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How can McDonald’s make money selling 99-cent burgers? That’s what Eric Kuang at Seeking Alpha wondered.  Then Kuang, founder of GuruFocus Capital Management, LLC., answered his own question… reinforced with some compelling stats showing why McDonald’s is thriving while others are struggling:

Well, maybe the company doesn’t make money off the 99-Cent burgers. Instead, the 99-Cent burgers are its symbols for value to attract customers. Once the customers are in the store or in the drive-thru line, they are bound to buy things other than 99-Cent burgers. They make money off those menu items, such as big Macs, hash browns, soft drinks, and all the other more expensive items.

As a matter of fact, according to the data available in Gurufocus, the gross margin for the fast food chain was 24.3% ten years ago in 1998, then it shrank to 13.7% in 2002, but has made a major comeback in recent years. In 2007, it was back to 24.3% again, and as of September 30, 2008, McDonald’s gross margin was at 28.4%, a high for the past ten years.

Gross margin is all important in determining whether a company worth the investment money…. despite the carnage of the general market, McDonald’s was up about 2% for the year 2008 whereas S&P declined 38.5%.

Kuang attributes McDonald’s sustained success to what Warren Buffett calls an “Economic Moat.”  Of companies with an Economic Moat, Buffett writes:  “The might of their brand names, the attributes of their products, and the strength of their distribution systems give them an enormous competitive advantage, setting up a protective moat around their economic castles.”

While that’s certainly true, I think many franchise companies that are doing well, like McDonald’s and Church’s Chicken (see CHURCH’S CHICKEN: Thriving in Hard Times), share another important trait:

They were already positioned for hard times before the hard times hit.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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Visit FRANBEST’s: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

Not every franchise chain is suffering in the recession. In fact, those who are positioned to meet the needs of the increasingly budget-conscious consumer are thriving.

Church’s Chicken is one whose “value leader” positioning makes it well-suited for the harder times to come. The Atlanta-based restaurant chain, which has 1,625 stores, posted both overall and same-store sales increases in 2008, and is projecting continued sales growth in 2009.

According to figures released by the company Friday, total global sales at Church’s restaurants rose 5 percent to $1.15 billion, marking the the fifth straight year of system-wide sales increases. Same-store sales at existing stores rose 2.7 percent —- up 3 percent at U.S. restaurants and 2.1 percent at international outlets.

Farnaz Wallace, Church’s executive vice president and chief marketing officer, attibutes its success to Church’s strategy of catering to a low-income, multicultural customers.

Church’s maintains a “no-frills” positioning of fried chicken at a low price. Church’s recently launched out a 99-cent value menu that includes a chicken sandwich, nuggets, fries, jalapeno cheese bombers, and a piece of dark chicken and a biscuit.

Church’s anticipates same-store sales to rise 2.5 percent to 3 percent in 2009.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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FEATURED STORY:

TanWorld: Creating the Next-Generation Tanning Salon Franchise

OVERVIEW Interview with Tanworld V.P. Bob McQuillan

Visit FRANBEST’s: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

There are abundant low-to-no-cost opportunities to get word out about your franchise business and your franchise opportunity.  All you’ve got to do is get relentless and get in touch!  Here are four opportunities franchisors and franchisees should immediately seize:

Wanted:  New Franchisors for PR Co-op Venture

Got a Top New Franchise?Top New Franchises is looking for promising new franchises opportunities to highlight in a major publicity initiative in 2009.  Get the word out about your new or emerging franchise program as part of an innovative campaign. To learn more about the 2009 PR promotional program designed specifically for new and emerging franchise programs.  Email your franchise name, website address and contact info to info[at]TopNewFranchises.com

Wanted:  Franchisee Success Stories
You tell us.  We’ll tell the world. FranchisePick.com is looking to highlight franchisees and managers who are dedicated to providing great service in their local markets.  We want to highlight the best of the best with short profiles and interviews.  For more info, email your name, title, location and franchise to info[at]franbest.com.

Promote your promotions at Franchisee Marketing
Share your Marketing Secrets Have you got a recent or upcoming promotion you’d like to share?  A charity event?  Store anniversary, award or milestone?  Photos of you and your staff?  Email your contact and promotion info[at]FranBest.com.  PR firms and ad agencies welcome.

CEO Interviews Sought for FranBest.com
Best practices, best franchises   FranBest.com is seeking franchise executives interested in sharing their expansion plans, franchisee profiles, and the training, support and other benefits their franchise program provides.  Submit contact and franchise info to info[at]franbest.com.

You can’t sell’m if you don’t tell’m so get relentless and start spreading the word about your franchise.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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FEATURED STORY:

TanWorld: Creating the Next-Generation Tanning Salon Franchise

OVERVIEW Interview with Tanworld V.P. Bob McQuillan

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com)  Congratulations to Claudia & Alan Robbins on the opening of their brand new Cuppy’s Coffee cafe franchise in Wilmington, DE!

If you’re in, near or passing through Wilmington, DE stop in, show your support and buy a lot of stuff from the Robbins, whose buildout took a Herculean effort and a significant investment of time, money and emotion.

It’s located at:

Cuppy’s Coffee

Millcreek Shopping Center,

4567 Kirkwood Hwy.

Wilmington, DE

Cuppy’s Coffee is in good franchise company with FastSigns and Hollywood Tans in the same shopping center.

The Robbins will be putting together a grand opening with a ribbon cutting some time around the 13th.

Best of luck to Cuppy’s Coffee of Wilmington, DE… they certainly deserve it.

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

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Visit FRANBEST’s: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

As people are losing their homes and need a place to liquidate their stuff, experts say the “Yard Sale Economy” is booming.

According to a UPI story: “Sociologists say the garage-sale economy is flourishing across the United States as the financial crisis deepens and more people lose their homes.

“This is the perfect storm for garage sales,” said Gregg Kettles, a professor at Loyola Law School in Los Angeles who studies consumers and outdoor commerce. “We’re coming off a 20-year boom in which consumers filled ever-bigger houses. Now people need cash because of the bust.”

This is no time for sentimentality, says the UPI story.  Gramps better not leave his upper plate on the nightstand while he sleeps.  Princess better chain up the trike and hide the key from Mom.

“That’s because many people need cash and no longer can afford to be sentimental, said Beatriz Duarte of Manteca, who sold her 3-year-old daughter’s tricycle to a stranger for $3 even as her daughter was riding it.”

I bet for an extra $20, Beatriz woulda thrown in the kid as well.  It’s a lovely time for bargain shopping!

WHAT DO YOU THINK?  SHARE A COMMENT BELOW.

photo source:  FranBest.com

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FEATURED STORY:

TanWorld: Creating the Next-Generation Tanning Salon Franchise

OVERVIEW Interview with Tanworld V.P. Bob McQuillan

Visit FRANBEST’s: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.

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Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com)  Where Would Jesus Work Out?

Ever ask yourself that question?  Me neither, but I bet it would be at Lord’s Gym.

According to the Nashville Business Journal, a group of entrepreneurs including Off the Grill founder Alan Thompson is launching a “faith-based retail and fitness business” with plans to franchise the concept.

Their group, Club Management Systems LLC, plan to open Community Life Centre in 13,500 square feet of space in May, 2008  in Spring Hill, TN. The Centre will include a fitness center - the Lord’s Gym - an Off the Grill franchise, coffee shop and a dry cleaner.

According to the article:  “Partnering on the venture are Thompson, Chip Wilson, Joe Brannon and Scott Frith. Wilson, spurred on by his 10-year-old idea, brought the team together in early 2007 and approached Thompson….Brannon and Frith are also partners in Vision Marketing Group LLC, a preexisting ad-placement company that will market the idea.”  Source:  Nashville Business Journal

WHAT DO YOU THINK?  DOES THE LORD’S GYM HAVE A PRAYER?  LEAVE A COMMENT.

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Opportunity Alert: Know a great salesperson capable of developing an innovative sales-based franchise? Hook’m up with this franchise and get a $5000 referral fee.

Visit FRANBEST: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and and business opportunities.

Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.

(FranchisePick.Com) Background: December, 2007, Pure Weight Loss (formerly LA Weight Loss) announced it was closing all its 400 centers nationwide by Jan. 4., 2008. With no notice and little explanation, Pure Weight Loss left thousands of customers without a weight loss program, without the half-million dollars they’d collectively prepaid for Pure Weight Loss services and products, and with NO information regarding the whereabouts of their confidential financial and health records, which include both credit card data, personal disclosures and blood test results.

In Part One, we asked: Is Pure Weight Loss violating the HIPAA* Federal privacy law?

FranchisePick.com commenters have shared some disturbing information about the alleged mishandling of and indifference to Pure Weight Loss members’ confidential records:

Ramone [former manager]: At my center they were just left behind .(I worked for LA Franchise, but was shut down the same time as Pure) Only current or 2007 files were boxed and sent in . I as a former manager was very concerned about this but all my regional wanted boxed and sent was current. I left 2 file cabinets full of client charts with very private info in them behind to probably be tossed into the trash by either the building manager or the next tennant. No one at the home office of the franchise I worked for seemed to care. As the manager I was very upset by this, but where could I store them , so they all sit there as I am sure is the case at most of the Pure Centers.

Curious [customer]: Were you prohibitted from shredding them or mailing them to your clients?

Ramone [former manager]: It was as if they didn’t even exist. I was given no agenda for them. When I ask what would happen to all of them, I was told someone eventualy would come and pack up everything.I think we all know this is just not going to happen.

Barb [customer]: What DOES happen to our confidential info? They have our names, ss#, address, and the Care Credit account #. This is not good.

Lynn [former manager]: Our center, here in the Chicago Market, happened to get them all boxed and dumped off at the UPS station. We boxed ALL of ours up. Let me assure you, too, it was done at our own goodwill.

There was no organization. I had no idea what was going on until the last day. We were supposed to have been sent boxes and such.. but I only received labels. I went and purchased boxes. There was a small group made up of former employee, myself and our children bundled them all and shipped them to Corporate.

Our biggest concern was that they would be left in our center for the “clean up” crews to go through. The clean up crews sent in my the leasing company.. not Pure.

rose [customer]: ...I am worried about the records - that is very bad. Those guys need to be accountable for the HIPAA laws.

Kim Matunis [customer]: How can we go about finding out where our medical records are…..I am very afraid!!

LISA [customer]: …I need my records. I am starting the process for Gastric Bypass and I need to prove I was on a program for at least 6 months. My center just abruptly closed also. It is located in a strip mall. I was thinking of finding out from one of the other businesses who would have the key to get in there and call to see if I could go in and get my folder (records)…. I am desperate to get them!!

rose [customer]: …I am going to call the strip mall landlord to see if my records and those of my friends who I referred are still there. If that does not work, I am calling the Attorney General to enforce HIPAA regulations - they took blood so it is PHI - Protected Health Information.) I own CareCall an emergency notification service I started in 1998 and I know all about HIPAA compliance…

Is Pure Weight Loss following proper procedures in handling the confidential files of thousands of members of their 400 weight loss centers? What about credit card information? Is identity theft a concern?

WHAT’S YOUR TAKE? COMMENTS WELCOME.

Also read: IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 1)

Pure Weight Loss Members Ask: Where Are My Confidential Records?

* Here’s a SUMMARY OF THE HIPAA PRIVACY RULE issued by the U.S. Department of Health & Human Services

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Opportunity Alert: Know a great salesperson capable of developing an innovative sales-based franchise? Hook’m up with this franchise and get a $5000 referral fee.

Visit FRANBEST: Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and and business opportunities.

Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.