It’s a childhood tradition. Order a McDonald’s Happy Meal and get a cheap plastic toy that thrills you for about 30 seconds, but invariably ends up under the car seat for the next seven years. Sadly, this rite of passage is coming to an end for a new generation of Californian’s thanks to officials in Santa Clara County. The county, which is home to Silicon Valley, just passed an ordinance that “breaks the link between unhealthy food and prizes” by preventing restaurants from “preying on children’s love of toys to peddle high-calorie, high-fat, high-sodium kids meals.” Council members split 3-2 in favor of the ordinance. In a dissenting vote, one council member said, “If you can’t control a 3-year-old child for a toy, God save you when they get to be teenagers.” It’s perhaps pertinent to mention that this council member is himself obese. No joke. Under the ban, restaurants will be fined up to $1,000 for every unhealthy meal they are caught selling with a toy. Specifically, the meals must not contain more than 485 calories or 600 milligrams of salt. The bloggers, of course, are weighing in with their own verdict. “I’ve got news for the health experts: Kids aren’t getting fat because of McDonald’s. They’re getting fat because of chronic inactivity and a culture of laziness,” says one. “If you can lure kids into eating junk food with the help of toys, why not do the same with healthier food items?,” says another. For our part, we’re still devastated that Dad sold the ‘82 Buick and we never saw that McWrist Wallet again.
One-way ticket to Kyrgyzstan. Corporate franchisers are getting creative when it comes to finding financing for their franchisees, reports The Wall Street Journal. Quiznos, for example, started a lending division that allows new owners to buy a store with only a $5,000 down payment. Participants in the program have to agree to pay back 80 percent of their profits each month until the loan is paid off. Quiznos expects it will take franchisees two to five years to repay the debt. But what happens if a store doesn’t turn a profit soon enough? Well, Quiznos reserves the right to change ownership after the first year. Dunkin’ Donuts, meanwhile, is reducing royalty fees for franchisees who set up shop in target markets. Where exactly are those target markets? It’s unclear, but given the chain’s unrelenting global expansion, we wouldn’t be surprised if Kyrgyzstan topped the list. At any rate, the funding situation is getting desperate. Franchisees will require $10.1 billion in loans this year, but banks are only expected to lend $6.7 billion, according to the International Franchise Association.
The return of CIT? One of the major reasons that franchisees are struggling to find financing is the bankruptcy of CIT, which was once the biggest lender to the franchise industry. But now comes word that a newly restructured CIT, led by former Merrill Lynch CEO John Thain (is that a good thing or a bad thing?), has returned to profitability. However, don’t expect CIT to finance your franchise anytime soon. Last December, the company said it would work with the Small Business Administration to make $500 million in loans this year. But it has gotten off to a slow start, making only 24 SBA-backed loans totaling $19.4 million in the first quarter of 2010.