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Franchisers Create Stronger Brands Through Corporate Ownership

My franchiser does not believe in corporate owned franchises. I suppose that's nice since they never have conflicts with us franchisees over unfair corporate competition. But, my franchisor is at a disadvantage in matters of branding and we franchisees pay the price of their weaker brand if they don't have corporate stores (I'm not with 7-Eleven. In my case our network has very little branding although we like to kid ourselves that we do.). What I find particularly fascinating about the Stanford Study is how few franchisers review their corporate / franchise mix once it is set, probably by default, in the beginning years.

Companies that spend heavily on advertising to build their brand's reputation own a higher percentage of franchise outlets for that brand as a way to protect its reputation, say Stanford researchers.

"Franchisers with aggressively advertised brands-such as Hertz or Pizza Hut-tend to have much higher rates of company ownership. For example, among car rental agencies, Hertz is 66 percent company owned, compared with Dollar, which is only 2 percent company owned. Pizza Hut is 50 percent company owned, compared with Shakey's Pizza Restaurant, which is only 7 percent company owned.

News of Cheerful Holiday Retail Sales

Retail sales rebounded on Monday with consumers taking advantage of discounts. Internet retail sales continue to boom. The after-Christmas week is still young, with retailers hoping to gather momentum with discounts, gift card usage and Hanukah just now gathering steam.

Here’s Tuesday morning’s cheery news according to the WSJ (subscription needed).

"Holiday spending climbed ($$) 8.7% ahead of last year, according to SpendingPulse, a retail-sales data service from MasterCard International's MasterCard Advisors unit. Sales of home furnishings, such as linens and picture frames, were up 15% and consumer-electronic sales, including flat-screen TVs and digital cameras, rose 11%, the data showed."

Japan 7-Eleven selling iPods. Coming to US?

According to Engadget, 7-Eleven has picked up a deal to resell iPods in Japan. The iPods arrive in the store a couple days after a customer places an order. Japan is a country that has taken convenience stores to the next level -- with copy centers, grocery vending machines outside the front doors, just-in-time inventory and much more. I guess when one thinks of the neighborhood 7-Eleven , one soon will think of a drink, sushi and i-pod music. It is true that Japan's market dynamics are different than ours but 7-Eleven is a Japanese firm. So, we wonder if this experiment in Japan succeeds, if one day the U.S. operations will follow. Go to your neighborhood 7-Eleven convenience store to purchase a Big Gulp, eat a hot dog and buy an i-pod. --- Naaah.


Fight Retail Crime With Plastic

The Motley Fool argues for fighting retail crime by using more credit cards and not cash -- an interesting theory. They quote a Palm Beach Times article stating that,

"Based on past numbers from the Bureau of Labor Statistics, it's estimated that over 700 convenience store workers, particularly cashiers, will be murdered during robberies this year in the United States.... A convenience-store cashier job is the 10th-most dangerous occupation in the United States according to the U.S. Labor Department, which classifies being a convenience-store cashier job as more dangerous than being a firefighter."