Independent Joe #28: October/November - Mapping the Future: DDIFO National Conference

October/November 2014

The Magazine for D D

Independent Franchise Owners

MAPPING THE FUTURE

DDIFO NATIONAL CONFERENCE 2014

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WHAT HAPPENS IN VEGAS… It might be the most famous tag line in advertising history.

It is still quoted extensively in a broad array of applications across the business, personal and social arenas and it inspired both an Usher song (“What Happens Here, Stays Here”) as well as several full length movies (The Hangover trilogy, What Happens in Vegas). It’s been in steady use for a dozen years now, and some would even say it’s a good code to live by, too!

But, in the context of the DDIFO National Conference and all that we heard and saw, it’s a horrible principle! No, rather than what happens in Vegas, stays in Vegas, DDIFO members who attended the 2014 conference at the Rio Hotel want to be sure to bring home all that they learned and apply it to their business operations.

The beauty of any organization’s educational undertakings is that they can be applied to our everyday real life experiences. Whether it is the multitude of “take-aways” from the Conversation with Dunkin’ Franchisees or the guidance and direction established by BAC co-chair Clayton Turnbull, we can all bring what we learned home from Vegas and apply the knowledge, insight and perspective to our businesses. And, that is precisely what DDIFO has been focusing on – helping its members with education, best practices and other suggestions with the goal of helping DDIFO members become better, more successful business owners.

In the wake of so many data breaches happening over the past few months, we wanted to bring you the latest research and information on cyber security and what you, as a small business owner, can do to protect yourself and your business. We put forth a presentation in conjunction with ANX eBusiness and the Federal Bureau of Investigation (FBI Cyber Crime Unit). Now, armed with that information you received in Vegas, you can better protect yourself from cyberterrorism, position your business more effectively for the future and thereby improve your longterm bottom line.

Similarly, in light of such undertakings as the “Fight for 15”, the state-by-state push for mandated sick leave, CPI-linked minimum wage increases and the like, we believed you could benefit from a thorough exposé of the new tactics being employed by organized labor. The presentation titled, “The New Face of Labor Activism” was a vehicle by which we could prepare you for issues and tactics with which you may be confronted in the future.

And, with the blockbuster Burger King purchase of Tim Hortons – amid ongoing volatility on Wall Street – we were confident a detailed analysis and a deeper understanding of Wall Street machinations would be valuable knowledge

for you to bring home from Vegas.

And that’s not all! We presented a sold-out exhibit hall where DDIFO member sponsors displayed, explained and demonstrated how their many products, goods and services can benefit a Dunkin’ Donuts operator while increasing efficiency and maximizing profits. Their value propositions are definitely something to bring home from Vegas!

Once again this year, we were proud to recognize three remarkable individuals. They are pioneers of the early days of Dunkin’ Donuts and are examples of how businessmen and women successfully grow a company – and become successful on their own. We are proud of our 2014 DDIFO Hall of Fame inductees: Carlos Andrade, Joe Batista and Bill Daly.

These men – like so many successful franchisees – have learned how to use what they learn behind the counter and at events like the DDIFO National Conference to sow seeds for future growth. They also know that in a community like this one, it’s important to share information, experiences and best practices so other franchisees – especially those who are new to the system – can also be rewarded for their hard work.

These leaders understand what the great American businessman Harvey S. Firestone, founder of Firestone Tire and Rubber, meant when he said, “It is only as we develop others that we permanently succeed!”

Yes, what happens in Vegas may stay in Vegas, but what we learn there is too important to leave behind!

Ed Shanahan DDIFO Executive Director

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 1

SUB HEADLINE

CONTENTS

From the Executive Director: What Happens In Vegas• • • • • • • • • • • • • • • • • • • • 1 What’s Brewing: A Look at State Issues Around the Footprint • • • • • • • • • 5 Franchisee Profile: Shub Hedge • • • • • • • • • • • 10 NATIONAL CONFERENCE Mapping the Future National Conference Round-up ��� 14 Hall of Fame Coverage• • • • 20

5

14 Breakfast Business Competition• • • • • • • • • Post-California, Moving Fair Franchising Forward • • • • • • • • • • • • • • Legal: Protection from Employee Compensation Claims• • • • • • • • • • • • • • • • • • • • Directory of Sponsors • • • • • • • • • • • • • • • • Beyond the Business in Las Vegas• • • • • • • • 2 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

20

22 28 30 32 36

36

10

Independent

The key is understanding the value of your business before making any decisions regarding the sale or transfer of your business.

The Magazine for DD Independent Franchise Owners

The first step in determining your options is getting a competent assessment of what your business will bring in the open market.

October/November 2014 Issue #28 Independent JoeÂŽ is published

by DD Independent Franchise Owners, Inc.

Call or email Barry or Ellen today to explore your exit plan. We look forward to hearing from you.

•

Editors: Edwin Shanahan, Matt Ellis Contributors: Carolyn Assa, Lisa Iannucci, Scott B. Van Voorhis and John R. Vreeland, Esq. Advertising: Joan Gould Graphic Design: Caroline Cohen

Pleas note theat we 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 JOEŽ, INDY JOEŽ, and DDIFOŽ 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 Š 2014 Printed in the U.S.A.

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4 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

WHAT’S BREWING A LOOK AT STATE ISSUES

AROUND THE FOOTPRINT

By Scott Van Voorhis

G

et ready to up your game. The pressure on franchise owners, already high, is about to get even more intense.

Leading up to the 2014 elections, lawmakers and activists across the country have been in hyper-drive, pushing various minimum wage hikes, sick leave bills and environmental regulations in a bid for votes.

In this edition of “What’s Brewing,” we take a look at how these issues can and will impact Dunkin’ Donuts franchise owners. Long before the November elections, lawmakers in several states increased minimum wages and instituted paid sick leave requirements. Industry observers say franchise owners will be grappling with the consequences of these measures for months and sometimes even years to come.

Moreover, if a wage hike or sick leave mandate hasn’t come to a city or state near you, just wait. This wave of activism in certain town halls and state capitols is showing no signs of abating and probably won’t change regardless of which party controls the United States Senate and House of Representatives, according to

Keith Miller, chairman of the Coalition of Franchisee Associations (CFA), of which DDIFO is a founding member.

Rosenberg, with money from his estate helping establish it.) “Excess laws and regulations are not of great help.”

“It seems to be growing and growing,” Miller says. “If you asked a majority of the public if workers should be getting $15 an hour, if you are like me, you aren’t going to like the answer.”

That said, one bright spot for franchise owners has been the positive momentum behind fair franchising legislation, which aims to protect franchise owners against arbitrary termination and other potential abuses by franchisors. Despite a setback in California, state lawmakers across the country are increasingly taking a good hard look at the issue (see article on page 30).

Ditto for efforts that appease environmentalists. As 2014 draws to a close, many states and municipalities have imposed new mandates on the use of plastic bags and Styrofoam cups and food containers, in addition to stricter bans on food waste.

On the federal level, small business owners are waiting to see the true impact of new mandates connected to the Affordable Care Act, also known as Obamacare.

What’s more, an important National Labor Relations Board ruling has primed labor unions to penetrate quick service restaurants.

“If you overregulate an industry, you will have problems,” notes Udo Schlentrich, co-director of the Rosenberg International Franchise Center at the University of New Hampshire. (The center is named for Dunkin’ Donuts founder William

Bottom line issues Minimum wage is all the rage right now.

While President Barack Obama’s proposal to increase the federal minimum to $10.10 an hour is stalled in Congress, state legislatures have more than made up for it. Minimum wage hikes were proposed in 38 states this year, passing in nine plus the District of Columbia.

Four New England states – Massachusetts, Connecticut, Vermont and Rhode Island – were among those that have passed wage hikes, going along with Minnesota, Michigan, Delaware and Hawaii, according to the National Conference of State Legislatures.

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 5

WHAT’S BREWING

The wage increases will have an impact across the board, not just on those franchise owners paying the minimum.

Franchise owners, who have typically paid a bit more than what is required, may find they have to increase pay to get the better workers, with the increase in the minimum raising the floor on wages that much higher.

In fact, Dunkin’ franchise owners in some states will face not just a one-time boost, but a series of wage hikes as increases are rolled out over the next few years.

In California, lawmakers raised minimum wage to $9 this year with plans to push it to $10 by 2016. Meanwhile, on the other coast, Massachusetts plans to increase the minimum from $8 an hour to $11 an hour by 2017.

A two dollar hike in the minimum wage for a franchise owner with ten workers equates to an increase of $800 a week in labor costs. That leaves the operator with a few hard choices: cut costs, lay off

6 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

" In many small businesses the profit margin is already razor-thin, and employers simply cannot afford to take on additional costs" workers or raise prices, according to Jason Stverak, president of the Franklin Center for Government & Public Integrity in Alexandria Virginia.

“In many small businesses the profit margin is already razor-thin, and employers simply cannot afford to take on additional costs,” Stverak says.

Some major U.S. cities are pushing even more radical proposals, with Seattle having OK’d an increase to $15 an hour, and Chicago studying a similar boost.

Paid sick leave is another bottom line issue of importance and momentum is building around proposals that force private companies to grant this benefit to their employees.

California, often a trend setter for the nation in policy and politics, not only

raised the minimum wage, but will also now require employers to provide three paid sick days a year. Massachusetts voters weighed in on the issue at the polls this November as well.

The California law kicks into action next July. Both states are following the lead of Connecticut, which started mandating sick leave back in 2011.

“What we will see is that these politicians who are waiving the labor union flags are going to be responsible for price increases in parts of the country where people can’t afford to pay $10 for a hamburger or $3 for a donut,” contends Ben Litalien, founder and principal of FranchiseWell LLV, a consulting firm.

Green mandates The growing environmental movement is taking direct aim at quick service

restaurants that routinely use Styrofoam cups or food containers. As many as 100 cities, towns and counties across the country banned Styrofoam containers, according to the National Resources Defense Council. Washington, D.C. recently became the latest city to ban the containers, joining New York, San Francisco, Minneapolis, Portland, Seattle and San Jose.

The anti-Styrofoam push has forced many Dunkin’ Donuts franchise owners to start using a polypropylene Styrofoam cup alternative. In a recent interview with Bloomberg News, Dunkin’ Brands Chief Supply Chain Officer Scott Murphy said Dunkin’ will probably make a decision on a new hot coffee cup next year and begin a nationwide introduction in 2016.

A different kind of ban is already impacting business owners in Chicago and California. Inexpensive, handy plastic take-out bags are no longer available.

Alderman passed a Chicago bag ban in the spring, followed by California’s firstever statewide ban on plastic bags over

the summer. In New York, activists are pushing for a 10 cent charge for the use of a plastic bag.

“It’s all a cumulative effect,” says the CFA’s Miller. “Maybe they are good things – maybe we need to quit having the bags and all this, but at what cost?

Who is going to pay for it all? We are in an environment where consumers are very cautious and our costs just keep going up,” he says.

Another kind of crack-down, this one on food waste, could also have major implications for Dunkin’ Donuts franchise owners and other restaurant operators.

Connecticut was first to pass a food waste ban in 2011. The regulation requires any business that generates more than two tons of food waste a week to recycle that waste rather than send the scraps to a landfill.

Vermont passed its own law in 2012, which gradually tightens restrictions so that by 2020 no food waste will be

accepted at any landfills, right down to the leftovers thrown out at home. A food waste ban in Massachusetts, similar to Connecticut’s, kicked off in October.

Federal Restrictions to Note Restaurants across the country have been bracing for menu labeling requirements stemming from the Affordable Care Act, which are expected to require calorie counts. But, the final regulatory edict has been delayed for years, leaving franchise owners in limbo. The U.S. Food and Drug Administration is scheduled to release final regulations by the end of 2014.

In the meantime, cities and states have increasingly taken matters into their own hands, with a patchwork of requirements being issued by New York City, Massachusetts, Maine and other states.

“Each of these franchisees will now be tasked with complying with the mandate—paying for new signage, removing profit-generating advertisements to make room for the calorie data, updating menus every time recipes change, and accommodating inspectors,” says Stverak of the

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 7

WHAT’S franchisors can be considered “joint employers” along with franchise owners when it comes to workplace conditions, is also generating great concern. The ruling, which centered on a McDonald’s case, could provide labor unions greater opportunities to organize workers at quick service chains, observers warn.

“Every franchisor in the U.S. is vulnerable if the NLRB actually adopts a new policy on joint employer liability,” argues William Sentell, an attorney and franchise law expert at Pugh Accardo in New Orleans. “Franchisors in the retail food sector, including Dunkin’, have more cause for concern, given their reliance on the mobile workforce and their razor thin profit margins.”

Franklin Center. “At the end of the day, it will lead to more work for business owners and less choices for customers.”

1, 2016, is the launch of the employer mandate requiring a business to provide coverage if it has 50 or more workers.

The other important component of the Affordable Care Act, beginning Jan.

On the labor front, the National Labor Relations Board’s recent ruling that

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With a new slate of lawmakers coming on the job in Washington and in state capitols across the nation in 2015, we will keep a close eye on these issues and other developments so franchisees have a clear sense of how laws, mandates and regulations will impact the bottom line.

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All programs and offers are subject to final credit approval by Direct Capital.® Please contact Direct Capital for eligibility and program terms. Dunkin’ Brands® trademarks and logos are registered trademarks of Dunkin’ Brands® and used with permission. Photo courtsey of ViewPoint Sign and Awning.

From Corporate Player to Franchise Owner

Shub Hedge Never Looked Back

W

hen the company you’ve worked for suddenly decides you are expendable, your sense of security can vanish, even if you are the calmest of personalities. However, for Shub Hegde, the experience meant just one thing: Opportunity.

It was the early 1990s and Hegde, who was born in a small town in southern India and moved to the U.S. in 1965, worked in finance for Gulf and Western Industries, a growing conglomerate that was buying up large companies like Paramount Studios, Madison Square Garden and Simon and Schuster. But, when Gulf and Western founder Charles Bluhdorn died in 1983, the new chief executive made an about-face and started selling off parts of the company. In its restructuring, Hegde was offered an option to move to another part of the company. He opted out.

“I wanted to get out of the corporate world and was planning on going back to India to start a business there,” says the now 74-year old. “But that fell apart.”

Eager to own his own business, he began researching various fast food franchise options in the U.S., including McDonald’s and Dunkin’ Donuts.

“At the time, if you wanted to own your own McDonald’s you had to either get on a waiting list or take one that was in the boondocks,” he says. “I knew someone who owned a Dunkin’ Donuts store, so I talked about it with him and it seemed like a more attractive opportunity for me.”

Hegde is a numbers guy and was attracted to the Dunkin’ system, and, in particular, its bottom line.

“I had looked at the numbers and it was reasonably attractive for the type of investment you had to make, so I hoped I could make some money.”

A new opportunity in a new state

By Lisa Iannucci

10 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

Wilmington, Delaware is about 100 miles from Central New Jersey, where Hegde and his wife were raising their family.

Close enough, he thought, to own a Dunkin’ Donuts location.

It was 1994 and Hegde was optimistic. He purchased an existing store and started commuting to work.

“It was 104 miles one way from my house to the store and I commuted for the first six months. Then I rented a small place in Wilmington and stayed there for six months. The whole process was an experience I’ll never forget,” he says.

And, business was tough. When he first took over, the store was barely grossing $8,000 a week in sales. “The first year I barely broke even,” he says. “It was doing badly because the former franchisee really didn’t take care of it. I fixed it completely and did what was required—a little bit of painting, fixing the parking lot and a lot of local promotions. That really helped. By then, it wasn’t making that much money, but it was doing okay.”

The second year, Hegde says he earned more than 10 percent in operating margin and his confidence began to build. “I thought, ‘I can run this business,’ I can hire some decent people.”

It took some time – and a lot of hard work – but the store finally reached $15,000 a week in sales, and stayed there. Hegde enjoyed the success but the commute was wearing on him and he missed being with his family in New Jersey.

Time to sell… and buy Hegde stuck with the Delaware business for three years, then sold his store in 1997. He wasn’t finished with Dunkin’ Donuts; he liked the business, but he wanted to grow a network closer to his hometown.

Just a couple of months later, he bought two existing Dunkin’ locations in Ocean and Monmouth Counties. He says they were doing okay, at the time.

“I thought the numbers were okay but not great,” he says. “However, it’s a good market and had good potential. I wanted to get into it and develop more stores.”

He eventually did, through new construction, a relocation and purchases of existing stores until he had a nine-store New Jersey network.

“If you want to get into this business, you need to understand why you want to get in…If you’re not willing to make that time and commitment it’s hard to succeed in this environment.”

Like other long-time operators, Hegde keenly remembers the struggles as well as the triumphs. There were many early mornings he thought about Fred the Baker and his famous commercials.

“I would come in in the middle of the night,” he says, because the regular baker had called in sick. He never considered any other option; this was his business. “You have to understand that kind of situation isn’t easy, but if you made up your mind, you did what you needed to get done.”

Hegde believes his background in finance and his ability to keep his eye on the big picture have helped him achieve success as a Dunkin’ Donuts franchise owner.

But, he is also quick to point out that any successful franchisee has to do his homework.

“If you want to get into this business, you need to understand why you want to get in,” advises Hegde. “What do you want to do? Can you make some money out of it?

I had some very good finance experience, but besides that you have to commit to yourself that this is what you want to do and put any time and effort into it that it requires. If you’re not willing to make that time and commitment it’s hard to succeed in this environment.”

And, even if you are committed, Hegde notes, timing still has to be on your side.

New region, new lessons Jacksonville is Florida’s northernmost big city—straddling the Georgia border. An old paper mill town with the largest deep water port in the South, Jacksonville has grown into a banking and manufacturing center. It’s also home to an NFL franchise.

In the mid-2000’s, as Dunkin’ Brands was expanding its Florida footprint, Hegde was presented with the opportunity to purchase two existing stores in Jacksonville.

“At that time, the city of Jacksonville had fewer than a dozen Dunkin’ Donuts stores, so the market just wasn’t there,” Hegde says. Plus, the nation was on the brink of recession. Jacksonville would not reach its market potential until after the economy improved. “[My two stores] tanked completely and I ended up selling and getting out,” he remembers without a sad or sour note.

“Right now, [Jacksonville] has 30-40 stores and is doing reasonably well, I understand.”

The Florida experiment taught Hegde a few things. First: the Florida market would never be like the New York/New Jersey market—buying habits, traffic patterns and store sales were all different. He also realized how important it is to research a market before buying a business there.

“I felt that I could just jump into it, but afterward I realized you need to find out what the market is all about. Back then I didn’t realize the southern market would be different than the north.”

Something else Hegde has learned in his different Dunkin’ experiences: You have to know how to respond to changes in the marketplace as well as changes in your own system.

“It’s extremely competitive today, so many [Dunkin’] stores have opened in the last few years and we have competition from 7-11 and mom and pop stores. Everyone wants to sell coffee.”

What’s more, he says, the numbers are different. “It’s not quite the same bottom line, and even the top line has changed. It has changed quite a bit.”

A new generation When he was commuting to and from

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 11

FRANCHISEE PROFILE Delaware, Hegde’s two sons, Ram and Sudhir, were too young to work at their dad’s Dunkin’ shops. And, even in New Jersey, it took 45 minutes to drive to the family’s business units. Unlike many second generation franchisees, the Hegde boys did not grow up serving coffee and donuts.

“It wasn’t until after college, when I asked one of them what they planned on doing and he said he was interested in coming aboard and working with me.”

Today, Ram and Sudhir operate 30 percent of a Dunkin’ franchise company with their dad; Shub still owns 100 percent of another franchise company. Ram and Sudhir are hands-on running the business, which allows Shub the chance to slow down a bit and enjoy a little more time with his wife Latha, “It’s made my life much easier,” he admits, though he remains active with DDIFO and the IAFO, (Independent Association of Franchise Operators) a subchapter of DDIFO in New Jersey. Time away from work

means more travel. “I also like to get back to India a few times each year,” he says.

Like many people of his generation, Shub Hegde sought job security in corporate America. There was a time he even imagined retiring from Gulf and Western and

living off his pension. When that dream evaporated, he chased a new dream: that of the entrepreneur. There have been ups and downs, but for Hegde the decision to become a Dunkin’ Donuts franchisee has provided more security for him and his family than he ever imagined.

•

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DDIFO National Conference Addresses Dunkin’ Franchisee’s Successes and Threats

By Matt Ellis

Talking BAC

A

fter hosting its National Conference at resort hotels at Mohegan Sun Casino in Connecticut and Caesar’s Palace in Atlantic City, DDIFO Executive Director Ed Shanahan decided to take the show to Las Vegas. The distance from the franchisee association’s New England headquarters was great, but Shanahan knew that a Las Vegas destination would send the right message, that DDIFO is a national organization with reach across the entire Dunkin’ Donuts footprint.

The 2014 DD Independent Franchise Owners National Conference and Hall of Fame Gala was a huge success. The winners were the franchise owners, the sponsors and the organization.

The house made out pretty well, too as DDIFO contributed its part to the Rio Hotel’s bottom line for 2014. The conference provided useful industry content for franchisees from such notables as an FBI agent specializing in cybercrimes, a former restaurant CEO and DDIFO’s estimable restaurant analyst, joined by leaders from the Brand Advisory Council and National DCP. As Shanahan put it, “The National Conference is this organization’s opportunity to address major issues of concern to Dunkin’ Donuts franchise owners in an environment that is focused entirely on what franchise owners need to operate their restaurants and maximize profits.”

14 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

In a world where information travels in a nanosecond and people can go online to find out almost anything, face to face communication still matters. One of the most important and well received components of this year’s DDIFO National Conference was the discussion of brand and franchisee issues which came under the heading “Talking BAC” and was headlined by a keynote address from Brand Advisory Council co-Chair Clayton Turnbull.

Turnbull, who entered the DD system in 1992, focused his remarks on one primary issue: change. He noted that for seven years Dunkin’ Donuts has earned top rankings in national surveys on customer loyalty.

“Overall, this brand is in good shape now. We know there’s more that we can do and we have to do it, because our world is changing faster than we can understand. Our customer’s lifestyles are changing in years, not decades,” he said.

He emphasized to the crowd assembled in the Brasilia Ballroom that change will be reflected in managing the menu and pushing new product innovation into the marketplace—even if it is not 100 percent ready.

“In today’s world, if you wait for 100 percent ready to roll, you are going to get rolled over; you’ve got to take a little bit of risk.”

Turnbull also turned the discussion to the DDIFO, suggesting the organization change its focus to provide more research and analysis for Dunkin’ Donuts franchisees and the BAC.

Photos By Zoran Dobrijevic

Conversation with Franchisees

Like other great national brands, Dunkin’ Donuts franchises are operated with great uniformity and consistency, but operators from different parts of the country face different challenges.

Some of these were highlighted in a spirited discussion among franchisees led by Rob Branca, who operates a network in Massachusetts, Ohio and Florida.

“One of the things we talk about is that [Dunkin’ Brands] management is not in the same business we are,” said Branca.

“DDIFO can have a role facilitating better lines of communication without interference from management.”

“DDIFO has been an incredible resource for me, this is my third DDIFO national meeting. I’ve found DDIFO is an organization that can help me be a better operator,” said Bryce Bares, a recent franchisee from Nebraska.

For this discussion, Bares was joined on stage by Charles Cutler from Florida, Hank Huth from Arizona and Washington, D.C., Brianne Medeiros from Massachusetts and Vishal Shah from Chicago. The group was seated comfortably on couches and soft chairs for a 90-minute conversation touching on issues from the value of an independent franchisee association to the challenge of appealing to new customers in established and emerging markets.

“When times are good and people are making money, and the relationship with the brand is constructive and collaborative, it’s difficult to stay relevant as a franchisee association. I know the relationship with the brand has swung wildly and there are folks here that have fought those battles together,” said Branca.

“It [the relationship] is better than it's ever been but, I am starting to see if things don’t pan out, it can be a volatile future. We may need the support of DDIFO and to have it there and not to have to create it is huge,” said Cutler. “I think if DDIFO is used correctly, it is a check and balance system for the brand and I can see the value now that I didn’t see before.”

On the subject of competition, Shah a second-generation Chicago franchisee who also operates one of the largest central kitchens in the system, said, “I think at its best, DDIFO is a vehicle that can protect interests of franchisees while promoting the interest of the brand. It truly is a working partnership.”

“It’s good that there is an organization like this that has the opportunity to push back if needed,” said Huth, a self-professed franchise junkie who has developed restaurant concepts such as Boston Chicken and Einstein Bagels in addition to Blockbuster Video stores during his career.

The group reflected on different competitive issues they face in

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 15

NATIONAL CONFERENCE ROUND-UP their markets, but all agreed on the importance of appealing to new, younger customers who will make up the core of Dunkin’s audience as older customers retire. Medeiros referred to those pending retirees as the “medium hot with cream and sugar” crowd.

“We need young people to come in and realize we have different swirls you can try and mix into beverages. We have to let them know we have that available.” Medeiros said she uses free samples to appeal to new customers. “It’s as simple as putting something free in front of them one time and knowing that, on this day, they will try something new just to get them to come in and try something new the next day,” she said.

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“I do think our future is in the iced beverage business,” said Cutler, who believes Starbuck’s is a chief competitor not only because of their slate of customizable frozen and iced drinks, but also because of the experience the brand creates for its younger customers.

“What they care about is: Is it relevant, is it cool, do we want to be seen there? And I think that’s where we lose out to Starbucks. We are not as cool and relevant.”

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Huth’s choice for drinks that appeal to Gen Y? “I’m going with iced coffee. I think that is a drink of choice outside of New England that has the chance to skew younger, especially with the different flavors we can put into it.”

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Photos By Zoran Dobrijevic

Dunkin’ Brands report Card

As DDIFO’s restaurant analyst, John Gordon, president of Pacific Management Consulting Group, provides analysis of Dunkin’ Brands and offers franchisees an unbiased view of how external factors – like Wall Street cycles, brand management and industry trends – can impact their bottom line. In his 2014 DDIFO National Conference presentation, Gordon covered several topics including Dunkin’s stock price, McDonald’s earning troubles and what the newly merged Burger King and Tim Hortons entity will do to the competitive landscape.

Gordon noted while the DNKN stock price was well above the July 2011 IPO, pressure remains to improve same store sales and initiatives to bolster the top line could impact franchisees.

Commenting on McDonald’s lackluster stock performance, Gordon said, “The majority of the McDonald’s fall-off occurred in the lunch and dinner hours. While breakfast was said to be higher, it appeared to be driven by deep product discounts, which do not positively benefit franchisees or the brand over time.”

Looming threats Sprint is widely recognized for developing, engineering and deploying innovative technologies and is a longtime provider of business and personal products and services to the Dunkin’ Donuts community.

Sprint offers comprehensive communications Business Solutions for franchisees— from a variety of mobile devices and plans to related services and accessories.

The carrier also offers Dunkin’ employees a 15 percent discount on select monthly service personal consumer accounts, which is a benefit that franchise owners can promote to prospective employees.

“Franchisees see Sprint as a solution partner for their business needs. Those who have deployed our Business Solutions tell us they’re pleased about saving money in different ways, including our stolen goods asset trackers and easy POS capabilities and backup,” said Sprint Wireless Benefits Manager Heath Stone.

“They also like being able to extend a personal discount to their employees.”

One of the greatest outside threats to Dunkin’ Donuts franchise owners doesn’t come from any individual business or entity. It comes from hackers, just ask Staples, Home Depot, Target or any of other brand name corporations that have been hacked. Online vulnerability is a costly proposition, both on the bottom line and in the minds of the public. It’s estimated a data breach can cause $80,000 in damages and fees to the owner of a single Dunkin’ Donuts location.

Mark Wayne, a vice president with ANX eBusiness – which provides integrated security and compliance services – painted a vivid picture of the dangers online hackers pose to giant corporations and small businesses like Dunkin’ Donuts franchises.

and if you’re hacked, you are responsible for the damages.”

Sepulveda, who investigated gang crimes before focusing on cyberspace, pointed out that attacks get more sophisticated each year and Point-ofSale (POS) systems running on older software systems like Windows XP are even more vulnerable.

According to Wayne, 70 percent of breached locations are out of business within one year of the attack. “The first thing I hear from a franchise owner,” Wayne said is, “Gee I wish I had known.”

“One in six franchisees will suffer a credit card breach in the next 24 months.” Wayne said.

“Ninety-eight percent of breaches originate from organized crime.”

Hector Sepulveda, an agent with the Las Vegas office of the FBI who investigates cybercrimes, joined Wayne on stage at the National Conference and made this point: “You are a target, you might not think so because you are a small business, but you are a target

Visit Sprint’s custom DDIFO member online store at sprint. com/ddifomembers. For questions about the employee discount and how employees can register, contact Heath Stone at Heath.H.Stone@ Sprint.com or 603-793-2129.

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18 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

The C-Suite Perspective

Robert J. Hoffman was chief executive at Ponderosa and Bonanza Steakhouse, a steak and buffet concept he led through bankruptcy reorganization. Today, he is the President and owner of RJH Hospitality Consulting LLC, and owner of a Fricker's Wings, a sports bar franchise concept. In his closing keynote address, he told National Conference attendees that franchisors and franchisees are often focused on different issues and different metrics.

He offered his view on the Burger King-Tim Hortons merger. “I’m not sure Burger King is not a threat [to Dunkin’ Donuts]. As a CEO, I’d be worried that Tim Hortons has a great coffee product and they now will have 7,000 U.S. outlets they can put coffee into. That’s 7,000 competitors for all of you.

Photos By Zoran Dobrijevic

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HALL OF DDIFO Honors Three Franchisees with Inclusion into the Hall of Fame

20 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

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ANC

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FAME

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Photos By Zoran Dobrijevic

Bill Daly Company man turned franchisee When he came to the stage to accept the honor of being inducted into the DDIFO Hall of Fame, Bill Daly shared a story from his first day as a franchisee. Daly, who had spent 29 years as a company man, in both the Howdy Beef ’n’ Burger and Dunkin’ Donuts systems before buying Dunkin’ Donuts shops in New Bedford, Mass, recalled walking into his shop and seeing longtime franchisees John Henderson and Joe Prazeres cleaning and organizing his back rooms.

“They had come over from Rhode Island to help out. It was 5 o’clock in the morning and John said to me, ‘you’re a franchisee now and franchisees take care of one another.’ It was something I never forgot,” Bill Daly always wanted to be a franchise owner and, with the encouragement of his family, he made the leap in 1999. Today, his family owns a network of stores in Massachusetts and Florida.

Bill’s children run the day-to-day business now. He has one grandson who is working part time at a DD—learning the business his grandfather learned from the men who started it all. For Bill, the continuity of the franchise community is something he holds dear.

“The loyalty within the franchisee community is still there. They take care of each other through the various committees and the DDIFO. It’s all about watching out for one another, taking care of one another. Making sure it is the way it should be.”

As he addressed the crowd of franchisees and friends in the Miranda Ballroom at the Rio Hotel, Daly noted how the culture within the Dunkin’ system is the same today as it was years ago, when the guys from Rhode Island came over to help the new guy get his stores up and running.

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 21

Carlos Andrade A trail blazer There are a few Dunkin’ Donuts franchise owners who are recognized as true trailblazers.

One of them is Carlos Andrade, the second of three 2014 Hall of Fame inductees. When he first came to work at his cousin Manny’s shop in Providence in the early 1970’s, Carlos hadn’t imagined how Dunkin’ would grow—or how his family would grow along with it.

Before Carlos took the stage to accept his honor, his friend and long-time attorney Carl Lisa told the assembled crowd that Carlos was always full of energy, always ready to jump in and help others.

“When the opportunities came to buy a new store and expand his business, Carlos was ready. He never considered sitting still,” Lisa said.

“We were buying stores and I needed more help, so I called my friends and my family and we worked together,” added Carlos.

Over the years, Carlos helped countless people get involved in the Dunkin’ system and reap its rewards. He demonstrated his

22 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

passion for the business – and his commitment to the franchisees – through his work on advisory councils, committees and with DDIFO. Reflecting on his induction, Carlos joked, “I’m too young to be in the Hall of Fame,” but then struck a serious note saying, “We need to recognize people in other markets, the Chicago market and the New York market [for example]. There are franchisees there who have been in the business 40 years, 50 years and we have to be aware of them and reward them for what they have done.”

When asked his thoughts on the state of the Dunkin’ Donuts business today, Carlos said, “The second and third generations are the ones leading us now and this is what will take this company to the next level.”

HALL OF FAME

Photos By Zoran Dobrijevic

Looking back, Joe said he never expected back then that Dunkin’ Donuts would grow the way it has.

Joe Batista I loved making the donuts Joe Batista, worked in a factory before he took a job as a baker at Manny Andrade’s Broad Street store in Providence, RI. A year later, he bought his own shop and began a career that was exciting, rewarding and memorable. Through his years as a Dunkin’ Donuts franchise owner, Joe loved interacting with people—his customers, his co-workers, and his family.

“Coming from the factory, it was like walking into the sunshine,” he said. “It was exciting and it was a real education for me.”

His favorite memory was making donuts and selling them to his customers. “I loved making the donuts,” he remembered fondly.

“It’s because of this unique American phenomenon we call franchising, where everybody pulls together, not just one single entity. It’s a collective effort.”

Joe sold his network and is now retired, but still feels his connection to the system and to DDIFO. “This organization [DDIFO] is very important to the system, it helps even things out and it’s important to recognize the people who have done well as franchisees,” Joe said. “I am very appreciative to be in the Hall of Fame.

With the inclusion of this year’s group, there are now 22 men and women in the DDIFO Hall of Fame. It is a testament to the legacy of Dunkin’ Donuts and to the pioneers who helped build the brand. It is also a wonderful reminder of how hard work, commitment and loyalty transcend the years and remain the building blocks of happiness and success.

•

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 23

Dunkin’s Choices Keep it a Strong Competitor for Breakfast Business

By Carolyn Assa

M

y morning workout is one of the few things I do for myself each day. The other is stopping at Dunkin’ Donuts for a healthy, low-calorie, breakfast on the way home,” says Sherri Horlink. The slender blonde, soccer mom from Natick, Massachusetts, enjoys an egg-white veggie flat bread sandwich when her busy schedule allows time for it.

Horlink is exactly the kind of customer Dunkin’ Donuts is courting—not just in New England, but across the brand’s growing footprint. The strategy is simple: Offer fresh, hot coffee paired with one of a myriad of choices at virtually any hour of the day “Our current focus is and has been coffee. Traditionally people come to us for that first cup of coffee. People want coffee and breakfast together. That puts us in this space,” says Chris Mellgren, owner of Surfside Coffee Company, a Dunkin’ Donuts franchise group with a network that stretches from Miami to the Keys, and from Sarasota to Fort Meyers.

More than just a cup of coffee Breakfast is the meal of champions, and there is plenty of competition for those morning meal dollars. In today’s busy world, where everyone is overextended, starting the day off right is about more than just a getting a good cup of coffee, it’s about getting an enjoyable breakfast at a reasonable price.

“Obviously there’s been a progression toward a healthier option—egg whites, low-fat turkey. We will continue to provide that as well as other options for customers,” says Mellgren. “The other trend we’re seeing, and Taco Bell is all over this, is portability of product. We are looking for more creative ways to come up with options, ways to create food you can carry with one hand while driving down the road—flatbreads and wraps, for example.”

Dunkin’ Donuts builds customer loyalty with its products, but there’s more to it than that. “Value, speed, quality, and convenience are the top priorities at Dunkin’ Donuts,” says Addison Ames, a former owner

24 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

of 100 Dunkin’ Donuts/Baskin Robbins combo stores in Central Florida.

Mellgren agrees: “We are always looking to provide speed, quality and diversity of breakfast sandwiches. We are constantly rolling out new offerings on an almost quarterly basis.”

Consumers want a friendly face, healthy options, reasonable prices, a clean restaurant, and fast service—ideally, with a drivethru window. According to Ames, 70 percent of sales take place at the window for franchises that have a drive-thru.

Options in product and location Ames says that Dunkin’ Donuts does a good job of creating new and better products that consumers readily accept and are willing to pay more to purchase. He says that consumers vote with their dollars, and their money says breakfast is what they want.

New York City native Eva Kant waited years for a Dunkin’ Donuts to open in her neighborhood on the Upper West Side of Manhattan. A therapist who routinely walks to work, Kant says she makes a regular stop at DD in the morning. She loves the coffee

DDIFO Restaurant Analyst John Gordon, who is president of Pacific Management Consulting Group, agrees that the drivethru option gives Dunkin’ Donuts an edge especially when those drive-thrus are open 24 hours—something conventional restaurants do not generally offer and many Starbucks don’t offer.

“At Starbucks—one out of every three coffee transactions has some food transactions added on. Dunkin’ Donuts has similar numbers, they just don’t track them. Part of the economic goal and motif going forward is to increase sales—once you have a store, rent and overhead to cover, you need to make money,” says Gordon.

Breakfast when you want it “Lots of consumers look for a 24-hour-a-day option. The fact that Dunkin’ offers that gives the company a very unique place in the market,” says Ames. “It also helps that all menu items are available 24-hours-a-day.”

“People’s patterns are changing. The notion of very narrow eating times has ended for most people. People are working from home. Everything is dispersed every which way. Kids, especially, like breakfast food. Kids tend to be up later. Their time clocks are different. This trend to breakfast is big,” says Gordon who emphasized that being able to get breakfast all day is a plus.

Gordon adds, that McDonald’s, long known as the industry leader in the breakfast wars, is losing a lot of customers because they don’t serve breakfast after 10am. Even so, breakfast still accounts for 25-percent of all daypart sales for McDonald’s.

Breakfast is the most profitable meal of the day for any restaurant, so the opportunity for increased revenues is huge.

“If you are interested in making money it (breakfast) is the place to be,” says Ames, now based in Orlando, FL, and working as the Director of Marketing and Communications for Barnie’s Coffee Kitchen. “There’s a lot of opportunity to expand with breakfast.

Whenever we offered new or limited time products—sales went off the charts for that item.”

“As much as we like to think of ourselves as clever, we are not the only ones that have identified breakfast as profitable. Especially in Miami, but everywhere there is one of our competitors within a mile of us,” says Mellgren, who operated Dunkin’ franchises in the Washington, D.C. area before relocating to Florida a few years ago.

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 25

and the various breakfast options. “I was happy to learn that Dunkin’ Donuts has a variety of breakfast choices,” she says.

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With greater competition from other quick service restaurants and mom-and-pop shops across the country, Dunkin’ Donuts franchisees are always on the look-out for new opportunities to entice morning customers.

“We had the breakfast sandwiches. We would make combos with muffins, coffee, sandwiches, etc. We always tried to keep it under $5. We sold a lot of sandwiches. I did that on my own and built those areas,” says Kathy Anczerewicz, a former franchise owner in Chicago. She and her husband owned several Dunkin’ stores for more than three decades before retiring earlier this year and selling their last two restaurants.

“Going into more breakfast sandwiches is one way of reaching consumers. Dunkin’ always watches out for competitors,” says Anczerewicz, who found the battle for breakfast with McDonald’s extra challenging because the Golden Arches are headquartered in Chicago.

To beat the competitors, she says, she made sure to get involved – and stay involved – in her community, hiring local people to work in her shops and featuring community messages on her bulletin board.

According to the research firm NPD Crest, a leading global information company in Purchase, NY, U.S. consumers cut back on restaurant visits at lunch and dinnertime last year, but increased their visits at breakfast. It was the fourth straight year of that trend. There was a gain of three percent to over 12.5 billion for breakfast visits last year in the U.S. Fast food, which accounts for about 80 percent of total revenue for morning meals, showed the strongest increase at four percent.

After Dunkin’ Brands’ third quarter earnings report delivered a two percent increase in comparable store sales and year-overyear revenue growth of 3.4 percent, media reports cited pressure from strong competition in the breakfast and coffee environment as a chief cause of the brand’s failure to meet Wall Street’s expectations.

Bloomberg Businessweek wrote, “The only coffee and doughnut company that is having a solid year on Wall Street is Canadabased Tim Hortons – and that's mainly because Burger King has agreed to buy it,” Franchisees see competition for breakfast dollars wherever they look.

“Taco Bell is doing a good job with breakfast. Of course Denny’s has always had breakfast too,” says Anczerewicz, “Just look at the economy… people aren’t spending money. Fast food is what people can afford, so, everyone’s trying to grab that business.

Plus, people are on the go. They want things quick, and they want quality. You have to give quality. I feel a lot of chains are going to look at breakfast. It’s the best area; it’s the most profitable.”

BREAKFAST BUSINESS And of course, “coffee is universal and can be had at any time of day or night,” says Gordon. “It’s true that coffee companies and fast food restaurants do compete in the [4:00 a.m. to noon] daypart known as breakfast – McDonald’s, Burger King, Wendy’s, Taco Bell, Tim Hortons, Peete’s Coffee, and Tea Leafe – but the value of this market share extends beyond breakfast.”

Gordon says that leveraging affordable breakfast, sandwiches and snacks in addition to beverages, helps franchisees generate sales during traditionally quiet periods. “Breakfast enables a stronger 10:00 a.m. to 11:00 a.m. hour which builds up the lunch crowd—breakfast consumption has been rising, and is very well reported. In the restaurant space it’s the only daypart that is growing. Lunch and dinner are down. The reason is that there has been emphasis on breakfast. Breakfast also enables a more robust overnight presence—from about 2:00 a.m. to 3:00 a.m. people start to desire breakfast food. Overnight food offering becomes viable. Utilizing your asset again.” The goal, Gordon says, is to satisfy those customers so they return over and over again.

Chuck Fries, an east coast transplant who works as an engineer in Chandler, AZ, has become a Dunkin’ regular now that the brand has established itself in Arizona. Fries likes the options on the DD Smart Menu. “My family and I moved here from the Northeast for a healthier life-style. It’s nice to know that Dunkin’ Donuts is here too, and that healthy food options for breakfast and other meals is a priority for them as well.”

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DDIFO SPONSOR ADVERTORIAL

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In-depth interviews with QSR operators and employees, along with 3M’s decades of QSR industry experience, guided its design.

The G5 features better sound quality and background noise reduction, increased durability, lighter weight, enhanced comfort, backward-compatibility and even the ability for in-store “repair-ability.” This means you can make key repairs in your store in seconds—the G5 never has to leave your shop, eliminating the need for maintenance contracts.

“We provide best sound quality, enhanced durability drive-thru systems to help Dunkin’ franchisees to run successful operations, and we offer the lowest cost of ownership over the life of the system,” said Key Account Representative Bill Muenkel.

3M offers Dunkin’ franchisees special pricing on all of its headset packages, and significant discounts on its XT1 model are available through year’s end.

Learn more at www.3m.com/ communications. For an in-store G5 demo or additional information, contact Bill Muenkel at wemuenkel@ mmm.com or 952-484-4875.

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By John R. Vreeland, Esq.

A

s a Dunkin’ Donuts franchisee, you and your labor lawyer should immediately audit your franchise’s compensation practices. Lawsuits for unpaid minimum and overtime wages are on the rise, and several Dunkin’ Donuts franchisees in the northeast have been the targets of lawsuits and Department of Labor investigations.

In September 2014, a Dunkin’ Donuts franchisee near Pittsburgh was sued by his assistant managers, who alleged that the franchisee misclassified them as exempt from overtime pay, and violated the Fair Labor Standards Act (FLSA) and Pennsylvania’s Minimum Wage Act (PMWA). In that case, the assistant managers alleged that they performed the same duties as hourly paid employees and did not otherwise meet the FLSA’s or PWMA’s overtime exemption for executive or administrative employees.

The assistant managers claimed that they were required to work 50 or more hours per week without overtime pay. The assistant managers also accused the franchisee of inaccurately recording the number of overtime hours each assistant manager worked, by recording each assistant manager’s hours worked as 50 per week, regardless of the actual number of hours worked.

Another case involving a Dunkin’ Donuts franchisee demonstrates the impact that minimum wage and overtime violations can have on your franchise. In 2013, a two year investigation conducted by the U.S. Department of Labor resulted in a Dunkin’ Donuts franchisee, who operated 55 stores in New Jersey and New York, paying nearly $200,000 in overtime

28 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

violations. The Department of Labor found that the franchisee incorrectly classified its store managers as exempt employees. Although the store managers did perform management duties that satisfied the FLSA’s duties test, the managers did not meet the salary basis test for exempt status. Specifically, the franchisee docked its store managers’ weekly salaries whenever they worked fewer than 60 hours per week. This violated the FLSA’s salary basis requirement and converted the store managers into nonexempt employees. The Department of Labor also determined that management at two of the franchisee’s locations violated the FLSA’s minimum wage requirements by taking employees’ tips to make up for register shortages.

These cases highlight just some of the common compensation and payroll mistakes that plaintiff’s attorneys can use to initiate a court action. In some cases, employers have been held liable for millions of dollars in unpaid minimum and overtime wages. These common mistakes can be particularly problematic for franchisees who own multiple locations. If the Department of Labor determines a franchisee has committed a violation at one location, it will naturally assume that the same franchisee is committing the same violations at his other locations and launch investigations of those stores.

Both of the cases mentioned above highlight a common overtime exemption mistake. Many employers believe that managers and assistant managers are not entitled to overtime pay simply because they have “manager” in their title. However, under the FLSA and similar state wage and hour laws, an employee’s actual job duties – and the manner in which they are compensated – determine whether the employee is exempt from overtime pay. Accordingly, you should evaluate whether your employees are entitled to overtime pay on an employee-byemployee basis. An employer that determines

Experts at Delivering Franchise Finance Solutions

that an employee is exempt from overtime pay simply because the employee shares the same job title as other exempt employees runs a serious risk of litigation or a state or federal department of labor investigation.

In order for an employer to claim that an employee qualifies for one or more of the FLSA’s “white collar” overtime exemptions, the employer must be able to demonstrate that the employee satisfies both the “duties test” and the “salary basis test.”

The FLSA’s duties test varies among the various overtime exemptions, but each duties test is defined in detail by federal regulations. The FLSA’s salary basis test is also controlled extensively by federal regulations. These regulations provide in part that, in order to meet the salary basis test, an employee must receive a guaranteed salary of at least $455 per week which cannot be reduced because of variations in the quantity or quality of the employee’s work.

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In fact, federal and state regulations have effectively eliminated an employer’s ability to take what some might consider a common sense approach to classifying employees as exempt and non-exempt from overtime pay. Employers that incorrectly classify their employees as exempt can be liable for unpaid minimum and overtime wages going back three years under the FLSA–six years under certain state laws, liquidated damages equal to the amount of unpaid wages, and their employees’ attorney’s fees.

These examples underscore the importance of periodic self-audits to ensure compliance with the FLSA and state wage and hour laws. Every Dunkin’ Donuts franchisee should consult with his or her labor law attorney to evaluate whether you are compensating your store managers, assistant managers, and other employees as required by the FLSA and applicable state wage and hour laws—before a government audit starts or notice of a lawsuit arrives.

•

John R. Vreeland is a partner in the Newark, New Jersey office of Genova Burns Giantomasi Webster LLC. John directs the Wage and Hour Compliance Practice Group and is a member of the Labor Law Practice Group.

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INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 29

Post-California Moving Fair Franchising Forward

By Scott Van Voorhis

I

t’s easy to see why backers of California’s historic Fair Franchising Bill feel a bit like the 2007 New England Patriots.

You may remember that team that went 18-0 before losing the Super Bowl to the New York Giants.

The Coalition of Franchisee Associations, which counts as its members franchisee associations from Dunkin’ Donuts, Subway, Domino’s, 7-11 and other franchise systems, made it to the big game, battling hard to push the bill through the California Legislature in the teeth of fierce opposition.

The big franchisors came out hard against the proposal, which seeks to protect franchisees from having their franchise agreements arbitrarily cancelled and make it easier for them to sell their businesses and harvest their equity.

According to CFA Chairman Keith Miller, the opposition gained traction by grossly distorting the facts of the bill, and alleging it would open the door to unionization and cost thousands of jobs.

“We fought against high odds in California to get as far as we did.”

The bill finally made it to Governor Jerry Brown's desk, where it sat, unsigned, for 29 days. On the 30th day , Brown vetoed the measure.

Most tellingly, perhaps, Brown said he wasn’t convinced there was a big enough problem to warrant a revision of the law.

“We are gathering and looking at all the intelligence and analyzing why Governor Brown vetoed the bill,” says John Gordon, DDIFO’s restaurant analyst and the principal of Pacific Management Consulting Group. “We have had hundreds of franchisees in California who have written and gone to meet with their legislators. Certainly no one here is happy with this.”

With California off the table for the moment, fair franchising supporters are now turning their attentions to Maine, Massachusetts, New Hampshire and Pennsylvania where proposals are already on the table. Those proposals, however, appear more complicated than California’s bill, which totaled just two pages.

They take, what observers are calling, a kitchen sink approach— proposing to remedy a wide range of injustices beyond simply protecting franchise owners from unfair termination and protecting their right to sell.

The Massachusetts proposal would free franchise owners from having to stay open for late-night and early morning hours and give them more control over pricing. The Maine bill called for any franchisor that set up a competing restaurant to compensate franchisees of its existing brand for losses.

The sponsors of the Maine bill were forced to streamline it down to five main points by The Joint Standing Committee on Labor, Commerce, Research and Economic Development. It was then defeated in the Senate and sent to another committee for more study.

“We are the 2007 Patriots – we went undefeated the whole season and then lost the Super Bowl,” says Miller.

The latest proposal to float in Pennsylvania sported 10 different provisions, including the threat of criminal penalties should a violation of the “responsible franchise practices” occur.

In the wake of the Golden State setback, franchisee leaders will huddle to discuss their strategy moving forward. The plan, however, is to regroup, not retreat.

New Hampshire is considering refiling its bill for Fair Franchising and the CFA is in talks with franchise owners in other states interested in trying to pass fair franchising bills.

The CFA plans to push ahead with efforts to pass fair franchising bills in several other states. These range from pursuing proposals already in the legislative mix to introducing new bills—a process that can take some time.

“This really is a state-by-state situation,” says Gordon.

Miller and other top franchise association leaders are also reviewing what happened in California to determine how best to revive the legislation.

In announcing his veto, Brown argued the proposal was “changing the standard” by which franchise agreements can be cancelled and would “significantly impact California’s vast franchise industry that relies on the certainty of well-settled laws.”

Brown did leave the door open ever so slightly to revisiting the issue later, but noted, in light of the “diametrically opposed views,” both sides would need to demonstrate a “collaborative effort” for any deal to materialize.

30 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

While the CFA is not prepared to name the additional states where franchise owners will be pushing legislation, Miller says the organization’s first goal is to build a solid base of support— before dashing off a proposal.

“It’s easy to introduce a bill; the hard part is getting [lawmakers] to take it seriously,” says Miller. “We try harder and harder to work and make sure we have a group of franchisees from multiple brands committed to supporting a bill and working on it before it is introduced.”

The demise of the California proposal, may prove a cautionary tale for groups in other states pushing fair franchising bills. In other words, don’t get too fancy or draw up a wish list of demands.

Even though California’s bill was relatively simple (and just two

pages), opponents framed the issue as a total revamp of existing franchise laws that would kill jobs and open the door to unions.

And, Miller says, the opposition was able to confuse franchise owners through a misinformation campaign. Many franchisees, Miller says, never bothered to read the actual bill.

Miller cited this example of an email from an opposition group representing several major franchisors. The email warns of a “grave threat” supposedly posed by the fair franchising bill.

The legislation would open the door to unionization of the franchises, harm brand standards, erode franchisee equity and enable franchise contracts to exist in perpetuity. If passed, SB 610 will negatively impact jobs, franchise businesses will close and existing contracts will become embroiled in costly litigation. This legislation must be stopped! We need your support to take action now!

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

- Matthew Tenore Dunkin’ Donuts®, Brockton, MA

Miller recounted a phone call from one franchise owner who received the email. “He told me, ‘I got one of your emails and read the bill. I couldn’t find any correlation between the actual bill and the talking points I was given by my franchisor.’” Misinformation at its best.

During this battle, the CFA also realized they were outgunned financially. Miller estimates opponents spent more than a million dollars on advertising and lobbying, while franchise owners spent ten percent as much.

Learn more at watchfiresigns.com/donuts

The decision by one of California’s largest unions, the Service Employees International Union, or SEIU, to back the fair franchising bill also proved to be a mixed blessing. While the union’s support was critical in winning over California lawmakers, it also exposed franchise owners to further attacks from fair franchising opponents.

“We got the crap beat out of us because the SEIU got very involved,” says Miller. “They came to us, wanting to support our bill; it’s not like we sent out an invitation.”

If the bill is to have any success during Brown’s administration, the language will have to be changed. In his veto, the governor said he was concerned the bill would fundamentally change a franchising system that got its start in California and that has been so successful.

Specifically, according to Gordon, Brown took issue with the wording “standard and material breach” referencing what franchisors would have to prove before being able to terminate a franchisee agreement.

“They (substantial and material) are very well known words in the judicial sphere. We thought those were extremely solid words.” But, Brown apparently didn’t object to the phrase for “good cause.”

Gordon says that’s a term franchisees can live with. Now, if they can only get Governor Brown to live with it.

•

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INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 31

Directory of Sponsors Please Visit The DDIFO Sponsor Directory online at www.DDIFO.org Sansiveri, Kimball & Co., LLP

ACCOUNTING

Adrian A. Gaspar & Company, LLP, CPAs

Robert Costello 617-621-0500 • cpas@gasparco.com 1035 Cambridge Street, Ste. 14, Cambridge, MA 02141 www.gasparco.com

Bederson LLP - CPAs and Consultants

Steven Bortnick, CPA 973-530-9113 • SBortnick @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, Ste. 61, Warwick, RI 02886-0114

Honkamp Krueger & Co., P.C.

Ryan Hauber 608-620-4794 • rhauber@honkamp.com 251 Progress Way, Ste. 200, Madison, WI 53597 www.honkamp.com

Marcovich, Mansour & Assoc. Inc.

Joseph Mansour 401-334-9099 • jmansour@mm-cps.net 640 George Washington Hwy., Lincoln, KI 02865

Neovision Consulting Inc.

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

Michael A. DeCataldo 401-331-0500 • mdeca@sansiveri.com 55 Dorrance Street, Providence, RI 02903 www.sansiveri.com

Thomas Colitsas and Associates, CPA

Tom Colitsas 609-452-0889 • tcolitsas@tcacpa.com 103 Carnegie Center, Ste. 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

Poyant Signs

Bill Gavigan 125 Samuel Barnet Blvd, New Bedford, MA 02745 508-717-4930 • bgavigan@poyantsigns.com www.poyantsigns.com

Trane HVAC

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

WatchFire Signs

Devon Mourer 217-442-0611 • devon.mourer@watchfiresigns.com 1015 Maple Street, Danville, IL wwwwatchfiresigns.com

BUSINESS BROKER National Franchise Sales

Ellen Hui 949-428-0498 • eh@Nationalfranchisesales.com 1601 Dove Street, Ste. 150, Newport Beach CA 92660 www.nationalfranchisesales.com

COMMUNICATIONS

AT&T Corporate Business Solutions

Sophy Englund 954 383-8133 • SE1885@ATT.COM 13450 W Sunrise Blvd, Ste. 602, Sunrise FL 33323 http://att.com/wireless/dunkindonuts

Charter Business

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

Comcast Business Services

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

Sonu Satellite

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

Sprint

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

Time Warner Cable Business Class

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

Verizon

Kevin Tatten 508-380-1807 • kevin.tatten@verizonwireless.com 77 Boston Turnpike, Shewsbury, MA 01545 www.verizonwireless.com

COST RECOVERY EF Cost Recovery

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

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.

32 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

Thank You to Our Sponsors!

Photos By Zoran Dobrijevic

Performance Business Solutions, LLC

Jeff Hiatt 508-878-4846 • jdh@revenuebanking.com 87 Lafayette Road, Ste. 11, Hampton Falls, NH 03844 www.revenuebanking.com

ENERGY

Directory of Sponsors

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

Pacific Premier Franchise Capital

Plotwatt, Inc.

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

FINANCE Bank RI

Josh Rouswell 856-505-4450 • jrouswell@marlinfinance.com 300 Fellowship Rd, Mount Laurel, NJ 08054 www.marlinfinance.com

BMO Harris Bank N.A.

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

Scott Vautrin 919-883-5679 • scottvautrin@plotwatt.com 1715 Six Gables Road, Durham, NC 27712 www.plotwatt.com

Tom Fitzgerald 401-574-1119 • tfitzgerald@bankri.com One Turks Head, Providence, RI 02903 www.bankri.com Angelo Maragos 949-293-0152 • angelo.maragos@bmo.com 7700 Irvine Center Drive, Ste. 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

Marlin Franchise Finance Group

Santander Bank

TCF Franchise Finance

Bill Johnson & Brittney Weber 952-656-3268 • bjohnson@tcfef.com 11100 Wayzata Blvd., Ste. 801, Minnetonka, MN 55305 www.tcfef.com

TD Bank

Business Financial Services

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

Centrix Bank & Trust

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

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

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

Fidelity Bank

United Capital Business Lending

FOOD PRODUCTS

First Advantage

Suzanne Cormier 317-245-1665 • Suzanne.Cormier@fadv.com 9800 Crosspoint Blvd., Ste. 300 Indianapolis, IN www.fadv.com

Granite Payroll Associates

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

Heartland Ovation Payroll

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

Paychex

Tina Maxwell (585) 218-6781 • franchisesolutions@paychex.com 1551 S. Washington Ave., Ste. 200 Piscataway, NJ 08854 www.paychex.com

HK Payroll Services, Inc.

Quaker Oats A Division of PepsiCo

Laurie Fleming 732-968-2700 Ext: 41916 • lfleming@honkamp.com 2345 JFK Rd, PO Box 3310,Dubuque, IA 52004 www.hkpayroll.com

HUMAN RESOURCES

Chris Wirt 804-433-2761 • chris.wirt@snagajob.com 4851 Lake Brook Drive, Glen Allen, VA 23060 www.snagajob.com/employers

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

ADP

Snagajob

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

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

First Franchise Capital

Bill.com

Richard Riecker 201-326-4021 • Richard.riecker@firstfcc.com 2715 13th Street, Columbus, NE 68601 www.firstfranchisecapital.com

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

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

GE Capital, Franchise Finance

CareerBuilder

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

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

Kylie Cox 781-343-4351 • Kylie.Cox@CareerBuilder.com 400 Crown Colony Dr., Ste. 301, Quincy, MA www.careerbuilder.com

INSURANCE

Insurance World Agency Inc.

KK Insurance Agency

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 33

Directory of Sponsors Please Visit The DDIFO Sponsor Directory online at www.DDIFO.org HME Drive-Thru Headsets

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

Hockenbergs

Tom Schrack Jr. 402-609-5111 • tomjr@hockenbergs.com 7002 F St., Omaha, NE 68117 www.hockenbergs.com

Jarrett Services ATM, Inc.

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

KD Kanopy

Leavitt Group

Angela Newman 626-384-3717 • angela.newman@leavitt.com 1820 East First Street, Ste. 500, Santa Ana, CA 92705 www.leavitt.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

Paris Ackerman & Schmierer LLP

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

OPERATIONS

3M Company

Bill Muenkel 952-484-4875 • wemuenkel@mmm.com 3M Center, 220-12E-04, St. Paul, MN 55144 www.3M.com/communications

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 - Ste. 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., Ste. 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

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

Ecolab

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

Green Turtle Americas

Eric Hancock 704-295-1733 • ehancock@greenturtletech.com 2709 Water Ridge Pkwy Charlotte NC 28217 www.greenturtletech.com

Hi-Tech Sound

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

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.

34 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

John Behrens 303-650-4707 • john@kdkanopy.com 1921 E. 68th Ave. Denver, CO 80229 www.kdkanopy.com

New England Drive-Thru Communications

Angela Bechard 888-966-6337 • angela@nedrivethru.com 12 Wildwood Road, Auburn, NH 03032 www.nedrivethru.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 • bdubose@qualservsolutions.com 7400 28th Street, Fort Smith, Arkansas, 72906 www.qualservsolutions.com

SensoScientific

Zary Lahouti 800-279-3101 ext. 475 • ZaryL@sensoscientific.com 685 Cochran St, #200, Simi Valley, Ca 93065 www.sensoscientific.com

Photos By Zoran Dobrijevic

Directory of Sponsors ServSafe/NRA Solutions, LLC

Kevin Scott 540-868-8292 • kscott@restaurant.org 175 W Jackson Blvd. Ste 1500, Chicago, IL 60604 www.servsafe.com

Thank You to Our Sponsors!

Shoes For Crews

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SKAL East, Inc

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

Tryad Solutions

Nick Restivo 630-549-0079 • nick@tryadsolutions.com 2015 Dean St. Ste. 6A, St. Charles, IL 60174 www.tryadsolutions.com

UAS Security Systems

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

PCI COMPLIANCE

TAX DEFERRED EXCHANGE

Mark A. Wayne 313-268-1606 • waynem@anx.com 2000 Town Center Ste. 2050, Southfield, MI 48075 www.anx.com

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

ANXeBusiness

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640 George Washington Hwy. • Lincoln, RI

401.334.9099 Joseph Mansour, CPA jmansour@mm-cpas.net

Dedicated provider of accounting, income tax, payroll and consulting services to Dunkin’ Donut franchisees across the country.

INDEPENDENT JOE • OCTOBER/NOVEMBER 2014 35

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36 INDEPENDENT JOE • OCTOBER/NOVEMBER 2014

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Up to 4 FREE Receivers Local Channels Included 3 FREE Months SonicTap® Music Channels

Local Channels Included 3 FREE Months SonicTap® Music Channels

INCLUDING

INCLUDING

8499

$

**

MO.

FOR 12 MONTHS

COMMERCIAL XTRA™ PACK

O MIDSIZED BARS WITH AN ESTIMATED VIEWING OCCUPANCY OF UP TO 100

OVER 180 Channels 3 FREE Months of HD Access 4 FREE HD Receivers Local Channels Included 3 FREE Months SonicTap® Music Channels INCLUDING

SAVE $49/MO. FOR 12 MONTHS with 24-month agreement and Auto Bill Pay

Keep your clients and customers informed with the best TV. CALL NOW!

SONU SATELLITE

(888) 706-1205 Authorized DIRECTV Dealer

Offers end 10/26/14; on approved credit. New commercial customers only. Pricing based on EVO 1 -100 only. $19.95 Handling and Delivery fee may apply. To access DIRECTV HD programming, HD Access fee ($25/mo.) and HD equipment are required. Number of HD channels varies by package. Applicable use tax adjustment may apply on the retail value of the installation. Additional outlet fees $15.00/mo. apply for the third and each additional receiver.

Local channels eligibility based on service address. Not all networks available in all markets. 3Blackout restrictions and other conditions apply to all sports programming. Actual number of games varies by market due to blackout rules and other conditions. *BUSINESS INFORMATION BILL CREDIT OFFER: Purchase of 24 consecutive months of BUSINESS INFORMATION (regularly $48.99/mo.) with local channels (if available in your market) required. Upon DIRECTV System activation, beginning in the second month, DIRECTV will credit the new customer’s account $9/mo. for 12 consecutive months for BUSINESS INFORMATION with local channels packages, plus an additional $10/mo. when customer activates and maintains BUSINESS INFORMATION and enrolls in Auto Bill Pay for 12 months with credit card at the point of sale. COMMERCIAL ENTERTAINMENT PACK BILL CREDIT OFFER: COMMERCIAL ENTERTAINMENT PACK (regularly $89.99/mo.) includes local channels, COMMERCIAL ENTERTAINMENT ($56.99/mo.) and outlet fees for two receivers ($33/mo.). Additional outlet fees of $15/mo. apply for the third and each additional receiver. Purchase of 24 consecutive months of COMMERCIAL ENTERTAINMENT PACK required.

Upon DIRECTV System activation and beginning in the second month, DIRECTV will credit the new customer’s account $17/mo. for 12 consecutive months for COMMERCIAL ENTERTAINMENT PACK, plus an additional $10/mo. when customer activates and maintains COMMERCIAL ENTERTAINMENT PACK and enrolls in Auto Bill Pay for 12 months with credit card at the point of sale. COMMERCIAL XTRA PACK PROGRAMMING/BILL CREDIT OFFERS: COMMERCIAL XTRA pack (regularly $133.99/mo.) includes local channels, COMMERCIAL XTRA ($74.49/mo.), SPORTS PACK ($12.99/mo.) and outlet fees for two receivers ($46.51/mo.). Additional outlet fees $15.00/mo. apply for the third and each additional receiver. Purchase of 24 consecutive months of COMMERCIAL XTRA Pack with local channels (if available in your market) required. Upon DIRECTV System activation and beginning in the second month, DIRECTV will begin to credit the new customer’s account $39.00/mo. for 12 consecutive months for the COMMERCIAL XTRA Pack with local channels packages, plus an additional $10.00/mo. when customer activates and maintains COMMERCIAL XTRA PACK and enrollment in Auto Bill Pay with credit card at the point of sale. Account must be in “good standing,” as determined by DIRECTV in its sole discretion, to remain eligible for all offers. IF BY THE END OF PROMOTIONAL PRICE PERIOD(S) CUSTOMER DOES NOT CONTACT DIRECTV TO CHANGE SERVICE THEN ALL SERVICES WILL AUTOMATICALLY CONTINUE AT THE THEN-PREVAILING RATES. IN THE EVENT YOU FAIL TO MAINTAIN YOUR PROGRAMMING AGREEMENT, YOU AGREE THAT DIRECTV MAY CHARGE YOU A NON-PRORATABLE EARLY CANCELLATION FEE OF $480. LIMIT ONE BILL CREDIT OFFER PER ACCOUNT. In certain markets, programming/pricing may vary. HD ACCESS OFFER: To access DIRECTV HD programming, HD Access fee ($25/mo.) and HD equipment are required. Number of HD channels varies by package. Upon DIRECTV System activation, DIRECTV will credit the new customer’s account $25/mo. for three consecutive months for HD Access, provided account is in “good standing,” as determined by DIRECTV in its sole discretion. In the fourth month, HD Access will automatically continue at the then-prevailing rate. LIMIT ONE HD ACCESS BILL CREDIT OFFER PER ACCOUNT. HARDWARE OFFER: Programming agreement, as defined by customer’s Commercial programming rate card, required. Up to four free HD or SD Receivers per BUSINESS INFORMATION or above commercial location. HD equipment also requires HD Access fee of $25/mo. Offer available to new Commercial customers in commercial structures no more than three stories high. No single-family residences allowed. Make and model of system at DIRECTV’s sole discretion. Offer void where prohibited or restricted. All DIRECTV Receivers must be continuously connected to the same land-based phone line. SONICTAP MUSIC CHANNELS OFFER: 24-month agreement to a Commercial base programming package required. Upon DIRECTV System activation, DIRECTV will credit the new customer’s account $35.99/mo. for three consecutive months for SonicTap Music Channels. Unless customer calls to cancel, in the fourth month SonicTap Music Channels will automatically continue at the then-prevailing rate.

INSTALLATION: Free standard professional commercial installation for COMMERCIAL XTRA PACK customers. $49 standard professional commercial installation for COMMERCIAL ENTERTAINMENT PACK and BUSINESS INFORMATION customers. Complex/custom installation extra. DIRECTV programming, pricing, terms and conditions subject to change at any time. Taxes not included. Receipt of DIRECTV programming subject to terms of DIRECTV Commercial Customer Viewing Agreement; copy provided with new customer information packet. ©2014 DIRECTV. DIRECTV and the DIRECTV for BUSINESS logo, BUSINESS INFORMATION and COMMERCIAL XTRA are trademarks of DIRECTV, LLC. All other trademarks and service marks are the property of their respective owners.

2

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

in assets under ManageMent

EstAtE PlANNING, PRIVAtE ClIENt GROUP

500 2,000 $100

private CLient group MeMbers

JCM advisory serviCes, LLC

BUsINEss VAlUAtION/ CONsUltING sERVICEs, RIA

dunkin’ donuts stores

JCM FranChise deveLopMent, LLC

MiLLion M&a

MERGERs & ACQUIsItIONs

$300 18

MiLLion debt pLaCeMent

JCM Mortgage Co., LLC

BANKING

states

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

Sean O’ Brien

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