Independent Joe Magazine April 2014 #25

April 2014

The Magazine for D D

Independent Franchise Owners

Roots Deep in Dunkin’

Issue 25

Larry Lemos keeps his family business going and growing strong

DUNKIN’S BRAND EVOLUTION Reflecting the Customer’s Changing Needs

P lus What’s Brewing

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REINVENTION As a lifelong baseball fan, it was a thrill to celebrate the 40th anniversary of Hank Aaron’s 715th homerun, which broke the longtime record set by the immortal Babe Ruth. 1974 marked Aaron’s 20th season in the big leagues. It was also the year after Major League Baseball introduced the designated hitter (DH) rule in the American League. While purists might say the DH ruined baseball, it’s worth pointing out that the DH has provided many players the opportunity to reinvent themselves and extend their careers. Aaron, in fact, finished his career as the DH for the Milwaukee Brewers, bashing another 22 home runs to bring his career tally to 755.

When Nigel Travis assumed the leadership of Dunkin’ Brands (DBI) a few years back, Dunkin’ underwent a reinvention of its own—not only from an operational perspective; but also from the relationship perspective with regard to its franchisees. Under previous leadership, some franchises used terms like “tyrannical” to describe how the brand dealt with its franchisees. Against that negative backdrop, many franchisees believed a strong counter-balance was necessary and DDIFO emerged as the “anti-Dunkin.”

Like so many aging baseball players have done, DDIFO has also reinvented itself.

No longer is the organization concerned with taking swings at DBI. Instead, it is focused on its role as a national partner for its member franchisees with the goal of ensuring the continued growth and success of all Dunkin’ Donuts franchise owners. And, because franchises enjoy a healthy relationship with their franchisor, DDIFO is keeping its eye on the ball—advocating for the diverse and varied interests of all Dunkin’ Donuts franchisees.

In years past, DDIFO would counter the franchisor’s aggressive action against franchisees with a strategy devised largely with a nod to the association’s New England roots. Today, as Dunkin’ expands westward, DDIFO has expanded its reach and sphere of influence to better reflect

the diversity of its membership. As an example, after holding the DDIFO National Conference at Mohegan Sun in Connecticut for two years, in 2013, we brought the signature event to Atlantic City. This year, we’re going to Las Vegas, with the hope of drawing a record number of members from all parts of the nation.

We are committed to delivering valuable services, benefits and representation to Dunkin’ franchisees all across the footprint, even if the concentration of members is higher in one region over another.

As an example, we work with tax experts in Illinois to address inequities in state tax policies and we work with employment lawyers in the Mid-Atlantic to ensure our members are informed about and complying with myriad new employment policies. We became a founding member of the Coalition of Franchisee Associations (CFA) to increase our influence on Capitol Hill and we work closely with other business organizations advocating for state legislation that is favorable to Dunkin’ Donuts franchisees. When possible, we also work with the International Franchise Association (IFA) to fight legislation that is detrimental to your interests.

Advocating for all Dunkin’ Donuts franchise owners means looking forward—identifying the issues that require our attention and not reexamining the actions we took when circumstances were different or when one region had more representation than another.

The work is underway, and we’ll continue reinventing ourselves as a fully national organization. But to succeed, to keep hitting home runs, we will need the support, guidance and commitment of all franchise owners – from every corner of the footprint.

Now batting for DDIFO, at designated hitter…

Ed Shanahan DDIFO Executive Director

INDEPENDENT JOE • APRIL 2014 1

SUB HEADLINE

CONTENTS

Photos Courtesy: "Dunkin Donuts box" by Dan Goodsell Photo: William Alatriste/ NYC Council

From the Executive Director: Thoughts on Reinvention • • • • • • • • • • • • • • 1 What’s Brewing: A Look at State Issues Around the Footprint ������ 5 Dunkin’s Brand Evolution Reflecting the Customer’s Changing Needs ���� 10

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Roots deep in Dunkin’ Lemos Family Business Growing Strong• • • • • • • 14 National DCP unveils new initiatives • • • 19 Lisa on the Law: Beware Of…Franchisor Disclaimers• • • • • • • • • • • 22 Directory of Sponsors • • • • • • • • • • • • • • • 24 My Perspective Spring Safety • • • • • • • • • • • • • • • • • • • • • • • • • 28

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Independent The Magazine for DD Independent Franchise Owners

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April 2014 Issue #25 Independent Joe® is published

by DD Independent Franchise Owners, Inc. Editors: Edwin Shanahan, Matt Ellis Contributors: Cathy Cassata, Cindy Atoji, Adam Goldman, Lisa Iannucci, Carl B. Lisa, Esq. Advertising: Joan Gould Graphic Design: Caroline Cohen

Pleas note theat w e h ave moved

Direct all inquiries to: DDIFO, Inc. 10 First Avenue, Suite 20, Peabody, MA 01960 978-587-2581 info@ddifo.org • www.ddifo.org

DD Independent Franchise Owners, Inc. is an Association of Member Dunkin’ Donuts Franchise Owners.

INDEPENDENT JOE®, INDY JOE®, and DDIFO® are registered trademarks of DD Independent Franchise Owners, Inc. Any reproduction, in whole or in part, of the contents of this publication is prohibited without prior written consent of DD Independent Franchise Owners, Inc. All Rights Reserved. Copyright © 2013 Printed in the U.S.A.

WHAT’S BREWING A LOOK AT STATE ISSUES

AROUND THE FOOTPRINT

By Lisa Iannucci

L

ast August, Independent Joe interviewed Yuwen Chen, owner of three Dunkin’ Donuts shops in New York’s Hudson Valley, about paid sick leave legislation that was being considered in New York City and how its passage could affect his businesses 80 miles away.

“The costs can really hurt the business owner,” he said, “because not only do you have to pay for the employee to be out for the day, you have to pay the salary of their replacement.”

At the time, Chen’s biggest concern was that if the proposal – requiring employers to give their employees one hour paid leave for every 30 hours worked up to a maximum of 56 hours over a 12 month period – passed the New York City Council, it might be considered statewide by lawmakers in Albany.

Mandating Paid Time Off Fast forward seven months and Chen, like all small business owners in New York State, is now faced with paying for another kind of government-mandated benefit for workers: paid family leave. While the New York State Assembly has not to date

Photo: William Alatriste/ NYC Council

Council members join Mayor Bill de Blasio to announce New York City's paid sick time legislation. followed the New York City Council’s mandate for paid sick leave, the Assembly is considering several bills that would compel business owners (with at least 25 employees) to give up to six weeks of paid time off to employees with a newborn child or a seriously ill relative. The cost of the insurance would be offset by weekly employee contribution of up to 45 cents from their paychecks.

According to the Business Council of New York State, the plan would quadruple the maximum disability benefit payable over three years from the current maximum benefit of $170 a week to over $700 a week in 2018.

Among the challenges facing small business owners in every state, is understanding how such government mandates will impact the way they run their business— as well as their bottom line.

When individual states add a new regulation, tax or mandate, it creates a complicated situation for franchisees like Shaun Cain, whose family operates Dunkin’ Donuts shops in Connecticut and New York. Consider this: employers in New York must provide new paid sick leave for five or more employees; in Connecticut, it’s for employers with 50 or more workers.

“The worst part is implementing these

INDEPENDENT JOE • APRIL 2014 5

WHAT’S BREWING

changes in the same time period, it is just not realistic and small businesses cannot afford such a drastic increase in overhead,” says Cain.

The thought is shared by Staten Island, New York Councilman Steven Matteo, who voted against paid sick leave, “I continue to believe it unnecessarily burdens our city’s small businesses, at a time when our economic recovery is still slow and the sustainability is uncertain.”

Even as Jersey City and Newark, New Jersey have passed sick leave laws, state lawmakers are considering making it mandatory for all business owners in the state. The legislation will require all businesses, regardless of size, to provide between five and nine days of paid sick leave each year to each and every full and part-time employee, regardless of whether or not they already offer paid sick leave.

“These proposed new mandates would have a negative impact on Dunkin’ Donuts franchisees because they create confusion, increase administrative burdens,

“I continue to believe it unnecessarily burdens our city’s small businesses, at a time when our economic recovery is still slow and the sustainability is uncertain.” expose employers to liability, and add to the overall cost of doing business in New Jersey,” says Jeanette Hoffman, senior vice president for Capital Impact Group, which lobbies on behalf of New Jersey franchisees.

The push to mandate employee-centered benefits is prompting restaurant owners to consider price increases to cover their potential losses.

“Minimum wage hikes in some states, the effect of Obamacare and efforts to designate paid sick days all will increase costs,” according to DDIFO restaurant analyst John Gordon, who is principal of Pacific Management Consulting Group.

He warns, however, that operators should

not cut food portions because that customers will notice and that can have negative repercussions.

According to the National Federation of Independent Business (NFIB), these mandates equal rising labor costs for small businesses, and those costs eat into the profits of small business owners, especially in the food and retail industries.

“Minimum wage, for example, has a huge effect on these businesses,” says Bill Vernon, NFIB Massachusetts state director. “It may not impact a manufacturer the same way because profit margins are higher in manufacturing and fewer of the workers get paid minimum wage or near minimum wage.”

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DDIFO SPONSOR ADVERTORIAL

3Wire Group has been providing parts and supply chain solutions to Dunkin’ Donuts franchise owners nationwide since January 2012 and became a DDIFO sponsor that same year.

3Wire helps franchisees save time and money procuring genuine OEM food and beverage equipment replacement parts.

3Wire provides Dunkin’-specific ordering, inventory and pricing which can be accessed automatically via a franchisee’s online account or by contacting dedicated customer service managers.

“Dunkin’ Donuts franchise owners see a reduction in equipment downtime and increased store sales due to regionally stocked parts inventory ready for shipment and easily found in our Dunkin’-branded catalogs and customized DCP website,” said Business Development Manager Jim Chamberlain.

Chamberlain said 3Wire routinely receives positive feedback from Dunkin’ franchisees about its parts and supply chain program.

Specifically, he said franchisees cite ease of ordering via the 3Wire website and catalogs, excellent system-wide pricing from the national program, fast order-to-receipt turnaround and superior customer service from the dedicated national accounts team.

To learn more or to order parts, visit www.dcppartsdirect.com or call 3Wire’s Dunkin’ Donuts customer service team at 855-427-8209.

8 INDEPENDENT JOE • APRIL 2014

Federal Mandates Worth Watching: Depreciation, Full-time Overtime While Dunkin’ Donuts franchise owners keep a close eye on the status of various pieces of state legislation, including the minimum wage increase and the paid sick leave act, there are new important items on the docket at the federal level that deserve some close attention too.

“One of those items is permanent 15-year depreciation,” says Misty Chally, the national director of the Coalition of Franchisee Associations, of which DDIFO is a charter member.

Federal tax code calls for depreciating restaurant improvements and new construction on a 39-1/2 year schedule. Over the past few years Congress has allowed special one-year exemptions so businesses could depreciate on a 15-year schedule.

The allowance expired on January 1, 2014.

Now, a bill known as the “Restaurant and Retail Jobs and Growth Act,” introduced by U.S. Representatives Mike Kelly (R - PA), Richard Neal (D - MA) and Ron Kind (D - WI), would make the 15-year depreciation schedule the law without requiring yearly Congressional approval.

According to Chally, the bill has encountered expected resistance. “If you have more money that’s exempt from taxes, the government isn’t collecting it.”

“The foodservice industry employs more than 535,000 men and women in Pennsylvania alone, and is a constant driving force that makes our economy grow and keeps communities strong nationwide,” says Rep. Kelly. “Especially during this difficult economic recovery, it is absolutely vital that restaurant and other retail operators have the tax certainty they need to expand their enterprises and put more Americans back to work. This new jobs bill will help bring muchneeded long-term stability to our nation’s small businesses, and just makes sense.”

“The Restaurant and Retail Jobs and Growth Act will help restaurants, retail outlets and other businesses by bringing stability to their

long-term financial planning, while lowering their tax burden so they can expand and hire new workers,” says Rep. Kind.

Chally puts the legislation into terms for franchise owners. “It helps them to reinvest in their business and in development. It also trickles down. They hire other employees to do the remodeling work and that spurs the local economy. With permanent 15-year depreciation, you can plan for improvements. It’s hard to plan if you don’t know if it will happen that year.”

She says that it’s unlikely the bill will come up for a vote in 2014. “Right now the government is dealing with minimum wage and labor issues.”

Chief among those issues is President Barack Obama’s push to force companies to change the rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform.

Currently, employees whose jobs include management duties are exempt from receiving overtime. Additionally, employers do not have to pay time-and-a-half to people over $455 a week.

Obama wants to raise that cap.

Eric Reller, with the National Federation of Independent Business, says this plan would cost jobs.

“The president’s plan to increase overtime pay demonstrates another antibusiness policy — coming on the heels of a proposal to increase the minimum wage, increase the minimum tipped wage, rising health care costs, as well as evergrowing, costly and unwieldy regulations.”

A bill recently filed by Rep. Todd Young (R-IN) could save franchisees hundreds of millions of dollars in healthcare costs by changing the definition of a full-time employee to include only those who work at least 40 hours per week—not 30 hours per week as defined under the Affordable Care Act. A companion bill has been filed in the Senate, sponsored by Sen. Susan Collins (R-ME) and Sen. Joe Donnelly (D-IN).

WHAT’S BREWING State vs Federal Mandates On January 1, 2014, 13 states raised their minimum wage. The new wages vary from $7.90 in Arizona to $9.32 in Washington.

In March, a 14th state – Connecticut – raised its minimum wage to $10.10, which is now the highest in the nation. Not to be outdone, Massachusetts legislators are considering an increase to as much as $11 an hour by 2016, which would make the Bay State the most expensive minimum wage state in America.

It remains to be seen how these state changes would be impacted if the federal government institutes a $10.10 minimum wage as President Barack Obama Yuwen Chen and his and Congresbrother operate a network of Dunkin' Donuts shops in sional Democrats New York's Hudson Valley have proposed.

The federal government’s health care mandate – commonly referred to as Obamacare – is already causing concern and confusion among small business owners. Franchisee Shaun Cain told Independent Joe, “Obamacare and the mandatory increase on the state minimum wage are what plague me today.” We heard the same sentiment from franchisee Yuwen Chen.

The fact is, federal and state mandates complicate the challenges of running a small business and can greatly impact a franchisee’s profit margin.

And, we shouldn’t conclude that once the battles over sick leave, paid family leave and minimum wage are over so will the push for further mandates.

There is already mounting concern over depreciation and overtime policies (see sidebar).

Protection for franchisees Even as franchise owners in some states prepare for the impact of rising costs from new government mandates, others are

busy advocating for the passage of fair franchising legislation.

Legislatures in Pennsylvania, New Hampshire and Maine have bills under consideration. Just in the last few weeks Maine’s House of Representatives passed the bill, only to see it fail in the state senate.

The bill filed by New Hampshire State Representative Patrick Abrami defines fair franchising as defense “against unfair treatment by franchisors, who inherently have superior economic power and superior bargaining power in the negotiation of the terms and conditions of the franchise relationship.”

As DDIFO Executive Director Ed Shanahan told the New Hampshire Business Review, “You spend 30 years building a business that you want to turn over to your kids and the franchisor has the right to say no without a good reason. It’s just not right that they can arbitrarily take away what was earned with your blood, sweat and tears.”

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INDEPENDENT JOE • APRIL 2014 9

Dunkin’s Brand Reflecting the Customer’s Changing Needs

Photo Courtesy: "Dunkin Donuts box" by Dan Goodsell

By Matt Ellis

10 INDEPENDENT JOE • APRIL 2014

Evolution O h, how times have changed.

If Dunkin’ Donuts founder William Rosenberg walked into one of the world’s many stores today, he might wonder where he was. Instead of just fresh donuts and coffee, he could order a mocha Irish crème swirl iced latte with wake up wrap ¬– egg whites and turkey sausage only, please. And while customers sat around a horseshoe counter in his 1950s shop, today they can relax in cozy soft seating, while eyeing the digital menu boards. There would have been no artsy wall murals of coffee mugs or fresh sayings, nor relaxing music, or dimmer lighting – and no disposable cups.

But Rosenberg would have undoubtedly approved of the evolution of the Dunkin’ look, says Dunkin’ franchisee Victor Carvalho, 47, who owns the original location on Southern Artery in Quincy. “Rosenberg’s vision was always, ‘Do what you know, do it right, and do it well.” Carvalho recently completed a retro renovation

of the store where the system was born. Of the more than 7,000 locations in the U.S., it is the only throwback Dunkin’ Donuts shop—echoing the time when milk cost 17 cents, when poodle skirts and sock hops were all rage.

A Branding Evolution The branding changes in Dunkin’s more than 60-year legacy hardly happened by circumstance or accident, according to Bonnie Riggs, a restaurant analyst with The NPD Group. “Dunkin has been successful in transitioning its brand from one of where you go for donuts to where you go for breakfast, coffee, and unique breakfast menu items,” Riggs says. “The chain’s brand image has evolved with this transition. They have definitely become a major player and a successful one in the QSR breakfast arena.”

Dunkin’s coffee initially played a supporting role to its baked goods; after all, according to the Smithsonian, at the 1934 World’s Fair in Chicago, donuts were headline material, billed as the “food hit of the Century of Progress.” Dunkin’ shops initially embodied the blue-collar, working-man ethos of Rosenberg, offering 52 varieties of donuts. In the

early days, a “fancy case” – a glass case for bakery products – showed off the daily specials of crème puff and strudels, while a felt menu board displayed prices – a dozen donuts for $1.49. The logo of the donut man – a cartoon with a donut head, holding a coffee cup and wearing an apron – was emblematic of Dunkin’s image as a dedicated coffee-and-donut restaurant. Customers could sit at the counter, enjoying a morning brew sipped out of ceramic mugs and saucers; it was a way of catering to the needs of the guests in a slower-paced era.

“Dunkin’ Donuts has a long heritage of excellent service for our guests,” according to Michelle King, senior director of Global Public Relations for Dunkin’ Brands. “In the past, that meant counter service where people could sit down and be served.”

And, although coffee played second fiddle to the donuts, Bill Rosenberg always knew good coffee was important. In her biography of the Dunkin’ founder titled, “Time to Make the Donuts,” author Jessica Keener wrote, “The coffee wasn’t selling, so Bill said, ‘Offer it for free. If they don’t like it, they don’t have to pay for it.’” But customers did like it, and paid for it as well.

Photo Courtesy: "Vintage Dunkin' Donuts box"

by John Gavula

America’s changing habits In the ’80s and ’90s, as busy, dual-income suburban families juggled work, kids, and home, fast food and drive-through windows became as pervasive as Sony Walkman headsets. As older Dunkin’ shops were

INDEPENDENT JOE • APRIL 2014 11

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“Based on measurable standards and mutually beneficial agreements, BUNN-O-Matic Corporation works closely with Dunkin’ Brands and the DCP to ensure high quality equipment and value-added services that directly benefit franchisees,” said Global Accounts Vice President Todd Rouse.

As the preferred supplier for coffee, powder, iced tea/coffee and grinder equipment, BUNN-O-Matic Corporation is a global partner of Dunkin’ Brands with worldwide manufacturing, distribution and related services that ensure the highest standards. Its BUNNserve program offers added value services related to equipment installation, preventive maintenance, training and reactive service. Franchisees can count on BUNN for profitable and reliable dispensed beverage equipment and support worldwide.

According to Rouse, BUNN’s core values of honesty, integrity and courtesy translate into customer satisfaction. Franchisee feedback often reflects these values in comments about the supplier’s quality, innovation and professionalism.

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renovated, full-service counter seating was removed—replaced by takeout service. Customers fell in love with Fred the Baker, for whom it was always “Time to make the donuts,” and Dunkin’ continued its evolution to a food and beverage destination. The look and feel of Dunkin’ shops were tweaked: The largely pink and orange color scheme was toned down, including the signature white and pink uniforms being discarded in favor of more subdued beige. There was a menu change as well, introducing bagels in 1996, and then breakfast sandwiches; the cups and saucers were long gone. Even the menu boards, once simple wooden or felt panels, were swapped out for more efficient light boxes with photos and text that easily slid out for quick changes. All these updates, says global restaurant consultant Aaron Allen, were a strategic and methodical response as Dunkin’ refined its brand and messaging to not only stay in touch with the consumer, but to stay in front of the trends.

With the dawning of the new millennium, Dunkin’ started adapting to the nation’s health craze. The new slogan, “America Runs on Dunkin’,” not only reflected the on-the-go nature of modern society; it also suggested that coffee and snacks could keep a body fueled. With the introduction of the DDSMART Menu, the brand made a promise to consumers that they could find reduced calorie, reduced sodium, and reduced sugar alternatives. “The key to Dunkin’ Donuts’ continued growth is listening to our guests and evolving to meet their needs,” says King. “We know that our guests are increasingly health conscious, and are looking for a full selection of choices that satisfy their hunger and fit into their lifestyle.

We have been steadily expanding our DDSMART menu, and we will continue to do so to provide them with even more options.”

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12 INDEPENDENT JOE • APRIL 2014

Another, more fundamental shift, follows America’s growing love of coffee. According to the National Coffee Association, the United States is the world’s largest consumer of coffee. Eighty-three percent of adults in the U.S. drink coffee, compared with 78 percent in 2012. This love of Joe, has not only stoked competition from Starbucks, McDonald’s and others, it has also validated Dunkin’s position as a beverage company. Even before the introduction of flavored coffees in 1995, franchisees had long recognized that coffee would drive the business.

Today beverage choices, along with menu options, continue to grow. “Over the last several years, we have created innovative products specially designed to be portable, including Sausage Pancake Bites, and more recently the Eggs Benedict Breakfast Sandwich. These items provide tastes that are familiar with a twist, allowing our guests to experience some of their favorite flavors no matter where they are,” says King.

Last year, Dunkin’ unveiled a new store design, the first in nearly seven years. The contemporary new look further establishes the brand’s coffee credentials—interiors incorporate more brown tones with coffee merchandising inside. The update incorporates many features to create a welcoming environment for guests to linger.

“The restaurant look is increasingly important to younger millennial consumers who believe that older brands are where their parents ate,” according to Darren Tristano, an analyst at Technomic, a food industry research company. Newer contemporary décor packages generally impact important perceptions of cleanliness,

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quality. “Customers are willing to spend more at a restaurant that is more upscale because it is considered contemporary, Tristano says.

The global future What does the future hold for Dunkin’? According to analyst Aaron Allen, the best franchise companies aren’t necessarily the ones with the coolest logos or the latest designs. “They are the ones with the strongest cultures and sense of community with a shared purpose and vision.� He applauds Dunkin’s logo changes, product updates and marketing revisions, but says perhaps the brand’s most significant move is its push to capture new markets—not just in the U.S., but also in the rapidly growing overseas markets. “For all of the potential there is here in the USA, it must be said that any serious franchise company not looking abroad for growth opportunities is limiting its future. Dunkin’ has made brave pushes elsewhere,� which Allen says benefits franchisees as well as investors.

For the brand which was once touted as being “worth the trip,�

Dunkin’ Donuts may one day say, “The world runs on Dunkin’.�

•

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INDEPENDENT JOE • APRIL 2014 13

Roots Deep in Dunkin’

14 INDEPENDENT JOE • APRIL 2014

Larry Lemos keeps his family business going and growing strong

By Cathy Cassata

W

ith thriving Dunkin’ Donuts stores and various awards under his belt, Larry Lemos credits his parents for much of his success. After emigrating from Portugal to Rhode Island in the 1970s, his parents, Antonio and Maria Lemos, worked for a Dunkin’ Donuts in Warwick, Rhode Island.

“Joe Batista was the owner and he saw something in my Dad. He appreciated his hard work and dedication and offered him a partnership in the business,” says Larry. Antonio accepted, and the Lemos family went on to build stores with the Batista family.

When Larry was four years old, the Lemos family moved to Connecticut to operate one of the stores on New Park Avenue in West Hartford. “My whole life I saw my parents sacrifice. I’d hear them coming down the stairs at 2 a.m. to go to work; my mom would make coffee and my dad would bake. Then they’d come home exhausted yet still able to take care of our family,” Larry remembers.

From a young age Larry wanted to go to work with his parents. “I saw their passion for what they did.

They taught me that if you want something, you have to go after it, work hard, keep moving forward in everything you do.”

Larry Lemos’ story is familiar to that of many second generation Dunkin’ Donuts franchisees. Recognizing that hard work can pay off, the younger Lemos followed their lead. His parents bought out the partnership from the Batista family, and throughout the years subleased the properties to other franchisees. Over time, Larry operated the business and at the age of 22 became a franchisee. “When my parents were ready to retire, I bought into the business and continued to grow the business,” Larry says.

In the early days of Dunkin’ Donuts operators like Antonio and Maria focused on baking donuts and working the counter. But, as second generation operators like Larry started taking over, they looked at new opportunities to take a Dunkin’ Donuts restaurant and use it as part of a larger commercial development.

In Larry Lemos’ case, that shop on Larry and Sonia Lemos New Park Avenue in West Hartford afforded the opportunity to buy the property next door and build a strip center with a 3,000 square foot Dunkin’ Donuts that included a drive-thru. Newly married, Larry and his wife Sonia created Lemos Properties and learned what it takes to design a building, lease the space and manage the property. That was in 2002.

INDEPENDENT JOE • APRIL 2014 15

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Back in Canton, Dunkin’ Brands took note of Lemos’ success. The family earned recognition from the brand for their innovative development – creating a new Dunkin’ Donuts with a colonial style to match the look and feel of their Connecticut town – and for the sales increases they recognized that first year.

Larry and Sonia spent several more years in the West Hartford market, opening up another Dunkin’ Donuts just two blocks from their New Park Avenue store. “We did well in Connecticut,” he says, but like so many franchisees eager to grow their business, Larry realized he needed to look beyond his native territory.

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Before retiring, Antonio Lemos purchased an existing Dunkin’ Donuts shop in Melbourne, Florida with his son, Timmy. “In 2005, I flew down to help Timmy remodel the store and helped him decrease the remodel timeline from a month to two weeks,” says Larry. “The construction manager from Dunkin’ was impressed with how quickly we turned it around and he asked if I was interested in building more stores in Florida.”

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Larry and Sonia jumped at the opportunity and signed a development agreement in Orlando. For nearly two years, Larry flew back and forth between Connecticut and Florida getting up and running in a new territory while still managing the existing business. In late 2006, he and Sonia decided they would make the move permanent. They sold their existing franchises – maintaining ownership of the real estate – packed up their two kids, and moved

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16 INDEPENDENT JOE • APRIL 2014

“It was such a great start. My parents retired before they hit 50, our sales skyrocketed and the Dunkin’ Donuts alone was making enough money to pay its debt on the property.”

“I always wanted to give back to the Dunkin’ community, so a proud moment was when I received an innovation award for giving the brand a few design ideas,” Larry says.

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“I figured if we’re going to get a loan from the bank and make this happen, we should get some residual income,” he explains. Larry leased space to a Subway franchise and a Verizon Wireless store in the strip center.

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LEMOS FAMILY BUSINESS

to Orlando. At the time, Florida’s economy was still feeling the effects of the Great Recession.

“During the first few years it was challenging because the product mix is different in Florida. For instance, you don’t sell as much beverages, which are more profitable in New England,” he says. “At first, it was difficult. I was down because I wasn’t getting a return on my investment. Sonia really encouraged me to dig deep and move forward.”

Sonia and Larry first met as children at a soccer game. Years later, she came into one of the family’s Dunkin’ shops and they began talking. That led to a love affair which has blossomed into a 15 year marriage and successful business venture. Larry is in the process of building 10 new shops in the Orlando market.

Secrets for success

While controlling costs can be a significant challenge for any franchise owner, Larry says one secret to success is to build and nurture strong relationships with your employees. “You have to believe in your employees. Have a detailed interview process, ask if they are happy working for you, and listen to them. I feed off their ideas and implement new policies and procedures to ensure a consistent network with great manager incentives. If there are things that need improvement, we implement change, add new systems where needed.”

Lemos also relies on his faith to guide him. The family is active in their church, and every year they embark on a missionary trip to the island of Eleuthera in the Bahamas, where they help build a camp for struggling youth. In the course of his interview with Independent Joe, Lemos cited this biblical passage from Proverbs 11:14, “Without the guidance of good leaders a nation falls. But many good advisers can save it.”

The message resonates for this family-run business; Lemos feels strongly that as a leader he must take interest in his employees’ well-being. “Remind them that their family comes first and that work should never get in the way.”

He encourages his managers to go home early one day a week. “I believe that when your restaurant managers manage their family

Larry Lemos earned the Southeast Franchise Operator of the Year award in 2012. Supporting the Dunkin' Donuts - Baskin Robbins Community Foundation is a family affair. His daughter has created artwork to help raise money for the Foundation. well, they’ll definitely manage your business well.” The strategy’s worked; Lemos hasn’t lost a store manager since 2007.

Having invested in his employees and managers, Lemos says other investments need to ensure his Dunkin’ Donuts restaurants have excellent curb appeal and merchandising. “You don’t have to advertise donuts since it’s in our name, so put your advertising efforts elsewhere. Every three years, I put money back into my stores, whether it’s painting the interior, adding TVs, or painting the exterior trim. Usually, by the time the five-year refurbishment is up, I don’t always have to make those improvements at one time,” he says. “If you don’t do this, consumers will start comparing you to the competition and here in Orlando we have fierce competition with McDonald’s having double the locations that we do,” as well as convenient stores offering a wide variety of food and drinks.

Franchisor decisions can add stress too. “As if competition isn’t enough to worry about, sometimes the biggest stress can come from Dunkin’ Brands. Like the fact that they no longer offer territory protection rights to their franchisees, advertising it as open space—a free for all. At times, I wonder about those smaller operators that have less than 10 stores and want to grow,” notes Larry.

“We need to grow smart, as these are family owned businesses and the Dunkin’ system was grown on family owned business. When I see them losing their vision a little, it can get discouraging.”

It’s one reason why Larry supports DDIFO. “I believe if we have one voice to stand up for the franchisee, it can only help us. And I see that DDIFO is trying to reach out to franchisees in the Florida area, as well as others around the country, which is hopeful,” he says.

A means to give back

While the Lemos family has worked hard for their success, they pay it forward sponsoring local youth teams, donating to community events and volunteering with their church. “The last couple of years have been exciting,” and busy. Lemos serves on

INDEPENDENT JOE • APRIL 2014 17

LEMOS FAMILY BUSINESS

“Our late-night business has grown from .04% to 4% of sales. It’s a HUGE increase.”

- Matthew Tenore Dunkin’ Donuts®, Brockton, MA

The Lemos family sponsors an annual fund raiser to support children in need in the greater Orlando area. The event has raised over $50,000 thus far.

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www.lisasousa.com

5 Benefit Street, Providence, Rhode Island, 02904 Tel: 401-274-0600 Fax: 401-421-6117 e: clisa@lisasousa.com

We Know your Business.

Franchise Corporate & Business Real Estate & Development Employment Trust & Estate Planning Litigation

The Rhode Island Supreme Court licenses all lawyers in general practice of law.

The Court does not license or certify any lawyer as an expert or specialist in any field of practice.

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18 INDEPENDENT JOE • APRIL 2014

Lisa & Sousa Ltd. is a firm with over 50 years of collective experience representing multi generational Dunkin Donuts franchisees in the acquisition, financing, development, structuring, transitions and transfer of franchised and other businesses.

Specific example include: transfer of ownership of 100 locations in Northeast, Southeast and other parts of the United States; sale of 48 locations in NY; purchase of 15 stores in the Northeast; acquisition of multi-shop networks in Florida (18), Vermont (20) and Cape Cod, MA (20); Store Development Agreements (SDA’s) throughout the country; and formation of cooperative Central Production Locations (CPL’s).

Lisa & Sousa Ltd. is general counsel for the Dunkin Donuts Independent Franchise Organization (DDIFO) with a membership of approximately 2000 Dunkin Donuts franchise units nationwide.

Our clients have chosen to have an on-going relationship with Lisa & Sousa Ltd. because of experience, proficiency, determination and attention to detail.

the Advertising Committee and the southeast Regional Advisory Council. In 2012, he was awarded the Southeast Franchise Operator of the Year Award and, the next year, was nominated for Franchisee of the Year.

“I think a lot of these honors have to do with helping franchisees out with local vendors that I use, as well as the community involvement we do through the Dunkin’ Donuts-Baskin Robbins Community Foundation,” says Larry.

For the past two years, Larry and Sonia co-hosted a charity event for the Southeast chapter, which raised over $50,000 for local children in need, and they make giving back a family affair.

“My daughter is very artistic and she came up with an idea to display her Dunkin’ inspired artwork in our individual stores. She was asked to make paintings to donate to the foundation, which ended up raising money. Due to that success, she donated more paintings at a DDBR foundation dinner and a golf tournament, which generated over $7,000 for the foundation,” adds Larry. “It’s important that our kids embrace the opportunity to give back to our communities.”

Larry says his kids might eventually have more to do with the business. “Who knows, maybe our children will carry on the tradition. Our daughter says she wants to be an architect and our son says he wants to be a business owner,” he says. “Maybe their passions will lead to a third generation of Lemos franchisees running Dunkin’ Donuts.”

•

By Cindy Atoji

National DCP

Unveils New Initiatives T

he United States Postal Service has always been known for making deliveries no matter the weather. In recent years, Fed-Ex and UPS made seven-day-a-week deliveries commonplace. Now, the National DCP wants to transform the delivery system that serves Dunkin’ Donuts franchise owners into a 24/7 operation. The program, called route optimization, is one of two initiatives the National DCP is rolling out in 2014.

The other – known as network optimization – will reduce costs and improve service. The combination, according to Scott Carter, chief executive of the National DCP, will fulfill the promises made when the National DCP was created in 2012.

24/7, 363 Even as Dunkin’ Donuts has added shops in its core markets and expanded into new territories, the DCP has not altered the way it makes deliveries. While supply chains serving other restaurant systems expanded to 7-day-a-week deliveries during all dayparts, the DCP had yet to implement an every-day, around-theclock schedule. Route optimization, Carter says, brings Dunkin’ in line with other food service distributors.

“We are now ready to begin making deliveries at any hour, any day,” says Carter, who noted the DCP won’t make deliveries on Thanksgiving and Christmas. “And, we are prepared to make deliveries with or without the assistance of an employee. Stores can take deliveries during the hours they are closed overnight as long as the site has been prepped.”

Charles Cutler, a franchisee with a nine-store network around Fort Lauderdale, says the Florida market has been testing overnight deliveries for about 18-months.

“Most of my managers were nervous about the idea of having deliveries overnight, but they actually like it. It’s easier on everyone when deliveries come overnight, especially at shops that are open 24-hours,” Cutler says.

And, if a shop is closed when the DCP truck rolls in, the driver can access a key through a lock-box, the code for which is known only to the DCP. Once inside, the driver can stack boxes on shelf space that’s been left clear as well as in freezers where space has been cleared. According to Cutler, when the program first started, stores were given a four-to-five hour delivery window, but that’s changed to a guaranteed one-to-two hour window.

John Justo, former DCP board chair, says Florida was used as a test market to identify how route optimization would impact franchisees—from both an operations and cost perspective. He credits the franchisee leadership in Florida for their willingness to try it out and help identify rough spots that had to be smoothed out before such a change could go national.

“The organization is grateful to them for letting us pilot the test in Florida. The test uncovered a number of concerns in concert with some process issues. The NDCP leadership has utilized this learning, adjusted its process, and is better prepared to manage the next phase of the roll-out,” says Justo.

Carter says the Florida experience demonstrates that route optimization will shorten the delivery time and make the National DCP more efficient. “This was an issue we needed to address and it’s a solution that works for everyone.”

According to Cutler, “We had some hiccups during the first couple of weeks, just like with any launch, but there are no issues now.”

INDEPENDENT JOE • APRIL 2014 19

Route optimization enables the National DCP to operate more efficiently—controlling cost while enhancing service. “The merger gave us the opportunity to address this kind of improvement,” Carter says.

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SHORTEN THE MILES Seventy-five percent of the cost of operating the National DCP is transportation. Today, the NDCP makes deliveries from seven regional distribution centers – Bellingham, MA; Colonie, NY; Greensboro, NC; Groveland, FL; Mokina, IL; Phoenix, AZ and Westhampton, NJ – to the franchise owner’s back door.

As Dunkin’s domestic growth has increased, so has the number of miles DCP trucks are driving, according to Carter. “Since 2010, the number of stores opening beyond 200 miles of an existing distribution center has increased 60 percent,” Carter says. “Our business has not kept up.”

In fact, according to Justo, the merger review illustrated that, outside of opening a few new facilities, the regional DCP distribution approach hadn’t changed all that much over the past several decades, even as Dunkin’ had expanded its menu and its number of domestic locations. Creating a new DCP model, says Justo, is equally important for both existing as well as emerging markets.

“New development is not the only driver of these proposed initiatives. Route and facility optimization are important to appropriately service all our existing members as well,” Justo says.

In order to meet the growing demand – and additional miles – Carter and the National DCP board closely examined this question: Where are our buildings and are they in the right place, relative to cost to service and levels of service we need to provide?

The answer led to the National DCP’s new network optimization plan.

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“We are going to go from seven distribution centers (DCs) to 13 in the next three to five years. The average size of these new DCs will be 125,000 square feet,” compared to Bellingham and Westhampton which are approximately 300,000 square feet, Carter says. “If the most expensive cost is transportation, it’s logical to shrink a DCs size and shorten the route miles. This will optimize inbound supply with outbound delivery.”

As network optimization rolls out, franchisees will receive deliveries from a new DC. Carter says the transition should be seamless for franchisees even as they begin to notice the cost savings.

And, as new markets increase density, the new DCs will be better positioned to meet the demands without increasing franchisee costs.

Still, this change will not come overnight. “Network optimization could take five years to fully implement,” according to Carter.

BETTER POSITIONED Creating a larger network of smaller distribution centers offers another important benefit, Carter says. If, for example, a major weather event or power outage interrupts service at one site, the

DCP INITIATIVES

“ Having more small facilities rather than fewer large facilities will help us provide continuity.”

National DCP will be better positioned to support that impacted region. Carter likes to use the example of Hurricane Sandy. If that super-storm had knocked the Westhampton facility off-line, deliveries to 2,400 Dunkin’ Donuts shops in the Mid-Atlantic region would have stopped.

distribution centers are not finalized yet, but Carter says they will absolutely have a cost and service benefit to the franchisee community. Coupled with the new route optimization plan, the National DCP will more closely resemble other major food distribution systems—if not the U.S. Postal Service or Fed-Ex.

“Currently, we would have trouble absorbing 2,400 stores if there was a disaster,” says Carter. “Having more small facilities rather than fewer large facilities will help us provide continuity.”

It’s what franchisees expected when they voted to approve the merger. “The reason why we merged was to come up with cheapest price and best service at the back door. This will save us some money and that’s what we all want,” says Charles Cutler in Florida.

The locations and opening dates of the National DCP’s six new

•

INDEPENDENT JOE • APRIL 2014 21

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Lisa on the Law

Editor’s Note: Last fall, the Coalition of Franchisee Associations, of which DDIFO is a founding member, requested its counsel, Dady & Gardner, P.A., prepare an amicus brief to support a franchise owner in his appeal of a lawsuit against his franchisor. The case, Avon Hardware Company v. Ace Hardware Corporation, questioned the validity of disclaimers franchisors routinely place in their Franchise Disclosure Documents.

Even though the appeal was dismissed, the case brings to light an issue relevant to every franchisee.

We asked our friend John Holland, one of the partners of Dady & Gardner, to write a short summary of the case so Dunkin’ Donuts franchise owners could get a clearer sense of what is at stake when a prospective franchisee reviews franchisor disclaimers.

– Carl B. Lisa, Esq., Lisa & Sousa, Ltd. DDIFO General Counsel

FRANCHISOR DISCLAIMERS

By John D. Holland, Esq., Dady & Gardner, P.A.

O

ne of the ironies of franchising is that, while franchisors pitch their respective franchise concepts as successful blueprints for business operation, franchisor lawyers routinely pack franchise documentation with extensive disclaimer provisions identifying the myriad number of risks faced by any prospective franchisee that chooses to make a franchise purchase.

Franchisees that have substantively reviewed either pre-sale franchise disclosure documents or franchise agreements, are familiar with franchisors’ routine practice of including written provisions disclaiming that the franchisor’s sales team has said anything to a prospective franchisee that would give the prospective franchisee any reason for believing that the prospective franchisee, upon joining the franchise system, will have any meaningful expectation of financial success. Such disclaimer language, in many cases, is a complete fiction.

After all, while the franchisor’s legal team is crafting disclaimer language, (e.g., “We do not make any representations about a franchisee’s future financial performance or the past financial performance of companyowned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing”), the franchisor’s sales team is, all too frequently, touting the bottom line profits to be enjoyed by those who purchase a franchise. Such financial claims by the franchisor sales team – formerly referred to as earnings claims – are, now, generally referred to as “financial performance representations” (“FPRs”).

In litigation, franchisor lawyers frequently rely on disclaimer provisions in an effort to defeat legal claims by a struggling franchisee who points out that the performance of his/her franchise is nowhere near as good as was predicted by the franchisor’s sales team.

Some franchisors have had success relying on disclaimers to defeat franchisee claims. For example, in Avon Hardware Company, et al., v. Ace Hardware Corporation, 2013 Ill. App. (1st) 130750 (October 28, 2013), the Illinois Court of Appeals rejected an appeal by franchisees based in Illinois and Indiana that the franchisor had presented them with financial pro formas that unlawfully overstated the franchisees’ likelihood of success. The Illinois Court concluded that the franchisees could not have relied, as a matter of law, on pro formas which had included disclaimer language stating that the pro formas were “merely estimates and should not be considered as the actual or potential sales, profits or earnings that will be realized by any specific store operator.” In so doing, the Illinois Court ignored the amicus brief presented by the Coalition of Franchisee Associations and the weight

of recent franchise authority holding that franchisors cannot use disclaimers, as a matter of law, to defeat statutory franchise claims of franchisees that have, in fact, relied on the franchisor’s pre-sale financial performance representations in choosing to purchase a franchise.

The better result would have been for the Illinois Court to refuse to declare that the disclaimer made the franchisee’s reliance on the earnings claim unreasonable as a matter of law. The Illinois Court should have, instead, allowed for a factual examination as to whether the franchisee had, in fact, relied on the franchisor’s earnings claim.

As explored in two other court decisions involving recent franchise cases handled by our firm, courts should be reluctant to dismiss a franchisee’s statutory fraud claims based on the language of disclaimers alone. In Randall v. Lady of Am. Franchise Corp., a group of individual franchisees sued their franchisor and alleged that the franchisor had made earnings claims in violation of the Minnesota Franchise Act. The franchisor moved for summary judgment, arguing that the disclaimers in the franchise disclosure document and the franchise agreement precluded any conclusion that the franchisees had reasonably relied on the franchisor’s alleged misrepresentations. In denying the franchisor’s motion for summary judgment on such statutory claims, the Randall court illustrated why courts must be reluctant to allow franchisors to use disclaimers to defeat franchise fraud claims utilizing the following hypothetical:

Suppose, for example, that the dishonest franchisor included in the franchise agreement … the following: “I did not make any representations about the revenues of existing franchises. If you disagree, I hereby disclaim any representations that you believe I made.

You cannot rely on them.” * * * * * * * * * * * * * * * * The disclaimer cannot change the historical facts; if the dishonest franchisor made misrepresentations, then he made misrepresentations, no matter what the franchise agreement says.

For this reason, the Randall court refused to dismiss the claims of franchisees who alleged that they had relied on the franchisor’s earnings claims in electing to purchase a franchise. Other recent cases, including Long John Silver’s Inc. v. Nickleson, a civil case, have relied on the logic of Randall in refusing to use disclaimer language as a basis for dismissing franchise fraud claims.

That said, because some courts remain willing to rely on disclaimers to defeat franchisee claims, prospective franchisees should consult with a franchise attorney to evaluate the risk posed by disclaimer language which so frequently appears in boilerplate franchise documents.

•

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Lourilynn Throgmorton • 340-201-4323 Lourilynn.throgmorton@glacialenergy.com 24 Route 6A, Sandwich, MA 02563 www.glacialenergy.com

ACCOUNTING

Robert Costello 617-621-0500 • cpas@gasparco.com 1035 Cambridge Street, Suite 14, Cambridge, MA 02141 www.gasparco.com Robert Fischbein, CPA 973-530-9100 • rfischbein@bederson.com 100 Passaic Avenue, Fairfield, NJ 07004 www.bederson.com

Cynthia A. Capobianco, CPA

Cynthia Capobianco 401-822-1990 • cynthia@capobianco.necoxmail.com 60 Quaker Lane, Suite 61, Warwick, RI 02886-0114

Neovision Consulting Inc.

Nish Parekh 609-531-4444 • info@neovisioncpa.com 1246 South River Road, Suite 101 Cranbury, NJ 08512 www.neovisioninc.com

WatchFire Signs

National Franchise Sales

COMMUNICATIONS Charter Business

Mary Ewals • 303-267-9964 • mary.ewals@charter.com 6399 South Fiddlers Green Circle Suite 600 Greenwood Village, CO 80111 www.charter.com

Comcast Business Services

Rubiano & Company, CPA’s

Comcast National Sales • 866-407-6338 Dunkin_National_Sales@comcast.com 500 South Gravers Road, Plymouth Meeting, PA 19462 www.business.comcast.com/internet

Sansiveri, Kimball & Co., LLP

Neil Doshi 1-877-999-7668 • neil@sonusatellite.com 430 Commerce Lane, Suite F, West Berlin, NJ 08091 www.sonusatellite.com

Thomas Colitsas and Associates, CPA

Heath Stone 603-793-2129 • heath.h.stone@sprint.com 3 Van De Graaff Drive, Burlington, MA 01803 www.sprint.com/ddifomembers

Daniel J. Rubiano, CPA 401-949-2600 • dan@rubianocpa.com 5 Austin Avenue, Suite 1, Greenville, RI 02828 www.rubianocpa.com Michael A. DeCataldo 401-331-0500 • mdeca@sansiveri.com 55 Dorrance Street, Providence, RI 02903 www.sansiveri.com Tom Colitsas 609-452-0889 • tcolitsas@tcacpa.com 103 Carnegie Center, Suite 309, Princeton, NJ 08540

BACK OFFICE

Jera Concepts

Wynne Barrett 508-686-8786 • wynne@jeraconcepts.com 17 Fruit Street, Hopkinton, MA 01748 www.jeraconcepts.com

BUILDING

Trane HVAC

Jonathan Ralys 225 Woldwood Avenue, Woburn, MA 01801 781-305-1335 • Jonathan.Ralys@Trane.com www.Trane.com/commercial

Sonu Satellite

Sprint

Time Warner Cable Business Class

Tricia Petway (919) 654-4115 • tricia.petway@twcable.com 4200 Paramount Parkway, Morrisville, NC 27560 www.twc.com/business

COST RECOVERY

Bedford Cost Segregation, CPAs

Bill Cusato 978-263-5055 • bcusato@bedfordcostseg.com 60 State Street, Suite 700, Boston, MA 02109 www.bedfordcostseg.com/who_we_serve/ddifo.asp

DDIFO® does not endorse or recommend commercial products, processes, or services. A DDIFO® sponsor is paying to advertise, and it is not to be considered a product or service endorsement by DDIFO®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.

24 INDEPENDENT JOE • APRIL 2014

Ed Craig 774-263-7388 • ecraig3@efcostrecovery.com PO Box 79361 North Dartmouth, MA 02747 www.efcostrecovery.com

Performance Business Solutions, LLC

Glacial Energy

Plotwatt, Inc.

Marc Bodner 919-614-2293 • marc@plotwatt.com 1715 Six Gables Road, Durham, NC 27712 www.plotwatt.com

FINANCE Bank RI

Tom Fitzgerald 401-574-1119 • tfitzgerald@bankri.com One Turks Head, Providence, RI 02903 www.bankri.com

BMO Harris Bank N.A.

Angelo Maragos 949-293-0152 • angelo.maragos@bmo.com 7700 Irvine Center Drive, Suite 510, Irvine, CA 92618 www.bmoharris.com/franchisefinance

Brendon Pierson

Jeffrey Kotch 732-681-4800 • jkotch@brendonpierson.com 6333 North State Highway 161, 4th Fl., Irving TX 75038 www.brendonpierson.com

Business Financial Services

Scott Kantor • 954-509-8019 skantor@businessfinancialsservices.com 3111 N. University Dr, Suite 800 Coral Springs, FL 33065 www.businessfinancialservices.com

Centrix Bank & Trust

Deborah Blondin 603-589-4071 • dblondin@centrixbank.com 1 Atwood Lane, Bedford, NH 03110 www.centrixbank.com

Direct Capital Franchise Group

Robyn Gault 603-433-9476 • rgault@directcapital.com 155 Commerce Way, Portsmouth, NH 03823 www.franchise.lendedge.com

Thank You to Our Sponsors!

Directory of Sponsors

Photo Credits: Caroline Cohen

Fidelity Bank

Sally Buffum 508-762-3604 • sbuffum@fidelitybankonline.com 465 Shrewsbury Street, Worcester, MA 01604 www.fidelitybankonline.com

First Franchise Capital

Karen Johnson 402-562-5111 • karen.johnson@firstfcc.com 2715 13th Street, Columbus, NE 68601 www.firstfranchisecapital.com

GE Capital, Franchise Finance

Christine Keating 203-229-1804 • christine.keating@ge.com 201 Merritt 7, 2nd Floor, Norwalk, CT 06851 www.gefranchisefinance.com

Joyal Capital Management Franchise Development Daniel Connelly 508-747-2237 • dconnelly@joycapmgt.com 50 Resnik Road, Plymouth, MA 02360 www.jcmfranchise.com

NFA Restaurant Finance

Larry Howard 205-871-8450 • lhoward@nfaloans.com 400 E. 22nd Street, Suite A, Lombard, IL 66148 www.nfaloans.com

Pacific Premier Franchise Capital

Sharon Soltero 402-562-1801 • ssoltero@ppbifranchise.com 3154 18th Avenue, Suite 3, Columbus, NE 68601 www.ppbifranchise.com

Priority Capital

Brian Gallucci 800-761-2118 ext. 14 • bgallucci@priotiycapital.com 174 Green Street, Melrose, MA 02176 www.prioritycapital.com

Santander Bank

www.santanderbank.com 508-890-6880 • mmcgwin@santanderbank.com 446 Main St., Worcester, MA 01608 www.santander.com

TCF Franchise Finance

Mike Vallorosi 201-818-2700 • mvallorosi@tcfef.com 300A Lake Street, Suite B, Ramsey, NJ 07446 www.tcfef.com

TD Bank

Brian Frank 203-761-3818 • brian.frank@td.com 40 Danbury Road, Wilton, CT 06857 www.tdbank.com

United Capital Business Lending

Trey Grimm 410-771-9600 • tgrimm@ucbl-inc.com 215 Schilling Circle Suite 100, Hunt Valley, MD 21031 www.unitedcapitalbusinesslending.com

FOOD PRODUCTS CSM Bakery Products

Marla Cushing 770-723-2083 • marla.cushing@csmglobal.com 1901 Montreal Road, Suite 121, Tucker, GA 30084 www.csmbakeryproducts.com

Quaker Oats A Division of PepsiCo

Ed Bowes 610-948-8309 • Ed.bowes@pepsico.com 402 Kilarney Way, Royersford, PA 19468 www.pepsico.com

HUMAN RESOURCES

Granite Payroll Associates

Marco Schiappa 401-263-7921 • marco@granitepayroll.com 176 Granite Street, Qunicy, MA 02169 www.granitepayroll.com

Gulpfish.com

Ilya Reikhrud 800-974-4514 ext. 101 • ceo@gulpfish.com 1005 Main Street, Pawtucket, RI 02860 www.gulpfish.com

Heartland Ovation Payroll

ADP

Jim Ferreira 203-530-3512 • jferreira@ovationpayroll.com 90 Linden Oaks Suite 110, Rochester, NY 14625 www.ovationpayroll.com

Bill.com

Laurie Fleming 563-556-0123 ext.1190 • lfleming@honkamp.com 2345 JFK Rd, PO Box 3310,Dubuque, IA 52004 www.hkpayroll.com

John Stefko 908-625-7966 • john.stefko@adp.com 99 Jefferson Rd. MS 322, Parsippany, NJ 07054 www.adp.com

Becky Riffis 650-353-3301 • briffis@hq.bill.com 3200 Ash Street, Palo Alto, CA www.bill.com

Employers Reference Source

Sandra Fabrizio 888-512-2525 • sandraf@employersreference.com 1587 Hamilton Avenue, Waterbury, CT 06706 www.employersreference.com

HK Payroll Services, Inc.

INSURANCE

Insurance World Agency Inc.

Anil K. Sharma 630-654-6067 • info@iwainsurance.com 100 E Ogden Avenue Suite 203, Westmont, IL 60559 www.iwainsurance.com

INDEPENDENT JOE • APRIL 2014 25

Directory of Sponsors Please Visit The DDIFO Sponsor Directory online at www.DDIFO.org Belshaw Adamatic Bakery Group

Fran Kauth 206-718-3573 • fran_kauth@belshaw.com 814 44th Street NW, Suite 103, Auburn, WA 98001 www.belshaw-adamatic.com

Bunn-O-Matic Corporation

Todd Rouse 800-637-8606 • Todd.Rouse@bunn.com 1400 Stevenson Drive, Springfield, IL 62703 www.bunn.com

Cardtronics

Doug Falcone 973-599-0600 • dougf@cardtronics.com 628 Route 10 - Suite 8, Whippany, NJ 07981 www.cardtronics.com

Delphi/Fast Track 2+2 Drive-Thru Timer

Mike Pierce 714-850-1320 • mike@phaseresearch.com 3500 West Moore Ave., Suite M, Santa Ana, CA 92704 www.fasttracktimer.com

DTT Surveillance

Mira Diza 800-933-8388 • mdiza@dttusa.com 1755 North Main Street, Los Angeles, CA 90031 www.dttusa.com

Dunbar Security Products

Ashish Vadya 866-554-6799 • ashish@kkinsuranceagency.com 541 Broadway, Long Branch, NJ 07740 www.kkquote.com

Paris Ackerman & Schmierer LLP

David Paris 973-228-6667 • david@paslawfirm.com 101 Eisenhower Parkway, Roseland, NJ 07068 www.paslawfirm.com

Dustin Gosewisch • 800-766-9145 dustin.gosewisch@dunbararmored.com 8525 Kelso Drive, #L, Baltimore, MD 21221 www.dunbarsecurityproducts.com

Sinclair Insurance Group - Risk Management

Vernis & Bowling of Palm Beach, P.A.

Arliene Bird arliene.bird@ecolab.com 8300 Capital Drive, Greensboro, NC 27409 www.ecolab.com/Businesses

Zarco, Einhorn, Salkowski & Brito, PA

James O’Neill 800-974-1006 x326 • james.oneill@getetemp.com 5 Cold Hill Road, Building 20, Mendham, NJ 07945 www.getetemp.com

3M Company

OPERATIONS

Eric Hancock 704-295-3964 • ehancock@greenturtletech.com 2709 Water Ridge Pkwy Charlotte NC 28217 www.greenturtletech.com

3 Wire Group, Inc.

Gary Hanna 508-624-7479 • gary@hitechsound.com 19 Brigham Street, Unit 10, Marlboro, MA 01752 www.hitechsound.com

KK Insurance Agency

Matt Ottaviano 203-284-3235 • mottaviano@sinclair-insurance.com 4 Tower Drive, Wallingford, CT 06492 www.srfm.com

Starkweather & Shepley Insurance Brokerage, Inc.

Sabrina San Martino 800-854-4625 ext. 1121 • ssanmartino@starshep.com 60 Catamore Boulevard, East Providence, RI 02914 www.starkweathershepley.com

Wells Fargo Insurance Services

Mark Stokes 813-636-5301 • mark.stokes1@wellsfargo.com 2502 North Rocky Point Drive, #400, Tampa, FL 33607 wfis.wellsfargo.com

LEGAL

Lisa & Sousa Attorneys at Law Ltd.

Carl Lisa, Sr. 401-274-0600 • clisa@lisasousa.com 5 Benefit Street, Providence, RI 02904 www.lisasousa.com

Ecolab

Tammy Bouker • 561-775-9822 • 561-775-9822 tbouker@national-law.com 884 US Highway One, North Palm Beach, FL 33408 www.national-law.com Robert Salkowski, Esq 305-374-5418 • rsalkowski@zarcolaw.com 100 SE 2nd Street, 27th Floor, Miami, FL 33131 www.zarcolaw.com

Bill Muenkel 952-484-4875 • wemuenkel@mmm.com Bldg. 223-2N-20 St. Paul, MN 55144 www.3M.com/communications Derek Knapp 518-563-3200 • derek.knapp@3wire.com 101 Broadway Street West, Osseo, MN 55369 www.3wire.com

eTemp

Green Turtle Americas

Hi-Tech Sound

Thank You to Our Sponsors!

DDIFO® does not endorse or recommend commercial products, processes, or services. A DDIFO® sponsor is paying to advertise, and it is not to be considered a product or service endorsement by DDIFO®. Furthermore DDIFO® does not control or guarantee the currency, accuracy, relevance or completeness of information provided by sponsors in their advertising.

26 INDEPENDENT JOE • APRIL 2014

Photo Credits: Caroline Cohen

Directory of Sponsors HME Drive-Thru Headsets

Brady Campbell 858-535-6034 • bcampbell@hme.com 14110 Stowe Drive, Poway, CA 92064 www.hme.com

Jarrett Services ATM, Inc.

Eric Johnston 732-572-0706 • ej@jarrettforcash.com 1315 Stelton Road, Piscataway, NJ 08832 www.jarrettforcash.com

Macdonald Restaurant Repair Service, Inc.

Mark & Debi Macdonald 508-384-9361 • debi@macdonaldcompany.com PO Box 61, 83 Pond Street, Norfolk, MA 02056 www.macdonaldcompany.com

Mint-X Corporation

Amie Yee 877-646-8224 • ayee@mint-x.com 2048 119th Street, College Point, NY 11356 www.mint-x.com

New England Drive-Thru Communications

Angela Bechard 888-966-6337 • angela@nedrivethru.com 12 Wildwood Road, Auburn, NH 03032 www.nedrivethru.com

New England Repair Service

Jerry Brown • A Division of New England Coffee Co. 781-873-1536 • jerry.brown@necoffeeco.com 100 Charles Street, Malden, MA 02148 www.nerepairservice.com

Paramount Restaurant Supply Corp.

Jeffrey Cartier 401-247-6500 • jcartier@pararest.com 101 Main Street, Warren, RI 02885 www.pararest.com

Payless Shoe Source

Matt Lemke 785-368-7530 • matt.lemke@payless.com 3231 SE 6th Avenue, Topeka, KS 66607 www.payless.com

Pentair Filtration & Process

Jeannine Gaine 630-240-1298 • jeannine.gaine@pentair.com 1040 Muirfield Dr., Hanover Park, IL 60133 www.everpure.com

Pier Cleaners

Larry Fish 401-789-2333 • piercleaners@piercleanersri.com 50 High St. Wakefield, RI 02879 www.piercleanersri.com

R.F. Technologies

Jennifer Morales 618-377-4063 ext. 121 • jenm@rftechno.com 542 South Prairie Street, Bethalto, IL 62010 www.rftechno.com

QualServ

Becky Dubose 800-643-2980 ext. 256 • bdubose@qualservcorp.com 7400 28th Street, Fort Smith, Arkansas, 72906 www.qualservcorp.com

Shoes For Crews

Paola V. Kerns 877-437-6176 • paolak@shoesforcrews.com 250 S. Australian Ave. West Palm Beach Fl 33401 www.shoesforcrews.com

SKAL East, Inc

UAS Security Systems

Chris McGurk 800-421-6661 • chris.mcgurk@uas.com 700 Abbott Drive, Broomall, PA 19008 www.uas.com

Wentworth Technology

Lisa Keslar 207-571-9744 • jlisakeslar@wentworthtechnology.com 77 Industrial Park Road Saco Me 04072 www.speedthruheadsets.com

The Wifi Company

Kevin Huerth 508-238-0106 • kevin@skaleast.com PO Box 303, 31 Eastman Street, Easton, MA 02334 www.skaleast.com/index.cfm?keyword=dunkin

John J. Bailey 877-949-9434 • jbailey@thewificompany.com 190 Pine Rd., Golden, CO 80403 www.thewificompany.com

TredSafe/WalMart

TAX DEFERRED EXCHANGE

Ted Travis 909-949-0495 • ttravis@esoriginals.com 450 West 33rd Street, New York, NY 10001 www.walmart.com

Exchange Authority

Marie Dias 978-433-6061 • mdias@exchangeauthority.com 9 Leominster Connector, Suite 1, Leominster, MA 01453 www.exchangeauthority.com

INDEPENDENT JOE • APRIL 2014 27

DDIFO SPONSOR ADVERTORIAL

My Perspective: Spring Safety

By Adam Goldman

Pacific Premier Franchise Capital (formerly Infinity Franchise Capital) has been a national lender to Dunkin’ Donuts franchise owners for nearly 20 years.

A conventional lender for franchisees with three or more locations, Pacific Premier provides capital to build new stores, remodel or relocate, restructure partnerships, acquire stores and refinance debt. It can lend up to 10 years on equipment loans, and 20 years on real estate.

Due to its depth of experience with the Dunkin’ system, Pacific Premier can quickly ascertain store performance and ease the credit process. The lender takes into consideration extenuating circumstances – such as a dip in sales due to road construction – rather than misinterpreting the financial health of the business. Its closing and documentation process gets rave reviews from franchisees.

“I’ve funded several deals now with Pacific Premier Franchise Capital,” said Dipak Patel, a Dunkin’ Donuts franchise owner in New Jersey. “Their industry knowledge and smooth process from loan origination through funding has made me a repeat client.”

For more information, visit www.ppbifranchise.com or contact Sharon Soltero, VP Franchisor Relations and Marketing, at ssoltero@ ppbifranchise.com or 402-562-1801.

F

or many franchisees, especially among those of us in the northeast, spring can’t come fast enough. This winter’s deep freeze and near-record snowfall took a toll on our weekly sales. I am dreading this year’s common area maintenance (CAM) invoices with all of the snow plowing and salting that was required. Now that it’s spring, we can stop complaining about the weather. At our shops, we welcome spring by focusing on store safety.

In February, emergency responders on Long Island, New York responded to a report of people getting sick at a Legal Sea Food restaurant. In all 27 diners had to be hospitalized as a result of carbon monoxide poisoning. Tragically, the restaurant manager was overcome by the colorless and odorless gas in the basement and died at the scene. It turns out, a faulty flue pipe from the hot water heater was the blame; as the gas seeped upstairs diners started feeling sick, which prompted calls to 911.

This is a tragedy that never should have occurred.

It doesn’t cost a lot to buy CO detectors and place them in our restaurants—especially in the basement, and near any gas fired device. That way, if a flue is damaged or blocked, the alarm will sound and people will know to get out of the store before it’s too late.

It’s also a good idea to check all your flues because sometimes small animals will take up residence in the pipes that come from hot water heaters, furnaces and fryers. Animals and their nests can block the flues and cause gases to back into the building. When you have your HVAC serviced to get ready for summer, have these flues inspected and, if necessary, cleaned and capped.

Now that the snow and ice has melted, it’s a good idea to take a closer look outside your shops at the walkways, curbing and the parking lot itself.

Chances are you have broken pavement, loose concrete and potholes. These are more than inconveniences, they can cause a customer to trip or fall. And, while you’re outside, check the fences around your dumpster. Continued pounding by snow plows can weaken the hinges on your gates.

They should be checked and replaced before they fall on a crew member’s foot

28 INDEPENDENT JOE • APRIL 2014

A car crashed into Adam Goldman’s shop on the morning of February 2, 2014. No one was injured, but the accident prompted Goldman to install bollards in front of his shops to prevent future incidents like this.

Spring time is also a good time to remind your crew what to do if a customer begins choking.

Hopefully you have a poster in the back of your shop that details how to help an adult or child who is choking. Be sure all crew members – especially those recently hired – are familiar with the information and know they should always call 911 in case of an emergency.

Sometimes the emergency requires crew members to call you as well. This past winter, I had one of those situations. One of my managers called me to say, “Boss, sorry to bother you, I have a small problem...there is a car in the store.” Not completely grasping what he was trying to convey to me, I looked at the cameras from that store, and sure enough an SUV was clearly inside the front of the store. Glass was blown out, the door caved in, tables ripped out of the floor and the only thing that stopped the SUV was a pole inside the store that holds up the roof. Luckily there were no injuries. Had the incident occurred an hour earlier when the store was packed and the sidewalk was crowded, it would have been devastating.

We closed the store for three days after the incident. A month later we were still waiting for a new front facade to be custom fabricated. I am now working our various landlords to investigate the installation of bollards strategically placed in front of the stores to stop a vehicle from jumping the curb onto the sidewalk and through the glass.

Each pre-painted bollard is around $50 and can be easily installed by most concrete professionals for less money than you think. Spring time is the perfect time to have those installed.

As business owners we all carry various insurance policies to help mitigate the financial impact of a business interruption, property damage or personal injury. Still, the best insurance is taking the time to review the danger spots in your shops so you can take the necessary action before something tragic occurs.

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Total Plan Integration and

Commitment to Client Service Since 1990 we have enjoyed amazing personal relationships with Dunkin’ Donuts Franchisees.

$6 Billion

OUR EXPERtIsE JoyaL CapitaL ManageMent, LLC

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Find out how JCM can help you grow and plan today. We have helped many Dunkin’ Donuts franchisees and we can do it for you.

BOSTOn

•

B O C a R aT O n

•

B e v e R ly H I l l S

Start a Relationship Today: 1-800-56-JOYAL Gary F. Joyal

Richard P. Joyal, Jr.

Stephen M. Stabile

Managing Partner gjoyal@joycapmgt.com

Managing Director rjoyal@joycapmgt.com

President ss12@att.blackberry.net

Daniel F. Connelly

Kathy Rebello

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Managing Director dconnelly@joycapmgt.com

Managing Director krebello@joycapmgt.com

Chief Financial Officer sobrien@joycapmgt.com

PROUD TO Be:

Watch client testimonials at: www.JoyCapMgt.com OR www. JCMFranchise.com