In The News 
RFG to buy La Porchetta and Cafe2U
29th August 2014
Australian listed company Retail Food Group has announced it is to buy the mobile coffee franchise Cafe2U and Italian-themed casual dining franchise La Porchetta. RFG already owns nine other franchise brands, including The Coffee Guy, Brumby's Bakery and bb's Cafe.
'Established in Sydney in 2000, Cafe2U is the world’s largest mobile coffee franchise concept comprising
approximately 236 franchised units operating in Australia (157 units), New Zealand (11 units), Great Britain
(62 units), the USA (5 units) and South Africa (1 unit).
The acquisition complements RFG’s November 2012 acquisition of The Coffee Guy Brand System,
positioning the Company as clear market leader within the mobile coffee segment in Australia and New
Zealand with a combined population of 175 units and 66 units respectively.
[RFG CEO Tony Alford] noted that the transaction consolidates another impressive retail coffee system under the
Company’s umbrella, delivering further strategic benefits which include immediate scale in the Australian
market, manufacturing and coffee roasting synergies, and expanded penetration in key offshore markets.
“The transaction validates the position expressed to the market in 2012 that mobile coffee represents an industry segment ripe for consolidation, and possessing of genuine opportunity for international exploitation."
“Whilst RFG’s intention is to retain and develop the individual identities of both the Cafe2U and The Coffee
Guy Brand Systems, the acquisition generates significant synergistic opportunities. These include realisation
of the enhanced roasting capacity afforded by the Company’s recently established Yatala roasting facility,
potential for collaboration across a range of areas including marketing, research and development, and
other direct benefits that will enable accelerated growth of RFG’s coffee business,” he said.'
Strong end to year for Mad Butcher group
27th August 2014
The Mad Butcher's listed parent company, Veritas, made an after-tax profit of $4.3 million for the year ending June 30.
The Mad Butcher reported slower than expected sales "over an unseasonal summer period" and faced stronger competition from supermarkets. But that was offset by a boost from the joint-venture interest in Kiwi Pacific Foods.
Veritas bought the Mad Butcher in May last year and a half share of Kiwi Pacific Foods in December last year.
"We were particularly pleased with the last quarter's results from the Mad Butcher business following a difficult summer trading period," Mad Butcher chief executive Michael Morton said.
Burger King/Tim Hortons to make massive tax savings through merger?
26th August 2014
Burger King has said it is in takeover talks with Tim Hortons, the Canadian coffee and doughnut chain. A merger would create the world's third-largest fast-food combine, one with a stock market value of about $18bn (£10.9bn; 13.6bn euros).
The firms have said that any new group would have its HQ in Canada, where corporate taxes are lower.
These so-called "tax inversion" deals are attracting increasing criticism in the US, where President Barack Obama is understood to be looking at how they can be prevented in future.
The US corporate tax rate is 35%, but 26.5% in Ontario, Canada, where Tim Hortons is based.
McDonald's to retail branded coffee in US supermarkets
22nd August 2014
McDonald's has announced it will enter the $11 billion US retail coffee market in a partnership with Kraft following successful testing of the concept in supermarkets earlier this year. The coffee bags aim to capitalise on the popularity of the McCafe brand. The move is yet another initiative - like Georgie Pie in New Zealand - aimed at expanding McDonald's market away from its core burger business.
“We think this will increase the awareness of the McCafé brand beyond its current in-restaurant strength and that will encourage more people to try it. I think it allows us to tap into that very large base of coffee drinkers who now make their coffee at home. This will give us access to them as well,” Greg Watson, senior VP, McDonald’s U.S. Menu Innovation told BurgerBusiness.com.
Franchisee bans Maori greeting;
franchisor disagrees
22nd August 2014
An employee at KiwiYo's Whangarei franchise has been told she can't greet customers by saying 'kia ora', but the franchisor says they have no problem with it being added to the standardised greeting script. A report on the Stuff website (which confuses the issue by referring to the franchise as the 'franchise owner') suggests that the issue is already being escalated via social media despite the franchisor's response.
KiwiYo chief executive Norman Markgraaff said it was company policy that customers be welcomed with the scripted greeting, but the company had no problem if a staff member chose to add "kia ora" to the beginning of the presentation.
"In fact, we will actually promote the use of this form of welcome across our New Zealand stores and in our international stores, as it promotes the New Zealandness of our brand," Markgraaff said.
"I hope this position clarifies this highly emotionally charged issue, that I believe is being pulled completely out of proportion and can become political fodder which we have no intention to become involved with, and request reconciliation between the parties involved."
US decision finds franchisors not employers
19th August 2014
As the National Labor Relations Board in the US finds the McDonald's franchisor is a 'joint employer' of franchisees' staff, in a separate case a US Court of Appeals has reversed a federal court's decision as to whether a pizza franchisor can be considered the employer of a franchisee's worker. While every case is judged on its individual circumstances, the differing outcomes point to the continuing confusion over the independent business status of franchisees.
DLA Piper attorneys John A. Hughes and Stephanie Zosak reported last Friday that under the economic reality test, courts consider whether the alleged employer: (1) possessed the power to hire and fire employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records.
The attorneys state that although Plackis met with the franchisees and provided advice on improving the franchisee’s profitability, the appeals court held that the franchisor did not possess the power to hire or fire the kitchen employee.
The U.S. Court of Appeals for the Fifth Circuit also concluded that the employee failed to present evidence that Plackis supervised and controlled employee work schedules or conditions of employment in support of the second element of the economic reality test.
Read more on the latest decision.
Read more on the NLRB ruling about McDonald's employer status.
Burger King to put energy labels on menu boards
14th August 2014
Burger King is to display the total kilojoules per product on its menu boards but other chains will not follow suit, saying the information is available elsewhere in store. It's the latest move as fast food chains battle for the moral high ground in the face of continuing attacks from the healthy eating lobby.
Auckland nutritionist Lynda Smith said Burger King's move was positive because a lot of people were unaware of how much energy was in their food.
"It could influence what they buy - they might perhaps buy a smaller serve of fries or perhaps another type of burger, not such a high-energy burger."
Nutrition Foundation dietitian Sarah Hanrahan said displaying the energy in kilojoules was a "great place to start".
"It's a good first step, but you could go further. You do need context around it."
She urged fast food restaurants to adopt the healthy star rating system - an interpretive system endorsed by the Government which will be adopted voluntarily.
Esquires to open in Indonesia
12th August 2014
Economy just taking a breather, says Westpac
12th August 2014
New depot and GM for Fastway Auckland
11th August 2014
Next IFA chairman has plans for franchisees to increase stake in franchisor companies
11th August 2014
Aziz Hashim is the multi-unit franchisee who will take over as chairman of America's International Franchise Association in 2016. It's unusual for the IFA to have a franchisee at the top, but Pakistani-born Hashim is an unusual man. He's switched brands many times in building his multi-store empire and is now launching a private equity fund to buy and transform under-performing franchisors.
He’s the embodiment of a shifting balance of power over the last few years that puts many multi-unit operators on equal footing with, or in many cases several rungs above, the franchisor whose stores they buy and whose rules they follow.
Hashim is a vocal critic of franchisors who don’t treat their franchisees as partners, and he uses his bully pulpit to say so as the rising chairman of the International Franchise Association. (When he becomes chairman in 2016, he will be one of just a few franchisees to hold the post in IFA history.) He scoffs when, at conferences, the spotlight always shines on franchisor execs and rarely on franchisees. “CEOs of brands with literally 20 stores will be keynote speakers, and in the audience are franchisees with 300 stores. And somehow that franchisor knows more?” he says. “I find it comical.”
He knows which brands he’d never touch. “You look at the boards of companies that purport to be franchisors, and you will be hard-pressed to find a franchisee anywhere. How strange is that?” he says, adding such companies often lace their disdain of franchisees throughout their management practices. “I think the industry needs to take a stronger look at the wisdom and talent of franchisees and use that.”
What’s surprising to him is how few people do their due diligence, by calling multiple current franchisees before deciding to buy. “I’ve been in 10 brands and I’ve been called probably three times” over the years, he says, by prospective franchisees.
The National Labor Relations Board in the US has told McDonald's it will allow workers filing labour complaints to treat the franchisor company as a 'joint employer' with its franchisees. Industry experts say it's a dangerous precedent for the food franchise sector — and one that goes against at least 30 years of established case law.
“The staff decision issued today by the National Labor Relations Board recommending that McDonald’s and its franchisees should be considered joint employers gives a whole new meaning to the word ‘outrageous,’ David French, the National Retail Federation’s senior vice president for government relations, said in a statement.
McDonald’s and other fast-food operators — pressured by union groups in recent months to raise wages and improve working conditions — have said franchisees are independent business owners who set their own policies. But activists said the decision was proof McDonald’s controls its franchisees more than it claims to.
“The reality is that McDonald’s requires franchisees to adhere to such regimented rules and regulations that there’s no doubt who’s really in charge,” said Micah Wissinger, an attorney at Levy Ratner who brought the case on behalf of McDonald’s workers in New York City.
Franchisors still positive about growth prospects
8th August 2014
Burger King losses grow
29th July 2014
Increased competition in the burger market, as well as increased costs, are being blamed for the $4.4 million loss made by Burger King in New Zealand in 2013. The loss has increased from $1.9 million in 2012. The New Zealand operation is owned by US private equity firm Blackstone, and is not sub-franchised to individual operators here.
"Burger King New Zealand acknowledges 2013's increased competitive environment, however we remain focused on key business strategies that are right for our business," chief executive John Hunter said in an emailed statement. "Our menu innovation, restaurant expansion and refurbishment programme plus our operational and guest experience strategies remain our core focus for the continued growth of Burger King New Zealand."
The heat is on for Jamaica Blue chefs
29th July 2014
Georgie Pie to add more flavours?
21st July 2014
McDonald's head Patrick Wilson says the company has sold more than 3 million pies since re-launching Georgie Pie last year and is preparing to add more flavours to the range. Despite initial criticism of the price of the pies, they have proved a successful addition to McDonald's menu and Wilson says he is confident of the long-term future of the Georgie Pie brand.
Wilson said the company had been collecting customer feedback through social media about which pie flavours to bring back next. McDonald's will be trialling an apple and blackberry sweet pie from this week, until they run out. The trial would consist of 30,000 pies available in McDonald's in South Auckland, Hamilton, Palmerston North and Christchurch
Franchise awards to recognise field support managers
18th July 2014
Franchise pioneer Colin Taylor dies
15th July 2014
It is with great sadness that we have to report that one of the pioneers of New Zealand franchising, Colin Taylor, has passed away at the age of 85.
Pizza Hut under fire over call centre redundancies
14th July 2014
A 74-year-old is among 15 people losing their jobs as Pizza Hut closes its call centre in reponse to changing communication needs. Although the company is offering a longer notice period than required, the redundancies have attracted calls for mandatory severance pay.
Supporters of mandatory severance pay said it was time to align our severance pay model with other developed economies. But Employment advocate Danny Gelb said compulsory redundancy would increase costs to business "by stealth".
Small Business Voice chief executive Max Whitehead said small and medium-sized enterprises should be exempt from compulsory redundancy pay laws, as in Australia.
He said a mandatory regime would have destroyed small firms during the recession — but said he was "horrified" to hear of staff who had worked at big firms for almost 20 years getting no redundancy pay.
New names on FANZ Board
13th July 2014
Vale Bryce Bell
8th July 2014
We regret to report the death of Bryce Bell, one of the founding fathers of franchising in Australasia. Stewart Germann offers this appreciation
Tauranga fertile soil for double franchise winners
7th July 2014
Green Acres restraint case' a win for franchising'
27th June 2014
Restaurant Brands 'going from strength to strength'
26th June 2014
Carl's Jr has the potential to become a 'cash flow powerhouse' once quality problems in the supply chain are sorted out, Restaurant Brands told shareholders at its AGM today. However, the company is struggling to find suitable locations for any of its brands in central Auckland, which CEO Russel Creedy described as 'a pain in the backside.'
Speaking at the listed cafe and fast food company's annual general meeting in Auckland today, chairman Ted van Arkel said most shareholders would be satisfied with the return on their investment over the past year.
'Restaurant Brands is a business going from strength to strength,' Arkel said.
'We have the core competencies, the financial muscle and scale to capitalise on any opportunities that do arise.'
The Coffee Club turns 50 in New Zealand
21st June 2014
Franchise association sues a city - US
16th June 2014
Esquires opens 14th Chinese store
15th June 2014
BurgerFuel reports record system sales
10th June 2014
Why the Hell would you eat it?
7th June 2014
Cleaning franchises free to seek government business
30th May 2014
Carl's Jr. pushes Restaurant Brands sales higher
28th May 2014
With sales up 60 percent to $3.7 million, Carl's Jr. remains the star performer in Restaurant Brands portfolio as the company continues to adjust its store mix. Restaurant Brands is opening new Cal's Jr stores (the latest in Gisborne), closing Starbucks outlets, franchising regional and lower volume Pizza Hut outlets and increasing promotional activity around its biggest brand, KFC, pending a planned revamp of KFC stores nationwide.
Restaurant Brands' total sales during the first quarter (12 weeks ended 19 May 2014) were $77.7 million, an increase of 5.9% or $4.3 million on the equivalent period last year, with all four brandsrecording positive sales growth.
Of the total increase in sales KFC was the key contributor at $2.8 million with Carl’s Jr. contributing a further $1.4 million.
Same store sales for the company were up 4.3% with strong growth in KFC which grew 5.0%. Starbucks Coffee was up 5.5% and Pizza Hut up 9.3%. Carl’s Jr was down 36.2% as it rolled over very high new store opening sales in the four stores open in the prior year.
McDonald's launches soccer ball burgers
22nd May 2014
Last year's drought hits Mad Butcher sales
22nd May 2014
Veritas Investments, owners of the Mad Butcher franchise, says that sales last year were affected by product shortages created by last year's drought.
Third-quarter sales at the Mad Butcher business were weighed down by product shortages created by last year's drought, and aren't expected to recover in the fourth quarter. Still, the company's half-stake in Kiwi Pacific Foods, which makes hamburger patties for Burger King, is expected to make up for the shortfall.
Cafe2U beats coffee's big guns
16th May 2014
New date for financial workout course
14th May 2014
More positive signs for NZ economy
13th May 2014
Listed franchise's valuation report questioned
13th May 2014
Starbucks uses 'secret menu' to attract kids in US
7th May 2014
Starbucks in the US has launched a 'secret menu' that isn't advertised in store - you can only find out about it through social media. Bllomberg writer Mohammed El-Erian is applauding the move as a way of enabling and empowering customers - as well as selling more coffee.
Starbucks has gone well beyond allowing people to build custom orders around its traditional coffee drinks.
Last weekend, before my daughter and I left home, she had already searched for “Starbucks secret menu” on the computer and narrowed her choices to a handful of drinks (all of which involved various ingredients from Starbucks' menu for adult drinks).
By the time we reached the store, my daughter had decided on a “Rolo Frap," but neither the Starbucks’ employee taking her order nor the barista had heard of the drink. Rather than disappoint my daughter, they asked for the recipe to make it and we grabbed it online (using the free and easy-to-access Starbucks Wi-Fi, of course).
Starbucks prepared and priced a drink that they had never heard of before and my daughter was delighted -- so much so that she took a picture of the drink and posted it on her Instagram before she even tasted it.
NZ business broker opens in US
6th May 2014
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