Wiggin and Dana's Franchise Law Blog

Espresso Skinny RIF Sans Dolce

Coffee system giant Starbucks Corp. is laying off 220 workers, not refilling 380 jobs, slowing development and stirring up its organization management in order to try to improve performance, according to this article. Providing some insight into troubles at the chain, recent additions to the lineup, warm breakfast sandwiches, are being pushed out by the old timers, coffee beans, in part because the egg, cheese, bacon and ham competed with the coffee aroma in stores.

Big Chill

International Dairy Queen's plan to convert existing outlets to its new DQ Grill & Chill or DQ/Orange Julius concepts has had a frosty reception, according to this article. Snowballing opposition has four Dairy Queen franchisee associations spanning across ten states in the U.S. District Court to stop what they allege is a forced conversion program and unreasonable requirement, imposing a mandatory investment of thousands of dollars. The franchisees also allege problems with surcharges added to the prices of certain products, claiming that the surcharges should be credited against franchisee advertising contribution requirements, and that imposing the surcharge violates franchise agreements which do not require any advertising contributions.

Turning Green to Green

Commerce Bancorp founder and former CEO Vernon W. Hill II has made a major investment in Saladworks Incorporated, the Conshohocken, Pennsylvania based salad chain according to this article. Commerce Bank was just sold to Toronto-Dominion Bank for $8.5 billion, which may have provided Mr. Hill with a source for his investment.

Increasing the Sizzle

Pacific Equity Partners, an Australian based firm, announced plans to sell the Sizzler family steakhouse system, fanning the flames of speculation that it may return to American ownership according to this article. Pacific Equity Partners acquired the restaurant system in 2005 from Worldwide Restaurant Concepts, took it private, and now after infusing the system with greater profitability, is ready to flip it.

Franchising Loses Pioneer

Franchise visionary Tony Martino, the founder and chairman of Maaco Collision Repair & Auto Painting, died on Sunday, January 27, 2008 at the age of 75. His extensive career in franchising began in 1959, when he opened a repair shop specializing in transmission repair. Naming his company Aamco Transmissions, he used his own initials to take advantage of the favorable Yellow Pages placement. After selling his interest in Aamco in 1967, he turned his attention to a new business concept specializing in low cost, high quality auto painting and collision repair. Today, there are almost 500 Maaco centers throughout the country. In 1998, Tony also founded the Goddard School for Early Child Development, and developed it into a successful nationwide franchise before selling it in 2003. Having risen from humble beginnings in Northeast Philadelphia, Tony was known as a brilliant, tireless and charismatic businessman, as well as a good-hearted and generous friend and mentor to many. In recent years, lawyers at Wiggin and Dana had the privilege of getting to know Tony in the course of representing Maaco, and we will miss him.