In The News

McDonald’s has expanded its build-your-own burger test trials in Southern California. 

The aim is to discover popular combinations that McDonald’s – which hasn’t managed to generate a hit recently – can export to the rest of the country and potentially the world.

Coca-Cola and Pepsi have taken similar approaches with new machines that let people mix their own beverage combos. (Coke’s Freestyle machines are in McDonald’s stores.)

In the McDonald’s model, customers place their orders via tablet, which means the orders can be analysed to learn which ingredient combinations are most popular.

BYBH will likely become the second largest shareholder in CGF with a stake of approximately 15%. Recognising the significance of this investment, a nominee of BYBH will be appointed to the new Esquires China board of directors. BYBH is ultimately owned by the Provincial Government of Yunnan province in China which controls a multi-billion dollar investment portfolio with a strong focus on property and covering sectors including Hotels, Hospitals, Education, Finance and Insurance.

CGF Chairman Keith Jackson said this was an outstanding opportunity for CGF to welcome a highly reputable cornerstone shareholder to CGF who is already very knowledgeable about the business and is committed to the growth of the brand internationally. In addition owning the China master franchise will give CGF greater flexibility for increased growth in China.

'Franchising is the target of a well-financed, national campaign by the Service Employees International Union. The SEIU has launched a multi-pronged assault at the local, state and national levels of government.

The SEIU wants to undermine franchise contracts so it can more easily unionize entire franchise systems. The union and its affiliates want government officials to designate entire franchise systems as a single unit rather than the collection of separate, small business owners they actually are.

The reason is simple: It is much more difficult for unions to organize employees of thousands of independent small businesses than to unionize a single, large entity.

The effort is a desperate, special-interest ploy to replenish the union’s dwindling coffers and declining private-sector membership. The policy advanced by SEIU is meritless and stands in sharp contrast to years of federal and state legal and regulatory precedent.'

Restaurant companies will be among the first merchants to integrate Apple Pay, a phone-payment platform that Apple Inc. unveiled Tuesday. Apple said that the platform will launch in October at such restaurants brands as Panera Bread and Starbucks, and it is planning a rollout at Subway.

The technology company worked with McDonald’s and Subway to develop the platform. McDonald’s said it would accept Apple Pay at “virtually all” of its 14,000 U.S. restaurants when it is released in October.

New Zealand is the easiest country in the world to start a business, according to a report that also ranked this country second out of 144 nations for the "soundness" of its banking sector.

The World Economic Forum's latest Global Competitiveness Index ranked this country first in terms of the official procedures required to establish a company.

Only one procedure was needed in New Zealand, compared with other countries where multiple procedures could be required.

A company can be established in New Zealand through a relatively simple online process.

This country was also ranked first in the world in terms of the number of days it took to set up a business. It took only half a day to establish a firm here, according to the report.

Australia was ranked 10th in terms of procedures required (3) and fifth on the time measure (2.5 days).

Icecream and cake treat franchise Wendy's has been sold for A$10 million ($11.2 million) to a Singapore company looking to expand the chain into Asia.

Global Food Retail Group, a subsidiary of Singapore listed company Global Yellow Pages, acquired the rights for the Wendy's Supa Sundaes brand from Wendy's Supa Sundaes and Innovation Ice Cream.

Global Food chief executive Stanley Tan said the group would look to grow the brand in Asia, especially China.

The company had been looking for investments in brands and franchise systems which it could make global, he said.

Moss opened the first Original California Burrito Company store in Auckland in 2011. The business grew rapidly into a 10-store chain in New Zealand and expanded to Australia and the Netherlands.

But the Aussie stores and all apart from one in this country closed down after bank funding for the business dried up and rents went unpaid. The Manukau Original California Burrito outlet, which was run by a franchisee, is still operating, as is the Netherlands store, Moss said.

Last year Moss blamed the collapse on a legal battle he was having with his former wife, Lisa Krukziener, who was also a shareholder and director of a raft of companies that operated the burrito chain. He claimed the legal issues had caused his bank to withdraw funding.

Crest Commercial Cleaning managing director Grant McLauchlan says any claim that a campaign through Whale Oil influenced the Government's decision to open contracts up to non-BSC members is ridiculous.

"We have not specifically paid Carrick Graham to run a smear campaign on Whale Oil," he said.

Grant McLauchlan admits public relations work was done for him by Mr Graham against Mr Lee-Lo and the BSC, but it was through the mainstream media and public channels including submissions to the Government.

Veritas Investments, which owns the Mad Butcher franchise business, has entered into a conditional agreement to buy the gourmet-supermarket chain, Nosh Food Market from Nosh Management for an undisclosed sum.

The Auckland-based company said the acquisition will be funded by a facility of up to $5 million with ANZ Bank, without disclosing the purchase price saying it was "confidential and is not material". Nosh earns annual revenue of $25 million from its six Auckland region stores and one Mount Maunganui outlet, Veritas said. It employs 130 staff, who have all been offered ongoing employment as part of the contract.

'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.'

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.

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.

“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.

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."

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.

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.

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 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.

Also read QSR magazine's report.

"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."

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

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.

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.'