorstep.

Orchestrating “guerilla projections” for shops that are open at night: WDFA has two different types of special projectors to “broadcast” your signal, so to speak. A large projector shines still shots or actual movies on a nearby building or wall. Using hand-held projectors, about the size of a cell phone, WDFA brand ambassadors cast images on the ground, surrounding buildings, even parked cars. Again, once they’ve drawn consumer interest, they follow up with a targeted flyer or coupon that drives customers to you.

“Our non-traditional, attention-getting methods might seem unconventional, but they help to ensure that the tactics drive sales,” said Fordley. “For example, there are so many people handing out flyers on the street that people often try to avoid them. But the right location at the right time, with a little something extra—sidewalk chalk, mini-projections, or just a really fun personality—that changes the game. People actually want that flyer; they seek it out! And that’s what it’s all about for us—finding a way to maximize the effectiveness of a tactic. If our clients don’t feel the ‘WDFA effect’ in their bottom line, then we’re out of business.”

Another key element is WDFA’s quick turn-around on orders. For example, a flyer or coupon piece can move from conversation to design to delivery within just a few days. And, because of the volume of work WDFA does with its nationwide trusted vendors and suppliers, you’ll save on production costs. What’s more, if you own multiple shops and want to launch a concurrent campaign across all of them, this usually means more savings: The more stores involved, the lower the cost.

WDFA offers countless strategies, including utilizing social media and social networking sites like Facebook and Twitter to capture new customers and keep “regulars” coming back for more. Basically, whatever you want to accomplish in terms of promotion, WDFA has a way to get you there. Whether you want to follow a traditional route or are looking for unconventional tactics, WDFA can help tailor your marketing in ways that will most effectively reach customers and drive sales.

“We look forward to working with Dunkin’ Donuts franchise owners as we feel that our arsenal of tactics and our collective drive to succeed can be a major asset,” Fordley said. “‘Partnership’ is a very important word to us, so we’ll do what it takes until our client thinks of us in terms of a strong, reliable partner that can be trusted to drive sales whenever it’s needed”.

For more information or to launch a campaign, contact Jason Fordley at 646-240-4880 or jasonf@wdfamarketing.com.

Learn more at: WDFA Marketing

OEM Upgrades & Innovations Keep RFT Customers Up and Running

Since 1989, DDIFO Sponsor  R.F. Technologies, Inc. (RFT) has provided the quick-serve restaurant industry with drive-thru systems sales and repair services.  To date, the company has handled over four million repairs, ranking it the largest independent service center for drive-thru communication systems in North America.

While that ranking and the volume of repairs are impressive, there’s something even more notable about R.F. Technologies’ repair services:  the proven quality and product innovation.  Through results of independent, third-party testing and ongoing response of customers, it’s clear that R.F. Technologies has advanced its capabilities beyond basic repair services; the company offers significant OEM improvements that are of measurable benefit to restaurant operators.

“We have a full research and development team in-house,” explains Bob Noorian, President of R.F. Technologies, Inc. “We actively develop solutions and improvements for the equipment we sell and service.  Many of our customers don’t realize just how proactive we are in creating real product innovations.”

RFT’s R&D team, comprised of engineers and repair experts, is perpetually testing, investigating and creating prototypes and operational solutions to combat issues of product functionality and durability.  Working in tandem with the company’s sales and customer service teams, the R&D professionals identify equipment issues, assess functionality concerns and find better ways to fix what breaks. 

With its unique position in the marketplace, RFT is able to both quickly respond to known product repair issues and preempt potential issues before certain equipment filters into the general market. 

Noorian offers insight.  “We closely track all repair services. Thanks to the immense volume processed daily, we’re able to quickly identify recurring problems and respond to with equipment improvements and repair solutions.”

Through broad-reaching, closely knit partnerships with various franchise communities, RFT often gets early knowledge of potential issues and is able to innovate practical repair solutions before concerns hit restaurant operations en masse.

“This forward-thinking approach really sets us apart and heightens not only the quality and value of our repair service, but of the OEM equipment as well.”

Excellent examples of RFT’s OEM improvements include solutions created for two commonly used headsets in QSR environments—3M’s C1060 and XT-1 models. 

Such headsets are subjected to harsh treatment in the demanding restaurant work environment.  With insider insights about product use as well as well-documented accounts of recurring issues, RFT’s R&D team created an array of practical improvements to address areas proven weak through daily wear and tear.  RFT’s  custom tooling, perfected with in-house and field testing, allowed the following improvements to be achieved and successfully implemented, dramatically improving the performance and longevity of the headsets.

        ·     support jacket for mic boom

        ·     support sleeve for headband

        ·     thicker case parts

        ·     stronger headband

        ·     operator-friendly tactile feel buttons vs. OEM non-click buttons

A third-party material testing and engineering firm conducted comprehensive performance tests on components of each of these products, comparing OEM standard headsets to RFT-enhanced models.  RFT-enhanced products outperformed the OEM models on all counts. 

            1. TWIST & PULL

            RFT design tested at 47.4% longer durability when a “Twist and Pull” load was applied. The OEM failed at an average of 35.6 lbs releasing the metal band and      wires RFT’s enhancement held up to 67.8 lbs and only twisted internally.

            2. RESISTANCE TO TORSIONAL LOAD

            RFT’s design showed higher tolerance at 270º of rotation versus the OEM which failed at 180º of rotation. The RFT version suffered only a metal band      fracture when failing at 270º, compared to a complete case split for the OEM     product.

            3. MOUTHPIECE

            The RFT mouthpiece design was slightly stronger when subjected to a straight  pull—42 lbs versus 33.0 lbs respectively.

Other products, including the HME Odyssey IQ, have also outperformed OEM models in third-party testing.  According to Noorian, RFT is able to achieve such high performing product improvements because of the company’s investment in custom tooling and the expertise of the staff. 

“No one else in this industry has this level of repair solutions, as we custom tool—literally remake—the parts that require improvements,” Noorian says.

He also points out that the RFT advantages don’t end with the physical enhancements of the products.  “We provide same day service, while OEM’s offer 2-week turnaround times, and we don’t charge for inbound shipping.  Our cost value is $120 per headset while the OEM’s is $200 per headset, and we back our products with free, live, 24-hour professional support.”

Suffice to say, RFT customers reap the benefits of this proactive, progressive approach.   The RFT team frequently receives testimonials documenting the in-field results of RFT’s innovations, including the minimizing of operational interruptions and downtime and the extension of equipment’s life. 

Committed to meeting customer needs, RFT’s position is to continuously conduct field testing and analysis for all products, striving to find and correct issues before customers ever have a problem.

“We go the extra mile so that our customers’ equipment can perform that much longer….to keep their business up and running,” Noorian summarizes. 

For copies of R.F. Technologies’ third-party testing results or for specific product information, visit www.rftechno.com.

Controlling Risk

Let’s face it, running a small business is a risk—and not just in a bad economy. Every day different challenges threaten to undermine a business owner’s efforts or sap his investment.

Some risks can be avoided; others, like natural disasters, can’t. Rupali Shah and Storm Wilkins, attorneys with the firm RPS Legal Solutions, LLC in Philadelphia, provide legal advice and representation of their business clients.  They also help franchise owners manage risks and prevent little problems from destabilizing a business.

“Business owners need to be more analytical when it comes to understanding the risks that can impact their business,” said Wilkins, who also holds an insurance training designation. “Whether it’s a slip-and-fall accident or a tornado, there are certain risks all businesses face.”

RPS is in the process of creating a training course to help owners of hospitality and fast food franchises better manage risk. Some of the information is pretty basic like posting contact numbers for all emergency personnel—not just police and fire but also snow removal or flood mitigation. And, all managers should know the name and contact info for the company’s insurance company.

According to Shah, in some circumstances, insurance companies can deny a claim or refuse to pay a settlement if the business owner has not met all the conditions of his policy. “Owners have an obligation to report any incident to their insurance company, in the event there is a claim or a lawsuit against them.”  In fact, Shah said, many business owners don’t even know how to submit a claim to their insurance company.  Business owners should consult with their agent or attorney in the event their insurance company denies coverage for a claim which they believe should be covered.

Insurance is one important risk management tools but there are others business owners must use to help avoid and mitigate risk. Perhaps the most important, according to Shah and Wilkins is employee training.

“Business owners risk exposure to lawsuits or fines if they do not make sure their employees are trained and supervised. When owners are off-site they are more exposed to employment liability cases,” Shah said. “What if you have a defective piece of equipment and no one tells you until there’s an accident? That puts you in a position of risk because the employee can claim you ignored the problem.”

Business owners also face exposure to fines and/or lawsuits if they are not in compliance with local and federal laws and regulations—from health and hygiene to sexual harassment.  Shah says having policies in place to train employees and educate them about changing laws can help insulate owners from risk.

RPS also advises business owners to maintain a cash reserve to cover unanticipated expenses. Many business owners have all their cash tied up in operating costs and debt service and that can create difficulty—especially when economic factors cause business to dip.

Some risks can be avoided; others have to be managed. In either case, business owners need to have plans in place and a trusted team to help them cope with even the most unexpected risk.

For more information about RPS Legal Solutions, LLC go to www.rpslegalsolutions.com

HME Drives Accuracy & Speed of Service

With state-of-the-art drive-thru communications systems and timers alongside premium service and support, HME is a one-stop shop for improving drive-thru management and efficiency. HME has worked with Dunkin’ Donuts franchise owners and Dunkin’ Brands for many years, and now, the company is a DDIFO Sponsor.

Established in 1971, HME has a history of continuous innovation, including being the first to introduce the wireless drive-thru headset to the QSR industry. Following in that tradition, HME launched its groundbreaking ION IQ digital drive-thru headset system in February of this year. The system is designed to improve the drive-thru experience for both customers and employees with five cutting-edge sound technologies that reduce noise and increase clarity in headsets and speakers.

ION IQ also features a message center that allows you and your managers to customize alerts, reminders and greetings. Headset alerts and reminders can focus staff on issues of food safety, store security, key tasks and more. The customer greeter can deliver varying messages related to things like the time of day, store specials or new product promotions. What’s more, the entire system is remotely accessible, meaning you can modify the base station settings from anywhere.

HME’s ZOOM drive-thru timer system is another key component to increasing accuracy and speed of service. Its multi-colored graphical dashboard display makes it easy to see your operations performance in real time. The display shows how many cars are in the drive-thru and the cars change colors to indicate how quickly (or slowly) customers are being served. You and your staff can immediately identify bottlenecks and take action. The display also can be customized to show comparisons of actual service times to goal times.

With ZOOM’s fully customizable and remotely accessible graphical reports, you can easily see and evaluate performance issues and tie issues to specific day parts, shifts, day of the week, etc. Like ION IQ, you don’t need to be in the shop to access the system: Wherever you’ve got an Internet connection, you’ve got access. And if you’re shop has a System 30 Timer, HME’s DASH upgrade uses your existing system to provide the features of ZOOM at a fraction of the price.

Together with its top-notch products, HME prides itself on outstanding service. Most problems can be fixed over the phone with HME’s technical support specialists. If a part requires a physical repair, HME can advance ship a refurbished replacement to you so there is no down time. You can also opt in to an Equipment Maintenance Agreement (EMA), which covers your entire system–headsets, belt-pacs, base station, speakers and battery chargers–for a low monthly fee. The EMA also covers other brands like Panasonic and 3M.

VP of Marketing & New Business Development Daren Haas describes HME’s competitive edge this way, “Our advantage is that we are entirely focused on drive-thru restaurants. Our 30-plus years in the QSR industry makes us a leader in drive-thru solutions, always providing innovative solutions and cutting-edge technology to our customers. And since we manufacture, sell, market, design and support all of our products, customers can rely on us for all of their drive-thru needs.”

For more information and to find out about special pricing packages, contact HME Dunkin’ Donuts Account Representative Lisa Jokinen at 858-535-6085 or ljokinen@hme.com.

Innovation Helps Commissaries Achieve Efficiency and Consistency

Long before the first Dunkin’ Donuts franchise owner opened a central kitchen (CML), Belshaw was already established as a leader in the manufacture of donut machines. By the time Bill Rosenberg opened the first Dunkin’ store, Belshaw was already selling its machines internationally. By the mid 1960’s, Belshaw machines were helping franchise owners make donuts in the backs of their stores and when the first CMLs went on line in the late 1990’s, Belshaw was the brand standard.

Today, Belshaw provides fryers and proofers and finishers to CMLs in New England, Illinois, Florida and Kentucky. They enjoy a unique relationship with the brand, the DCPs and the franchise owners.

“We’re one of the few vendors who can sell directly to franchise owners and the DCPs,” said Roger Faw, president of Belshaw. “Because of that, we can take the layers out of the cost.”

But, it’s not just price that’s positioned Belshaw as an industry leader; it’s also innovation.

“Recently, we’ve been focusing on equipment for finishing. We’ve come out with a sugar tumbler for powdered donuts and a machine that automates icing,” said Faw. “Now we’re working on automatic jelly fillers. We showed the prototype (at the Dunkin’ Brands convention) in New Orleans. We hope to introduce it for test in June.”

Belshaw’s innovations help franchise owners achieve efficiency and consistency—the critical components of a successful operation, according to CML operators. The icing machine, for example, can finish three dozen donuts at once as opposed to having a person hold a donut in one hand and a spatula in the other.

“Their equipment absolutely supports the consistency of the product,” said Mark Dubinsky who runs a CML in Methuen, Massachusetts. “I made plenty of donuts in the back of my family’s store—and I was pretty good—but I never made them as good and consistent as the ones we turn out today with Belshaw equipment.”

“We know that in the business of donut production we are one of one. There is no other supplier like Belshaw,” said Faw. “The reason we are successful is because of what we do for the franchise owner after they buy our equipment.”

“What’s helped us is that Belshaw knew exactly what we needed and the right specs. Their product was custom designed for our end result,” said Peter Martins, co-owner of the JNS Commissary, part of the Salema network, which produces 20,000 dozen bakery products for 43 Dunkin’ Donuts locations in western Massachusetts.

Because of their long experience working with Dunkin’ franchise owners and CMLs Belshaw understands why a Dunkin’ bakery has different needs than, say, an Entenmann’s bakery. Dunkin’ products are not created to have a long shelf life, they are not shrink-wrapped and, even with all the automation available today, they are still touched by human hands.

Martins doesn’t see a fully automated process replacing the current process any time soon. That’s because of the dough that is used to make a Dunkin’ donut.

“Dunkin’ has had this recipe for a long time and it’s been really well received. If we were fully automated, they might have to tweak the recipe and that’s not something that could happen without a major change determined by the brand,” he said.

“One of the great things about the CML program is the level of cooperation between the brand, the franchise owner and us,” said Faw. “Some of the best ideas for how to improve equipment or operations come from the CML but, we don’t do anything to change the process without approval from Dunkin’ corporate.”

That’s why Dunkin’ will extensively test the new jelly-filling equipment before it’s offered to the CMLs. As Martins noted, adding jelly to a hot donut or munchkin is not that simple.

“You have to handle the dough carefully and gently all the way through. The donut is hot and gets damaged easily. Up until now there hasn’t been a machine that can barely touch the donut to protect its quality,” said Martins.

Dubinsky says he hasn’t seen the prototype jelly-filler yet but, “If it works I’d be interested in testing it and analyzing to see if it made sense for my operation.”

Innovation and automation from Belshaw have helped CML operators turn out more consistent products over the last 17 years. The donuts, munchkins and specialty goods are just what the customer ordered, and the efficiency created by Belshaw machines is just what CML operators wanted.

“Everyone has an equal interest in making this thing successful. It’s been a good ride,” said Faw.

Cost Segregation Makes Sense for Remodels

Due to the state of the economy in 2009, Dunkin’ Brands gave franchise owners a pass on their 10-year remodel obligations, but now franchise owners who were due to remodel last year or are due this year, by and large, will have to bite the bullet. So, in a still struggling economy, where can you turn for help with remodeling expenses? Cost Segregation is one answer.

With engineering-based cost segregation services, DDIFO Sponsors MS Consulting (sister company of Performance Business Solutions) and Bedford Cost Segregation (Bedford) can help you accelerate tax depreciation deductions and reduce taxes in order to generate cash flow savings.

“The reason we’re in business is because the vast majority of accounting firms don’t have engineers on staff,” said MS Consulting Director of Business Development Jeff Hiatt. “We serve as the back-office engineering department, helping clients maximize depreciation deductions. By having both engineers and CPAs in house, we’re really able to offer the whole package.”

If you have already had a cost segregation study performed on an existing building that you now need to remodel, you’re in great shape to immediately take advantage of un-depreciated values of assets in your store. If you haven’t yet had a study performed and need to remodel, you’ll want to work very closely with the cost segregation provider’s tax staff as well as with your own CPA to ensure you follow all applicable IRS rules and tax codes. It is important to note that cost segregation studies can benefit both those franchisees who own their shops outright and those who lease space.

Bedford’s Director of Business Development Bill Cusato itemized the three ways that cost segregation studies can help with a remodel as follows:

1. by helping to pay for the remodel
2. by enabling the write-off of assets that will be “retired” or thrown away in the remodel process
3. by maximizing the depreciation of the remodel investment after the fact

Franchise owners often use the tax deferrals and benefits created by cost segregation to fund upcoming remodels. A cost segregation study on an existing property typically identifies depreciation that has been missed in prior years and enables franchise owners to take that depreciation in the current tax year, thereby increasing existing cash flow. In scenarios in which franchisees own multiple stores, they frequently will use the additional cash flow generated by a study or studies on one or more shops to fund the remodel of one or more other shops.

“What we find is, with the tax deferrals we create, we end up reducing the amount of borrowing that franchise owners have to do for remodel projects and the like,” said Hiatt. “In fact, I just met with a franchisee for whom we’ve been able to reduce half a million dollars in income tax, which will negate his need for a lot of borrowing.”

A Dunkin’ Donuts franchise owner who had cost segregation studies performed by Bedford on six of his existing shops was able to realize $1 million in depreciation in the first year and another $400,000 over the following four years. That franchisee said the additional cash flow gained through the studies would “serve to fuel our growth and remodels without having to go to the bank to borrow.”

A cost segregation study on an existing property can also be helpful when facing a remodel by creating a baseline of asset values, or an inventory of assets that may be discarded in the course of remodeling. These include such items as signage, millwork, floorings, wall coverings, and plumbing and electrical components. With properly documented values of such assets in hand as you go through a remodel, you would be able to take the write-offs associated with items you are throwing away or “retiring” that have not yet been fully depreciated. As an example, Cusato said that a $600,000 shop opened in 2003 might see $50,000 to $100,000 in current year write-offs in remaining values of its retired assets.

Once a remodel has occurred, you can achieve additional tax benefits and savings by having a post-remodel cost segregation study performed. “Any property with a remodel investment of $350,000 or more would likely benefit from a study,” said Cusato. “Typically, a property with a remodel investment of $350,000 would see as much as $100,000 in accelerated depreciation, and the study would create a baseline record of values that could be used the next time the property is renovated.”

Hiatt pointed out that if you begin working with MS Consulting as you gear up for a remodel, the company could not only determine what you can expect in terms of tax savings but also act to increase those tax benefits by working with your contractors to select the most beneficial products. For example, vinyl tile flooring may be advantageous over cement flooring as it can be written off over five years instead of 39 years. Helping you choose the right materials upfront can help you achieve tax benefits sooner than later. Further, Hiatt said there were bonus depreciations available in 2008 and 2009 related to renovated properties and that MS Consulting can help you go back and get any of those bonuses you may have missed.

Cusato indicated that a cost segregation study helps to ensure you are receiving the benefit of all available tax incentives. “Since 9/11, there have been numerous tax incentives to motivate investment in property, and a cost segregation study will often trigger those benefits that can be captured in the current year,” he said.

Both MS Consulting and Bedford offer free, no obligation analysis and estimates of savings upfront and both companies aim to ensure a high return-on-investment (ROI) for you. Hiatt said that Dunkin’ Donuts franchise owners usually realize a ROI of 10-to-1 or more and Cusato said, “If, in our upfront analysis, the tax benefit is not expected to exceed 10 times the study fee, Bedford typically would recommend against the study.”

Moreover, in addition to its already competitive pricing, MS Consulting offers a DDIFO member discount of $200 per store when you sign on for cost segregation. Bedford has standardized pricing for Dunkin’ Donuts franchise owners which is discounted from the pricing for other clients and is about 50 percent lower than it was just a couple of years ago.

MS Consulting and Bedford also offer free post-study consultation to walk you and your CPA through the report, help you interpret the results and provide guidance for taking advantage of the tax benefits. In addition, both firms will provide free audit support if necessary.

You are encouraged to find out more about how cost segregation can help you with a remodel, generate considerable tax savings and increase your cash flow by reaching out to MS Consulting and Bedford. Jeff Hiatt can be reached at 888-989-0054 or jdh@revenuebanking.com; Bill Cusato at bcusato@bedfordcostseg.com or 978-263-5055.

You can also visit each company’s website at www.revenuebanking.com or www.bedfordcostseg.com.

TD Bank buys S.C.-based South Financial

The Boston Business Journal reports that TD Bank Financial Group, the parent of TD Bank, said Monday it has struck a deal to acquire a money-losing South Carolina-based bank with an elevated amount of problem loans on its balance sheet.

Editor’s note: TD Bank is a DDIFO Sponsor.

As part of the deal, Toronto-based TD Bank Financial said it will inject an estimated 250 million Canadian dollars ($241.7 million) in capital to stabilize the operations of acquisition target, The South Financial Group.

In addition, TD Bank Financial (NYSE: TD) said it will pay about $61 million in cash or common stock for South Financial Group (Nasdaq: TSFG) of Greenville, S.C. Before the deal is completed, the U.S. Treasury also will sell to TD its $347 million of South Financial preferred stock and discharge all accrued but unpaid dividends for total cash consideration of about $131 million.

Though South Financial Group has had a problem with troubled loans, TD Bank Financial emphasized that deal adds 176 branches to its footprint in the Southeast, including 66 in the Florida market.

“This is a relatively small acquisition and exactly the kind of unassisted transaction that we’ve said we’re comfortable doing,” TD Financial Group CEO Ed Clark said in a press release.

At the end of March, South Financial had $8 billion in loans and nearly $10 billion in deposits on its balance sheet.

Since the beginning of 2008, however, South Financial’s operations have generated more than $1.3 billion in losses, TD Bank said. The losses stem mostly from residential construction and land development loans.

The bank recently entered into a consent order with the Federal Deposit Insurance Corp. and was told to raise capital and pare problem loans. The bank is not considered to be well-capitalized by bank regulators.

The South Carolina-based bank lost $85.8 million in the first quarter, compared with a net loss of nearly $194 million in the year-earlier period.

The bank set aside $95.1 million for anticipated loan losses, down from $171 million in the year-earlier period.

Nonperforming assets, as a percentage of total assets, were 4.17 percent at the bank.

Read more: TD Bank buys S.C.-based South Financial – Boston Business Journal

Access to Money, Inc. Reports First Quarter 2010 Financial Results

DDIFO Sponsor Access to Money, Inc. (OTC Bulletin Board: AEMI), one of the largest providers and non-bank operators of ATMs in the United States, reports its financial results for the first quarter ended March 31, 2010.

Highlights for the First Quarter 2010:

• Net sales for first quarter 2010 were $7.6 million compared to $7.3 million in the first quarter of 2009
• Operating income for first quarter 2010 was $728,000 compared to $847,000 in the first quarter of 2009
• Net loss for first quarter 2010 was $716,000, or $0.03 per share, compared with a net loss of $597,000 or $0.03 per diluted share in the first quarter of 2009
• Adjusted EBITDA was $1.3 million compared with $1.3 million in the first quarter 2009
• Transaction-based sales were $20.2 million for the quarter compared with $20.8 million for last year’s first quarter
• Average gross sale per withdrawal transaction was $2.46 for the quarter compared with $2.39 a year ago
• Average commission per withdrawal transaction for the first quarter was $1.78 compared with $1.72
• Average net sale per withdrawal was $0.68 compared to $0.67 a year ago
• Average number of transacting machines was 10,983 compared with 11,425 in the year-ago quarter
• Final payment of note payable to Notemachine was made on March 1, 2010, providing approximately $120,000 per month of free cash flow going forward

 

Richard Stern, President and CEO of Access to Money said, “We continued to display strong results, posting another solid quarter of positive Adjusted EBITDA and operating profits.  This was especially encouraging given the adverse winter weather conditions that affected much of the Eastern portion of the country, and the negative impact caused by one of our armored car providers which was forced out of business due to alleged illegal activities.  The effect of this caused approximately 365 ATMs to be out of service for several weeks during the quarter.  The reduction in transacting ATM numbers was the result of our selective removal of lower performing, unprofitable ATMs and normal attrition.”

“We continued to deploy ATMs equipped with the Select-A-Branch technology pursuant to our exclusive distribution agreement.  The machines continue to generate significant increases in transactions.  Based upon the demonstrable success of this surcharge-free program, we are rolling out an additional test market of 60 machines during the second quarter.  We believe the positive results we have achieved thus far with Select-a-Branch can be replicated, and we look forward to capitalizing on the expansion of this program,” he continued.  ”Our agreement with Dunkin’ Donuts is also proceeding well and according to plan, having placed approximately 90 new ATMs with franchisees.  Including the Dunkin’ Donuts program, the total amount of ATM equipment sales this quarter increased to $1.3 million from $363,000 in the first quarter of 2009.”  

Mr. Stern added, “Although we are pleased with the progress we are making with our national sales efforts, our master agreement with Cumberland Farms to supply ATMs to all of its stores recently expired.  While we have been in discussions regarding renewal, it is now apparent that the agreement will not be renewed.  Therefore, we expect a reduction in the number of ATMs currently operating in Cumberland Farms stores over the next six to twelve months.  If we are unable to replace these expiring transacting units with new business, our financial results for future periods would be adversely affected.”

“The student loan business, which we entered in late 2009, was strengthened by our recent agreement with People Capital.  I am pleased to report that system integration is expected to be completed within the next few weeks, which will allow us to be fully operational in time for the peak student lending season.  With People Capital as our strategic partner, we will be able to offer a more robust student loan solution to our customers,” he added.

Mr. Stern concluded, “Our focus will continue to be on strengthening the company and identifying complementary business lines and partners in order to position the company for growth, profitability and Adjusted EBITDA improvements.”

Access Offers Pay per Performance Marketing Options for Franchise Owners

If Dunkin’ Donuts franchise owners are not familiar with how Access Rewards works, they may want to ask their customers. According to Doug Jentzsch, Director of Partnership Marketing for Access, customers who belong to various groups or associations that offer member discount programs are printing coupons for Dunkin’ stores more than any other restaurant or service provider in their database.

“It’s quite impressive considering we promote over 250,000 different business locations across the country,” said Jentzsch.

Access Rewards is one of the nation’s largest affinity marketing companies. Started in 1984, Access creates private-labeled discount programs for our client organizations—like teacher’s associations or travel clubs. Through the programs, members save on all kinds of products and services. The organizations use the programs to increase profit and achieve a variety of organizational goals.

Earlier this year, Access signed on as a DDIFO sponsor because it is in the process of expanding its business to include a Rewards Program for customers.

“The way it works is, we work with a local bank that wants to add local content and opportunities for cardholders in a specific region to earn rewards. The participating business—like Dunkin’ shops— can use it as a way to increases customer count and frequency as well as the amount they spend on each visit,” said Jentzsch.

He says a customer with a CitiBank Rewards card, for example, could receive a dollar back on his credit card when he spends $7 or more. There is no upfront cost to the franchise owner to enroll, there’s no out of pocket expense. The franchise owner only pays when the offer is redeemed with the correct credit card. Access can develop up to four different offers for each location—customized to help the franchise owner increase sales.

By offering the discounts to credit card holders in a specific geographic area, Jentzsch says, the franchise owner is able to generate new customers and more business from the people who already frequent his shop.

Based on data from Access, coupons offered through their traditional affinity marketing program are already a huge success with Dunkin’ customers. Jentzsch says he believes the new rewards program will also be a hit with customers and franchise owners.

For more information, contact Doug Jentzsch by email: doug.jentzsch@accesscashrewards.com or by phone 866.681.2427.

Jera Concepts Helps Franchise Owners Forecast

Wynne Barrett of Jera Concepts explains forecasting in one simple sentence. “Good data in means good forecasting out.” As a former Dunkin’ franchise owner and now the VP of Business Development for Jera, Barrett understands the inventory and supply chain challenges franchisees and central kitchen (CML) operators face. When he joined Jera in 2004 he helped develop the food service component of Jera’s network solutions business.

The “data in/forecasting out” theory is particularly relevant now with Dunkin’ Brands’ greater emphasis on forecasting to ensure better merchandising. As an approved Dunkin’ vendor and a DDIFO sponsor, Jera wants franchise owners to know their forecasting system can help franchisees and CML’s achieve their goals.

“Forecasting represents a major change for a lot of franchise owners. It’s a paradigm shift and we want to help walk them through it,” said Barrett.

Many Dunkin’ franchise owners have been early adopters of forecasting and see the benefits. They also recognize that even the best forecasting can’t prepare you for the unexpected storm or busload of tourists.

“You have to have a tool and theirs works well,” said Ray Messier a Massachusetts franchise owner. “We want to get the right numbers and with their forecasting we know when we’re within the right parameters. Jera has kept us ahead of the curve. Anything we’ve asked them to do they’ve done for us.

According to Barrett, accurate forecasting doesn’t necessarily mean a franchise owner will decrease his daily orders.

“We’ve seen stores where forecasting has reduced product a store orders and we’ve seen stores when orders increase as a result of forecasting,” said Barrett. “Typically almost all stores south of New York decrease see orders decrease while stores in the north can see both decreases and increases depending on the existing merchandising philosophy of an individual franchisee.”

Barrett says he will happily discuss Jera’s forecasting tools with any franchise owner or kitchen operator who is interested in learning more. He can be reached by email: wynne@jeraconcepts.com or by telephone: 508.686.8786.

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