McDonald’s this week is formally launching McCafe, its own line of specialty coffee drinks featuring cappuccinos, lattes, and mochas. Given the fate of Starbucks, which just reported a whopping 77 percent drop in earnings, one has to wonder whether this is the best time to get into the specialty coffee business. As reported in the Wall Street Journal, Mickey D’s is betting it can persuade people to buy high-end coffee drinks during a recession, as long as they charge about a buck less than Starbucks. Personally, we’re skeptical. And no, we don’t want fries with our macchiato.
Franchising gets its lobby on. In an effort to curry favor with elected officials, the International Franchise Association has launched a new grassroots program called Franchise Congress. “The goal is to raise awareness about the power of franchising and its importance to local communities among policymakers in Washington and in states around the country,” said IFA President Matthew Shay. Our advice to the IFA: set you sights higher than Blimpie and Smoothie King when wining and dining members of Congress.
Better financing, better franchisees? Papa John’s, know for its catch phrase “better ingredients, better pizza,” is making it really easy to become a franchise owner. In an unprecedented offer, the company is eliminating its $25,000 franchise fee and doing away with royalty payments for one year. It is also offering $10,000 in startup costs to existing and aspiring restaurant owners who join the Papa John’s family before the end of the year.
Conflict resolution. As the economy continues to slump, franchisors around the country are dealing with increasingly desperate franchisees. This article advises franchisors not to run away from any complaints, but to deal with them head on. Savvy managers are picking up the phone and reaching out to nervous franchise owners. Some are even travelling the country to spend valuable face time with stressed out franchisees. Others are cutting to the chase and getting their lawyers lined up, which is the tried and true way of resolving franchise conflict.