Enter the Venture Capitalist. Deal.com posts this interesting article on the trend of venture capital groups moving away from technology and into franchising for investment purposes. From Burger King to Carvel to CiCi's Pizza, private equity firms are choosing management-led (and non-management-led) buyouts of franchise companies as solid investments in these tenuous financial times. According to some of the experts, existing franchise companies offer a combination of low capital expenditures and employee overhead and a stable, predictable revenue stream. As franchising and franchisors grow during an economic slump, their appeal to investors increases as well.
D.C. Court Holds that Association Has Standing to Sue State Farm. The Wall Street Journal (subscription required) reports that a court in the District of Columbia has ruled that the National Association of State Farm Agents can proceed with its lawsuit against State Farm for breach of contract and violation of franchise laws. Although most franchising authority holds that independent associations lack standing to sue their franchisors, the court held that the State Farm agent association met the three-part test to establish standing and rejected State Farm's argument that the association must represent 100% of the agents in order to have standing. Copies of the complaint and other pleadings, including the motion to dismiss for lack of standing and NASFA's opposition, can be found on NASFA's website here.
Harrigan's Restaurant Chain Unable to Successfully Convert. On court order entered yesterday, the Harrigan's chain closed the doors of its ten restaurants in Texas, New Mexico and Oklahoma. The chain's parent, Pinnacle Restaurant Group, recently converted its Chapter 11 bankruptcy to a Chapter 7 and its plans to convert its restaurants to C.J.'s Roadhouse restaurants failed.
Buffalo Wild Wings IPO. The Wall Street Journal (subscription required) reports that the Buffalo Wild Wings IPO took off on the stock market last week. While the company sought to sell 2.7 million shares at $14-$16 per share, the demand for the shares ultimately raised the price to $16-$17 per share. Ultimately, the shares were trading on the NASDAQ for $21.73 per share. The pricing of shares above the range set by the company is unusual for restaurants -- even Krispy Kreme had not accomplished this feat in its IPO.
Little Caesars Claims the Number One Spot in Pizza Industry -- A Lesson in Spin. PizzaMarketplace.com investigates Little Caesars' website claim that the Detroit-based company leads the pizza industry. While the privately-held company has boasted increases in sales for the last six quarters, the price-wars during the 1990s and a lawsuit filed by 250 franchisees in 2000 took their toll on the pizza franchisor, moving it out of the top three positions in the pizza industry. The real story, says the franchisor, is the reinvigoration of the company, increased profitability of its franchised locations and new store openings.
Rx Depot Loses Stay During Appeal. Last week, Rx Depot asked the Tenth Circuit Court of Appeals to stay the Oklahoma district court's order requiring all Rx Depot locations to immediately cease operation. Rx Depot sought a stay of the order while the appeal was pending in the Tenth Circuit. On Friday, the Tenth Circuit rejected this request.
Smoking Ban Moves South. Smoking bans have passed in several states and municipalities; most recently, Massachusetts passed a law prohibiting public indoor smoking except in cigar bars, private clubs and nursing homes. See blog entries from July 24 (New York), September 29 (Lexington, Kentucky), November 10, 18 and 20 (Massachusetts). The ban in Lexington, Kentucky, however, has been exceptionally controversial. As the second-largest tobacco producing state in the country, Kentucky has an interest in maintaining the sale of tobacco, but its second largest city recently banned public smoking. On Friday, a judge dismissed the lawsuit filed by the Lexington-Fayette County Food and Beverage Association and said the law "is directly related to public health, and is not an unreasonable exercise" of the city's authority. The ban is the first of its kind in Kentucky.
Burger King Changes Breast-Feeding Policy. Burger King announced on Friday that it would permit breast-feeding in the dining areas of all of its restaurants. The new policy came just one day before a planned "nurse-in" was scheduled to occur at Burger King restaurants to protest the treatment that a Salt Lake City woman received when she attempted to nurse her child in the dining area of a Salt Lake City Burger King. According to reports, the woman was asked to nurse in the restroom or leave the restaurant when another customer complained to the management. See blog entry of November 12. Burger King issued an apology in a prepared release. According to the company, Burger King was also in the process of preparing this new policy before the "nurse-in" was scheduled.
Jury Awards Dr. Gousse $33 Million in Damages in the Budget-Rent-A-Car Case of the Stolen Plates. When a Miami doctor flew to Los Angeles for a medical conference, he did not expect to end up in a jail cell. After renting a car from Budget, Dr. Gousse was stopped on the highway by a police squad car and back-up units, with a police helicopter hovering overhead. The police forced Dr. Gousse to lie in a prone position, aimed a gun at this head and refused to look in the car for the rental information. As it turns out, the car that Dr. Gousse rented from Budget had stolen plates. After the police learned of their mistake when they brought Dr. Gousse to the station, they continued to question him in a recorded session in an attempt to cover up their misconduct.
Dr. Gousse sued Budget and the LAPD over the incident. The jury returned yesterday with the $33 million verdict and apportioned 57% of the liability to Budget. Budget had a policy that it would not allow a car to leave its lot unless the license plate matched the plate number in its computer system. Budget failed to catch the switched plates on Dr. Gousse's car and evidence was admitted that it failed to identify switched plates on 43 other occasions. Dr. Gousse alleged that Budget's negligence in carrying out this policy set the stage for the LAPD's misconduct.
McDonald's Caters to Skaters in Singapore. In the first of its kind, McDonald's has lauched a skate-through restaurant in Singapore. Like drive-through customers, the skate-through consumers have a designated lane which has a special surface to make skating easier. McDonald's expects to increase revenue at the restaurant by 40%.
Hefner Ads Make an Impression. It's not quite the reaction Carl's Jr. may have been looking for, but the President of Thomas Aquinas College, a Catholic institution in Ventura, California, announced yesterday that Andrew Puzder, President and CEO of CKE Restaurants, Inc., will resign from the board of the college. CKE Restaurants is the parent company of the Carl's Jr. chain, which recently launched an ad campaign featuring Hugh Hefner discussing his views on variety. The college president indicated that Mr. Puzder's resignation was directly related to the ad campaign, stating: "We've been proud of a long relationship with Carl's Jr. founder, Carl Karcher, and his company . . . . We have enjoyed a continuation of the relationship with the company through Mr. Puzder. But Thomas Aquinas College stands for principles that are in direct conflict with those of Hefner and Playboy."
Buffalo Wild Wings Goes Public. Buffalo Wild Wings, a Minneapolis-based franchisor, is raising $51 million with its recent IPO and apparently doing very well. According to CBS Market Watch, the company raised its share prices form $14 to $16 yesterday based on the sign of strong demand. The stock is now at the high end of the $16-$17 range.
A Sweet Deal. In a deal announced yesterday, Fuzziwig's Candy Factory, Inc. will acquire the assets of Sweets From Heaven USA L.P., a Pittsburgh-based operator and franchisor of candy stores. The Sweets From Heaven chain included nine company-owned stores and 26 franchised stores. Fuzziwig's, a Colorado company with 63 company and franchised candy stores, says that it will retain the Sweets From Heaven name. The terms of the deal were not disclosed.
Ruby Tuesday's Joins the Low-Carb, Healthy Eating Ranks. In this story in Entrepreneur.com, Ruby Tuesday's announces that it is adopting some law-carb menu items, looking to attract its share of the growing low carb eating population. It also announced that it would switch its frying oil from soybean oil to canola oil.
You Can Drink But Do Not Smoke. The Massachusetts legislature last night passed the ban on indoor smoking. The state is now set to become the sixth state to enact statewide smoking bans in public places, unless the Governor vetoes the bill. Even under this ban, however, smoking in private clubs, cigar bars and nursing homes is still permitted. In the same session, the legislature lifted the ban on Sunday liquor sales.
KFC Abandons Healthy Eating Ads. After launching a bold ad campaign that attempted to promote its chicken as healthy, KFC announced yesterday that it would stop running its healthy campaign by the end of this week. On October 29, the blog included an article discussing KFC's plans to air television spots that suggest that eating healthy could include sitting down with a bucket of Kentucky Fried Chicken. Just three weeks later after a complaint was lodged with the FTC by a consumer protection group, KFC has pulled the campaign. KFC would not confirm whether this move responded to the FTC complaint and the FTC would not confirm whether it planned to investigate the claim.
The Tomato Wars. Taco Bell faces additional boycotts from college campuses as a result of Taco Bell's purchase of tomatoes from Immokalee region. The boycott supporters claim that Taco Bell does not pay a living wage to the workers who pick the tomatoes used in Taco Bell restaurants. According to the Daily Bruin, and the UCLA student association recommended to the University's board of directors that Taco Bell's contract not be renewed and that Taco Bell be phased off campus. Similar boycotts have received support on Texas and Florida campuses. See blog entries from October 17 and October 14.
Rx Depot Seeks Stay of Injunction. Rx Depot, the company that allows its customers to order prescription drugs from Canada at cheaper prices, has asked the Tenth Circuit Court of Appeals to stay the order of a federal judge in Tulsa requiring Rx Depot stores to shut down. After being ordered to shut down its 65 store fronts for allegedly violating federal law by providing consumers access to Canadian drugs, Rx Depot has appealed the order and sought a stay of the order during the pendency of the appeal. In its motion for a stay, Rx Depot claimed that American consumers would suffer irreparable harm if the injunction were permitted to stand during the appeal. The Tenth Circuit's decision will follow.
Roy Rogers Rides Again? Roy Rogers, a 35-year-old franchise system, that has passed from Marriott to Hardee's to CKE Restaurants, has recently found itself a new owner with close ties to the system. The Washington Business Journal reports that the burger chain has been acquired by one of its franchisees. The terms of the deal were not disclosed. Plamondon Enterprises, Inc., a Frederick, Maryland-based company, owns 15 Roy Rogers franchises and hopes to guide the remaining 12 franchisees who own 63 units into another era of success for the struggling brand. Started in 1968, the Roy Rogers chain, named after the popular cowboy star, once boasted almost 650 units. After years of decline and transfers of the franchise brand, the chain now plans to grow by revitalizing its image and by adding 77 new units in the next five years.
Wendy's Franchisee Testifies Before Senate on Proposed FASB Rules. Pete Salg, a Wendy's franchisee and shareholder of QSC Restaurants in Colorado, testified on November 12, 2003 regarding the proposed FASB Rules. Claiming that the new FASB rules amounts to "pure overkill," Mr. Salg stated that the implementation of these rules would make franchising much less attractive and would place a significant burden on small businesses. This story available on the IFA website. Also available on this IFA webpage is the text of Jim Cantalupo's letter to Merriam Webster on the definition of "McJob." See previous blog post of November 11.
NBC Ranks Standards At Popular Chains. On Sunday, Dateline NBC aired a story ranking the top ten fast food chains in America based on health, sanitation and safety violations. The top ten chains have a combined 75,000 restaurants. Dateline visited 100 restaurants for each chain, for a total of 1000 inspections. The results were surprising and not surprising. Despite tough standards by franchisors, at the operational level, franchisees were not providing the health and safety protections required. Burger King held the unenviable position at number 1 with 241 critical violations in 100 restaurants.
Massachusetts Senate Prepares for Smoking Debate. The Massachusetts Senate is gearing up for debate over a smoking ban that has been the source of tremendous controversy in states and municipalities across the country. The ban would prohibit smoking in restaurants, bars and taverns, as well as any indoor public facility in which smoking is already prohibited. This extension of the smoking ban to bars and restaurants would make Massachusetts the sixth state to institute a state-wide indoor smoking ban. The governor of Massachusetts has not yet stated his position on the ban.
Smoke 'Em If You Got 'Em. The Guardian reported that the proposed ban supported by anti-smoking groups has been effectively abandoned in favor of voluntary compliance by bar and restaurant owners. British Health Secretary John Reid, who quit smoking at the beginning of this year, stated that persuading people to quit smoking is a more effective way to address the problem.
Hepatitis A Outbreak at Chi-Chi's in Pennsylvania. In a public relations crisis, Chi-Chi's restaurants across the country are trying to convince customers that it is safe to eat at Chi-Chi's again. These efforts come after the largest and deadliest hepatitis A outbreak that has killed 3 people and infected at least 500 more was traced back to a Chi-Chi's restaurant in Beaver County, Pennsylvania. So far, the only link between those infected has been the ingestion of green onions. According to a company spokesman, Chi-Chi's has taken "extraordinary measures" to remove green onions from every restaurant in the chain. This New York Times article (subscription required) reports that Chi-Chi's has a long road ahead to rebuild public confidence in the chain. The author recounts the story of Jeff Cook, a 38-year-old father of two, who took his family to Chi-Chi's and died one month later of acute liver failure brought on by hepatitis A.
Jared Has NOT Left the Building. Jared Fogle lost 245 pounds eating Subway sandwiches and has now become a household name. He is spoofed on Saturday Night Live; he is the topic of late-night talk show monologues and he even had a story about him published in the National Enquirer. In short, he's become a sub celebrity. This article on cnn.com recounts Jared's success as corporate spokesperson for the sandwich chain. Jared travels 230 days of the year to make personal appearances on behalf of Subway and receives more requests than he can fill in a year. The recent success of Subway tracks Jared's involvement with the chain. Since he became the spokesperson for Subway, sales has gone from $3.6 billion to $5.77 billion. While Subway can't say how much success is attributable to Jared, clearly Jared's loss has been Subway's gain.
Cendant Wins Injunction Against LendingTree. On June 20 and September 5, the blog included entries recounting Cendant’s lawsuit against LendingTree, Inc., as well as claims by Re/Max International against the mortgage broker. Both franchisors claimed that LendingTree lured customers to its website by claiming some affiliation with or endorsement by the real estate franchisors. In a ruling entered Friday, the court enjoined LendingTree, Inc. from using Cendant’s trademarks in any media and ordered the company to file an affidavit this week stating that it had complied with the court’s order. LendingTree provides a matchmaker service for mortgages and states that it provides “access to a national network of brokers from large independent companies and variously independently owned and operated franchisees of the nation’s leading real estate companies.” This statement on LendingTree’s website was previously followed by references to a variety of real estate broker franchisors.
Big Brother Concerns May Prevent Pay-By-Touch System. In the November 10 blog entry, the "Future of Credit," smh.com reports on a payment system that identifies customers using their fingerprints. In this fox23news.com article, there is a report that some customers are balking at the fingerprint identification technology. The use of fingerprints is becoming popular in business to prevent fraud and identity theft and to protect against terrorism. A number of businesses, including grocery chains and truck rental companies, use fingerprints to identify customers. Biopay, a company based in Virginia, has developed and uses biometric identification (i.e., fingerprints) to identify people cashing checks and as a substitute for writing a check. This system is being used at gas stations, cell phone dealers and a GNC store in Washington, D.C. The system does not yet substitute for credit cards, but this possibility remains open for the future. While the system may provide certain convenience to its customers, some organizations, like the ACLU, are concerned about the accuracy of the identification and what data will be gathered in the process.
Selling in the Shadows of Love. Based on a shared target audience of men, Carl’s Jr. and Playboy founder, Hugh Hefner, have launched an advertising campaign for Carl’s Jr.’s six dollar burger. The campaign is titled “Variety.” While Hefner has never participated in an advertising campaign during his 50-year career, he indicated that the Carl’s Jr. campaign “seemed like a good business opportunity.” The ads create an analogy between Hefner’s love of variety in women and the variety available at a Carl’s Jr. Restaurant. Some critics, however, do not find the ad amusing in the least. One angry graduate student in philanthropic studies and non-profit management calls for a boycott of all CKE restaurants in a letter to the editor of his University newspaper.
I Got My Mind on My Money and My Money on My Mind. Ryan’s Family Steak Houses, a South Carolina-based company traded on NASDAQ under RYAN, operates 316 restaurants and has 22 franchised restaurants operating in 23 states. Last week, a federal judge in the Middle District of Tennessee certified the class action lawsuit filed against Ryan’s in November 2002. The lawsuit alleges that Ryan’s paid employees “server’s pay” of $2.13 per hour for performing non-server duties for which they received no tips. In addition, the lawsuit alleged that Ryan’s required employees to work off the clock, failed to pay employees for hours worked (including overtime hours) and charged employees for 30 minute breaks that they did not take. According to the Complaint, Ryan’s subjected a number of its employees to these conditions in violation of the Fair Labor Standards Act. The class action could involve as many as 50,000 employees and former employees. The company’s stock closed Friday at $14.19 a share, down 26 cents.
McDonald's Ends Redbox Experiment. Saying that the Redbox no longer fit with its long-term strategy, McDonald's announced that it would abandon its Redbox kiosk development. Redboxes were mini-van-sized machines that dispensed a variety of grocery and convenience store items including toilet paper, shaving cream, eggs, milk, and paper towels. McDonald's intends to continue the DVD-rental service provided by the Redbox. Although Redbox was named as one of Time magazine's Best New Inventions of 2002 (see BBC article on Redbox), a McDonald's spokeswoman said that the experiment had not succeeded.
Former Governor of Georgia Takes on Junk Faxes in Court. Former Governor Roy Barnes appeared in the state appellate court yesterday to argue that the court should allow class actions against businesses who send junk faxes. Franchises that use fax distribution lists should be wary as class action lawyers, like the former governor, look to turn the 1991 federal Telephone Consumer Protection Act into the basis for a class action. The Act bans junk faxes and allows the complainant to recover $500 from the sender of the fax. After class action status was denied in the lower court, Barnes argued to the appellate court that a class action lawsuit is the only way to provide the relief the statute intended. According to Barnes, if each complainant is required to go to court, the business lawyers will request a jury trial and make the prosecution of the case financially impractical. The court took the case under consideration.
FBI Investigation of Former Domino's Executive. According to pizzamarketplace.com, the FBI is conducting a fraud investigation of former Domino's Pizza executive Tom Burnham. Burnham's former partner, Eric Wortham, told pizzamarketplace.com that he and Burnham were partners in the franchise company, Pizza World. Although Wortham later got of his dealings with Burnham, he says that Burnham cost him $1.8 million in a stock offering, $100,000 in attorneys' fees and his professional reputation. After only a year of working together, Wortham, the president and CEO of Pizza World, had no control over the company and Burnham controlled everything. By the end, Burnham abandoned the company and assigned the trademark back to Wortham. Pizza World has 12 franchises in the St. Louis area. This msn.com article also reports on three former investors in the Pizza World public offering who took their investment findings to the Manatee County, Florida sheriff's office and prompted the FBI investigation of Burnham. Burnham has filed a $10 million lawsuit against the three investors for defamation and interference with business relations.
Senate Reviews FASB Rules. The Washington Post reports in this article about the concerns of small businesses with respect to the new FASB accounting rules.
Noodles & Co. Expands into California. In a deal announced Monday, Noodles & Co. signed a development agreement with Great Circle Management LLC of Los Angeles to open 56 Noodles & Co. restaurants in the area in the next seven years. Great Circle enjoyed previous development success with the Krispy Kreme franchise in Southern California. Each Noodles & Co. restaurant will be a stand-alone unit of about 2,200 to 2,400 square feet and employ about 40 people. Great Circle hopes to have its first restaurant open and operating before next summer.
Burger King Gets into Trouble with the Ladies. In a couple of recent events, Burger King has lost some ground as the fast food company at the forefront of the women's movement. The first article from Timesleader.com reports that Burger King issued an apology to a nursing mother after a franchisee employee in Orem, Utah asked her to stop breast-feeding her baby in the dining room or leave. The mother sought an apology from the burger chain. In a prepared release, Burger King apologized for any inconvenience any of the guests experienced. Burger King stated, however, in the release that a female employee was simply responding to the complaint of another customer and never asked the woman to leave the restaurant. Under Utah law, women have the right to nurse anywhere.
Overseas, Burger King came under fire for an ad that depicted a woman with a number of bite marks. The Guardian Unlimited reports that Burger King ran an ad in which a woman woke up next to her partner and said, "I feel like I've been bitten." As she goes to the mirror, the camera shows bite marks all over her back and the tagline is "Got the urge for a big bite? Try the new Burger King Pepper Jack Stack." After receiving 83 complaints from consumers about the ad, the Independent Television Commission opened an investigation. The consumers, including one victim of domestic violence, complained that the ad depicted a violent relationship. The ITC cleared the ad, finding that most people would not interpret the ad as depicting domestic violence. Burger King, however, pulled the ad and apologized for any offense it caused.
Hold the Bun -- Low Carbs Give Lettuce a Boost. Here's another article on the low-carb efforts of some fast food restaurants to cater to their low-carb dieters. Hardee's introduces "The Low Carb Thickburger" wrapped in lettuce to the great joy of lettuce farmers everywhere. In-n-Out Burger also introduced a similar low-carb burger to provide Atkins friendly menu items to its customers.
Merriam Webster's McJob Definition Draws Fire. After listing including the definition of "McJob"("low paying dead end work") in its most recent dictionary, Merriam Webster received an open letter from McDonald's CEO, Jim Cantalupo saying that the definition was a "slap in the face to the twelve million people in the restaurant industry." According to The Register, Merriam has revised its web page for its new dictionary and removed the McJob definition. The dictionary claims that the web page revisions are unrelated to Cantalupo's letter and that the McJob definition remains in the published dictionary and will be restored to the web page.
Add Goldfinger to the List of KFC Critics. Who? Goldfinger. Not quite in the league with Paul McCartney, the LA-Based punk rock band Goldfinger shares at least one concern in common with the former Beatle -- They both protest against KFC's treatment of chickens. Goldfinger members have launched a world tour and at each stop along the way, the band plays a venue and stages protests at KFC restaurants. Their music may the only thing reaching the masses though. Said one KFC customer: "I think they're being very disrespectful to the Colonel."
The Future of Credit. In a story from smh.com in Australia, the author describes the revolutionary technology that will make credit cards obsolete. Based on fingerprint analysis technology, a San Francisco based company, Solidus Networks, Inc., has created a device that reads a customer's fingerprint and links it with the customer's credit or debit card account. The customer need only present valid identification and seven-digit password to pay for his purchases. The Thriftway in West Seattle is testing this pay-by-touch system, while McDonald's is testing it in California and Blockbuster is testing the machines in Texas and New York.
McDonald's May Sell Partner Brands. The speculation continues regarding McDonald's plans with respect to its Donato's Pizzeria, Chipotle Mexican Grill and Boston Market brands. Although McDonald's experienced a rise in same store sales for its burger chain, it announced that it would take fourth-quarter charges on its Partner Brands. The Wall Street Journal (subscription only) claims that this announcement signals the coming end for McDonald's partnership with these brands. Jim Cantalupo said that McDonald's would make a decision on the partner Brands by the end of the year.
The Future of Auto Dealerships. In a blog entry on October 7, we included an entry in the Wall Street Journal in which J.D. Power III advocated the development of auto superstores that would provide customers with comparable products from different manufacturers under the same roof. We haven't quite gotten there but this story from the Dallas Business Journal suggests that Dodge, Chrysler and Jeep are headed in the right direction. Chrysler has announced a dramatic departure from its traditional dealership requirements with the introduction of its Project Alpha program. The manufacturers now encourage metropolitan dealers to sell all three brands from one location rather than from multiple dealerships. Project Alpha has been introduced on a voluntary basis only but dealers involved in the program indicate that it's a more profitable way to operate the multiple dealership concept and it gives customers one place to shop for all of their Jeep-Dodge-Chrysler needs.
Even if You Got'em, You Probably Shouldn't Smoke'em. It's been a tough year for smokers -- they've been shoved outside in a dozen cities, towns and states. New York expanded its New York City indoor smoking ban statewide. Connecticut passed a smoking ban which went into effect for restaurants on October 1 and will become effective for cafes and bars in April 2004. Now, some efforts, backed by RJ Reynolds, are being made to reverse the trend of ousting smokers. In this article for the New Haven Register, the author reports that at least one state representative is attempting to modify the smoking ban, which has sparked another debate about the need for a statewide ban and the public health concerns.
Meanwhile, in Massachusetts, RJ Reynolds has started a grass-roots campaign using consumers that log on to the tobacco company's Smokers' Rights website. The Massachusetts legislature has introduced a bill that would extend the workplace smoking ban to restaurants, bars and taverns. In contrast to years past when the tobacco company lobbies held sway over a number of political arenas, Massachusetts Senate offices and advocates say that there has been no indication that any tobacco lobbyists are attempting to contact senators directly. The companies appear to be relying on the voices of their consumers to carry the message to the politicians.
Finally, north of the border, Manitoba is considering legislation to impose the first provincewide smoking ban in Canada.
Bruegger's New CEO Breathes New Life into Bagel Business. James Greco, the new CEO of Bruegger's Bagels, is excited about his plans to expand the Burlington, VT franchise company and to update the company's look and menu. Bruegger's has 250 stores in 18 states. As part of the Bruegger's overhaul, Greco plans to add new menu items, including new sandwiches, and to switch Bruegger's to a higher grade of coffee and potato chips. The company plans to open 100 new Bruegger's locations in the next three years.
Franchise Frontier -- Dating Services. The growing numbers of singles -- from the newly-divorced to the confirmed bachelor/bachelorettes, combined with an increasing public openness toward new ways to meet people, have apparently created a successful industry of matchmakers. Many of these matchmaker companies, from It's Just Lunch to Equally Yoked Christian Introductions, are franchises operated by local matchmakers in a national dating system. This article profiles the growing dating service industry in Arizona.
Oklahoma Judge Shuts Down Rx Depot. In an opinion issued yesterday, U.S. District Judge Claire Eagan in Tulsa ordered drugstore chain Rx Depot to close its outlets because their operation was illegal. Rx Depot offered customers the ability to place orders with Canadian drug manufacturers and to have the drugs shipped to their home at a far lower cost than the U.S. drugs approved by the FDA. Although Rx Depot shops do not stock the illegal Canadian drug products, the judge claimed that the company went too far: "This court is not unsympathetic to the predicament faced by individuals who cannot afford their prescription drugs at U.S. prices. However, the defendants are able to offer lower prices only because they facilitate illegal activity determined by Congress to harm the public interest." A copy of the order and the findings of fact/conclusion of law are available here: Rx Depot Order.pdf and Rx Depot Findings.pdf. Rx Depot has approximately 75 retail outlets across the United States operated by the company and by franchisees. Rx Depot plans to appeal the court's order.
More Information on the MEAL Act. The Menu Education and Labeling Act (or MEAL Act), if passed, would require restaurant chains with more than 20 restaurants to print nutritional information on their menus. Representative Rosa DeLauro, D-Conn, introduced the bill in the House of Representatives on Wednesday. Senator Tom Harkin, D-Iowa, plans to introduce a similar bill in the Senate. While the National Restaurant Association has argued that bill oversimplifies the obesity problem and that it will have no effect on consumers' exercise habits, the idea seems to be gaining momentum. The bill itself appears to be an amendment to the Nutrition Labeling and Education Act of 1990, which required all pre-packaged foods to contain nutrition information on the package. To view the bill, click here: MEAL Act.
Colonel, Meet Pammy . . . The blog has been following the story of Pamela Anderson's efforts as a PETA member to meet with the CEO of Kentucky Fried Chicken regarding KFC's treatment of chickens. MSN.com reports that the CEO will not take Ms. Anderson's calls. Now, according to PETA, two things will happen. First, Ms. Anderson will call for a boycott on her weekly radio show, raising one big question -- why does Pamela Anderson have a radio show? Second, PETA has decided to take action at KFC restaurants. In an apparently misguided effort to protect chickens, PETA has decided to show up at KFC units with their so-called "Buckets of Blood" which will contain "mutilated, gory chickens." PETA also plans to give children "Unhappy Meals." In its earlier campaigns against Burger King and McDonald's, PETA handed out BK crowns with animals impaled on the points of the crown and similar "Unhappy Meals." The PETA representative said, "After those kids started screaming, both McDonald’s and Burger King got reasonable." The good news is that the chickens finally have a voice -- a shrieking, horrified, soon-to-be-medicated child's voice. That's progress.
Other PETA Members Opt for a Different Approach. Rachel Bjork of Seattle is bicycling across the United States in protest of KFC's treatment of chickens. She hands out pamphlets at KFC restaurants along the way. Ms. Bjork has gotten as far as West Virginia so far. KFC has accused PETA of engaging in a misinformation campaign.
Marriott Settles New Orleans Lawsuit. Forbes reports that Marriott has settled the lawsuit against it by a New Orleans business partner that owns the New Orleans Ritz-Carlton. The suit alleged that Marriott was attempting to introduce another high-end hotel into the New Orleans market in breach of an agreement between plaintiff and Marriott. The parties settled the suit for an undisclosed sum that was not material to Marriott, according to a Marriott representative.
Canada Franchisor Hit With $174,000 For Violating Exclusive Territory Agreement. This case is another dispute over ambiguous language in a franchise agreement -- but here the franchisor lost for bad faith wording of the contract. The court held that the franchisor's wording of its obligations to respect its franchisee's exclusive territory was purposefully drafted to be ambiguous. After making this finding, the court held that the franchisor acted "contrary to standards of honesty, reasonableness and fairness." The court further rejected the franchisor's argument that the franchisor was not required to comply with the contract because the franchisee's was repeatedly late in submitting its paperwork and payments.
Debunking the Salad Myth. This ABC News report claims that fast food's efforts to offer healthy items may leave customers more confused than ever. According to the report, in some cases, salads may be as fattening as the obvious fatty choices. Some examples include the Wendy's Chicken Caesar that has 32 grams of fat and the Au Bon Pain Thai Chicken Salad has 32 grams of fat. Not surprisingly, salad dressings account for the high fat content in many salad offerings.
John Banzhaf Still Hot on Fast Food Litigation. Notwithstanding all of the state and federal efforts to ban obesity lawsuits against food manufacturers, Professor John Banzhaf claims that the fast food industry is liable to fat customers unless restaurants begin publishing fat content on their menus. Banzhaf, who teaches a class affectionately nicknamed "sue the bastards," claims that people understand that fast food is fattening but they don't know how fattening. CBS News reports that Banzhaf suggests an advisory label at fast food restaurants stating that a single fast food meal provides the recommended fat content for an entire day. While the restaurant industry may view Banzhaf as an extremist, he debunks this view by comparing his crusade to Gandhi's: "Remember Gandhi said, 'First they ignore you, then they ridicule you, then you win.'"
FDA May Agree With Banzhaf. In a related story on an issue of considerable interest to QSR franchisors, The Salt Lake Tribune reports that the Food and Drug Administration is considering a proposal to require restaurants to provide nutritional information for their menu items. The National Restaurant Association called the plan unworkable because many restaurants change their menus on a weekly or daily basis. The plans under consideration in state and federal legislatures require labeling for chains with more than 20 operating restaurants. Representative Rosa DeLauro (D-Conn.) plans to introduce legislation on Wednesday.