Kermit Pattison writes in the New York Times that Mr. Tessier had owned a liquor store for nearly a decade. He had a good credit score and a solid track record as a businessman in central Georgia. He assumed lenders would be happy to help. “I went to several banks and they acted like they could do loans,” Mr. Tessier said. “But when it came down to it, it was ridiculous. Ultimately, the terms and conditions were just outrageous.”

So Mr. Tessier turned to another source of capital, his franchiser. He financed the $250,000 cost of opening his pizza restaurant though a leasing program established by Marco’s Pizza to help franchisees unable to obtain traditional loans. The case is one example of a trend that is rattling the chains of franchising: facing a $3.4 billion credit shortfall, franchisers are trying to spur growth by offering franchisees new financing approaches and incentives.

“When you talk to anybody in the franchising industry, financing is the No. 1 concern,” said Sean Fitzgerald, vice president for franchise development at Wireless Zone, a cellphone retailer that has introduced in-house financing programs to cover part of its franchise fee and opening costs. “And it’s not going to get better anytime soon.”

Chains are facing the worst credit squeeze since the franchise model boomed in the years after World War II. This year, the franchise industry is expected to seek $10.1 billion in capital, but banks are expected to lend only $6.7 billion, according to the International Franchise Association.

The big national companies that dominated franchise lending before the 2008 collapse have stopped or reduced financing. The remaining lenders — often local banks — have been more restrictive in their credit underwriting, and they have been demanding more collateral (like home equity), more cash liquidity, more experience in the industry and outside sources of income, like rental income or a working spouse.

“Banks have hit the reset button,” said Reginald Heard, president and chief executive of Bankers One Capital, a company in Danbury, Conn., that specializes in financing franchises. “They’re just holding onto capital and being conservative on how they approach new deals going forward. The franchisee who left I.B.M. and now wants to open a Dunkin’ Donuts or Subway, those deals are a lot more challenging to get done.”

Robert C. Seiwert, senior vice president of the American Bankers Association, said the tighter credit standards affected first-time franchisees in particular (especially those trying riskier ventures like restaurants). Beyond the concerns about lacking collateral, experience and cash flow, lenders are often wary of franchisees who are unable or unwilling to make a large equity investment in their business. And lenders are likely to be especially cautious with newer chains that lack a track record.

That is why the franchisers are getting involved, Mr. Seiwert said. “Financing for franchisees has always been tough,” he said. “But in today’s economy, it’s even tougher.”

Some franchisers have gone a step further and put their own balance sheets to work by creating captive financing programs, pooled credit support or leasing programs. Others have tried “credit enhancement” in which the franchiser guarantees part of a loan to encourage tight-fisted lenders to free capital. Some franchisers are submitting themselves to the bank credit report process — essentially getting their credit-risk language translated into banking terms — so that franchisees have a lender-friendly package ready to take to banks that might have never seen a loan application from a particular chain.

Besides financing, many franchises have also taken steps to help potential franchisees by reducing fees, waiving royalties or reducing square-footage requirements. Whatever the tactic, the motive is the same: playing a more active role in helping franchisees gain access to capital. “We had to get into the financing space to be able to deliver a solution to our franchisees,” said Peter Taunton, founder and chief executive of Snap Fitness, a national gym chain based in Chanhassen, Minn.

Read more at: New York Times

Cupcake Popularity

What makes cupcakes so popular? Are they really the perfect dessert? The answer may be in their individual size; small enough to eat by yourself but big enough to satisfy a craving for something sweet. Is it their decoration? They can be plain or fancy, casual or formal, crazy colored or pristine white. Is it because they bring back memories of childhood? The delight of having a cake small enough to fit in tiny hands and not having to share…the peeling off of the wrapper like a little present…and the of eating the frosting first, or not. Perhaps it is the versatility of a plate of cupcakes. Suitable for a midmorning coffee break, afternoon tea or even a wedding reception, cupcakes are always welcome.

History

Not much is known about the history of cupcakes. There is very little written about when cupcakes came into existence. One of the earliest records comes from the Fanny Merritt Farmer’s Boston Cooking-School Cook Book. In this book the cook is instructed to bake individual cakes in tin cups. Paper liners were not used until just after World War I when the James River Corporation manufactured cupcake liners on machines that a few years before were making artillery shells. Commercial cupcakes reached the market some time before World War II. Hostess introduced the Hostess Cupcake in the 1950’s.

Read more at Suite101: Food Fashion Trend: Cupcakes are Back in Style: Cupcakes aren’t just for Kids

Other related articles: Boy Friendly Cupcakes at QSR Magazine

There is even a franchise available: Cupcake Station

Visit any area Dunkin’ Donuts restaurant for complete eligibility requirements. Online applications will be accepted through April 15. Dunkin’ Donuts will award 25 recipients each with a $1,000 scholarship.

For more information and a complete list of scholarship program eligibility requirements, stop by any Dunkin’ Donuts in the area or visit www.dunkindonuts.com/scholarship.

McDonald's has been asking franchisees to increase $1 drink offers this summer. Above, a Utah restaurant.

Paul Zi0bro reports at the Wall Street Journal that McDonald’s Corp.’s summer sales may get extra juice with a push to sell all soft drinks, no matter the size, for $1.

McDonald’s executives have been trying to sell franchisees on the offer in recent weeks at regional meetings, where Coca-Cola Co. representatives have also pressed the case for $1 drinks, according to two franchisees.

McDonald’s, aiming to become a destination for buying beverages, has used dollar-drink promotions in summers past, with most markets opting to sell large sweet tea for a buck last year. But the franchisees say the fast-food chain is making a greater effort this year to get more markets—which have the final say on any offer—to sell all fountain drinks for $1.

McDonald’s also wants the $1 drink promotions to run 150 days, starting after Memorial Day, up from 100 days in prior years, the franchisees say.

McDonald’s spokeswoman Danya Proud declined comment on any conversations between the company and its restaurant operators. She said more than 90% of U.S. restaurants sold drinks for $1 last summer, which “should give you an indication of its success for our business.”

Read More at: Wall Street Journal

Meat Trade News Daily

Mike Downing posed with his wife, Dawnalee, volunteers from Cape Cod Lumber, and Homes for Our Troops founder John Gonsalves (kneeling) today in Middleborough. Valerie Larsen Photography Boston Globe

Jeannie Nuss reports in the Boston Globe that hundreds of contractors, students, and other volunteers are turning out in Middleborough this weekend to build an accessible home for a veteran who lost both legs in a roadside bomb explosion in Afghanistan.

Homes for Our Troops, a Taunton-based non-profit group, organized a three-day building brigade to raise a house for Staff Sergeant Mike Downing.

The house will have wider hallways and accessible doors to allow 43-year-old Downing to get around in his wheelchair. The kitchen will feature lower cabinets and the bathrooms will have roll-in showers.

“Even when it comes down to things as simple as doing the laundry, everything is set up so that I have access to it,” Downing said in a telephone interview.

Downing, a father of four, lost both legs after an improvised explosive device (IED) detonated in Afghanistan in September 2008.

 The Downings are slated to move into their new home in March. The new home is about 2 ½ miles away from their current multi-story house where Downing faces challenges in everyday tasks.

“I go up the stairs on my rear end. I have to go up one stair at a time,” he said. “And then when I’m up there, someone has to carry my wheelchair for me.”

Volunteers came out in such numbers this weekend that they had to set up a shuttle from a parking lot at a nearby high school.

“There isn’t enough room for everybody to park here — there’s been so much help,” Downing said.

Homes for Our Troops has built 48 accessible homes like Downing’s since John Gonsalves founded the organization in 2004. Another 33 homes, which each take about six months and $275,000 to build, are in the works.

Donations from organizations like the Dunkin’ Donuts & Baskin-Robbins Community Foundation cover the cost of the houses, which go to the veterans for free, according to Vicki Thomas, a spokeswoman for Homes for Our Troops.

“It just enables him to be a part of his family, to participate in things, to go out to his backyard,” Thomas said.

Boston Globe