The Franchise Owner's most trusted news source

Log In / Register | Apr 26, 2017

France's Bollore backs away from EV ambitions

AutoNews - Tue, 2017-04-25 10:03
Vincent Bollore, the French billionaire who helped build Paris's auto-sharing network, is backing off on ambitions for his electric cars to compete with models from VW Group and Renault.
Categories: Latest News

First Shift: Public to test self-driving Pacificas

AutoNews - Tue, 2017-04-25 09:30
Phoenix residents to test Waymo's self-driving Pacificas; AutoNation profit rises; Ghosn: Not merging Nissan, Mitsubishi; Tesla doubling charger network; CarMax's closest rival?
Categories: Latest News

AutoNation Q1 net rises 2.3% on flat revenue

AutoNews - Tue, 2017-04-25 08:45
AutoNation's first-quarter net income rose 2.3 percent to $98.1 million on parts and service growth, while revenue inched up 0.4 percent to $5.14 billion.
Categories: Latest News

Summit summations: Dallas event delivers Texas-sized dividends - Tue, 2017-04-25 08:27
Katie Fuhrman of MomentFeed; Kimberly Brastad of Dairy Queen; Keith Hill of I Love Bacon; Jamal Bara of Waterfall; Demetra McLain of DW's Subs and Jacquelyn Cirko of Groupon, give an inside look to their Summit experiences.

Google will begin testing autonomous cars with consumers

AutoNews - Tue, 2017-04-25 06:59
After almost a decade of research, Google's autonomous car project is close to becoming a real service as it begins testing its vehicles with consumers.
Categories: Latest News

China targets 35 million vehicle sales by 2025, NEVs to make up one-fifth

AutoNews - Tue, 2017-04-25 04:36
China is targeting 35 million vehicle sales by 2025 and wants new energy vehicles (NEVs) to make up at least one-fifth of the total. Automakers in the country are pushing into electric and plug-in hybrid cars to meet stringent new government quotas.
Categories: Latest News

Crescent Hotels & Resorts To Manage The Crowne Plaza JFK Airport

Hotel Interactive - Tue, 2017-04-25 04:31
NEW YORK—Crescent Hotels & Resorts has been selected to manage the Crowne Plaza JFK Airport Hotel. Crescent, based in Fairfax, Virginia ...

Wyndham Celebrates 200 Hotels In Latin America And The Caribbean

Hotel Interactive - Tue, 2017-04-25 04:15
PARSIPPANY, NJ—Hotel giant Wyndham Hotel Group’s rapidly mounting global presence hit a major milestone today, catapulting its presence in Latin America ...

Why Subway is shrinking

Nation's Restaurant News - Mon, 2017-04-24 21:24

This post is part of the On the Margin blog.

What has happened with Subway?

The Milford, Conn.-based sandwich giant has struggled to generate sales in recent years. And now those struggles have claimed something once thought almost unstoppable: The chain’s unit-count growth.

Subway’s unit count has declined in each of the past two years. In 2014, according to Nation’s Restaurant News Top 100 data, Subway had 27,103 locations. In 2016 Subway finished with 26,744 locations. That’s a decline of more than 350 locations.

The simple explanation for this decline is that same-store sales have been falling since 2012, and unit count has followed. The chain has smartly cut back on unit growth while it works to recover those lost sales, and unit closures result in a modestly smaller concept.

The problems affecting Subway also show a chain that expanded too aggressively and discounted too much, and lost business to competitors.

Maybe no restaurant company emerged from the recession as strong as did Subway. According to the company’s franchise disclosure documents, the chain added 2,300 locations between 2007 and the end of 2009 — when it had more than 23,000 units.

It would then add another 4,000 domestic locations over the next five years.

Put another way: In 2007, Subway had 7,000 more locations than the next largest chain by unit count, McDonald’s Corp. Subway then added another 6,300 locations — growing unit count by 30 percent over just seven years. The sandwich chain basically added the same number of locations as a Taco Bell over that period.

Operators tell me privately that aggressive development over that period cannibalized existing locations and hurt unit economics. “Stores that were exceptionally strong five years ago are much weaker now,” one franchisee said.

Subway already generated relatively low unit volumes. But it has seen big declines more recently. In 2012, estimated unit sales were $482,000. By 2016, according to NRN data, that number had fallen to $420,000. That’s a 15-percent decline.

Some of that could be attributed to the 2015 arrest and imprisonment of the company’s well-known, longtime spokesman, Jared Fogle. Yet the chain’s decline was in full force when video of the raid on Fogle’s Indiana home was broadcast nationwide.

Subway has also relied heavily on discounts. The chain successfully used its $5 Footlong promotion for years to generate sales coming out of the recession when consumers stopped eating out. And any chain as ubiquitous as Subway needs some discounting strategy.

Yet as the economy improved, consumers shifted more spending toward higher quality options, and Subway’s focus on discounts made it the lower-end sandwich seller in the market. It’s probably no coincidence that both McDonald’s and Subway started seeing sales and traffic declines in 2012.

And the sandwich market that Subway operates in today is much more competitive than it was five years ago — even with the decline of onetime major rival Quiznos. To be sure, Subway is still larger than the next six largest sandwich chains combined, including Arby’s.

But those other six sandwich chains, which also include Jimmy John’s, Jersey Mike’s, Jason’s Deli, Firehouse Subs and McAlister’s Deli, added another $1.5 billion in system sales between 2013 and 2015, based on NRN data. Subway’s system sales have declined by $700 million over that same period.

Those other chains are taking business away from Subway while also sapping its growth opportunities.

Subway did not respond to requests for comment.

To be sure, Subway is hardly standing still. By stopping development, the chain can focus on generating organic sales again — something chains like Arby’s and Domino’s, among others, have done in the past as they’ve sought their own turnarounds.

All mature restaurant chains go through no-growth periods. No restaurant can add locations in perpetuity. Ultimately, the law of averages catches up. People simply get tired and go somewhere else. 

Subway is planning to upgrade locations in the coming years. It is also focused on technology — its mobile app, in my view, is one of the best in the industry. It is hiring engineers to beef up its in-store technology efforts and is testing delivery.

Subway is also working to upgrade the quality of its products, such as eliminating antibiotics from its chicken.

But with a huge number of locations with low unit volumes in a system with declining sales, closures appear likely to continue. It will be a while before Subway will be able to get back to the unit growth that was once its birthright.

Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.

Contact Jonathan Maze at

Follow him on Twitter at @jonathanmaze

Buffalo Wild Wings decries activist’s ‘risky’ strategies

Nation's Restaurant News - Mon, 2017-04-24 20:51

Buffalo Wild Wings Inc. on Monday issued a full-throated defense of its performance and stock price, and vowed that it wouldn’t support the “risky financial engineering strategies” of activist shareholder Marcato Capital Management.

The Minneapolis-based chicken-wing chain, facing an aggressive proxy fight against Marcato, took aim at the shareholder’s plan to refranchise most company-owned units in documents filed with the SEC on Monday.

Marcato wants Buffalo Wild Wings to sell most of its company-owned units to franchisees, arguing that franchise operators run more profitable restaurants.

Buffalo Wild Wings has announced plans to refranchise 70 restaurants, but argued that Marcato’s “vastly more aggressive and unproven plan … simply does not pencil out.”

“Given our focus on extending our successful, long-term track record, we will not support risky financial engineering strategies that provide an unlikely and modest short-term benefit, but create substantial long-term risk,” the company’s board said in a letter to shareholders.

Marcato did not comment on Buffalo Wild Wings’ filing, and referred only to its existing filings.

Buffalo Wild Wings and Marcato are fighting for shareholder votes on three seats to the company’s board of directors that would give the activist considerable say in how the company operates. Buffalo Wild Wings has itself nominated one of Marcato’s nominees, Sam Rovit.

Last week, Marcato asked for the resignation of Buffalo Wild Wings CEO Sally Smith, essentially making the vote a referendum on her tenure at the company.

Buffalo Wild Wings said Monday that Smith’s tenure has been a strong one. The company said its stock price has increased nearly 1,700 percent since its IPO in 2003, compared with 124-percent growth for casual-dining chains and 329-percent growth for restaurants overall. 

“Our record of outstanding performance is compelling,” Buffalo Wild Wings said. “If you invested with us at our IPO, 10 years ago, five years ago or even a year ago, you have earned a return that exceeds the median return generated by other casual-dining restaurant companies.”

In addition to Rovit, Buffalo Wild Wings has nominated former McDonald’s USA president Janice Fields to the board. Fields, Rovit and three others appointed in October — Andre Fernandez, Harry Lawton and Harmit Singh — would give the company five new board members.

Marcato has nominated former Pizza Hut CEO Scott Bergren, former Buffalo Wild Wings executive Lee Sanders, and Marcato founder Mick McGuire, in addition to Rovit.

In its filing, Buffalo Wild Wings said that Bergren refused to be interviewed by the company’s chairman during its nominee vetting process. It added that Sanders “vastly exaggerates his achievements at Buffalo Wild Wings.”

Sanders was senior vice president of development and franchising from 2001 through 2007. On its website,, Marcato said that he “successfully planned and led the national rollout and opening of 486 units within seven years, driving annual retail sales to $2.5 billion for the 1000+ unit chain.” 

Contact Jonathan Maze at

Follow him on Twitter: @jonathanmaze

One Group COO and CFO step down

Nation's Restaurant News - Mon, 2017-04-24 20:35

One Group Hospitality Inc. chief operating officer Alejandro Munoz-Suarez and chief financial officer Samuel Goldfinger are stepping down to pursue other opportunities, the company said Friday.

The company has launched a search for a new CFO, and Goldfinger will assist with the transition. Following Munoz-Suarez’s departure, however, the position of COO will be temporarily eliminated as One Group increases emphasis on growth of licensing.

“As our growth strategy continues around an asset-light business model focused on management and licensing opportunities, we remain motivated to drive efficiencies that are aligned with that growth strategy,” said Jonathan Segal, One Group CEO.

Based in New York, One Group is parent to the steakhouse chain STK and operates restaurants and nightclubs around the world under various brands, including Bagatelle, Asellina and Heliot Steak House. 

Contact Lisa Jennings at

Follow her on Twitter: @livetodineout

Panera to expand in-house delivery

Nation's Restaurant News - Mon, 2017-04-24 17:57

Panera Bread Co. will expand delivery to 35–40 percent of its more than 2,000 restaurants by the end of the year, and add more than 10,000 in-store and delivery driver jobs, the company said Monday. 

The St. Louis-based bakery-café chain said it was expanding its delivery reach, which at the end of 2016 was available in 15 percent of systemwide units.

Panera, which in April agreed to be sold to JAB Holding Co. for $7.5 billion, said its new “Panera Delivery” platform, based on digital and mobile ordering, generally provides lunch and dinner to locations within an eight-minute drive of a restaurant. 

“In many places across the country, all that’s available for delivery is pizza or Chinese food,” said, Ron Shaich, Panera chairman and CEO, in a statement. “We’re closing the gap in delivery alternatives and creating a way for people to have more options for real food delivered to their homes and workplaces.”

Panera introduced delivery in 2015 and expanded it in 2016, integrating it into the MyPanera loyalty program, which has grown to 25 million members.

Panera said restaurants will generally deliver between the hours of 11 a.m. and 8 p.m., seven days a week, with a $5 minimum order. A $3 delivery fee is added in most locations, the company said.

The company is also rolling out a new order-tracking system, based on Bringg technology, which lets guests track delivery orders. Customers can see the expected arrival time, follow the delivery’s progress on a map, see a picture of the driver and receive a notification when the driver is arriving.

Panera is hiring its own drivers in company-owned and franchised markets across the country. It had tested third-party delivery companies in some markets.

“Hiring our own drivers was the only way we could ensure that our delivery guests get the same high-quality experience they have come to expect from our bakery-cafés,” said Blaine Hurst, Panera’s president, in prepared remarks.

Panera’s net income for the fourth quarter ended Dec. 27 rose 2 percent, to $44 million, or $1.92 per share, from $43.2 million, or $1.74 per share, the previous year. Adjusted for one-time items, Panera earned $2.05 a share, compared with $1.88 a year ago. Revenue increased 5.1 percent, to $727.1 million, from $691.8 million the previous year.

Fourth-quarter same-store sales increased 0.7 percent systemwide. Same-store sales at company-owned units rose 3 percent, but fell 1.4 percent at franchised restaurants. 

As of Dec. 27, Panera had 2,036 bakery-cafés in 46 states and in Ontario, Canada. Of those, 902 units were company owned and 1,134 locations were franchised.

Contact Ron Ruggless at

Follow him on Twitter: @RonRuggless

AutoNews Now: Supreme Court rejects GM case

AutoNews - Mon, 2017-04-24 16:30
High court rejects GM effort to block ignition-switch cases; Buick Avenir on Denali's path; BMW dealers seek more 5 series; What's behind used-car price drop; Driverless at Amazon?
Categories: Latest News

Fiesta to close 30 more Pollo Tropical restaurants

Nation's Restaurant News - Mon, 2017-04-24 16:07

Fiesta Restaurant Group Inc. will close 30 more Pollo Tropical restaurants in Georgia, Tennessee and Texas as it works to improve its performance, the company said Monday.

In October, Pollo Tropical closed 10 of its then 209 locations, most of those in Texas, as part of a portfolio review. 

On Monday, Dallas-based Fiesta said it was closing all Pollo Tropical locations in Dallas-Fort Worth and Austin, Texas, and Nashville, Tenn. Fiesta said it would continue to operated 19 Pollo Tropical restaurants outside its original market of Florida, including 13 units in Atlanta and six locations in south Texas.

As many as five closed Pollo Tropical units may be converted to Fiesta’s Taco Cabana brand, the company said.

“Where possible, employees impacted by restaurant closures will be offered positions at nearby restaurants,” the company said in a statement.

“Fiesta’s recent growth initiatives diverted resources from our core markets, and some amount of renewal is required to restore momentum in these markets,” said Richard Stockinger, who was named Fiesta president and CEO in February, in a statement.

Fiesta said preliminary same-store sales for the first quarter ended April 2 showed declines continued at both its brands. Preliminary same-store sales fell 6.7 percent at Pollo Tropical and dropped 4.5 percent at Taco Cabana. The company will announced first-quarter earnings on May 8. 

“Industrywide headwinds, which were particularly prevalent in Florida and Texas, and the impact of sales cannibalization continued to negatively impact topline performance,” the Fiesta statement said.

Stockinger added, “While the decision to close restaurants is never easy, we believe it is vital to focus the company’s resources and efforts on markets and locations that have proven successful for our brands.” 

Fiesta said it estimated impairment charges with closures to be $33 million to $37 million in the first quarter 2017, and related lease and other charges of $9 million to $12 million in the second quarter 2017.

The closures come as part of Fiesta’s “Renewal Plan,” which will include relaunching the Pollo Tropical brand in September and the Taco Cabana brand late in the year. 

For the fourth quarter ended Jan. 1, Fiesta reported net income of $2.4 million, down from $8.8 million in the same quarter last year. Revenue declined 4.6 percent, to $171.3 million, from $179.5 million the previous year.

Fourth-quarter same-store sales at Pollo Tropical declined 4 percent and fell 3.5 percent at Taco Cabana. 

As of Jan. 1, Fiesta had 177 company-owned Pollo Tropical restaurants and 166 company-owned Taco Cabana restaurants. The company also franchised 35 Pollo Tropical units and seven Taco Cabana locations.

Contact Ron Ruggless at

Follow him on Twitter: @RonRuggless

Buffett seeks exemption from Texas law

AutoNews - Mon, 2017-04-24 15:01
Warren Buffett has run afoul of the same Texas law that prevents Elon Musk from selling Teslas at factory-owned stores.
Categories: Latest News

M&A volume up 27% in first quarter

Store Front Talk Back - Mon, 2017-04-24 14:39
M&A volume up 27% in first quarter jacquelinerose55 Mon, 04/24/2017 - 14:39