January: Setting course for a New Year In this issue... Video: Take a ride down an airline landing strip that you won't easily forget. Click Here Street Smarts: Funding a New Franchise With Your 401k Industry Focus: Thriving in a Real Estate Slump, Continued Guest Column: The Making of a Regional Franchise Association

News You Can Use Carl's Jr. Founder Carl Karcher Passes Away at 90 Quick Service Chains Withstand Economic Slowdown Figaro's Pizza Opens in Abu Dhabi Casual Chains Aim to Drive Sales with Delivery and Catering Dunkin Brands' Airs Environmental Plan Rapid Growth Continues for Americas Best Value Inn Featured Supplier We Thank Our Sponsors FREE White Papers NEW! Click Here to see titles and download our free White Papers. Subscribe | Unsubscribe to the Newsletter

For years now, droves of corporate refugees have been looking at franchising as a way out of the corporate jungle. Of course, franchising requires an investment and in the current economic climate, money isn't as easy to come by as it once was. But did you know you could tap your 401k to fund a new franchise business? To get the low-down on how this works, we went to the experts at DRDA, a CPA and business consulting firm that specializes in loan sourcing and alternative financing.

"Most people don't realize they can access qualified retirement funds to invest in their own business without paying taxes, penalties, or interest," says Doug Dickey, managing partner at DRDA. To help people do this, the firm has created a structured product called BORSA (business owner's retirement savings account).

Dickey says there are only four steps to making this work. "It really is a simple process," he says. Here are the four steps:

1. Establish a C-Corporation.
2. Adopt a plan.
3. Roll money over from an existing plan into the new plan.
4. Make a participant investment in the stock of your new corporation.

"When buying a franchise, you will establish some sort of protective entity to buy and operate that business," Dickey explains. "That's your C-Corporation. Then you take the majority of the cash from your retirement account to put equity into your company." To do that, Dickey says, the C-Corporation adopts a 401k profit sharing plan that needs to have two additional attributes. "The first attribute is different than most 401k plans because it allows for the receipt of rollover moneys from other qualified plans."

Once your retirement money is transferred into the newly adopted retirement plan, the second attribute kicks in that lets you invest in anything allowed by law. "Specifically," says Dickey, "we enable you to invest in qualifying employer securities." Basically that gives you the ability to buy stock in your employer-which is your own company now. The result: now you have cash inside your corporation that you control without having to pay any taxes, penalties, or interest on the money to get it there.

*Note: BORSA is a trademarked name.

For more information:
Phone: 281-954-6032
Website: www.borsaplan.com

Thriving in a Real Estate Slump, Continued

For this issue, we wanted to find out what it's like for those in the trenches, trying to make a living from selling real estate. To get some answers, we went to Jim Barron, a real estate broker in Florida who is a multiunit franchisee with Exit Realty.

Florida is one of the hardest hit states-only California has a higher number of foreclosures. And like California, it was speculative excess that led to high home prices and unaffordable mortgages. Miami-Dade is going through the worst condo bust since 1975 while excess inventory plagues the rest of the state, a problem that probably won't be mopped up until 2010.

"We do about 70% residential and new construction and that's roughly where the biggest decline has been, due to builders creating a glut," says Barron. "I expect a lag in new home sales for the next 12 to 18 months."

As a business owner, Barron dealt with a slowing market with some belt tightening, cutting any unnecessary expenses and consolidating a couple of offices. Then the company got back to basics and increased training and re-education, at least for the agents that decided to stick it out. "Many agents are leaving the business right now because they can't make a living," says Barron, "and that's really helping the ones who are staying."

In recent years, home owners often tried to go it alone to save themselves a few thousand dollars in broker fees. But Barron says, that's not happening today. "In this buyer's market, home owners know they have to hire a professional. With the average days on the market now between 90 and 100 days on the market-in some states it's longer-they need to have a marketing plan. We as realtors can't control the market, but we can always control the marketing plan. In almost any market you want a professional realtor; in this market you need one."

Does it help to be part of a franchise organization? "Absolutely it has," says Barron. "In any type of sales capacity, you want to have name recognition. And a franchise creates the perception that you're bigger than you are."

We all know the bad news, but Barron says there's plenty of good news. "The excess inventory and price corrections have created a very good opportunity for buyers." Some buyers are people who have always wanted to move to Florida, but couldn't afford the over-inflated prices. "There are also a lot of buyers coming from overseas, investing with the strong English pound and even stronger Euro," says Barron. "And Canadians are now the single biggest buyers (collectively) of condos and residences in the state."

The Making of a Regional Franchise Association

By: Jim Coen

Owning your own business is part of the American Dream. The pursuit of that dream has always been a part of the United States called New England. New England has a rich history of invention, innovation, strong entrepreneurial spirit, and a highly supportive network of institutions that has made New England a great place to launch a business.

Since 1932, when Howard Johnson franchised the first Howard Johnson's Restaurant in Orleans, MA, franchising has played an important role in the New England economy.

Franchising, more than ever before, has an unprecedented opportunity to make a major positive impact on the future New England economy. A 2004-05 study conducted by PriceWaterhouseCoppers, on behalf of the IFA, found that in New England over 750,000 jobs are a result of franchising; the total output is over 70 billion dollars a year; and there are over 32,000 franchise establishments in the six New England States.

The seed for the New England Franchise Association (NEFA) was first planted about 20 years ago when the International Franchise Association (IFA) started the First Tuesday Program. The First Tuesday Program was a way for IFA Members to interact locally on the first Tuesday of each quarter of the year. The IFA saw the First Tuesday Program as a way to make a "high touch" connection to members at a local level.

Later the IFA created the Franchise Business Networks (FBN) to help the IFA grow membership and also help IFA Members network locally. At some point the IFA decided to merge the two groups together. That is when the New England Franchise Business Network (NEFBN) was formed. In January 2007 NEFBN become NEFA.

The mission of NEFA is: "Promoting the responsible growth of franchising throughout New England by fostering positive communication, learning and best practices." NEFA is an association dedicated to the entire franchise community in New England, including: franchisors, franchisees, investors, vendors, and customers.

NEFA is a 501c (6) non profit corporation and is governed by a Board of Directors, with Steve Dubin, of PR Works as President, Suzanne Cummings of the Law Offices of Suzanne Cummings, as Clerk. The writer, Jim Coen, is the Executive Director.

As the Executive Director of NEFA my role is to provide the management and support for NEFA to continue its mission and continue to build its membership. NEFA currently has over 125 members and has just scratched the surface of the potential membership. NEFA membership is open to everyone. Franchisors from all over the country are invited to join; the only stipulation is that the franchisor have at least one unit open in New England.

Some of the largest and most respected franchise brands in the world are headquartered in New England including: Subway, Dunkin Donuts, Baskin Robbins, Fantastic Sams, Ben & Jerry's Ice Cream, Brueggers, Friendly's, Pizzeria Uno's, Au Bon Pain, and Edible Arranngements, to name a few.

Members of NEFA include franchisors, franchisee associations such as the Dunkin Donuts Independent Franchise Owners (DDIFO), attorneys that represent franchisors as well as attorneys that represent franchisees, area developers, vendors, and franchisees.

NEFA produces at least 5 events per year. The events include time for networking, a speaker, dinner, and a legal and legislative update, which is provided by Michael Radin of Tarlow, Breed, Hart & Rodgers, P.C. The speakers scheduled for 2008 include: Peter Birkeland, Birkeland Consultants; Leonard Swartz, iFranchise Group; Ed Teixeira, Franchise Know How; Fred Berni, Dynamic Performance Systems and Michael Isakson, ServiceMaster.

NEFA has also started a weblog entitled: Franchising in New England (http://www.nefranchise.org/blog). Franchising in New England features news and announcements from and about NEFA and its Members.

To learn more about NEFA visit: www.nefranchise.org

About the Author: Jim Coen is Executive Director of the New England Franchise Association (NEFA). You can reach Jim at 617-469-3002 or email him at Jimcoen@nefranchise.org

Carl's Jr. Founder Carl Karcher Passes Away at 90

Fast-food legend Carl N. Karcher, whose $326 investment to launch a Los Angeles hot dog cart in 1941 grew into the 3,000-plus branch CKE Restaurants system, died this month in Fullerton, California at the age of 90. The Ohio native, who added more L.A. carts before moving to Anaheim in 1945 and opening Carl's Drive-In Barbeque, debuted Carl's Jr. in 1956 and began expanding the burger chain in Orange County, CA. The chain went on to pioneer such quick-service breakthroughs as carpeted dining, padded seats, landscaped buildings, limited table service, charbroiled chicken breast sandwiches and self-service beverage fountains. He took Anaheim-based Carl Karcher Enterprises public in 1981 when there were 300 Carl's Jr. branches. CKE and its franchisees today operate 1,121 Carl's Jr. and 1,915 Hardee's restaurants. (Nation's Restaurant News, 1/13/08)

Quick Service Chains Withstand Economic Slowdown

According to a recent report by Bear Stearns & Co. Inc., the largest quick-service chains have been able to withstand the one-two punch of depressed consumer spending and rising costs by rolling out value meals to spark traffic and relying on mostly franchised business models to insulate themselves from food and labor cost increases. The report downgraded the entire restaurant sector largely because of a weakening U.S. economy but continues to favor quick-service restaurant chains "where same-store sales and traffic have held up well and franchised business systems offer partial insulation from high food and labor costs."

However, a successful 2008 for quick-service chains won't be accomplished without continued product news and operational changes, analysts concluded. While such chains as McDonald's, Burger King, Jack in the Box and Sonic have benefited from consumers' trading down from higher-priced segments, they also have found success with longer operating hours, expanded daypart offerings and improved menu quality and speed of service. (Nation's Restaurant News, 1/14/08)

Figaro's Pizza Opens in Abu Dhabi

The first Figaro's Pizza store planned for the Middle East has opened in Abu Dhabi. Sense Gourmet, a subsidiary of Abu Dubai-based Foodco Holding, signed an exclusive franchising agreement with Figaro's Pizza in early 2007 to open stores in seven Middle Eastern countries. On Jan 17, the group opened their first location in the Marina Mall in Abu Dhabi - the first of four Figaro's Pizza restaurants it will open this year.

Plans call for the opening of 35 locations in the United Arab Emirates alone with two locations in Abu Dhabi, two in Dubai and one in Sharjah to kick off the expansion. Additional locations are planned for Kuwait, Saudi Arabia, Qatar, Oman, Bahrain and Egypt. In addition to expanding to the Middle East, Salem, Oregon-based Figaro's Pizza also recently signed a franchising agreement for Mexico where 50 stores are expected to open. Figaro's currently has more than 100 locations. (Portland Business Journal, 1/23/08)

Casual Chains Aim to Drive Sales with Delivery and Catering

Casual-dining restaurants that are struggling with a sectorwide slump as consumers rein in discretionary spending are starting to look more intensely at delivery and catering for new revenue streams. For example, Maggiano's Little Italy, the 41-unit division of Brinker International Inc. of Dallas, launched home delivery in August. Columbus, Ohio-based Damon's Grill also has launched a companywide catering program for the 74-unit chain. And 238 domestic units of Sizzler are watching an expansion of delivery operations by some franchisees as the nearly 35 franchisor-owned Sizzlers delve into catering through an initiative begun last month. (Nation's Restaurant News, 12/17/07)

Dunkin' Brands Inc. detailed plans this month for a number of environmentally focused initiatives within its Dunkin Donuts and Baskin Robbins quick-service franchise chains. The planned efforts include the construction of a restaurant in St. Petersburg, Florida that would meet the standards of the Leadership in Energy and Environmental Design (LEED); the modification of current store designs to make them more ecofriendly; and the sponsorship of carpooling and recycling programs for the public.

The LEED certified pilot store in Florida would be constructed during the second half of the year. Structures bearing the LEED designation are popularly known as green buildings. Dunkin' Brands' system includes about 7,300 franchised Dunkin' Donuts units and 5,830 Baskin-Robbins units. (Nation's Restaurant News, 1/9/08)

Rapid Growth Continues for Americas Best Value Inn

Americas Best Value Inn's (ABVI), which now has 768 properties in its system, grew by more than 27% in 2007, adding some 9,600 rooms. The company now ranks at number eight in number of hotels worldwide and grew its marketing budget by $400,000 last year as a result of its expansion. Reservation growth for the brand jumped 28% during 2007, while revenue growth increased 17% overall.

ABVI said looking ahead for 2008, member initiatives include making customer service a priority and having members invest in their assets. The brand, which has expanded into Canada and China, also will be ramping up its marketing efforts using the slogan "The Stars Come Out At Night." (Hotelbusiness.com, 1/6/2008)