8 We check out three Mexican concepts so you don’t have to, in FT Undercover By FT Staff
10 ‘Newstalgia’ strengthens A&W’s legacy, in Behind the Sales By Alyssa Huglen
11 Bankruptcy for On the Border, plus more in FT Online By FT Staff
12 Olympian pools talents at SafeSplash By Joe Halpern
14 Lines out the door at Somedays Bakery By Emilee Wentland
16 Franchisee leans on brand blueprints By Matthew Liedke
18 Fast start for Pancheros franchisee By Matthew Liedke
19 Pause founder promotes accessibility, in The Upstart By Alyssa Huglen
COVER STORY
20 With social media superstar and professional boxer Jake Paul in its corner, 60-unit hot dog and burger franchise Dog Haus is primed for growth. Paul is opening locations as a franchisee and putting his marketing prowess behind the Californiabased brand as it eyes nationwide expansion. By Joe Halpern
20: Social media star, pro boxer and Dog Haus franchisee Jake Paul 19: Pause Studio co-founder Jeff Ono 12: Multi-unit SafeSplash franchisee Cammile Adams 14: Somedays Bakery’s specialty croissants
photo by José Vallecillo
TOOLKIT
61 Technology, profits, marketing dominate at IFA event By Alyssa Huglen
64 FODC puts off-premises ops in focus By Bernadette Heier
65 Stubborn inflation affects outlook By Laura Michaels
Meet the 2025 class of Franchise Times Legal Eagles, the best and brightest attorneys in franchising. Get their insights on regulatory issues, private equity, dispute resolution and more hot topics in franchise law.
ArticlesbyJoeHalpern,AlyssaHuglen, MatthewLiedke,LauraMichaels and Emilee Wentland
ResearchbyJennyRaines 27-56
INTERNATIONAL
67 Major restaurant group brings YogaSix to Japan By Laura Michaels
68 Expect healthy competition in Japan, reports Country Profile By Laura Michaels
NEWS & VIEWS
71 Existing franchisees sign Five Iron Golf’s largest deal, in The Wire By Matthew Liedke
80 There are no franchise lifeguards, and don’t expect PE to save the day By Alicia Miller
81 By land and air, bots are on their way, but ‘zees should take a deep breath By Nicholas Upton
46: Haynes Boone attorney and Legal Eagle Elizabeth Weldon 64: Adam Brotman, co-founder of Forum3 71: Indoor golf simulator concept Five Iron
Taste Success with the #1 HOT DOG franchise
Pearls of franchise wisdom come to those who read
My grandmother had a lot of great sayings: “He’s windy.” (He talks too much.) “You’ll catch more flies with honey than vinegar.” (You’re more likely to get what you want when you’re nice.) And finally, one of my favorites: “He was three sheets to the wind.” (He was drunk.)
When my son Ben was a middle schooler, he and a group of friends were playing outside and were chided by our neighbor. I don’t remember why, but I do remember Ben coming inside and telling me it wasn’t fair. He didn’t commit the offense; one of his friends did.
I channeled my grandmother. “Birds of feather flock together, Ben,” I told him. Seeing his blank expression, I explained that even if you aren’t guilty, people will assume you are because you’re hanging out with the offender. Lesson: Select your friends carefully.
Same goes for franchising: Who you partner with matters.
During her interview with Pause Studio founder Jeff Ono for this issue, Reporter Alyssa Huglen asked about the consultants they brought in to kick-start their franchising plans.
“When we decided to franchise, we hired a plethora of different consultants and brought on a franchise team. We had many consultants tell us, ‘You guys are fine. You guys were set up well to launch a franchise,’” he recalled. But Ono knew he needed more help and brought in “A-plus talent” for franchisee support.
For multi-unit, multi-brand franchisee Garren Grieve, partnering with the right talent ensures they’ll succeed. As Grieve told Senior Writer Matthew Liedke, “Developing that talent means having a robust vetting process to make sure the right people are in the right places, which in turn translates to quality.”
And along the same lines, Alicia Miller, managing director of Emergent Growth Advisors, a franchise and financial advisory firm, writes in her column this month that private equity is picky about who they’re linking arms with.
One of my favorite lines from her column: Private equity “is not cherry picking the Island of Misfit Toys looking for ‘opportunities.’ There is simply too much risk.” Translation: As a franchisor raising your hand to receive PE dollars, you better be a brand that’s worthy.
Miller provides seven must-do’s to receive that investment. No. 5 is “be very selective recruiting franchisees.” And “If you need to make changes, involve your franchisees. Franchising is a brilliant business model with a fascinating twist: Management must ultimately retain franchisee engagement and buy-in. Reluctant franchisees can humble and frustrate management teams and sponsors, drag their feet on development…or otherwise remind us that entrepreneurs aren’t pushovers.” Indeed.
And for franchisees, if you want to buy into a new concept, that’s exactly what your new partner should be good at—getting buy-in from franchisees and helping them grow their profits.
The subject of our cover story, Jake Paul, boxer and mega-influencer, is no exception. He recently became a Dog Haus franchisee and both he and the franchisor declare the partnership a win.
“I see so much potential,” he told Senior Writer Joe Halpern. “I could’ve picked a lot of other restaurants to do this with.”
The win for the franchisor is for Jake to be Jake. “If he pretends to be anything else, this partnership won’t work,” said Michael Montagano, Dog Haus CEO. “He’s created an amazing brand on his own and we don’t want to change that.”
This old chestnut wasn’t in my grandmother’s lexicon, but I’m sure she’d agree: “A trouble shared is a trouble halved.” Having experienced partners, consultants and staff to bounce ideas off of is why franchising is so popular. (Remember, we have our special Legal Eagles section this month featuring the top legal minds in franchising.)
To reference the grandfather of franchising, former International Franchise Association President Don DeBolt, it’s all about being in business for yourself, not by yourself.
Reach Mary Jo at 612-767-3208 or mlarson @franchisetimes.com
Volume 31, Issue 4
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We check out three Mexican concepts so you don’t have to
Yes, cilantro tastes like soap. No, that didn’t impact the experience at the Chicago-based franchise named after the herb. This visit to a location in its home city was prompted by the desire for a saucy burrito, and Cilantro Taco Grill (A) satisfied that craving. The burrito al pastor ($11) comes with standard burrito inclusions: lettuce, avocado, tomato, beans, cheese and sour cream. The brand’s menu features authentic Mexican flavors and recipes, and the birria queso tacos were another delightfully messy entrée sampled during this visit. The brand recently rolled out a systemwide loyalty program to reward repeat customers and drive unit sales for franchisees.
Backed by rapper Pitbull, Cilantro Taco Grill has 19 units in and around Chicago, with deals signed in other states as it works to bolster expansion. This location was small, with seating for maybe a dozen people. Our group was the only one dining in at this strip mall location at lunchtime on a Friday, as most of Cilantro’s customers seemed to be picking up food to go.
The upshot: Cilantro’s flavors are inviting and satisfying, and the portions, plus an inexpensive price tag, would make me a repeat customer if the brand had spots in Minneapolis. —E.W.
“Welcome to Moe’s!” shout two workers as customers enter a Moe’s Southwest Grill (B) in Orlando, Florida. Having ordered online for pickup, there was only a brief wait as one worker ladled steaming queso into a bowl and packaged all the items together. She gets extra points for double-checking the accuracy. Moe’s gets extra points for having Foreigner on its playlist. The Homewrecker burrito in bowl form ($12.99) was stellar, brimming with chicken, rice, black beans, cheese, lettuce and topped with sour cream and guacamole. The chicken club quesadilla ($12.99) was likewise heartily assembled, and together there was enough food for two more meals. That’s my idea of value. The queso lived up to the hype, and who can say no to free chips and salsa with every entrée? The only ding on the experience was many of the chips were crushed during the enthusiastic packaging process. Moe’s, which sits under the GoTo Foods umbrella, is working to build upon its footprint of 600plus restaurants after several years of net unit count declines. Moves to update the menu and service standards began in 2023.
The upshot: Moe’s hits the right notes and emphasizes execution in its restaurants. —L.M.
Aburrito from Qdoba (C)? Twist my arm. The brand has a solid presence in Minnesota and I’m no stranger to it, thanks to its consistent quality. With that said, it had been several years since the last visit so this was a nice chance to reconnect. This particular location was a smaller inline store, built for a steady stream of foot traffic. Despite being busy, though, service at the line was fast and efficient. Like most of these fast-casual burrito spots, the cost can run higher, with a traditional burrito priced at $10.99 and another $3.29 for extra protein. The return on investment is strong, as the burritos are quite large and, considering everything that can go in them, it’s practically a balanced meal. As for the taste this time around, Qdoba held its own. The steak was all right, but competitor Pancheros has the flavor edge. Overall, it was still a mix of tasty components. Located in a bustling area near the University of Minnesota, this location is one of more than 800 in the Qdoba system. Entering its 30th year of operation, the brand is part of the Modern Restaurant Concepts portfolio.
The upshot: Qdoba has a strong selection of options to build a burrito, and the price is offset by the portion size. —M.L.
Ever wonder how consumers feel about your franchise? Editorial staffers Laura Michaels, Joe Halpern, Matthew Liedke, Alyssa Huglen and Emilee Wentland check out three brands in a different genre each issue, and report back.
FRANCHISING SINCE: 1995 under prior ownership. New ownership and brand re-launch in 2019
MULTI-UNIT FRANCHISEE OPERATING UNITS: 27
TOTAL OPERATING UNITS: 39
COMPANY OPERATING UNITS: 1
CAPITAL INVESTMENT:
$514,200-$980,500*
*Source: 2024 Bad Ass Coffee of Hawaii FDD
FRANCHISE FEE: $100,000**
**for three-store commitment (required)
ROYALTY FEE: 5%
ADVERTISING FEE: 2%
EARNINGS CLAIMS: No
BUILD-OUT OPTIONS: We offer a full complement of store build-out models for any real estate need.
AVAILABLE TERRITORIES: Opportunities available nationally.
OPPORTUNITY DETAILS
39 stores now open nationally, 22 new stores coming in 2025, and many more in the works, Bad Ass Coffee of Hawaii is making serious waves, and rapidly emerging into the market.
BADASS is GOOD. This is a new stand-out iconic & traffic driving name, experience, and concept in the coffee space, driving customers in. Opening with its unmatched Premium Hawaiian Coffee Collection, exciting and intentionally crafted Hawaiian drinks, and food menu, and following with must-have branded merchandise, it all adds up to some of the highest $/ transaction in the coffee segment. The distinct branding makes merch not only a significant revenue stream, but also an integral part of the brand experience, driving word-of-mouth and brand buzz.
DEMOGRAPHICS
• Proximity to dense populations, schools/colleges, businesses, parks, retail areas.
• Residential population greater than 25,000.
• Morning commute side with multiple access points, visible signage and 20,000+ ADT
• Median HHI $55,000+
SITE ASSISTANCE
We provide end-to-end support throughout the site selection, lease or purchase execution, and construction/build-out process.
QUALIFICATIONS
• Multi-unit franchise partners with prior or current multi-unit, multibrand experience preferred, or strong business ownership/ management experience.
• A persistent entrepreneurial spirit.
• A desire to be a part of a bigger ‘ohana (family) with a strong connection to their community.
• $750,000 available in liquid assets and a minimum net worth of $1,500,000. Three-store minimum development commitment required.
RANKINGS & AWARDS
• QSR’s 40/40 List 2023 as one of America’s hottest emerging fast casual brands
• QSR’s Top 50 – 2022 Contenders List as a brand to watch
• IFA Franchisee of the Year Award winners: 2022, 2023, 2024
• Inc. 5000 2024
‘Newstalgia’ strengthens A&W’s legacy
Meredeth Jones is no stranger to the A&W brand, and she knows she’s not alone.
“Everyone knows the name A&W … and a lot of brands have to work really hard for that brand recognition,” Jones said. “We have the name after
being in business for 105 years. We have that brand recognition and the legacy built up.”
Jones became vice president of franchise development and design for A&W Restaurants in December. The company has 860 global locations, with about half operating across the United States, including 230 co-branded with KFC or Long John Silver’s. It’s unit count in the U.S. has declined since 2018, when it had 613 locations across the country.
Brand familiarity played a role in Jones’ decision to join A&W, and she believes it’s integral in generating leads and driving realistic franchise growth. Nostalgia is at the core of what makes A&W stand out, she said, in reference to the iconic frosted mug, root beer and all-American food.
making it cool and relevant to today. Generations that are coming up are longing for cassette tapes, record players and even the Polaroid cameras. We’re not going too far back; we’re giving them just enough to get them interested in the brand.”
But it’s not enough to have a legacy; it’s all about how you use it. For A&W, this means taking advantage of “newstalgia.”
Meredeth Jones
“Like ‘new nostalgia’—it’s kind of a cool buzzword,” Jones explained. “It’s really bringing the nostalgia piece and making what’s old new again,
A&W is bridging the generational gap with this initiative, increasing its digital activity on Instagram and TikTok to appeal to younger generations.
But the company takes a holistic approach to franchise development. While LinkedIn builds interest, in-person interactions also prove beneficial when restaurant visits resonate with nostalgic franchisee candidates.
“There’s definitely ... that nostalgia for the days of when they were growing up, and people want to bring that experience to their community and their children,” Jones said. “That’s what we hear the most: ‘I grew up on A&W. I really want to own one. I want to bring it to my community.’ And that’s such a great testament to the brand.”
— Alyssa Huglen
Bankruptcy at On the Border
Citing more than 10,000 creditors and with upwards of $25 million in debt, On the Border Mexican Grill & Cantina filed for Chapter 11 bankruptcy protection March 4. It engaged Hilco Corporate Finance to manage a sale process and wants to finalize a buyer by May. The filing by OTB Holding, parent company of On the Border, comes after the chain in recent weeks closed at least 77 locations in 24 states that were deemed underperforming or were expected to drive losses. The company still has 60 stores, and franchisees in the United States and South Korea operate 20 units. In court filings, Jonathan Tibus, OTB’s chief restructuring officer, listed “a difficult macroeconomic environment, labor shortages, an underperforming restaurant footprint and creditor enforcement actions” as factors in the bankruptcy. —L.M.
Big Chicken joins Craveworthy
Craveworthy Brands is joining Shaquille O’Neal as one of the two largest shareholders in Big Chicken, the fast-casual fried chicken restaurant concept O’Neal launched in 2018 and began franchising in 2021. Craveworthy becomes a managing partner, investor and stakeholder, and its CEO, Gregg Majewski, will work alongside Big Chicken CEO Josh Halpern to accelerate growth for the 40-unit brand. “We bring the playbook that a fast-growing brand needs to use, and one that I’ve used before. When you sell to the big multi-unit operators, they want every aspect of their business systemized,” said Majewski. “Craveworthy allows us to hyper-focus that in a way that, as someone who’s been doing it for 27 years, knows what they’re looking for and is able to provide that aspect of every avenue of the business.”
—L.M.
Daisy raises $15M in Series C
After three strong rounds of venture capital fundraising, home and small business technology installation company Daisy reached $35 million in investment money and increased its valuation by 115 percent, said its founder and CEO, Hagan Kappler. More importantly, the Costa Mesa, California startup secured the capital to build out its technology stack and provide operators the back-end support needed to grow their businesses, she said. “The new fundraising money is really exciting and we’re well on a way now to becoming the leading player in this rapidly growing space,” said Kappler after her company secured an additional $15 million in a Series C funding round from Massachusettsbased Fifth Down Capital. She noted the investment solidifies Daisy’s balance sheet and provides significant cash resources.—J.H.
Olympian pools talents at SafeSplash
Two-time Olympian and former United States captain Cammile Adams swam against the best in the world when she was in her teens and early 20s.
The 33-year-old Texas native, who came oh-so-close to capturing bronze in the 200-meter butterfly at the 2016 Olympic Games in Rio de Janeiro, is achieving another kind of success in the pool as a multi-unit franchisee.
Adams owns six SafeSplash Swim Schools and one cobranded SafeSplash and SwimLabs unit, all of them located in and around Houston. And while she’s excited about opening her second brick-and-mortar location in Cypress, Texas, this summer, she’s also mindful of all the hard work that needs to be done to stay ahead of the competition.
“It’s very competitive here in this part of Texas with a lot of pools and places for people to get swim lessons,” Adams said. “That’s why we know we have to do everything we can to be better and to provide the best pool experiences possible.”
Since retiring from competitive swimming, the mother of two has immersed herself in her swim business. When she joined the Youth Enrichment Brands platform with the acquisition of six corporate-owned SafeSplash locations that operated out of leased pools, she did practically everything—from teaching classes to running the front desks to power washing the pool decks.
She can still be seen scrubbing the toilets at her locations because, as she said, “I really believe that as a leader you have to model the behaviors that you’d like to see.”
With a staff of about 30, including a general manager who helps oversee daily operations, Adams has been able to delegate a lot of tasks. Still, the work week is long one, with Mondays devoted to facility maintenance, Tuesdays to marketing and Wednesdays to meeting with her management team.
No matter what day it is, she still tries to build in time to coach her swim instructors, whose students range from three months to seniors in their 70s. Parker, Colorado-based SafeSplash has 150-plus locations across the country; 25 are in Texas. Average gross revenue for franchised “hosted locations,” the brand’s term for leased pools, was $205,662 in 2023.
Adams said she decided to invest in the franchise after studying the class curriculums of other swim brands and determined that SafeSplash provided the most effective lessons.
“What I saw the others doing that really bothered me is they were doing a lot of their lessons with the swimmers not even in the pool,” Adams said. “We want our swimmers in the pool to get comfortable and acclimated to the water.”
“Swimming took everything I had to compete against the best and it’s the same thing for me now as a business owner,” said Adams. “There’s so much that goes into running your own business with having to pay attention to every detail. The most important thing I do is train my staff the best I can and support them no matter what happens.”
Adams said she draws often on the lessons she learned as an elite swimmer to teach her staff and students important life skills and how small the difference is between success and failure. Adams certainly knows. She followed a fifth-place finish in her first Olympics in London in 2012 with a career best time of 2:05.90 in the 200 butterfly finals at the 2016 Games.
Between raising a 3-year-old daughter and 15-monthold son with her husband and running a business in multiple locations, Adams admitted she has little time for herself. But then again, the former U.S. butterfly champion knew what she was signing up for when she became a SafeSplash franchisee in 2018.
The difference between finishing fourth and making the medals podium in Rio was just seven-tenths of a second for the swimmer who was voted captain of the U.S. women’s squad.
“Coming that close to bringing home a medal was very disappointing. But what I realized is that I don’t want one race to define who I am and what I was able to accomplish,” Adams said.
“I truly do love still being around the water, and I think that’s something that really translates well to operating my swim business now,” she said. “Nothing makes me more pleased than to be a leader to my staff and receive praise for our work.”
—Joe Halpern
Multi-unit SafeSplash franchisee Cammile Adams, left, is a hands-on owner and says her experience as an elite swimmer pushes her to succeed.
Cammile Adams
Lines out the door at Somedays Bakery
It was a vacancy sign that finally pushed Peter Phillips to open his bakery concept in New York City.
“There was a space that I drive past every day on my way to the gym where I work out, and it’s a nice corner location, and it was available for like eight months,” Phillips said. “It was something that was on my mind and I just kept seeing the vacancy sign and I was like, I really want to do this.”
He partnered with pastry chef Arlander Brown to develop Somedays Bakery, a French-style artisanal bakery with a modern flare. The brand is known for its large croissants, soft-serve ice cream and it serves La Colombe coffee. Phillips is the CEO and Brown, previously of the Manhattan bakery Librae, is the chief culinary officer. Other leadership team members are Chief Development Officer Eddie Mamiye and Dion Vangelatos, the chief finance officer.
Somedays had a line out the door about 30 people long for the entirety of its first franchise’s opening weekend in January. “We were sold out within five hours on Friday, Saturday,” Phillips said. “It was just an unbelievable response. People were waiting in 20-degree weather to get their hands on the product.”
Phillips is also CEO and co-founder of Chip City Cookies, which features a weekly cookie rotation on its menu. Based in New York, Chip City has 45 locations in nine states. The cookie brand is largely made up of corporate-owned stores, with a franchise unit here and there, Phillips said.
Chip City attracted Enlightened Hospitality Investments, led by Shake Shack founder Danny Meyer, as an investor when it started franchising in 2022. Enlightened initially invested $10 million and then another $7.5 million.
Somedays wants to grow via franchising. The first franchisees, Joe Vaccaro Sr., Nick Zias and Joe Vaccaro Jr., opened their store in April 2024. It’s just two miles away from the flagship bakery in Astoria, Queens, and has grown a loyal following in the borough.
“The franchisees there are just to the moon. There’s no better feeling than opening up a new business that you sink all your money into and have a line down the block,” Phillips said.
In addition to its signature plain croissant, Somedays serves other flavors such as pistachio with raspberry jam and white chocolate, chocolate hazelnut with strawberries and a prosciutto and gruyere croissant. What customers are “going crazy for,” Phillips said, is the company’s 10-layer cake. Flavors change often, so customers could find a black sesame croissant or even an elote-flavored Danish on their visit. Everything is made from scratch in house.
With just two stores open, the company has garnered 26,500 followers on Instagram, where Somedays posts aesthetically pleasing photos and videos of its croissant varieties and other offerings.
“I think nobody’s doing this within a small format the way that we’ve created it,” he said. “It’s a hyper-specialized, streamlined program.
Competition continues to rise in the bakery category, with large players like Panera Bread, Tous les Jours and Paris Baguette. There are smaller brands, too, such as La Madeleine, Kolache Factory and Breadsmith.
Peter Phillips
Franchisees need to share the passion for delivering service that has guests leaving with a grin on their faces, Phillips said. Somedays isn’t looking for owners who want to squeeze every last cent out of their bakeries; rather, it’s seeking people committed to a high standard of quality and experience.
But Phillips said Somedays stands out among the masses.
The first two bakeries are just 800 square feet with limited seating. Phillips modeled the concept after bakeries he visited across the Atlantic Ocean.
“If you go to Europe, there’s a lot of these very small format bakeries. It’s not really something you see here in the States,” he said.
Somedays plans to have 10 bakeries open by the end of this year in the New York City area.
“My idea behind Somedays was this is something that I think can work in every major city across America,” Phillips said. “That’s my ambition, to bring it to every single city. The fact that we’re doing it from scratch, it really can go anywhere. So, who knows? Maybe by next year we might have locations all across the map.”
—Emilee Wentland
Somedays Bakery in New York is known for its artisan croissants, with flavors such as pistachio, chocolate hazelnut and prosciutto with gruyere.
Franchisee leans on brand blueprints
Garren Grieve sees two types of personalities in franchise owners: Those who have a more inventive approach and others who strictly adhere to the system.
Grieve, a multi-brand franchisee, said he’s one of the latter.
“Some business owners add their own touch, from development of the menu to products and so forth,” Grieve said. “I’ve never really been that passionate in the sense of having a creative mind, though. I’m more somebody who loves procedure, following things that have been established and proven to work over time, and in some cases, decades.”
In following the blueprints from several concepts, Grieve built a portfolio with Jack in the Box, Del Taco, Denny’s and Keke’s Breakfast Café totaling 72 locations. In the past three years alone, he opened 20 restaurants, including 12 Jack in the Box units in Salt Lake City, which marked the brand’s first foray in the market.
The rest of Grieve’s restaurants are in California, his home state. His hospitality career, however, began in Las Vegas. After graduating from the University of CaliforniaRiverside and working in the sales and finance fields for a few years, Grieve took a position at MGM Resorts in 2007.
His time spent in Las Vegas reinforced an interest in the hospitality sector that originated when he worked at different quick-service restaurants in high school.
“I was out there for just under five years, but ultimately wanted to move back home,” Grieve said. “I had fast food jobs in high school and kept an interest in those brands and that developed into a desire to become a franchise owner.”
He made that happen when he returned to California in 2011 and went into business with Mike Gribble, a Jack in the Box franchisee who had five locations at the time. Over the years, Gribble became a mentor to Grieve before he died in 2021. In the time since, Grieve carried on with the business, now called Seaside Dining Group.
Over his time as a franchisee, Grieve continued to find the relationship-building process with the franchisor as the most critical, especially when following the brand standards.
“Things are rubber-stamped in a way that we know we can execute existing menus and operating models,” Grieve said. “It allows us to turn our attention to scaling our business and other areas on the operation side of the business.”
Developing that talent, Grieve said, means having a robust vetting process to make sure the right people are in the right places, which in turn translates to quality.
“We also have a deep roster of management put in place,” Grieve said. “We really emphasize having talent in all areas to make sure all of our systems are united in maintaining quality. We look at that as the way to grow the business and keep guest satisfaction.
That scaling has led to the opening of many restaurants and Grieve said it’s possible the growth could continue toward hitting 100. But he added he’s not focused on just reaching a number.
“We want to make quality decisions that will lead to success,” Grieve said. “First and foremost, we look at how the growth will impact our overall enterprise value. Secondly, we want to just enjoy where we’re at. With the issues we face, we want to make sure that as we grow, that we have the right infrastructure and people. To have a lot of talent around to execute at a high level.”
“The culture that we’ve been able to implement, a lot of that comes from the management,” he continued. “I like to have our teams as autonomous as possible. So, everyone is in their role and they understand what their responsibilities are, so we don’t have to micromanage too much across the organization.”
Van Ingram, vice president of franchise development for Jack in the Box, said it’s the attention to growth and quality that makes multi-unit and multi-brand operators good partners.
“They typically have the infrastructure, knowledge and ability to develop,” Ingram said. “They’re also the type that look for new opportunities, whether they’re territory contained or just looking to expand. Garren is a perfect example of that and has proven himself as a successful operator within the Jack in the Box system.”
Finding those types of franchisees is important for Jack in the Box lately, as the West Coast brand with 2,050 locations looks to expand eastward.
—Matthew Liedke
Along with Jack in the Box, Garren Grieve’s franchise portfolio includes Del Taco, Denny’s and Keke’s Breakfast Cafe, for a total of 72 restaurants.
Garren Grieve
Fast start for Pancheros franchisee
After just a year and a half with the brand, Missouribased Pancheros operator Dick Davis was named the brand’s franchisee of the year in 2024.
While he was pleased with the accomplishment, Davis has no intention of resting on his laurels, and said the award is just the beginning.
“I was very flattered and humbled to receive that recognition because we had been doing this for just over a year,” Davis said. “I said, well, gosh. If you think we did good now, just give me a little more time and see what we can really do, because I think we’re going to grow this and have some fun in creating a great company here in Missouri.”
His confidence is supported by a background in franchising that goes back to the 1980s, though it’s not where his career started. Davis’ father was a gasoline distributor with Phillips 66, and he originally worked in that business.
Eventually, Davis said convenience stores started to become more common with gas stations, and that was followed by quick-service restaurants. That’s where Davis had his first brush with franchising.
“I became involved in a project that was adding McDonald’s restaurants to truck stops,” Davis said. “I became well acquainted with McDonald’s in the process, and really became interested in the food franchise business overall. I started looking at opportunities, but not necessarily with McDonald’s.”
Around that time, Taco Bell sought franchisees in Missouri and Davis decided to dive in, opening his first in 1990.
“It was a good business and I was able to get a few more through acquisition and built more of my own to make a 14-store operation,” Davis said. “I was involved with them for nearly 20 years before retiring in 2012 and selling those off.”
Nearly a decade after he left the QSR space, Davis started to miss the restaurant industry and was looking for a path to return. He found it in Pancheros, a roughly 75-unit fastcasual brand that had emerged in Missouri with four stores owned by a franchisee in Iowa. Impressed by the brand’s food and operations, Davis bought the stores in 2023.
“I’ve been really glad to be involved in the concept,” Davis said. “It’s been especially appealing to me to have an opportunity to grow the concept in this state, which is what I’ve been busy with the last year and a half. I’m evaluating sites to see where we can go next.”
be a great partner for us,” Gale said. “He’s done nothing but prove me right. He’s growing in parts of Missouri that are new for us, and that’s incredibly important. He’s also built a really strong operations team. He trusts them, he lets them do their jobs, and it frees him up to work on more growth.”
In building that team, Davis used the blueprint he developed for his previous operations, which mainly involved infusing a positive culture in the business.
His four locations include three in Columbia and one in Jefferson City. In the first year and half, Davis grew sales and transactions by more than 20 percent across all four locations, and increased digital sales by more than 30 percent.
Joe Gale, Pancheros’ director of franchise development, said Davis is an ideal franchisee to develop the brand in the Show Me State.
“The first time I talked with Dick, I knew he had a wealth of knowledge in franchising and felt strong that he would
“It’s a culture where we serve our guests, each other and the community,” Davis said. “By creating a great place to work, it creates a great place for our customers. Our guests see the execution of the operation being performed at a high level with people that are appreciated.”
For Davis, that type of culture goes back to his business philosophy, which has long been centered on the Golden Rule.
“Treat other people the way I want to be treated is what I try to do in every relationship I do business with, whether that’s my franchisor, an electrician or my insurance agent,” Davis said. “I haven’t gone to school for a lot of the things I’ve done. I’m not a formally educated man. But I just feel like treating others well and trying to work together to accomplish a common goal is the basis of a successful business.”
—Matthew Liedke
Mexican food has long been part of Dick Davis’ franchise journey. He owned Taco Bell units and today operates four Pancheros restaurants in Missouri.
Dick Davis
Pause founder promotes accessibility
How did the idea for Pause Studio come about?
My business partner and I have a combined 30- to 35-plus years in the health and fitness industry. At the big national brands we were at, we could start to see the importance people were putting on recovery. You look at the proliferation of yoga, Pilates, tai chi, meditation, more restorative services. Then you pair that with the way life is evolving and the way we live today, which is nonstop. You could see that mind-body recovery was growing, and people were starting to embrace it, and we knew it was only going to exponentially grow.
On the personal side, I experienced complete and total burnout first hand. I had a great job, great career, was traveling all the time. I kind of had everything I thought I wanted, but life lost its flavor. I started doing a lot of the services we now offer at Pause. It made a transformative difference in my body, in my mind and my ability to be a husband and a father.
What lessons have you learned in the early stages of franchising?
When we decided to franchise, we hired a plethora of different consultants and brought on a franchise team. We had many consultants tell us, ‘You guys are fine. You guys were set up well to launch a franchise.’ But in retrospect, we needed more. We’re bringing in more top-notch talent to run the franchise side of our business. We need to be early in building out an A-plus franchise team, sooner than perhaps originally expected, because we’re kind of building our own roadmap here with franchising.
The company plans to open 20-plus locations this year.
The brand’s mission of making wellness accessible to everyone—what does that entail?
We’re a mission-driven brand. Profits are important and drive the business, but we measure our success in two ways: our impact on the community as well as our profitability. The services we are offering positively affected both my life and my business partner’s life. We decided to launch Pause so we could get more people into these services because we know they’re going to make people feel better.
“We don’t believe that an elevated experience has to be exclusive to a specific socioeconomic group.”
— Jeff Ono
We’re very fortunate for the franchisees that have jumped on board with us. We’re attracting people that have been very successful in their previous careers and because of that, we are learning so much from our franchisees in terms of what could work in their market. This is not a cookie-cutter business, so when it comes to certain marketing tactics, operational tactics and hiring tactics, we are truly learning from our franchisees. Our ear is very close to the ground, listening and learning.
Somebody may look at a brand like Pause—the marketing we put forth and the experience you see in our studios—and automatically assume that it’s for the top 1 percent. That’s something we’re trying to break. We don’t believe that an elevated experience has to be exclusive to a specific socioeconomic group, so people are oftentimes shocked at what our pricing model looks like. People can come into Pause and get services for less than $40. We’re able to do that because we’re committed to it and because we have these different modalities in the building.
When we opened Pause, we had a lobby, and it was tremendously gratifying to see four or five people from completely different walks of life sitting in a room together and talking about their experience with Pause. These are people that would never interact with each other in their daily lives. We’re providing something that people need.
Reporter Alyssa
asks what makes emerging brand leaders tick—and presents their edited answers in this column in each issue. To suggest a subject, email ahuglen @franchisetimes.com
Illustration by Jonathan Hankin
Ono created Pause Studio with John Klein in 2016 and has grown it to 13 units in five states.
JEFF ONO
Huglen
INTERNET STAR JAKE PAUL THROWS HIS WEIGHT BEHIND DOG HAUS
OF THE TAPE TALE
JAKE JOSEPH PAUL
AKA, EL GALLO DE DORADO
28 YRS / 6’1”/ 227 LBS
BIRTHPLACE: CLEVELAND, OHIO
RESIDENCE PUERTO RICO
FAMILY: MOTHER IS NURSE PAMELA ANN STEPNICK, FATHER IS REALTOR GREGORY ALLAN PAUL AND BROTHER IS SOCIAL MEDIA INFLUENCER AND PRO WRESTLER LOGAN PAUL.
RELATIONSHIP STATUS: JAKE’S GIRLFRIEND IS DUTCH SPEED SKATER JUTTA LEERDAM, A SIXTIME WORLD CHAMPION IN THE SPORT.
“It’s time to bring the attitude, the go-to-war shit talk, because people are going to find out how good we are,” says Jake Paul, who’s bringing star power to Dog Haus as a franchisee and spokesperson.
SOCIAL MEDIA AUDIENCE: 32 MILLION, INCLUDING 20 MILLION YOUTUBE SUBSCRIBERS.
NET WORTH: ESTIMATED AT $80 MILLION PRIOR TO THE MIKE TYSON FIGHT IN WHICH HE WALKED AWAY WITH A REPORTED $40 MILLION. HIS HOME IN PUERTO RICO IS VALUED AT $20 MILLION.
The new celebrity spokesperson for Dog Haus and the brand’s most famous franchisee sounded like he was promoting one of his prime-time boxing matches when asked to size up the restaurant competition.
“Yeah, we’re pretty small now compared to those others, but our chicken is better than Dave’s Hot Chicken and our burgers are way better than McDonald’s. Buffalo Wild Wings? Tastes like dog food compared to Dog Haus. We’re just so much better than them. It’s
not even close,” Jake Paul said.
The tattoo-covered and cocky 28-year-old social media influencer, whose face shows the toll taken by 12 professional fights, gave an allknowing grin before delivering his next round of jabs, hooks and body shots.
“It’s time to bring the attitude, the go-to-war shit talk, because people are going to find out how good we are. We just need to bring the energy to the brand now and get more people aware of us and who we are, and that’s what I do best,” said Paul from a spacious office overlooking his 12,000-square-foot, $20-million mansion in Dorado, Puerto Rico, a place its gregarious owner dubbed “The Taj MaPaul.”
“Social media is where it’s at now and there’s no
Jake Paul now goes by the nickname “El Gallo de Dorado,” Spanish for “the fighting rooster of Dorado.”
one better at attracting and bringing the excitement than me.”
There is nothing understated or restrained about the new face and voice of Dog Haus. Paul, who earlier in his career took the nickname “The Problem Child,” is loud, proud and enormously successful. The influencer, boxer, rapper, dancer and former Disney Channel actor who amassed a huge following on Vine and then YouTube while in his teens has built a business empire that exceeds $200 million mainly on his ability to draw attention to himself and his personal brand.
The always entertaining and oftentimes controversial entrepreneur who is now boxing’s biggest draw is a master at creating online fun. He’s not afraid to stir things up with bold video rants laced with profanity and bravado.
To his credit, Paul attacks each of his business ventures like one of his boxing matches, with both fists flying and a single-minded fight plan to score a fast and decisive knockout win. He co-founded boxing brand agency Most Valuable Promotions with Nakisa Bidarian, a former Ultimate Fighting Championship chief financial officer, and the Anti Fund, a venture capital firm, with investor Geoffrey Woo.
He also co-owns the energy drink company Prime with British YouTuber KSI (full name Olajide Olayinka Williams), the snack brand Lunchly, the clothing line Maverick and is the CEO of men’s personal care brand W, which sells in Walmarts throughout the country.
With a social media following of 32 million, including more than 20 million YouTube subscribers, there are few influencers who have a larger online audience and carry as much weight with the younger set. Although his online fan base mainly skews 8 to 18 and male, his newfound boxing success now makes him a household name for all age groups, particularly millennials and Gen Zers, which are prime targets for restaurant brands like Dog Haus.
FUELING THE EXPANSION EFFORT
Paul’s latest business endeavor, Dog Haus, is his initiation into franchise ownership. His multi-layered partnership formalized with the brand last fall includes board involvement for him and Bidarian, his business partner and consultant. He is already making an impact on the 15-year-old company that has built a loyal following serving creative gourmet-styled hot dogs, sausages and burgers along with beer and an assortment of other fun food items.
Dog Haus had 60 units in 12 states at the end of February, but with Paul on board the company is poised to hit the gas pedal on growth. Paul acquired two corporate-owned restaurants, in Arlington and San Antonio, Texas, in November, and at press time was set to open two new locations in Houston and Dallas in March. He is partnering with Puerto Rican boxer and mixed martial artist Amanda Serrano on his first Puerto Rico location, which is slated to open this year.
On the spokesperson front, Paul is appearing in Dog Haus digital advertising and social media campaigns. He’s set a personal goal to eat El Gallo Wings, his favorite, at every store. He’s already made appearances at a number of stores in Texas, California and Washington, D.C.
“I could’ve picked a lot of other restaurants to do this with. I choose Dog Haus because I really love their food. I’m a huge fan of their burgers and wings. And I love the fun sports bar atmosphere they bring,” Paul said. “My fan base is made up of young and old sports fans, so this is great fit.”
Dog Haus CEO Michael Montagano said Paul has had a two-fold impact on the Pasadena, California-based restaurant chain as a catalyst for increased in-store traffic and customer trials.
Montagano said they’ve seen an 8 percent same-store sales bump and an increase in overall store traffic of more than 5 percent since Paul came on board. He noted the company saw an increase in its delivery business, which is a crucial component for a brand that generates 50 percent of its overall sales volume from
off-premises channels, including third-party marketplace orders.
The average unit volume for Dog Haus Biergartens, which feature outdoor seating areas, was just under $2 million in 2024, according to Montagano, who joined the company in 2023 after leading ghost kitchen operator Kitchen United. He credited Paul for the strong yearend finish.
Dog Haus continued on 24
Dog Haus CEO Michael Montagano, left, and Jake Paul want to turn the brand into a national powerhouse.
Dog Haus continued from 23
“The partnership with Jake was a game changer for us for sure. He’s a once-in-a-generation talent that understands something so innately about how to capture an online audience that he’s basically sitting on the top of the pyramid as the expert about it now,” said Montagano from his perch outside Paul’s 5,000-square-foot entertainment space with recording studio that overlooks a reflecting pool.
Bidarian, who was also on hand at Paul’s house, added: “Everything Jake and I do together is a passion and Dog Haus is our latest passion. Dog Haus was successful without us and our goal is to help turbocharge it going forward.”
The company said the arrangement is structured so that Paul earns equity and compensation as sales and the brand’s national footprint grow.
The timing of the partnership couldn’t have been better. Paul took over those corporate restaurants days before he fought Mike Tyson in the most streamed sporting event in history.
Paul’s unanimous eight-round decision over the 58-year-old former world heavyweight champion reportedly attracted a worldwide Netflix audience of 108 million and netted Paul $40 million.
“It was just an electric atmosphere there with most of the fans in the building rooting for Tyson,” said Montagano, who had a second-row seat for the heavyweight bout that filled AT&T Stadium in Arlington, Texas, with more than 70,000 fight fans.
Montagano said he and his team had ambitious development plans for Dog Haus even before announcing the partnership with Paul. The company—founded by friends Hagop Giragossian, Quasim Riaz and Andre Vener in California in 2010—added 10 new stores in 2024 and plans to open 25 this year.
The original 25-unit development agreement Paul and Bidarian signed with Dog Haus in November called for them to acquire two corporate stores in Texas and then open 23 new builds in Puerto Rico, Texas and Florida. Those development plans have since expanded, said Montagano, with new stores planned for 16 additional trade areas including Virginia, Pennsylvania, Detroit and Paul’s hometown of Cleveland.
“There is just so much potential to grow beyond our 12-state footprint with Jake on our team,” said Montagano, who wined and dined many of Jersey Mike’s largest operators in February during that brand’s annual multi-unit operator retreat in the Bahamas. He said he was there to pitch them on signing 10-unit area development agreements in each of their established markets.
Details of those potential agreements were still being ironed out, but Montagano felt confident that a number of Jersey Mike’s franchisees were warming up to the idea of developing Dog Haus restaurants in their respective areas under an arrangement that they become equal equity partners with Paul on their first store openings.
RAPID FIRE WITH JAKE PAUL
FAVORITE MEAL:
Right now, the El Gallo Wings made by Dog Haus. I came up with the sauce and I just ate some.
FAVORITE SNACK FOOD:
PB &J. Peanut butter and jelly is a snack food, right?
FOODS YOU WON’T TOUCH:
Curry. No way. Not my thing.
FOOD YOU ONCE HATED BUT HAVE SINCE WARMED UP TO:
I would say sushi. I can eat that now.
CRAZIEST FOOD YOU EVER ATE:
I once ate live worms and crabs. We did some crazy shit in Cleveland as kids.
WHAT IS A TYPICAL PRE-FIGHT MEAL:
Peanut butter, chicken and rice. Those are my go-to foods.
POST-FIGHT MEAL AFTER BEATING MIKE TYSON:
For the past two fights it was Dog Haus. I’m serious. They brought it into the arena. The cheeseburger in the Hawaiian bun went down fast. Delicious.
FAVORITE CELEBRITY CHEF: Guy Fieri
CELEBRITY CHEF YOU WOULD LOVE TO BOX:
That’s just bullying. I don’t have a beef with any chef.
OTHER THAN DOG HAUS, FAVORITE QUICK-SERVICE RESTAURANT:
Two of those multi-unit franchisees are in the midst of finalizing a 70-store deal to develop Dog Haus Biergartens across six major trade areas in the United States.
Montagano said that deal is evolving and is expected to be announced later this year. Attracting world-class franchisees with experience in other brands, he noted, is going to be key to the development strategy as Dog Haus works to reach 600 units.
A RISKY PARTNERSHIP?
Having a celebrity franchisee and spokesperson whose antics have run afoul of the law, who’s been sued for defamation and in 2021 faced sexual assault accusations comes with big risks for Dog Haus. (Paul has denied the assault allegations; no charges were ever filed.)
The only fast food I really like is Chick-fil-A or Taco Bell. Either one. Dog
But when asked if he’s nervous having
Haus
A. Dog Haus Biergarten locations feature a mix of indoor and outdoor seating in a fast-casual format. B. Its biergarten locations have full bar programs that include a range of craft beers and cocktails. C. The El Gallo chicken sandwich is smothered in Jake Paul’s signature El Gallo sauce.
D. The 60 restaurants in the Dog Haus system are spread across 11 states and include its smaller fast-casual units, larger biergartens and remote kitchens.
E. Specialty hot dogs and sausages are the stars of the Dog Haus menu, with options such as the Cowboy, topped with bacon, cheddar cheese sauce, crispy onions and barbecue sauce. Tots, fries and other sides round out the offerings. F. Dog Haus hot dogs and sausages are free of hormones and antibiotics, and are served on King’s Hawaiian rolls.
Dog Haus continued from 24
someone with Paul’s bad boy reputation being the official face and voice of the brand, Montagano denied any apprehension.
“I told him when he started this that I want Jake to be Jake because if he pretends to be anything else, this partnership won’t work. He’s created an amazing brand on his own and we don’t want to change that. He’s got full rein to be himself,” said Montagano, who accompanied Paul to scout a potential location for the brand’s first Puerto Rico restaurant in February, just a short drive from Paul’s home and gym in Dorado. So far, the famous influencer has stayed on script for Dog Haus. He and his social media team have provided a series of fun promotional
videos from his restaurants. With that he’s brought a greater awareness to a relatively small restaurant brand that’s poised to grow fast with its new superstar onboard.
Paul sounded like he understood his place and role with Dog Haus during a visit to the private gym he shares with brother Logan, a professional wrestler, and later at his home in Puerto Rico. He got particularly animated when recounting how he came up with his signature hot dipping sauce for the brand during a stopover at the Dog Haus corporate office in Southern California earlier this year.
El Gallo Sauce is a nod to Paul’s fighting name in the ring, “El Gallo de Dorado,” or “the fighting rooster of Dorado.” El Gallo Wings, the El Gallo Chicken Sandwich and El Gallo Tenders hold permanent places on the menu after they
became some of Dog Haus’ most popular items.
“The goal is to make the brand as big as possible, and the best thing beyond opening up my restaurants is helping the brand with marketing and coming up with fun and entertaining content, which is my bread and butter,” Paul said. “I see so much potential. There are just a ton of cool things we can do around sporting events and other fun stuff like eating contests that you’re going to see unfold.”
Will Paul’s deft branding ability and outsized personality ultimately help translate online hype to real restaurant transactions for Dog Haus? His track record proves it’s probably best not to bet against him.
JAKE PAUL SAYS IT ALL
Boxing is a metaphor for life. It’s a challenge. It’s a fight, and like the restaurant business, every day is something new. You have to learn on the job, change, adapt, overcome. Sometimes you’re tired, but you just got to breathe and keep going. You know, there’s different rounds, so you could have a bad day, a bad round and then come back the next day and do better. ”
Of the first things I can remember is my peers in school and my teachers doubting me and not believing in me and actually, like, demeaning me and being terrible. That just built this, like, thick skin in me. But also I was like, I’m going prove all you motherfuckers wrong. And I think that’s important. You need enemies. You need those people if you really want to do big things in the world. ”
I’m having fun, that’s all. And sometimes I feel like I’m being driven by a darker force. But I’m also driven by a lighter force, which is love for friends and family and boxing. I feel like I got a greater purpose to help people. So, I’m really driven by both. ”
Special section recognizes
Articles by Joe Halpern, Alyssa Huglen, Matthew Liedke, Laura Michaels and Emilee Wentland; Survey and research by Jenny Raines
Change in Washington, D.C., is just one of the many factors adding to complexities in franchise law.
To provide a roadmap for those in franchising, Franchise Times compiled its annual Legal Eagles list, a collection of the best lawyers franchisors and franchisees can turn to in 2025. These attorneys come
from firms spread across the United States and Canada, and bring a depth of experience and perspective specific to franchising.
As part of our Legal Eagles special section, Franchise Times reporters tapped this list of experts to discuss several current topics, ranging from regulatory shifts to M&A transactions. Regarding the latter, experts weighed in on what franchisees can expect when their brand is acquired, and how they can navigate the split apart through contract terminations. Attorneys also discussed what to expect from both state and federal governments in terms of legislation and rules. In Washington, D.C., President Donald Trump’s return could mean a softer approach to franchise regulation from the Federal Trade Commission and National Labor Relations Board. It could also lead to yet another change in the joint employer standard. Various state legislatures, meanwhile, are considering new bills that could impact the franchise model and extend new protections to franchisees. Those topics and more
This
also
the
and much
Plus, we introduce a handful of newcomers and tenured members of the Legal Eagles roster. In a comprehensive profile, we introduce you to the
UNITED STATES LEGAL EAGLES ®
Robyn Abbate Wiggin & Dana Hartford, CT
Karen Abrams Paris Ackerman LLP East Hanover, NJ
Michael Ackerman Paris Ackerman LLP East Hanover, NJ
Kevin Adams Mortenson Taggart Adams LLP Irvine, CA
Mohammad Alturk Baker & McKenzie LLP Dallas, TX
Bethany Appleby DLA Piper Boston, MA
David T. Azrin Wuersch & Gering New York, NY
Jonathan Barber Franchise.Law Charlotte, NC
Richard Bayer Einbinder & Dunn LLP New York, NY
Andy Beilfuss Quarles & Brady Milwaukee, WI
Eli Bensignor Lathrop GPM Minneapolis, MN
John Berg Monroe Moxness Berg PA Minneapolis, MN
Jennifer Bippus Drumm Law Denver, CO
Andrew P. Bleiman Marks & Klein, LLP Chicago, IL/ Northbrook, IL
Barry Blum Venable LLP Miami, FL
Michael Boardman Baker & McKenzie LLP Los Angeles, CA
Joseph Brooks Fisher Zucker Philadelphia, PA
Timothy Bryant Preti Flaherty Portland, ME
Joel Buckberg Baker Donelson Nashville, TN
Mark Burzych Fahey Schultz Burzych Rhodes PLC Okemos, MI
Christopher Bussert Kilpatrick Townsend & Stockton LLP Atlanta, GA
Brett Buterick The Franchise Firm Chads Ford, PA
David Cahn Offit Kurman Baltimore, MD
William Cantrell Cantrell Schuette Atlanta, GA
Filemon Carrillo Mortenson Taggart Adams LLP Irvine, CA
Carmen Caruso Carmen Caruso Law Firm Chicago, IL
NAME LAW FIRM LOCATION REPRESENTS SPECIALTY
Brad Cashman Monroe Moxness Berg PA Minneapolis, MN
Megan Center Quarles & Brady Washingon, DC
Amy Cheng Cheng Cohen LLC Chicago, IL
Harris Chernow Reger Rizzo Darnall Philadelphia, PA
Deborah S. Coldwell Haynes and Boone, LLP Dallas, TX
Derek Colvin Waldrop & Colvin Virginia Beach, VA
Nicholas D’Amico Quarles & Brady Tampa, FL
J. Michael Dady Dady & Gardner, P.A. Minneapolis, MN
Mark Dady Dady & Gardner, P.A. Minneapolis, MN
Michael Daigle Cheng Cohen LLC Chicago, IL
Jess A. Dance Polsinelli PC Denver, CO
Elissa Deitch Drumm Law Denver, CO
Rocio Deitz Baker & McKenzie LLP Dallas, TX
Max Deleon Cheng Cohen LLC Chicago, IL
Amanda Dempsey Saxton & Stump Philadelphia, PA
Jessica Dempsey Spadea Lignana Philadelphia, PA
Liz Dillon Lathrop GPM Minneapolis, MN
Mackenzie L. Dimitri Einbinder & Dunn LLP New York, NY
Andrew Donovan Cheng Cohen LLC Chicago, IL
John Doroghazi Wiggin & Dana New Haven, CT
Cassie Doutt Lathrop GPM Los Angeles, CA
Mike Drumm Drumm Law Denver, CO
Abhishek Dube Baker Dallas, TX
Franchisors could be back in favor
By Matthew Liedke
President Donald Trump’s return to the White House and Republican control of Congress could lead to significant, but not quite sweeping, federal changes for franchising.
Potential policy adjustments are more likely to come from several different boards, though, rather than via executive orders or legislation. The main cause is the pendulum swinging to the conservative side at the National Labor Relations Board and the Federal Trade Commission, with probable course changes at both.
On the NLRB front, the most anticipated measure to receive action is the joint employer rule, something that has kept the franchise community on notice over the last few years. In October 2023, the NLRB put a new joint employer rule in place that would make a franchisor liable for labor violations with franchisees.
The new standard also set a legal obligation for franchisors to negotiate with unions alongside their franchisees. The move was opposed by franchise organizations, and by Congress, which passed a Congressional Review Act resolution to reverse the NLRB’s decision. That resolution was vetoed, though, by former President Joe Biden.
While congressional action was ineffective in stopping the rule, the NLRB’s new standard was halted in federal court, and has remained in a state of legal limbo. Attorney Harris Chernow of Reger Rizzo Darnall said moving forward, the rule will likely be removed entirely.
“When you look at the NLRB and what they were trying to initiate, almost all of those are going to be placed on hold, if not extinguished during this administration,” Chernow said. “They will likely take all the joint employer talk off the table.”
While the joint employer talk may be taken off the table at the NLRB, Warren Lee Lewis, an attorney at the firm Akerman and co-chair of its franchise and licensing sector team, said it may be put on the table in Congress.
“I think the Republicans would like to pass legislation and make it law, since they don’t want the agency to change the rule every time there’s a new administration,” Lewis said. “Right now, you have a ping pong effect.”
“I wouldn’t be surprised if Congress takes action,” Chernow said. “No one wants to keep going back and forth every four years on something, especially with joint employer. I think both sides, franchisees and franchisors want to see that clarified once and for all.”
The trick is getting a law passed with a narrow majority. Republicans hold 218 seats in the U.S. House of Representatives, the minimum needed for a majority, while the Democrats have 215.
The Republicans have clearer majority in the U.S. Senate, with 53 seats, while the Democrats have 47 in their caucus.
“With Congress being so close, especially in the House, I don’t know if they’re going to be able to pass it,” Lewis said. “The NLRB will go back to how it was before the Biden administration, but as for legislation, it’s a big, hot button issue for people.”
Lewis added it’s likely the same for legislation coming from the other side of the aisle.
In December 2024, U.S. Rep. Jan Schakowsky, D-IL, reintroduced a bill to give franchisees private right of action to address violations of the FTC’s Franchise Rule, specifically when details aren’t properly disclosed.
“I think the franchisee bill is dead,” Lewis said. “I don’t think it’s something the majority will vote for, unless you’re a representative in a district with a lot of small business people who are franchisees. Maybe there would be some pressure, but I don’t think it would be likely to pass.”
The implications there are two-fold. First, a stronger relationship between the franchisor community and the federal government, and secondly, a new approach at the FTC.
“I think there’s going to be a shift toward franchisors,” Chernow said. “Under the previous administration, the initiatives favoring franchisees had a better chance, whereas now they have a have a harder time. There are those franchise relationship laws out there and with this administration, it will probably favor franchisors.”
This could be reflected in the second point regarding FTC action. Under the leadership of new Chairman Andrew Ferguson, the FTC is expected to take a lighter approach to franchise oversight, especially with any review of
the Franchise Rule, in place since 1979 and last revised in 2007.
Lewis said the FTC’s rule, which largely regulates the franchise model, is reviewed about once every decade, and will likely be looked at during this administration with the franchise community at the table.
Chernow said it does represent an opportunity to bring clarification to the regulatory environment.
“I know that many are working to that,” Chernow said. “It’s all about disclosure, and what someone should have going into the franchise relationship to make an informed decision. The way it’s currently written, it lends a lot of good information, but it could be done in a better way.
“There could be things better clarified or additional information provided. There is some movement for the rule to be more streamlined.”
That’s why Lewis said some actions the FTC took while Biden was in office may stay in effect.
One of those updates was a policy statement issued in mid-2024 covering how contractual provisions that prevented franchisees from approaching the commission with complaints were unlawful. Lewis said that, and another policy statement regarding the requirement to disclose all fees, were common sense, fair approaches.
Warren Lee Lewis of Akerman
Harris Chernow of Reger Rizzo Darnall
UNITED STATES LEGAL EAGLES ®
NAME LAW FIRM LOCATION REPRESENTS SPECIALTY
Jarina Duffy Polsinelli Philadelphia, PA
John Dwyer DLA Piper Reston, VA
Michael Einbinder Einbinder & Dunn LLP New York, NY
Tom Emmons The Franchise Firm Chadds Ford, PA
Madeline Fajardo Paris Ackerman LLP East Hanover, NJ
Adrian Felix Bilzin Sumberg Miami, FL
Caroline Fichter Bundy & Fichter Seatlle, WA
Joseph Fittante Larkin Hoffman Minneapolis, MN
John Forrest Fahey Schultz Burzych Rhodes Okemos, MI
Dean T. Fournaris Wiggin & Dana Philadelphia, PA
Maisa Frank Lathrop GPM Washington, D.C.
Vincent Frantz Cheng Cohen LLC Chicago, IL
Eric Friedman Paris Ackerman LLP East Hanover, NJ
Christina Fugate Ice Miller Indianapolis, IN
Aaron Gagnon Warshawsky Law Group Phoenix, AZ
Ronald Gardner Jr. Dady & Gardner, P.A. Minneapolis, MN
Lindsey Gentry Shipe Dosik Law Decatur, GA
Eleanor Gerhards Fox Rothschild LLP Plymouth Meeting, PA
Richard Gibson Monroe Moxness Berg PA Minneapolis, MN
Elliot Ginsburg Garner Legal Minneapolis, MN
Evan M. Goldman The Franchise Firm Chadds Ford, PA
Jeffrey Goldstein Goldstein Law Firm Washington, D.C.
Joseph Goode Laffey, Leitner & Goode LLC Milwaukee, WI
John Gotaskie Fox Rothschild Pittsburgh, PA
Kevin Graff Lathrop GPM Chicago, IL
Michael Gray Lathrop GPM Minneapolis, MN
Nina Greene Venable LLP Miami, FL
NAME LAW FIRM LOCATION REPRESENTS SPECIALTY
Richard Greenstein DLA Piper Atlanta, GA
Tal Grinblat Lewitt Hackman Encino, CA
Stephanie Grobler Spadea Lignana Pennsylvania, PA
Allison Grow Ryan Cheng Cohen LLC Chicago, IL
Lucie Guyot Faegre Drinker Biddle & Reath Boulder, CO
Jeffrey Haff Dady & Gardner, P.A. Minneapolis, MN
John Halpin Laffey, Leitner & Goode LLC Milwaukee, WI
Brett Halsey Venable LLP Miami, FL
Evan Harra Spadea Lignana Philadelphia, PA
Kevin Hein Akerman LLP Denver, CO
Barry Heller DLA Piper Reston, VA
Kristian “Kit” Higgs Kit Franchise Law Cincinnati, OH
John Holland Dady & Gardner, P.A. Minneapolis, MN
John Hughes Quarles & Brady Chicago, IL
Scott Husaby Monroe Moxness Berg PA Minneapolis, MN
Stephen Jarvis Cheng Cohen LLC Chicago, IL
Michael Joblove Venable LLP Miami, FL
Jessica Johansen Larkin Hoffman Minneapolis, MN
Erin Johnsen Garner Legal Minneapolis, MN
David Kaufmann Kaufmann Gildin & Robbins LLP New York, NY
Kevin Kennedy Wiggin & Dana New Haven, CT
Thomas J. Kent Saxton & Stump Malvern, PA
Maral Kilejian Haynes and Boone, LLP Dallas, TX
Mark Kirsch Lathrop GPM Washington, D.C.
Justin M. Klein Marks Klein Red Bank, NJ
Gaylen Knack Lathrop GPM Minneapolis, MN
Scott Korzenowski Dady & Gardner, P.A. Minneapolis, MN
Matthew Howard & Howard Las Vegas, NV
Attorneys go on 2025 trend watch
What is the biggest trend you’re watching in 2025, and how are you approaching it?
Recent uncertainty in global trade and tariff announcements are beginning to impact franchise systems operating across borders. While the extent to which tariffs will impact cross-border supply chains and sourcing is yet to be determined, almost every franchisor that I work with is watching it carefully. They’re attempting to identify key risks in their supply chains and looking for alternate suppliers, or other ways to manage tariff and currency risks.
—Clark Harrop,
Dale & Lessmann
As competition for market share at the unit level continues to ramp up, I am watching the creative ways franchisors and franchisees are working together to position brands for success at that level. This not only includes a greater focus on unit-level economics, but also novel ways franchisors are assisting and encouraging franchisees to invest in their units through updates to the unit along with a focus on local marketing efforts.
—Joseph
Fittante, Larkin Hoffman
The biggest trend continuing in 2025 is the use of AI. Our clients are using AI in research, development, marketing, training and sales. As attorneys, we continue to emphasize that our client’s use of AI is an opportunity for them to reassess and strengthen their risk management procedures.
—Nicole Micklich, Urso, Liguori & Micklich
The biggest trend is how the threat, or fact, of tariffs will impact the business market in general. Every business is assessing the impact, and franchising is generally no different. Franchisors we work with are looking for guidance on how to assess and address their potential impacts.
—Allan D.J. Dick, Sotos
I’m certainly watching how the U.S.Canada trade dispute will play out and its effect on cross-border franchising, including cross-border supply issues and delays with construction and development.
—Debi Sutin, Gowling WLG Canada
The continued growth of private equity firms in acquiring both franchisors and franchisees. I’m approaching it one transaction and one situation at a time. Most PE firms are well intended and bring value to the brands they own or manage. However, a small handful are hellbent on simply selling as many units as they can, without regard for quality or the success of their franchisees, and this is obviously very bad for the franchise industry.
—Michael Rosenthal, Clark Hill
I continue to watch for franchisors to utilize AI in sales, management and compliance. Mapping and CRM platforms are becoming more integrated, and new tools pop up every day.
—Derek Colvin, Waldrop & Colvin
Private equity taking over franchised businesses and imposing increasingly onerous terms in franchise agreements.
—Elliot Ginsburg, Garner, Ginsburg & Johnsen
Performance matters. Unit-level economics, system changes and brand-level performance will matter more in 2025 than ever before, especially with emerging franchisors. Yes, franchise development is important, but in order for any franchise system to be successful and sustainable for all stakeholders, franchise leaders must have an obsession with unit-level economics and franchisees delivering on the brand promise.
—Brian Schnell, Faegre Drinker
In Canada, bankruptcy and creditor protection proceedings swept the restaurant industry in 2024 at the franchisor and franchisee level. A perfect storm of increased food costs, high interest rates and higher obstacles in lending, together with overextended lease obligations resulted in well-known chains taking drastic measures.
Coming into 2025, I expect more creative and aggressive lease negotiations that will include a fixed termination payment in the event of default or the ability to terminate early so that tenants and indemnifiers can crystallize their liability.
—Cassandra Da Re, Dale & Lessmann
The biggest trend I am watching in 2025 will come from the new administration and the direction of the FTC. The removal of Lina Kahn and the appointment of Andrew Ferguson will certainly change the regulatory landscape.
—Deborah Coldwell, Haynes and Boone
One of the biggest trends I am seeing is the ongoing recognition by franchisees that they need to organize with their fellow franchisees. The number of franchisee associations coming into existence continues to increase, and I see no sign of it slowing down.
—Mark Dady, Dady & Gardner
States may enhance ‘zee protections
By Laura Michaels
Abill signed by California Gov. Gavin Newsom in 2024 addresses what Tal Grinblat called a “fairly serious problem with these brokers doing everything they can just to close the deal, and then they disappear.”
The franchisor, continued Grinblat, who represents franchisors and franchisees at California law firm Lewitt Hackman, “ends up holding the bag with all kinds of promises and misrepresentations.”
Changing that scenario is the aim of legislation that amended California’s Franchise Investment Law to regulate franchise brokers and franchise sales organizations. It requires them to register annually with the state’s Department of Financial Protection and Innovation and provide prospective franchisees with a Uniform Franchise Broker Disclosure Document.
Franchisors routinely use broker networks and franchise sales organizations to build their lead and development pipelines, and aggressive tactics are not uncommon.
While requirements for the broker disclosure are still in the works, it’s expected that thirdparty sellers will need to provide details such as litigation history, their compensation or incentive structure, and the brands they’ve sold for in the previous year. Brokers who violate the law may be liable for damages to the franchisee or franchisor.
“It really makes the brokers on the hook,” said Grinblat, and will help ensure prospective franchisees have more information up front so they understand if a third-party seller has a financial incentive to steer them to a specific franchise.
Washington and New York have similar laws.
Franchisors need to carefully vet their broker networks, Grinblat said, and he encouraged brands to handle the sales process themselves.
“That way you have much more control over what is said to prospective franchisees,” he continued.
“It’s better to have control over that than use a third party who, the concern is they will say anything to get the sale done and then the franchisor is the one who gets in trouble afterwards.”
Of note, the law hasn’t taken effect. It will either one year after the California legislature authorizes funding for the bill or July 1, 2026, whichever date is later.
Franchise reform in Maryland
Significant changes to franchising in Maryland are on deck if the state’s legislature passes the Franchise Reform Act, introduced in January by Delegate Marc Korman. Expedited franchise renewals, prohibition of interference in franchisee associations and an extension of the time period for franchisees who were misled in
the sales process to bring a violation claim are all part of the proposed bill.
David Cahn, a principal attorney at Offit Kurman in Baltimore who represents franchisees and franchisors, said the updates to the Maryland Franchise Registration & Disclosure Law could improve the renewal process—the state’s franchise registration delays are known to frustrate franchisors—and provide needed protections on both sides that could spur more franchise activity.
Included in the bill is a pilot program aimed at accelerating franchise registration renewals by easing the amendment process. The intent, said Cahn, is to have more franchisors file their renewals in the fall versus during the spring rush. (Most registration states have an April 30 renewal deadline.)
“Therefore, there won’t be as many complaints about Maryland being a black hole where you can’t get registration renewals completed,” he said.
Another change would eliminate the ability of out-of-state franchisees to use the Maryland Franchise Law in disputes with franchisors that are or were headquartered in Maryland, something Cahn said is now a deterrent to franchising in Maryland compared to nearby states. Instead, only Maryland franchisees could sue a franchisor for violating the law.
“My position is that other states can protect their franchisees,” said Cahn, giving the example of if someone in Arizona buys a franchise from a Maryland-based franchisor and thinks they were misled, Arizona law should allow them to pursue a claim. “It’s not really Maryland’s business to protect franchisees around the country and around the world that do business with Maryland-based franchisors. The concern of the
state … is to protect Maryland residents and people that operate businesses in Maryland.”
A notable change for franchisees under the bill: It would, for the first time, prohibit franchisors from restricting or inhibiting the right of franchisees to join or form a franchisee association. The proposed right of association is similar to franchise laws in California and Illinois.
“It would have some pretty strong remedies if a franchisor tries to intimidate a franchisee or retaliate against a franchisee who wants to participate in or lead a franchisee association,” said Cahn.
Additional elements of the bill include the extension of the time period in which a franchisee may bring a private claim for violation of the franchise law. Franchisees could sue up to the later of three years from buying the franchise rights or two years after beginning operations. Maryland’s securities division would have five years from the time of a violation to bring claims against a franchisor.
One to watch in Minnesota
A Minnesota Supreme Court opinion issued last year in Cambria Company, LLC v. M&M Creative Laminants, Inc. concluded the Minnesota Franchise Act can apply to franchisees that do not operate in Minnesota. But that doesn’t mean the MFA is enforceable by every out-of-state franchisee.
Franchisors, wrote Faegre Drinker attorneys Brian Schnell and Hannah Leiendecker, “should consult with a franchise attorney to understand whether and how the Minnesota Supreme Court’s decision may impact relations with franchisees that operate entirely outside of Minnesota.”
Tal Grinblat of Lewitt Hackman
David Cahn of Offit Kurman
UNITED STATES LEGAL EAGLES ®
Jonathan Labukas Quarles & Brady Washington, D.C.
Peter Lagarias Luther Lanard San Rafael, CA
Nancy Lanard Luther Lanard Plymouth Meeting, PA
Rob Lauer Haynes and Boone, LLP Austin, TX
Jay Lecher Cantrell Schuette Atlanta, GA
Mark Leitner Laffey, Leitner & Goode LLC Milwaukee, WI
Michael Levitz Drumm Law Minneapolis, MN
Warren Lee Lewis Akerman LLP Washington, D.C.
Marc Lieberstein Akerman LLP New York, NY
Josh Lignana Spadea Lignana Philadelphia, PA
Vickie Loher-Johnson Monroe Moxness Berg PA Minneapolis, MN
Bret Lowell DLA Piper Washington, D.C.
Julie Lusthaus Lusthaus Law PC White Plains, NY
Trish Macaskill Akerman LLP Denver, CO
Leonard Macphee Polsinelli PC Denver, CO
Kevin Maher Baker & McKenzie LLP Dallas, TX
Gina Malandrino Cheng Cohen LLC Chicago, IL
Andrew Malzahn Dady & Gardner, P.A. Minneapolis, MN
April McKenzie Mason Burr & Forman LLP Birmingham, AL
Nicole Micklich Urso, Liguori & Micklich, P.C. Westerly, RI
Dennis Monroe Monroe Moxness Berg PA Minneapolis, MN
Richard Morey DLA Piper Chicago, IL
Cheryl L. Mullin Mullin, PC Richardson, TX
Chris Mumm Monroe Moxness Berg Minneapolis, MN
Stuti Murarka Cheng Cohen LLC Chicago, IL
Jason M. Murray Nelson Mullins Miami, FL
Kathryn Ng Spadea Lignana Philadelphia, PA
Nancy Nguyen Sims Baker & McKenzie LLP Los Angeles, CA
Ashley Nielsen Nielson Franchise Law Scottsdale, AZ
Maureen O’Brien DLA Piper Reston, VA
David Oppenheim Greenberg Traurig New York, NY
Ryan Palmer Lathrop GPM Minneapolis, MN
David Paris Paris Ackerman LLP East Hanover, NJ
Sawan Patel Larkin Hoffman Minneapolis,
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Heather Perkins Faegre Drinker Biddle Reath Denver, CO
Silas Petersen Larkin Hoffman Minneapolis, MN
Henry Pfutzenreuter Larkin Hoffman Minneapolis, MN
Thomas Pitegoff Offit Kurman New York, NY
Lee Plave Plave Koch, PLC Reston, VA
Jason Power Franchise.Law Charlotte, NC
Michelle Prager Paris Ackerman LLP Hingham, MA
Rebekah Prince Duane Morris LLP Los Angeles, CA
Brenden Pumphrey Spadea Lignana Philadelphia, PA
Mike Reagan Warshawsky Law Group Scottsdale, AZ
John Remakel Monroe Moxness Berg Minneapolis, MN
Natalie Restivo The Franchise Firm Chadds Ford, PA
Michael Rosenthal Clark Hill Atlanta, GA
Michael Santa Maria Baker & McKenzie LLP Dallas, TX
Joseph Santaniello Shumaker, Loop & Kendrick Charlotte, NC
Aaron-Michael Sapp Cheng Cohen LLC Chicago, IL
Alexandra Schiavino Spadea Lignana Philadelphia, PA
Brian Schnell Faegre Drinker Biddle & Reath LLP Minneapolis, MN
Antonia Scholz Cheng Cohen LLC Chicago, IL
Max Schott II Larkin Hoffman Minneapolis, MN
Michael Schuette Cantrell Schuette Tampa, FL
Marc Paul Seidler DLA Piper Chicago, IL
William Sentell Akerman LLP Houston, TX
Joseph Sheyka DLA Piper Chicago, IL
Kitt Shipe Shipe Dosik Law Atlanta, GA
Peter Siachos Gordon Rees Scully Mansukhani New York, NY
Elizabeth Sigety Fox Rothschild Philadelphia, PA
Eric Sigman Ruberto, Israel & Weiner Boston, MA
Robert J. Smith Akerman LLP Washington,
Talking federal shifts, FDD updates
What action are you anticipating at the federal level with the change in administration and congressional control?
The FTC’s Franchise Rule, which mandates that franchisors provide prospective franchisees with a disclosure document containing 23 specific items of information, is currently under review. The rule, last amended in 2007, is being evaluated to determine its effectiveness and relevance in today’s franchising landscape.
With the new administration’s pro-business stance, there is speculation about possible legislative initiatives that could impact franchising. While specific proposals have yet to be outlined, areas of interest may include tax reforms favorable to small businesses and efforts to reduce regulatory burdens.
However, it’s essential to monitor these developments closely, as changes in trade policies or immigration laws could also have indirect effects on the franchising sector. It’s also important to note that while federal regulations provide a framework, many aspects of franchising are governed at the state level.
—Jonathan Barber, Franchise.Law
I would assume we won’t see any attempts by the National Labor Relations Board to move the test for joint employment from the traditional test. In terms of the federal franchise law, I would imagine that the push to amend the law and/or to pass a federal relationship law will be less.
—Joe Fittante, Larkin Hoffman
I expect that the National Labor Relations Board and Department of Labor will again change the test for joint employer.
—Mark Burzych, Fahey Schultz Burzych Rhodes
I believe there’s likely to be very little federal action in franchising for the next four years. Antitrust matters will also be eliminated, most likely.
—Nancy Lanard, Luther Lanard
My hunch is that the administration change will end up curbing the work done by the FTC to regulate franchising.
—John Holland, Dady & Gardner
In Canada, FDDs are grant specific. Franchisors miss the fact that if they have an outstanding offer, and the financial statements they provided became stale before the offer was accepted with a signed franchise agreement, the offer must be put on hold until new statements are in hand and provided.
—Allan Dick, Sotos
What efforts do you make to maintain compliance for franchisors in creating their FDDs and what’s something franchisors can sometimes miss?
There’s a checklist that I have prepared to assist franchisors with compliance. Before each renewal period, I have them complete it, and then we review it together. One update that sometimes gets missed is updating the products and services that are required in the franchise system that must be reported under Item 8.
—Christina Fugate, Ice Miller
Franchisors should not simply rely on their lawyers in drafting of the FDD, particularly with the annual updates. Franchisors should take a vested interest in it and make it routine to have the FDD reviewed by multiple internal people to make sure that it is accurate and complete, and not simply assume so because it’s been in place for years.
—Harris Chernow, Reger Rizzo Darnall
Franchise regulations are always evolving, but regardless of political shifts, transparency and clear disclosures remain a priority. I expect ongoing discussions around franchisee protections, financial performance representations, and dispute resolution, which means franchisors will continue refining how they present information in their FDDs.
For franchise consultants, this reinforces the importance of working with professionals who can break down legal language into real-world implications, so their candidates have a clear understanding of what they’re signing.
—Kristian “Kit” Higgs, Kit Franchise Law
We provide each active franchisor with a questionnaire to complete for updating their FDD. Franchisors can sometimes miss updating their initial investment cost estimates to account for inflation, identifying when they discount initial franchise fees during the prior year, and updating the descriptions of their training programs and technology requirements.
—David Cahn, Offit Kurman
We work with all of our clients to help them generate compliant, accurate franchise disclosure documents. Franchisors need to make sure they are checking Item 7 against the experience of their franchisees.
—Ritchie Taylor, Manning Fulton
UNITED STATES LEGAL EAGLES ®
Tom Spadea Spadea Lignana Philadelphia, PA
Rochelle (Shelley) Spandorf Steinbrecher & Span LLP Los Angeles, CA
Ari N. Stern Fox Rothschild Boston, MA
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Michael Sturm Lathrop GPM Washington, D.C.
Jim Susag Larkin Hoffman Minneapolis, MN
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Craig R. Tractenberg Fox Rothschild LLP Philadelphia, PA
Alexander Tuneski DLA Piper Washington, D.C.
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John Verhey DLA Piper Chicago, IL
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Adam Wasch The Franchise Firm Boca Raton, FL
Joseph Wasch The Franchise Firm Boca Raton, FL
Elizabeth Weldon Haynes and Boone, LLP Costa Mesa, CA
Patricia Weller Monroe Moxness Berg PA Minneapolis, MN
Lizzy Westrope DLA Piper Chicago, IL
Bryan White Baker & McKenzie LLP Dallas, TX
Richard White Baker & McKenzie LLP Dallas, TX
Ryan Whitfill Cuhane Meadows Dallas, TX
Matthew Wizmur Spadea Lignana Philadelphia, PA
Jeffrey H. Wolf Quarles & Brady Phoenix, AZ
Will Woods Baker & McKenzie LLP Dallas, TX
Erik Wulff DLA Piper Washington, D.C.
Tao Xu DLA Piper Reston, VA
Rachel Zaiger Dady & Gardner, P.A. Mineapolis, MN
Stephanie Zosak DLA Piper Chicago, IL
About the Legal Eagles project:
This Franchise Times list of star legal professionals in the franchise industry is built with nominations and recommendations from clients, peers and other legal professionals. New Class Legal Eagles are those who are making their debut on the list this year. Hall of Fame Legal Eagles are lawyers who have been named to the list for 10 years. Nominations for the 2025 Legal Eagles open in December.
Attorneys urge open minds on M& A
By Joe Halpern
It is only natural for franchisees whose brands are acquired by a private equity firm to wonder what changes will take place, and how having a new owner will impact their bottom lines.
The advice franchise attorneys give franchisees when their company is sold to an outside investment firm is for them to research their new owners to understand how they’ve handled previous acquisitions. They also recommend being proactive by reaching out to their new bosses to open the lines of communication and collaboration.
“My experiences in these mergers and acquisitions are that there are two kinds of private equity firms that buy franchises,” said Ron Gardner, a partner at Dady & Gardner. “There are those that are in it for the long haul and will do the right thing for their franchisees, and there are those that do a turn-and-burn, meaning that they will resell the company in three to five years.”
Gardner, who’s based in Minneapolis and represents more than 50 franchisee associations, added, “It’s the ones that are in it for the short term and cut at edges of the brand by raising fees and eliminating corporate positions that franchisees have to be prepared for.”
With merger and acquisition activity poised to accelerate this year, Gardner said regardless of outcome, it’s imperative that franchisees do their due diligence to be better prepared for all scenarios. He also strongly recommended that franchisees reread their existing franchise agreements, determine the critical products and services they rely on and go over their legal rights with an attorney.
Gardner made it clear that although PE firms cannot increase royalty fees until the expiration or termination of existing agreements, they can adjust marketing and technology fees in most cases because of vague language in standard deals. He pointed out that franchisees that have been with the brand the longest and whose locations are performing at the top of their system almost always have the most leverage when it comes to renegotiating those costs and vendor agreements.
Expect some significant changes
“Franchisees need to remind PE firms that significant brand growth comes from the existing franchise base and it is in their best interest to incentivize them and play nice,” Gardner said.
Eleanor Vaida Gerhards, the national co-chair of the franchising and distribution group at Fox Rothschild, urged franchisees, especially those in their system the longest, to review the information provided by their advisory council or new
owners to stay involved in the transition process. She also recommended they be ready to provide input to their new owners and not be afraid to share feedback with them about the brand, whether it’s good or bad.
“In my recent experience, franchisors are a lot more communicative with franchisees to earn their trust,” Gerhards said. “They want existing franchisees to remain happy in the system, renew their agreements and continue to grow.”
To pull this off, Gerhards said PE often brings greater resources, more personnel, technology, administrative support and a deeper bench to a system.
Still, Gerhards said franchisees in a brand that’s acquired by private equity can expect changes to their system and those changes are put in place for a reason. She recommended they do a comprehensive audit of their operations to ensure that they are complying with all current system standards and are not in breach of any terms of their franchise agreements.
“It’s really important that you are in good standing with approved vendors and suppliers,” said Gerhards, who advised franchisees to carefully evaluate requests for franchise amendments or new franchise agreements prior to their expiration and renewal dates.
“If the acquisition is structured as a sale of stock, then the selling franchisor remains the counterparty to the franchise agreement. If it’s structured as an asset sale, then the franchisor will assign the franchise agreement to the buyer,” said Gerhards.
“Many buyers wait and then require execution of their preferred current form of franchise agreement when the franchise term is up for renewal,” she said. “However, PE may try to
encourage franchisees to sign amendments to the current franchise agreement or replace the existing franchise agreement with their desired form before a franchise comes up for renewal.”
Gerhards cautioned that the buyer of a franchise system will have their preferred form of franchise agreements and that it will likely look very different than the one signed with the previous owners.
“Make sure to compare the changes and discuss with a knowledgeable franchise attorney,” Gerhards said.
Amy Cheng of Chicago-based Cheng Cohen also urged franchisees to review their agreements before resigning them, taking into account their duration and investment, as well as the franchise they operate in.
Like Gardner, she stressed franchisees should be fully transparent in sharing with their new owners what worked and didn’t work for them in operating their locations under the past ownership. Additionally, they should be prepared to argue why receiving more corporate support and/ or new vendor contracts will help improve their bottom lines.
“Their positive and negative feedback given to private equity helps both the franchisor franchisee understand the strengths and weaknesses of the system,” said Cheng. She pointed out that it’s always going to be in the best interest of franchise owners to maximize profitability of their franchisees because it’s their success which determines the success of the brand.
Amy Cheng of Cheng Cohen
Ron Gardner of Dady & Gardner
Carmen D. Caruso
77 West Washington Street Suite 1900 Chicago, IL 60602
(312) 626-1160
cdc@cdcaruso.com
Practice Areas:
L. Dimitri
Carmen D. Caruso Law Firm
Cdcaruso.com
Carmen D. Caruso and his firm are sought-after for high stakes litigation and arbitration cases throughout the United States. Nationally recognized for its success in franchise and dealership litigation, and at the negotiating table, the firm’s cases have expanded legal protections for franchisees and dealers, and their independent associations, against anticompetitive, abusive, and bad faith or fraudulent conduct.
Carmen’s practice extends to all types of business and professional liability litigation, and Carmen is also an Arbitrator for the American Arbitration Association. Richard Bayer
Einbinder & Dunn LLP
Mackenzie L. Dimitri is a partner with Einbinder & Dunn LLP. She splits her practice between litigation, representing franchisor and franchisee clients in trials and other dispute resolution forums throughout the country, and transactional work, including franchise acquisitions, drafting and negotiating commercial contracts including franchise agreements, area development agreements and multi-unit agreements and franchise disclosure documents. Ms. Dimitri is a member of the American Bar Association Forum on Franchising, the Women’s Caucus for the Forum, the International Franchise Association, IR Global, and other prominent legal organizations. Ms. Dimitri is a frequent author and presenter, including several articles for the American Bar Association’s Forum on Franchising, the International Franchise Association, the New York Chapter of the Franchise Deskbook, a chapter on claims arising after termination in the franchising forum’s publication “Representing Franchisees.” Ms. Dimitri has also spoken at several franchise conferences, hosted webinars, and teaches continuing legal education classes on franchise legal issues.
John is Of Counsel with Fahey Schultz Burzych Rhodes PLC. John has over 30 years of experience representing and advising established and start-up franchisors in all aspects of franchise, business opportunity, and distribution law. He has extensive experience in compliance with federal and state franchise laws, preparing franchise and distribution related documents, the purchase and sale of franchisor companies, the purchase and sale of franchise units, franchisee relationship matters, and advising franchisors on antitrust, price discrimination, supplier, and trade regulation issues, as well as all aspects of franchise dispute resolution. John also has significant experience in other aspects of commercial transactions and business planning.
Michael Einbinder 112 Madison Ave, 8th Floor New York, NY 10016 (212) 391-9500 me@ed-lawfirm.com
Practice Areas: Franchise Law Business/Commercial Litigation Business/Corporate Law Intellectual Property Law
Einbinder & Dunn LLP
Richard Bayer, a partner with Einbinder & Dunn LLP, leads the firm’s franchise regulatory practice. Richard has extensive experience in representing franchisors with the development and growth of their franchise systems domestically and internationally. Services for franchisors include franchise disclosure document preparation and registration, franchise sales compliance and onboarding, corporate structuring, mergers & acquisitions, trademark registration and protection and commercial real estate leasing. Richard also represents franchisees in connection with the acquisition of single-unit, multiple-unit, area development and master franchises, the formation and operation of franchisee associations, as well as matters involving corporate structuring, financing, commercial real estate leasing, and mergers & acquisitions. Richard is a frequent author and speaker on franchise and business law topics.
Einbinder & Dunn LLP
Michael Einbinder is a founding member of Einbinder & Dunn LLP. He is a member of the American Bar Association Forum on Franchising, the International Franchise Association and other prominent franchise organizations, as well as a frequent speaker at leading franchise industry events. An author in numerous publications, he has contributed a chapter to the “Franchise Litigation Handbook,” and to “Covenants Against Competition in Franchise Agreements,” both published by the ABA Forum on Franchising. Michael Einbinder also serves as an arbitrator in franchise cases for the American Arbitration Association.
Einbinder & Dunn handles litigation, arbitration, and mediation nationwide for both franchisors and franchisees (including associations). The firm also represents start-up and established franchisors in franchise development and regulatory compliance. In addition, Einbinder & Dunn represents multi-unit and single unit franchisees in transactional and real estate matters of all kinds.
Schultz Burzych Rhodes PLC fsbrlaw.com
For more than 30 years, Mark has been a trusted legal partner for franchisors, guiding businesses of all sizes—from emerging brands to Top 300 franchise systems—through every stage of growth. As a founding member and President of Fahey Schultz Burzych Rhodes PLC, he provides strategic counsel, helping clients navigate franchise sales compliance, relationship management, dispute resolution, supply chain structuring, marketing,
CANADA LEGAL EAGLES ®
Joseph Adler Keyser Mason Ball, LLP Toronto, ON
Adrienne Boudreau Sotos LLP Toronto, ON
Jason Brisebois Sotos LLP Toronto, ON
Cassandra Da Re Dale & Lessmann LLP Toronto, ON
Allan Dick Sotos LLP Toronto, ON
Jennifer Dolman Osler Hoskin & Harcourt LLP Toronto, ON
Idan Erez Sotos LLP Toronto, ON
Chad Finkelstein Dale & Lessmann LLP Toronto, ON
Helen Fotinos Dentons Toronto, ON
Andraya Frith Osler Hoskin & Harcourt LLP Toronto, ON
Daniel Hamson Sotos LLP Toronto, ON
Clark Harrop Dale & Lessmann LLP Toronto, ON
Lloyd Hoffer Keyser Mason Ball, LLP Toronto, ON
Jeffrey P. Hoffman Dale & Lessman LLP Toronto, ON
Christopher Horkins Cassels Toronto, ON
Christine Jackson Osler Hoskin & Harcourt LLP Toronto, ON
Noah Leszcz Cassels Toronto, ON
Andrae J. Marrocco McMillan LLP Toronto, ON
licensing, distribution, brand expansion and protection, joint ventures, strategic transactions, compliance matters and disputes both domestically and on a global basis.
Dominic Mochrie Osler Hoskin & Harcourt LLP Toronto, ON
Lauren Parker Sotos LLP Toronto, ON
Colin Pendrith Cassels Toronto, ON
Frank Robinson Cassels Toronto, ON
Derek Ronde Cassels Toronto, ON
David Shaw Dale & Lessmann LLP Toronto, ON
Geoff Shaw Cassels Toronto, ON
Peter Snell Cassels Vancouver, BC
Sam Sokoloff Cassels Toronto, ON
John Sotos Sotos LLP Toronto, ON
Debi Sutin Gowling WLG (Canada) LLP Toronto/ Hamilton, ON
Anna ThompsonAmadei Sotos LLP Toronto, ON
Peter Viitre Sotos LLP Toronto, ON
Larry Weinberg Cassels Toronto, ON
John Yiokaris Sotos LLP Toronto, ON
Broker disclosure in the spotlight
New legislation in California requires third-party franchise sellers to be registered and provide disclosure documents. Do you see this coming to other states and what impact do you see it having?
I think the law will eventually come to other franchise registration states, but only after those state agencies find out how much administrative burden it places on the California Department of Financial Protection and Innovation. If the obligation spreads, I expect that it will decrease the number of third-party franchise seller companies. Or it will result in less franchise growth in states adopting such laws, since this registration will be another impediment to offering franchises in those states.
—David Cahn, Offit Kurman
I was a member of the International Franchise Association’s task force that worked diligently with other franchise groups in getting California’s legislation passed. Although there is some clean-up to complete, the bill closes a huge gap in helping franchisees better understand the role brokers play, who they represent and how much they get paid.
Oftentimes franchise brokers are the first meaningful point of contact for prospective franchisees. The registration and disclosure requirements that will be implemented through SB-919 are important in a franchisee’s decisionmaking process. I absolutely believe other states will follow.
—Brian Schnell, Faegre Drinker
I think under the current political climate nationally, it is unlikely that there will be a federal requirement. However, I do believe it’s likely that, at a minimum, registration states like Maryland, Minnesota, New York, Virginia, Washington, etc., may decide to impose a disclosure requirement.
Becoming a franchise seller requires no official training or certification, unlike most industries, such as real estate. It’s about time that franchise sales people be licensed before they can encourage people to invest large sums of money in a brand. I applaud California for instituting a disclosure as part of the registration. I believe it gives further credence and authority to the
I do not. Many states are already stretched thin and do not have the state resources to allocate to this type of a matter. In terms of impact, I think the more disclosure the better for all parties involved so long as the disclosure does not materially increase the costs of compliance because those costs will ultimately be passed on to franchise buyers.
Joe Fittante, Larkin Hoffman
sellers and is long overdue. Franchise sellers, brokers and consultants should have nothing to hide from their clients. Even their fees should be transparent.
—Nancy Lanard, Luther Lanard
California’s enactment reflects a growing trend toward increased regulation in the franchise industry. Prior to California’s legislation, states like New York and Washington had already implemented similar registration requirements for franchise brokers. Additionally, the North American Securities Administrators Association has proposed a Model Franchise Broker Registration Act, aiming to standardize broker registration and disclosure requirements across states. This model act serves as a template for states considering the implementation of such regulations. Given these developments, it’s reasonable to anticipate other states may adopt comparable measures to enhance transparency and protect prospective franchisees.
—Jonathan
Barber, Franchise.Law
Yes, I think we will see similar laws being proposed and enacted in other states. I think this will result in higher compliance costs
Yes, I believe some other states will likely follow California’s lead in passing similar legislation, primarily those that already have strong laws for the regulation of franchise sales and protection of franchisees. These types of bills will help regulate important players in the franchise industry. Without regulation of third-party sellers, unscrupulous franchisors can hide behind the actions of these third parties and claim ignorance to unlawful or fraudulent conduct in which brokers or other seller engage. Where a thirdparty seller engages in conduct that would be unlawful for the franchisor to engage in, and state laws do not otherwise provide an avenue for redress for the franchisee, there is a gap in the law that can be filled by laws such as that in California.
—Erin Johnsen, Garner, Ginsburg & Johnsen
for franchise sellers. Sellers will need to ensure they’re in compliance with disclosure requirements, which will likely increase administrative costs and lead to more rigorous record-keeping and documentation processes. This may also create barriers for less-experienced or small franchise brokers entering the market.
—Christina Fugate, Ice Miller
I see it coming to more of the registration states. The vast majority of brokers are ethical and I think that for them, registration is just a nuisance. However, it may have the impact of keeping a few bad actors from selling in those states that are going to require registration.
—Michael Rosenthal, Clark Hill
Jeffrey M. Goldstein
1629 K Street NW, Suite 300 Washington, DC 20006 (202) 293 3947
jgoldstein@goldlawgroup.com
Practice Areas: Franchise Litigation
Antitrust, Unfair Competition, & RICO
Complex Commercial Litigation Representing Exclusively Franchisees, Dealers, and Distributors Law & Economics
Focus on Multi-Unit Franchisees and Dealers
Joseph
Goldstein Law Firm
If someone who has obtained the [ability to take undetected whatever he desires with the Gyges ring of invisibility] claimed to never have any desire to act unjustly, nor to lay hands on other people’s possessions, he would be regarded as wretched, and devoid of intelligence, by those who noticed, although they would still praise him when face to face with one another, deceiving one another completely, because of their fear of suffering injustice.
Glaucon discussing myth of Gyges, Plato, Book 2 of the Republic
Matthew J. Kreutzer
3800 Howard Hughes Pkwy. Ste. 1000 Las Vegas, NV 89169 (702) 667-4827 mkreutzer @HowardandHoward.com
Practice Areas: Franchise Law Transactional Litigation
Howard & Howard Attorneys PLLC
howardandhoward.com
Matt Kreutzer is a top-notch franchise attorney with extensive expertise in franchise law.
Whether you're just starting out or already established, Matt is your go-to for developing, protecting, and licensing your franchise and distribution systems.
Matt offers a full range of services, from navigating nationwide franchising laws and regulations to crafting essential documents like contracts and Franchise Disclosure Documents. With Matt on your team, you'll be well-prepared to handle state regulatory inquiries and secure exemptions.
What really sets Matt apart is his deep experience in franchise litigation. He guides clients through litigation and alternative dispute resolution, always aiming for the best possible outcome under the circumstances. Matt understands the risks in franchise relationships and works hard to mitigate them, so you can focus on growing your brand.
Joseph Adler is a partner and franchise lawyer at KMB Law.
He has over 35 years of experience in franchise law and regularly advises clients in all matters related to their operations and transactions in Canada. Joseph serves as legal counsel for Canadian, US and other international franchisors doing business in Canada and Canadian franchisors doing business in the US, Europe and abroad. He also acts and has acted for various multi-unit franchisees and franchisee associations as well.
Joseph has published and has been quoted in numerous articles and has spoken on various franchising topics at venues organized by the Canadian Franchise Association, the Ontario Bar Association, the American Bar Association Forum on Franchising, and the International Franchise Association.
Tal Grinblat is a California Bar Certified Specialist in Franchise and Distribution Law with over 25 years of experience advising franchisors and franchisees. He represents clients in franchise system structuring, Franchise Disclosure Documents and agreements, qualifying for exemptions, and resolving franchise relationship issues.
Tal also serves as Chair of Lewitt Hackman’s Intellectual Property Practice Group, where he represents franchise and other business clients in clearing, registering, and enforcing trademarks worldwide.
KMB Law
Lloyd Hoffer is a Partner at KMB Law where he leads the litigation group.
He is an experienced advocate who has assisted clients in managing disputes before a wide variety of courts and tribunals. Lloyd has conducted civil litigation in the trial and appellate courts of three Canadian jurisdictions as well as administrative proceedings before tribunals exercising regulatory powers at both the federal and provincial levels.
Lloyd’s practice includes a substantial focus on franchise litigation and he has spoken on franchising issues in venues organized by the Canadian Franchise Association and the Ontario Bar Association. He has also been a regular participant in the legal and other events of the International Franchise Association.
Julie Lusthaus has been practicing franchise law for more than 24 years, representing both franchisors and franchisees. Services for franchisors include assisting with the development of franchise programs, corporate structuring, preparation and registration of FDDs, onboarding franchisees, compliance with franchise sales and relationship laws and ongoing operational issues.
Julie also represents single unit, multi-unit and multi-brand franchisees as well as master franchisees, guiding them through franchise acquisitions and renewals, the purchase and sale of existing franchise businesses and real estate matters. She has extensive experience assisting sophisticated operators navigating the risks associated with multi-unit and multi-brand development.
Julie is a past member of the Governing Committee of the ABA Forum on Franchising and a past Director of the LADR Division of the ABA Forum on Franchising. She was Program Co-chair for the 2018 ABA Franchise Forum. Julie has published extensively on franchise law issues and is the co-author of the chapter on “Representing Franchisees” in the Fundamentals of Franchising, 4th Edition and the co-author of the chapter on “FDD Review and Franchise Agreement Negotiation” in Representing Franchisees. Julie is also a frequent speaker on franchise issues at events hosted by various organizations including the ABA, Strafford Webinars, the IFA, NYS Bar Association and WCBA.
Bankruptcy can be tool for stability
By Emilee Wentland
Bankruptcy gets a bad rap. It feels like an admission of defeat, guilt or failure, and many parties who could benefit from a bankruptcy filing put it off for too long because of that.
“People wait too long to file bankruptcy until they’re so desperate that they have not much to save,” said Tom Spadea, founding partner at Spadea Lignana. “It’s like going to the hospital. If you’re feeling those symptoms, the sooner you get to the ER, the better chance you have of surviving whatever that catastrophic problem is. Business is the same way.”
Bankruptcy isn’t always the end of a business; it’s usually a survival strategy to restructure a business before things are beyond repair, Spadea said.
“When you go through these reorganizations, it’s really with an eye toward survival,” Spadea said.
The need for bankruptcy can come about for a number of reasons, including selling too many franchises, developing an unprofitable business model, poor management and undercapitalization. There are different bankruptcy chapters, too, so parties can decide if restructuring or selling assets and dissolving are the best path for them.
In the last two years, there have been a number of significant franchisor and franchisee bankruptcies. On the brand side, TGI Fridays, Red Lobster, Anchored Tiny Homes, BurgerFi and Anthony’s Coal-Fired Pizza declared bankruptcy last year.
DMD Ventures, an eight-unit Twin Peaks franchisee, filed for bankruptcy protection in January. Applebee’s franchisees Apple Central KC and Louisiana Apple filed as well. Two Orangetheory Fitness franchisees filed an involuntary Chapter 7 bankruptcy petition against the brand’s largest operator last fall as a result of a private equity creditor reportedly owing them millions. And there are many more.
Often, trouble starts to show itself in franchisees who are struggling financially. “It doesn’t take many of those to really turn the franchisor upside down,” Spadea said.
Franchisors can go to bankruptcy court and essentially say they’ve messed up somehow and need to restructure.
“It’s going to be better for everybody if we reorganize, as opposed to having maybe the first two or three claimants grab all the cash and the business just closes,” Spadea said. “What bankruptcy affords you is this reset opportunity to say, ‘look, we’ve made some mistakes. We owe a bunch of money. The business isn’t what we thought it was going to be.’”
Bankruptcy lawyers and judges try to balance the needs of stakeholders with those of the filing party, Spadea said. For example, if franchisees are owed money, it won’t help them if the franchisor shuts down entirely because then other operators would stop paying into the system and the franchisor would have even less revenue. Therefore, the franchisees who are owed money would, in theory, get paid back less.
“It gives pause so that everything can get organized and the valuable parts of the business can be saved, and the parts of the business that are hurting the business can be put in a box,” Spadea said.
When franchisors file, there are a lot of constituents to consider that could be impacted by the bankruptcy, said Deb Coldwell of Haynes Boone. Franchisors need to ask themselves: Should we reorganize and continue operations to pay back our creditors? Or should we sell our assets, pay back creditors where possible and ultimately shut down?
“Some franchisors come out of it and continue to monitor and run a less-robust or smaller system,” Coldwell said.
On the operator side, Coldwell said bankruptcy attorneys aim to get the highest value possible for their clients. If a franchisee wants to continue operating under the brand, they’d file an administrative claim so operators can continue using the trademark and keep their stores open throughout the bankruptcy process.
Franchisors are still affected when a franchisee declares bankruptcy, even though they aren’t the party directly involved in the filing, said Elizabeth Weldon of Haynes Boone. When attorneys represent the franchisors in this instance, they could file a proof of claim as a creditor because the
operators owe them money.
“Oftentimes, it’s very unsatisfying as somebody representing the creditor in those situations, because the business just kind of fades away,” Weldon said. “You get either pennies on the dollar for your claim, or nothing on your claim, very often.”
If a brand deems a franchisee’s bankruptcy filing unnecessary, they could file an adversary claim, Weldon said.
“If you think that there really aren’t grounds for that bankruptcy, or perhaps a particular debt should not be discharged in the bankruptcy, you can file a claim in that bankruptcy to say, ‘hey, don’t let this claim go,’” she said. “There’s different avenues that you can undertake here, but it’s extremely, extremely regulated by the bankruptcy rules.”
The best practice for those who are operating post-bankruptcy? “Watch your debt,” Coldwell said. “Keep it clean and simple going forward. … Check the underlying reasons that the bankruptcy happened in the first place, and try to avoid those mistakes.”
Weldon echoed Coldwell’s comment. Those who survive bankruptcy and come out with an viable business need to focus on stability across the board, she said.
“Try to run a stable business,” Weldon said, “where you don’t have too much credit, where you appeal to consumers and, for the people that are your constituencies, perhaps your franchisees, they can see and feel that you’re running a stable business.”
Tom Spadea of Spadea Lignana
Elizabeth Weldon of Haynes Boone
Ritchie W. Taylor
3605 Glenwood Avenue
(919) 787-8880
taylor@manningfulton.com Practice
Jason M. Murray
jason.murray @nelsonmullins.com
Manning, Fulton & Skinner, P.A.
Ritchie leads Manning Fulton’s franchise practice, providing innovative strategic counsel to franchise systems through all phases of growing and protecting their brands. Ritchie’s clients benefit from his wealth of experience representing both sector-leading franchisors as well as innovating emerging concepts. From launching their franchise system to navigating a successful business sale, franchisors and multi-unit franchisees alike rely on his timely, practical counsel. Learn how Manning Fulton can help your brand by visiting www.manningfulton.com and www.franchisefeed.net.
Cheryl Mullin 2425 N. Central Expy., Suite 200 Richardson, TX 75080 (972) 852-1703
Cheryl.mullin@mullinlawpc.com
Nelson Mullins nelsonmullins.com
Jason M. Murray practices in the area of franchise and distribution law and provides counsel and assistance with creating, managing, licensing, protecting, and enforcing franchised business relationships, product distribution systems, and dealership networks. His franchise and distribution law practice specifically relates to licensing and development, regulation and compliance, and dispute resolution through mediation, arbitration, and litigation. Mr. Murray’s litigation experience consists of general commercial litigation in state and federal courts, including franchise and distribution law, intellectual property, and real property matters.
Harris J. Chernow chairs the Firm’s national Franchise & Distribution and Hospitality practice groups, which provides full-service franchise, hotel, hospitality, and business legal services to franchisors, franchisees, brands, single and multi-unit owners, area developers, management companies, master franchisees, franchisee associations, and businesses desiring to expand through franchising and distribution systems.
Harris has served on numerous franchise-related committees, including the ABA Forum on Franchising Governing Committee, the IFA Legal Symposium Task Force, and county/state bar association Franchise Law Committees. He is a frequent speaker on franchise, hospitality, and businessrelated topics. In addition, his balanced approach and understanding of matters has made him a highly sought-after mediator and arbitrator. Reger Rizzo & Darnall’s full-service capabilities not only provide clients with franchise/hospitality representation, but also corporate, merger & acquisition, real estate, leasing, intellectual property, employment, financial, and immigration services, along with day-to-day counseling and dispute resolution services, including complex litigation, mediation and arbitration.
Mullin P.C. mullinlawpc.com
Cheryl is the founding shareholder of Mullin P.C., a full service commercial law firm located in the Dallas-Fort Worth area, and leads the firm’s practice in areas of franchise, corporate, tax, intellectual property, and commercial litigation. In addition to “Legal Eagle” recognition, Cheryl has been recognized as one of the top franchise lawyers in International Who’s Who Franchise Lawyers since 2013. She is AV-Rated by MartindaleHubbell, has been selected by her peers as a Texas Super Lawyer since 2012, and has been selected for inclusion in the peer-rated Best Lawyers in America since 2007. Cheryl received her J.D. from Widener University School of Law in 1995 and her LL.M. (Taxation) from Southern Methodist University in 2013.
Preti Flaherty preti.com
Tim Bryant advises franchisors nationwide in prosecution, defense, and resolution of disputes related to franchise regulatory, intellectual property, and business relationship issues. He has assisted numerous startup and existing franchise businesses with relationship agreements and disclosure/regulatory compliance. He is also a member of the American Arbitration Association’s panel of arbitrators. Tim is repeatedly recognized by Benchmark Litigation, Best Lawyers in America, Super Lawyers and Chambers USA for work in the areas of franchise law and commercial litigation.
Eric Sigman 255 State St, 7th Floor Boston, MA 02109 (617) 570-3575 ems@riw.com
Ruberto, Israel
& Weiner
riw.com
Eric Sigman brings a wealth of knowledge and experience to his role as chair of the Franchise Practice Group at RIW. As a corporate transactional attorney with a deep focus on franchise law, Eric counsels single unit and multi-unit franchisees on all aspects of negotiating franchise and multi-unit and area development agreements, capital structures, financing, corporate formation, mergers and acquisitions, commercial real estate leasing, and general counsel services. Eric’s broad expertise and dedication have made him a trusted advisor for clients establishing and growing franchise operations nationwide. He advises businesses at every stage of their lifecycle—from formation and capitalization to succession planning, commercial leasing, and mergers and acquisitions. Eric’s clients rely on his strategic insight, strong negotiation abilities, and practical problem-solving skills.
Don’t sleep on these notable issues
What is a legal topic more people in franchising need to know about?
I think there are a couple topics. First, artificial intelligence and how brands and their franchisees are using it. There needs to be some shared vision and purpose around the use of AI, otherwise you have parties going in various directions. Brands need to clearly define how they expect and/or limit their franchisees use of it to ensure that confidential information is not unintentionally being disclosed.
Second, at the unit level, the click-to-cancel laws at both the federal and state level. Franchisees must be aware of these laws and how they may affect their consumer offerings, if at all.
—Joe Fittante, Larkin Hoffman
Franchising is both a body of law and a business model, which is what makes it such a dynamic practice. Further, franchising is affected by many other areas of law, and people in franchising need to know about changes in the law that may affect the landscape. For example, in Canada, there are recent and pending changes to French language laws, competition restrictions, and consumer protection regulations that will change the way franchisors and franchisees do business in Canada.
– Cassandra Da Re, Dale & Lessmann
From a franchisee perspective, reviewing their franchise agreement for renewal timing and issues and to plan accordingly. Also, the issue of contractual statutes of limitation and how they may affect the legitimate claims of franchisees.
—Harris Chernow, Reger Rizzo Darnall
While the excitement of franchising often focuses on initial investment, the legalities of renewal and termination are crucial for longterm success. Franchise agreements outline specific terms, including conditions for renewal, which franchisees must understand to plan for the future. This includes renewal fees, performance requirements and notification procedures.
Agreements also detail grounds for termination by either party, ranging from unmet performance standards to insolvency. Both franchisors and franchisees should meticulously review these clauses before signing and consult legal counsel to fully grasp their rights and obligations.
—Eric Friedman, Paris Ackerman
Bankruptcy. There were great brands filing for bankruptcy in 2025, including TGI Fridays, Party City and Vitamin Shoppe, to name just a few. Many franchisees are also seeking bankruptcy protection.
—Deborah Coldwell, Haynes and Boone
Attempts on the part of franchisors to block sales to reasonably-qualified buyer candidates.
—John Holland, Dady & Gardner
System changes in franchise systems, particular new or revised fees.
—Robert Lauer, Haynes and Boone
How terrible franchise agreements are and that they’re continuing to get worse and worse for franchisees.
—Elliot Ginsburg, Garner, Ginsburg & Johnsen
The possibilities and pitfalls from use of artificial intelligence by both franchisors and franchisees.
—Ritchie Taylor, Manning Fulton
How to effectively resolve franchise disputes early rather than engaging in protracted litigation. This topic is incredibly important for emerging franchisors where one knock-down, drag out lawsuit can set the entire system back for years.
– Brian Schnell, Faegre Drinker
Mediation provisions are on the rise
By Matthew Liedke
Franchisees and franchisors alike don’t go into a partnership with separation in mind, but it’s a reality of the model.
Long before these situations develop, attorneys at franchise law firms suggest including mediation clauses in initial agreements. Peter Lagarias of Luther Lanard said those types of clauses are becoming more common, much to the benefit of all parties.
“Many of them provide for it because litigation and arbitration can be quite expensive,” Lagarias said. “If it gets a result and the matter is resolved, it’s good for everybody.”
“I would say mediation often works wonders,” said John Gotaskie Jr. of Fox Rothschild. “I think it’s because by the time you get to that state, people have a pretty good idea of where the issues are, and a skilled mediator can get things done.”
David Kaufmann, an attorney with Kaufmann Gildin & Robbins, said for the franchisors he usually represents, mediation clauses can prove especially important, as when a dispute comes up, counterclaims are created fast.
“They are a constant,” Kaufmann said. “When a franchisee is sued by a franchisor, say an agreement expires and the owner keeps operating, they automatically file a countersuit against the franchisor. They’ll come up with something for a counterclaim. It’s usually to make the franchisors spend money and that’s what I see a lot of.”
Gotaskie Jr., though, said in many cases franchisors never want it to get to that point, whether the dispute is over expirations or terminations. It’s something franchisors work arduously to avoid, when possible, he said.
“Take default for example,” Gotaskie Jr. said. “It begins before there’s even a default letter. Brands have their regional people going to the franchisee on a regular basis and compiling reports if there are negatives. The franchisor representatives then meet with the owners and talk about where the issues are, and I’d say 98 or 99 percent of the time it stops there.”
“If it doesn’t get resolved there, steps are still available, such as a regional trainer coming in,” he continued. “It can also depend on the type of violation. If it’s a case of food safety violations, they move in quickly and get it fixed in a short timeline. If it’s a financial issue, the franchisor will still try to work with them.”
If a financial situation can’t be resolved, Gotaskie Jr. said franchisors still have the option of working out an agreement with the owner. In these scenarios, the franchisee voluntarily terminates the agreement, and can then market the store, getting equity they have in the location through a sale.
Sometimes litigation is inevitable, and like Kaufmann, Gotaskie Jr. noted how franchisees will respond with counterclaims alleging unfair trade practice under state or federal law.
When these situations do occur, Kaufmann said there’s been an increasing trend to go toward arbitration and mediation. At his firm, Kaufmann said they work hard to avoid the former, as it has changed over the years.
“Back in the day, arbitrations were faster, cheaper and less formal,” Kaufmann said. “There was no discovery and no pre-arbitration motions. Now, arbitration is almost identical to litigation. There’s full discovery of documents, depositions and motions brought before the hearing, ramping up expenses.”
“Rules of evidence also don’t apply in arbitration,” said Kaufmann. “In court, there are safeguards as to what evidence can and can’t be considered. Speculative and emotional testimony is excluded, but not in arbitration, which also can’t be appealed.”
Because of the issues with arbitration and the costs of litigation, if mediation isn’t possible, Kaufmann said settling is sometimes the best option.
“If it’s a meritless suit, where it will cost so much to litigate, our advice is to settle for less than the potential legal fees,” Kaufmann said. “Pay them instead of us. Get this done with a general release, because you’ll save money that you would put into litigation and a possible appeal.”
While there are legitimate termination and expiration cases with franchisors, though, Lagarias said there are also times when franchisees are subject to unfair practices.
“These things are written by and for franchisors,” Lagarias said of franchise disclosure
documents and agreements. “The franchisees spent, let’s say, $300,000 to build their store, and they have all this equipment and contracts. It’s a big investment. They shouldn’t be subject to termination for a ticky tacky foul, and they should have time and the ability to protect their investments.”
In those situations, Lagarias said the franchisees don’t file a counterclaim, but just defend against the original complaint. In other cases, franchisees may want to exit a deal earlier than the agreed term if an operation isn’t profitable, even after improvement efforts.
“With a client like that, there are two things,” Lagaria said. “One, they may not have enough money to keep going as they’ve been losing money. Two, they may have a loan which in some cases they put up their house as collateral. And they say ‘I’d like to file for bankruptcy, but I’m going to lose my house if I do that.’”
Like including a mediation provision, Gotaskie Jr. said it’s important to get ahead of bankruptcy situations.
“I encourage both sides to start talking as quickly as possible,” Gotaskie Jr. said. “If your operations team on the franchisor side starts to notice issues, or you’re the franchisee facing challenges, get on the phone and start talking. There’s usually an issue going on that, if you nip it in the bud, you can get it resolved and move on successfully.”
John Gotaskie Jr. of Fox Rothschild
Peter Lagarias of Luther Lanard
Nicole Liguori
Nicole Liguori Micklich has earned a reputation for successfully representing franchisees at every step of the franchise relationship and in litigation and arbitration with franchisors. Ms. Micklich has represented franchisees in a variety of disputes, including regarding disclosures, compliance issues, royalty payment disputes, other alleged breaches of contract and termination. It is important to Ms. Micklich that her clients’ claims are handled efficiently. She regularly represents clients in mediation and has favorably settled numerous cases on behalf of franchisees. Ms. Micklich also advises clients regarding the transfer of franchise agreements and other transactions. Ms. Micklich is a frequent author and presenter on franchise law topics. She co-authored Annual Franchise and Distribution Law Developments 2021, contributed to Representing Franchisees published in 2023, and is a member of the Governing Committee of the American Bar Association Forum on Franchising.
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No shortage of valuable lessons
What has been your most important lesson recently and how did you learn it?
One of the most valuable lessons I’ve learned recently is just how much consultants appreciate a balanced, practical approach to FDD reviews. I had a situation where a candidate was hesitant about a franchise because of a particular clause, but after explaining how it works in practice—and comparing it to industry norms—their concerns were put to rest. It reinforced that my role isn’t to push deals forward or shut them down, but rather to help candidates feel confident in their choices by providing perspective and context without the noise or fluff.
—Kristian “Kit” Higgs, Kit Franchise Law
I was involved in an arbitration matter for our client and was pleasantly surprised with how quickly the matter proceeded through to the hearing, and how accommodating both counsels were in agreeing to the process. I will certainly recommend that all my clients’ franchise agreements contain a mandatory arbitration provision in order to avoid the lengthy and costly process for litigation through the courts.
—Debi Sutin, Gowling WLG
Serving as a franchise mediator, it was realizing the obvious.
That there are two sides, if not more, to each issue, and to be able to find the real reasons for the dispute or inability to resolve it, and to then be able to channel the issues and turn it into something that the parties understand to reach a resolution that they otherwise may not have been able to recognize.
—Harris Chernow, Reger Rizzo Darnall
It is important for franchisors to enforce system standards. If they don’t, franchisees will take liberties. If they do, franchisees will reengage with and respect the system. Most franchisees will applaud the franchisor’s enforcement efforts. This lesson was reinforced through a ‘reluctant’ franchisor who has traditionally been relaxed regarding franchisee’s individual execution of system standards.
—Mark Burzych, Fahey Schultz Burzych Rhodes
Do not use mediators without franchise law experience, and who have not mediated, and successfully, resolved, a significant number of mediations involving franchisee/franchisor disputes. Otherwise, your chances for a mutually successful resolution are decreased dramatically.
—J. Michael Dady, Dady & Gardner
One important lesson is the importance of staying adaptable. The legal world is constantly changing due to shifts in the administration, the laws, technology, et cetera. Staying adaptable allows me to navigate these changes more effectively, helping to ensure that my legal skills remain relevant.
—Christina Fugate, Ice Miller
That the one constant we can all count on is change. Over the last 15 years I have watched the business climate, including the joint employment ball, bounce back and forth. From Obama, to Trump, to Biden, now back to Trump. What I have learned is that making extreme changes one way or the other is not the answer. Slow and steady wins the race. Focusing on brand core values and never wavering will lead to the greatest success for all stakeholders.
—Joe Fittante, Larkin Hoffman
Encouraging franchisors to act reasonably toward franchisees can save a lot of time, money and effort down the road.
My most important recent lesson—although it really is just a reminder—is that it’s essential to have a good working relationship with opposing counsel. Over the years, I’ve learned that while it is important to advocate your client’s positions zealously, it’s always more enjoyable to practice when you can pick up the phone and try to work things out with the other side.
—Deborah Coldwell, Haynes and Boone
That it is always important to manage client expectations. This is learned over time and through communication.
—Michelle Prager, Paris Ackerman
I changed law firms in 2024, after nearly 14 years at the same firm, which was both hard and reinvigorating. The lesson is to not be afraid of change, but also not to burn your bridges.
—David Cahn, Offit Kurman
Participate in legislation. Virginia was making updates to its Retail Franchising Act, and they took comments from franchisors and others in the industry. I was the only person who submitted comments, and they implemented my suggestions into the laws that went into effect on January 1st. Those changes directly benefit franchisors, especially emerging brands that face financial assurance requirements in Virginia. It was an easy way to advocate for my clients’ interests on a larger scale.
—Jonathan Barber, Franchise.Law
Tackling the Latest Franchise Legal Issues Presenting
Get a little pro bono legal insight from our panel of top franchise attorneys as we examine the legal landscape in 2025 and beyond. From state and federal regulatory actions to trademark protection, franchise sales compliance and the influence of AI, we’ll cover key intel franchisees and franchisors need to know to position their businesses for success.
April 9, 2025
Attorneys talk AI and global growth
By Alyssa Huglen
Victor Turcanu’s first exposure to franchising came early, as he was once a franchisee of a student painting company in college.
His work at Spadea Lignana today, though, focuses on the franchisor side of the model. Originally from Canada, he began his career at a corporate firm in Toronto before moving to the United States last year to join Spadea Lignana as the head of its international franchising practice.
Turcanu is one of 17 attorneys making their debut as Franchise Times Legal Eagles.
Top of mind for Turcanu is how a turbulent relationship between Canada and the United States may affect franchisors. He anticipates uncertainty in the food industry, specifically for U.S.-based quick-service restaurant concepts making the move up north.
Some Canadian food industries set tighter regulations and have local supply management systems in place, making it a challenge to bring certain products across the border without significant tariffs.
“You’re going to have to figure out how you’re going to source product locally in Canada,” said Turcanu, of addressing this concern with his clients in the U.S.. “You’re not going to be moving cheese and dairy and chicken across the border.”
International expansion requires intention and strategic planning, he said, as “it’s not as simple as just copying and pasting what you’re doing in the U.S. and assuming it’s going to work in Canada.”
About half of Turcanu’s clients are non-U.S. franchisors looking to enter American markets. He said he tries to educate those clients on what
it takes to franchise stateside.
“It’s a very tightly regulated market—franchise disclosure documents, state registrations, etc.— and it often catches brands by surprise,” Turcanu said. “There’s a huge element of education that goes into expansion into the U.S. that I think is often overlooked. A lot of franchisors simply just assume they can make it work in the U.S. because it’s the largest market in the world, and there’s a lot of opportunity.”
Finding the right party to successfully translate your brand to the U.S. can also be a challenge, from understanding consumer preferences and trends to knowing how to adapt supply chains.
Turcanu’s advice? “If you’re going to give away the keys to the kingdom to somebody in the United States, you better make sure that they’re the right people for the job,” he said, “and that they’re sophisticated enough to be able to handle it.”
For fellow Legal Eagles New Class member Silas Petersen, working in franchise law allows him to represent all sorts of small businesses.
“A lot of the pushback that you get politically or even in the media against franchising is maybe the similar kind of pushback that large corporations might get, and I’m not sure that’s always fair,” Petersen said. “Franchising is a really cool way for small businesses to thrive.”
Petersen’s work at Larkin Hoffman focuses on business litigation, but his career with the firm started in law school. He assisted with summaries of franchise cases as a law clerk, helping assemble an annual developments book for the American Bar Association’s Forum on Franchising.
“Writing case summaries isn’t the flashiest kind of job,” Petersen admitted, “but I turned out to enjoy it.”
Looking ahead, Petersen expects artificial intelligence to impact franchising’s future in unpredictable ways. While he notes its potential to increase efficiency, Petersen sees a concern in protecting confidential information among attorneys, franchisors and franchisees. As a result, franchise agreements are starting to include AI guidelines for franchisees to adhere to.
Adaptability is key in addressing challenges, Petersen advised franchisors.
“You have to be able to listen to advice,” he said, “change your behavior and adjust your system as need be.”
Prepare for more PE
Working for Cinnabon, Ground Round Grill & Bar, Ruby Tuesday and Red Lobster throughout high school and college paved Eleanor Vaida Gerhards’ path to franchise law.
“Franchise brands are just close to my heart, personally, and they invoke a lot of really great memories,” she said.
Gerhards has been with Fox Rothschild since graduating law school, starting as a general corporate transactional practitioner before gravitating toward a focus on franchising. She is one of 10 attorneys joining the Legal Eagles Hall of Fame this year.
“One day, I’m helping a really beloved, internationally known Korean barbecue restaurant concept expanding in the U.S., and then the next day I’m handling the acquisition and integration of two auto industry franchise systems,” she said. “I like the variety, and I like also focusing in a really challenging and specialized area of law.”
This element of the industry means accepting its ever-changing nature. Advice is always shifting as a result, Gerhards said.
Eleanor Vaida Gerhards of Fox Rothschild
Victor Turcanu of Spadea Lignana
Silas Petersen of Larkin Hoffman
“What might be great advice in 2024 may not even be great advice in 2025,” she said. “You should always consider your franchise lawyers as trusted advisers that you go to regularly to refresh and to make sure you’re on the cutting edge of what’s best practice.”
Gerhards expects a continued push for responsible franchising; communication will be important with the focus on third-party sales agents and broker regulations over the following years. She anticipates more states to follow suit in enacting their own broker regulations and laws.
“You see these broker misconducts, misrepresentations and fraud allegations that are making a lot of headlines and spurring a lot of lawsuits,”
Gerhards said of franchise systems using unregistered brokers. “I expect the regulatory outlook to shift toward greater broker oversight in 2025 and in coming years.”
Fellow Hall of Famer Abhishek Dubé, meanwhile, didn’t expect to work in franchising.
“Franchise law kind of found me,” Dubé said. “I didn’t really go seeking it out during law school.”
Dubé practiced traditional, corporate M&A work in his first job until a recruiter approached him with an opportunity to practice international franchise law. He said he’s been in love with it ever since, working for Baker McKenzie with 12 years of experience in franchise law.
“It’s so varied, and it’s so different on a daily basis,” he said. “I could be working with brands in a variety of industries, whether it’s hotels, car rentals, indoor trampoline parks, kids’ education, anything.”
Dubé expects an increased focus on AI as franchisors seek out automation in document drafting, compliance monitoring, assessing franchisee performance analytics and identifying inefficiencies. Franchisees can also benefit from utilizing AI to analyze demographics and market data for site selection, enhance training programs and optimize operations, he said.
He also predicts an uptick in M&A activity
2025 Hall of Fame
Eleanor Gerhards
Fox Rothschild
Marc Paul Seidler DLA Piper
Abhishek Dube
DLA Piper
Frank Robinson Cassels
Andrae J. Marrocco McMillan
Derek Ronde Cassels
Dominic Mochrie Osler Hoskin & Harcourt
Maureen O’Brien DLA Piper
Megan Center Quarles & Brady
Helen Fotino Dentons
2025 New Class
Sam Sokoloff Cassels
Lindsey Gentry
Shipe Dosik Law
Victor Turcanu
Spadea Lignana
Stephen Jarvis Cheng Cohen
Alexandra Schiavino Spadea Lignana
Max Deleon Cheng Cohen
Jarina Duffy Polsinelli
Joseph Sheyka DLA Piper
Kathryn Ng Spadea Lignana
Lizzy Westrope DLA Piper
Nicholas D’Amico Quarles & Brady
William Cantrell Cantrell Schuette
under this new administration, with a “lot more appetite” for completing large-scale transactions.
The market and private equity firms will play integral roles in dictating how much activity happens. Dubé expects an interest to lean toward multi-unit franchisees.
“It’s a little bit of a shift from what it’s traditionally been,” he added, “but I think that’s another investment vehicle that PE is seeing as a great opportunity to grow the bottom line, just given how predictable a model franchising is.”
When it comes to what firms are looking for in franchisors, Dubé stressed the importance of sharing brand values and objectives. Franchisors should also “keep their house tidy” by maintaining healthy practices, monitoring and documenting franchisee compliance, checking in with franchisee associations and complying with
Jessica Johansen
Larkin Hoffman
Michael Schuette Cantrell Schuette
Mike Reagan Warshawsky Law Group
Silas Petersen
Larkin Hoffman
Brenden Pumphrey
Spadea Lignana
federal and state requirements.
“They want to make sure that it’s all cleaned up before they invest in anything or buy anything,” he said of PE firms. “I think that overall compliance piece continues to be incredibly important … because they don’t really want to come in and clean up too much.”
Abhishek Dubé of Baker McKenzie
Compelling franchise cases abound
What has been your most interesting case or transaction lately, and how did you work through it?
I worked on the Self Esteem BrandsOrangetheory Fitness merger. Based on the powerhouse brands and the strong leadership on both sides, it was a very interesting transaction. The importance of clear communication, as well as the clarity of common vision and purpose is integral in any combination. That’s even more so with this one, as you had two of the largest brands in the health and fitness space coming together.
—Joe Fittante, Larkin Hoffman
Assisting our client with their master license rights in Canada for a celebrity chef-owned restaurant brand. We were persistent
in our discussions and negotiations with the U.S. master licensor given the market differences between the U.S. and Canada, as well as the value of the Canadian dollar vis-a-vis the U.S. dollar.
—Debi Sutin, Gowling WLG
I worked with a client who was stuck on a particular clause in the franchise agreement. Rather than focusing on worst-case scenarios, I walked him through how similar clauses are typically enforced in practice and shared examples of how other franchisees navigate them successfully.
By reframing the discussion with real-world experience, we turned uncertainty into understanding. That’s the value of a good FDD review—it’s not just about red flags, but about helping candidates make informed, confident decisions.
—Kristian “Kit” Higgs, Kit Franchise Law
I’m representing a former franchisee of a dessert-based concept. The franchisor is claiming that the generic recipes are trade secrets. I’ve spent hours looking at cookbooks going back 80 years to prove the substitutions are commonly known.
—Caroline Fichter, Bundy & Fichter
Successfully representing a franchisee association in a use-of-technology dispute with their franchisor. The dispute centered on our client’s members’ use of their franchisor’s technology. By agreement, a skilled, mutually acceptable mediator with franchise law experience, who had previously resolved several prior franchisee/franchisor disputes, was brought in. In a ‘one day’ mediation, the matter was concluded at 11:59 p.m.
—J. Michael Dady, Dady & Gardner
• Three days of exclusive editorial-driven content
• End-to-end off-premises solutions in a full exhibit hall
• Highly focused attendees with a digital-first approach
• Complimentary admission to the Catering Growth Forum
• Daily networking events and receptions
New Perspectives Technology, profits, marketing dominate at IFA event
Franchise Times went booth to booth at the 2025 International Franchise Association to ask several leaders about what’s to come in franchising.
By Alyssa Huglen
Franchisors, franchisees and suppliers from all over the world gathered for the 2025 International Franchise Association Convention in Las Vegas in February. Franchise Times went booth-hopping to ask franchise players their insights on what to expect next in franchising. We bring you the notable quotables.
SoundHound AI
Artificial intelligence is dominating many conversations. Ishai Reinfeld, SoundHound AI’s director of sales operations and customer success, wants to clear up confusion about AI’s role in the business world.
“We talk to some people with the expectation that AI is this magic silver bullet that you can deploy, and it’s able to solve major problems for the business. That’s really not the case,” said Reinfeld, whose company provides voice and conversational AI solutions. “There’s a lot of under-
standing, a lot of infrastructure that you need to have in place … It can meet expectations in many cases and exceed expectations. But if you’re not prepared or looking at it from a fundamental standpoint, it can be misleading or disappointing.”
Reinfeld understands the hesitation for some around incorporating AI into their brand. What’s important, he said, is for business leaders to be transparent in the reasons behind using the software.
If customers “understand why the business is using it, they’re much more likely to be with the flow of it,” he said.
“On the staff side, it’s important to let them know that this is not something that’s going to replace them,” he continued. “The focus is on mounting their capabilities, allowing them to no longer focus as much on the redundant types of tasks so they can focus on a lot more inspiring and impactful work.”
ProfitKeeper
Franchise analytics platform ProfitKeeper wants to take the financial analysis burden off franchisees. The company breaks down data through submitted P&Ls and leverages it
As artificial intelligence infiltrates franchising, Soundhound AI’s Ishai Reinfeld advises franchisors and franchisees to think realistically about its capabilities and avoid the notion of it being “this magic silver bullet that you can deploy.”
among an entire network, allowing franchisees to compare their performance and target improvements. Franchisors have centralized data at their fingertips and can make proactive business decisions as a result.
Riley Wingerd, ProfitKeeper franchise solutions adviser, sees cost analysis and offsetting rising labor costs as core issues on which franchises should focus.
“Trust your franchisor,” Wingerd advised franchisees. “You bought into their system so they can help you run the business. By them looking into your financials, they’re not there to slap you on the wrist—they’re there to help you.”
For franchisors, he continued, collecting P&Ls is essential.
“If you’re not collecting P&Ls, you need to start because you’re going to get left behind,” he said. “If you’re not intentionally looking at your financials, then there’s money left on the table. It’s a full circle, where if the franchisees aren’t seeing that profitability or their ROI, then you’re going to start to have dissatisfied franchisees.”
Saxton & Stump
Law firm Saxton & Stump launched a formal franchise litigation practice earlier this year.
Though the firm has been supporting clients in franchise litigation for years, having a formalized program in place satisfies those desiring a more holistic suite of services.
“It’s really a need that our clients have expressed … This firm has built out that franchise practice in the last three years,” said Amanda Dempsey, shareholder and co-chair in franchising, licensing and distribution. “We’ve added some really fan-
tastic litigators to that practice, and they’ve been working with our clients over the past three years to get more experience in franchise litigation.”
SiteZeus
Sean Ryan, president of brand development platform SiteZeus, highlighted trust being a two-way street between franchisors and franchisees—especially when it comes to site selection.
“On the franchisee side, lean on your franchisor as much as possible to provide data and assistance to point you in the right direction from the start,” Ryan advised. “From the franchisor side, it matters how you’re leveraging these solutions. You need to build trust with your franchisees and provide them actual insights and data.”
The company provides technology solutions to help brands identify quality locations and prospective franchisees, as well as assist in the construction management process, customer segmentation and customer retargeting.
With everyone having access to many of the same data points, Ryan said it matters how franchisors and franchisees use said data to develop actionable insights and quickly evaluate sites.
“I think the market is still very competitive,” Ryan noted, “and brands need to act quickly if they want to get prime real estate.”
Sunbelt Franchise Resales
Baby boomers are starting to retire, and Sunbelt Franchise Resales President Terry Kelm expects this to soon affect franchise ownership.
“We believe that there is going to be this really monumental shift in the change of ownership of small businesses,” Kelm said. He anticipates this shift to take place over the next three to 15 years, already noticing an increase in inquiries from franchisees planning
their exit strategies. Contrary to stereotypes, he said Gen X and millennials are stepping up to take on business ownership roles in franchising.
Kelm is optimistic this shift will continue in a positive direction and plans for his company to assist in the ownership transition process.
ActiveCampaign HQ
Franchise marketing platform ActiveCampaign HQ is making strides in scaling marketing and automation for brands. Platform initiatives are to hyperlocalize and personalize email marketing from a centralized dashboard.
“I’ve been hearing and seeing that things are very disjointed,” said Angela Reeves, franchise account executive. “They’ll have one platform for email marketing, one platform for CRM, one platform for brand dev. None of the platforms are talking to each other, or if they are, they’re not doing a very good job at it.”
Reeves highlighted how a centralized dashboard makes it easier for multi-unit franchisees to tailor marketing to specific locations, ensuring “you’re getting the right message to the right person.” The platform also allows franchisees to see which markets are succeeding and use that data to replicate success in other markets.
“Our big goal is making sure we’re making some noise,” Reeves said, “and making sure people understand why hyper localizing messaging is important.”
Brand Networks (BN, an Augeo Company)
Brand Networks is set on building franchisors’ and franchisees’ marketing efforts around authenticity. The company helps employees create organic, authentic, influencer-style social media content all while adhering to brand safety parameters. IFA continued from 61
A successful franchisor-franchisee relationship depends on mutual trust, says SiteZeus President Sean Ryan.
Authenticity in branded content is “huge for consumers,” says Josh Gelfat of Brand Networks.
Director of Marketing Josh Gelfat said authenticity is huge for consumers, and franchise players should be prepared to incorporate this into their branding.
“Oftentimes when you pay the premiums for influencer content, you’re not getting that much content from someone with a lot of followers, and it really doesn’t feel that authentic to the communities that you serve,” Gelfat said. “This content really helps build an authentic voice in these local markets and in these local neighborhoods and communities.”
Platforms focused on authentic branding help franchisors hone in at the enterprise level to manage local connection points with consumers, Gelfat said. Franchisees benefit from authenticity as it provides them more flexibility and creativity to run their business based on their creative voice, marketing priorities and business needs.
“It really allows them and their employees to have fun, be authentic and talk to the community,” Gelfat said. “They’re the experts in the community after all, so they can create content that really speaks to the people that they serve.”
FODC puts off-premises ops in focus
By Bernadette Heier
The leading conference in the delivery and off-premises landscape is right around the corner.
The eighth annual Food On Demand Conference is May 5-7 at The Bellagio in Las Vegas, produced by Franchise Times’ sibling publication, Food On Demand. This year’s FODC kicks off with the annual Outstanding Operators Program, which recognizes 20 brands that are taking creative paths to success in their off-premises efforts. Winners are honored on stage and receive a $1,000 donation to the charity of their choice.
Up next is an keynote conversation with Adam Brotman and Andy Sack, co-authors of “AI First: The Playbook for a Future-Proof Business and Brand,” which features exclusive interviews with industry titans Sam Altman and Bill Gates. Brotman is the former chief digital officer at Starbucks, while Sack is a former adviser to Microsoft CEO Satya Nadella. The two will share bold insights and practical strategies to help leaders prepare their teams for the next AI frontier.
Day one also features a forward-thinking session on navigating the future of autonomous food delivery. From drones to sidewalk delivery robots, the session explores how technology is reshaping the delivery landscape. Speakers include Nicole Schone of Wing, Touraj Parang of Serve
Robotics and Michael Boyan of Shake Shack, led by Robin Riedel, of McKinsey & Company.
The Data & Insight Panel examines insights on what customers want, how value pricing is shifting in restaurants and the latest trends in delivery. Get the inside scoop on technology adoption, market shifts, and more from Lisa W. Miller & Associates and Blackbox Intelligence. And the Off-Premises Roundtable brings several powerhouse restaurant brands to the stage, all discussing their strategies for success.
Day two features the Third-Party Deep Dive, where attendees get to hear directly from the biggest delivery providers, DoorDash, Uber Eats and Grubhub, plus their operator partners.
The day continues with a session on Developing Restaurants for Off-Premises Excellence, where Toni Ronayne of Perkins, Christophe Poirier of KFC spinoff Saucy, and Adam Noyes of Potbelly discuss how their brands redeveloped spaces to meet the needs of digital-first customers. Get a front-row seat to the latest tech-driven strategies, from digital menus and kiosks to automation.
The Next-Gen Marketing panel explores the latest tactics to engage the digital-first generation. Geoff Alexander of Wow Bao, Shawn P. Walchef of Cali BBQ Media and Stacey Kane of Emerging Brands discuss everything from gamification to leveraging social media for viral content.
AI is a huge topic this year. Talking generative AI and practical solutions for restaurants are
A. Adam Brotman, co-author of “AI First: The Playbook for a Future-Proof Business and Brand.” B. Andy Sack, co-author of “AI First.” C. Destiny Clark, Papa Johns delivery strategy manager D. Brandi Villarreal, head of online food delivery for Uber Direct.
Deborah Matteliano of Amazon Web Services, Rich Faltot of Point B and Carl Orsbourn of Invisible Technologies.
In From Tradition to Tech, Ahsan Jiva of Mellow Mushroom, Amy Barnett of Cracker Barrel and Katie Walker Rankin of Landry’s will discuss how legacy brands with traditions of in-person dining are upgrading technology to attract and retain digitally savvy guests.
Another discussion on optimizing delivery features Brandi Villarreal of Uber, Destiny Clark of Papa Johns and Dino Northway of Portillo’s, who share their expertise on blending in-house and third-party delivery strategies.
Food On Demand will again host the Catering Growth Forum, produced in partnership with ezCater. This is a special free event for all Food On Demand attendees, held the morning of Monday, May 5, before FODC officially begins. The forum covers strategies for understanding how the catering market is shifting, how to attract high-value customers, and what operators can learn from industry experts.
Stubborn inflation affects outlook
By Laura Michaels
Fluctuations continue in confidence levels for franchisors as they consider their ability to meet franchise growth goals this year.
Just over 72 percent of the nearly 700 franchisor chief executive, chief financial and chief development officers surveyed for BoeFly’s Franchise Growth Confidence Index said they expect to achieve their domestic growth goals this year. That’s a more optimistic start than in 2024, when 67 percent of those surveyed said they expected to hit their growth targets.
“I do really think a lot of this has to do with the past the election. It was obviously a lot of anxiety leading up to the election, a lot of inflation, a lot of interest rate concerns,” said BoeFly CEO Mike Rozman. “And so now that that passed, I think you see a bump.”
Rozman added the first quarter typically reflects a “honeymoon period,” as leaders are more confident after just establishing their goals for the year.
BoeFly, a financial technology company, conducted its survey in mid-February, with respondents coming from several industries including automotive, education, fitness, health and beauty, home services, restaurants and retail.
Interest rate and inflation worries persist, however, as 75.8 percent of respondents said interest rate levels have negatively impacted their brand’s growth plans. The same percentage noted the negative impacts of inflation on their expansion efforts.
Over the course of three cuts last year, the Federal Reserve lowered interest rates by a full percentage point but has since kept them at 4.25 percent to 4.5 percent and indicated more reductions are unlikely. Inflation, meanwhile, remains above the central bank’s target.
There is positivity, said Rozman.
“Franchisors are reporting that their franchisees that are joining the system, or that have already been in the system and are growing additional units, they’ve come to be comfortable with these higher rates. It’s not preventing them from opening,” he said. “I think there’s some positiv-
ity around that. Even in the face of rates sticking around at a higher level, franchisees aren’t letting that stop their ability to grow.”
Cost estimates listed in Item 7 of the franchise disclosure document are going up, with 94 percent of those surveyed saying inflation is pushing them to increase those estimates. Rozman said franchisors should emphasize education so prospective and existing franchisees understand the impacts, and those with strong unit economics can make a compelling case for continued development.
“If you’re producing good cash flow, good fourwall unit economics, are you really going to let the current interest rate environment slow you down from growing?” he said. Smart franchisors, he continued, are articulating the opportunity cost involved for franchisees who hold off on planned unit growth.
On the labor front, close to 60 percent of respondents said the ability to find and hire strong employees has improved compared to the previous year. Just under 42 percent disagreed.
How confident are you that your brand will meet its franchise growth goals this year in light of the current economic environment?
For each of the following questions, participants answered strongly agree, agree, disagree or strongly disagree with these statements:
Papa Johns stock starts to stabilize
After a volatile second half to 2024, the stock price for Papa Johns has been experiencing some wins.
On March 10, the stock price closed at $49.04, a 26 percent increase from $39.98 on February 10. Year-to-date, the price is up 19 percent, with the pizza brand starting the year at $43.09. Overall, it marks an upward trend after declines last year.
Papa Johns’ stock started 2024 at $69.42, and by July it had fallen to $43.65. After a few more rocky months, the price came to $39 in midDecember. The recent positive gains are still far from where the brand was a few years ago.
In 2021, the stock price ranged from $100 to a high of $133. In 2022 and 2023, meanwhile, the stock price ranged from $64 to $90.
Still, the recent gains are encouraging, and come after the end-of-year fiscal report with mostly steady results.
In its announcement of results from the fourth quarter and fiscal year of 2024 overall, Papa Johns revealed some declines, but noted the impact
from 2023 having an extra week.
In the fourth quarter of 2024, North American comparable sales were down 4 percent from the same quarter in 2023, while company-owned units had sales fall by 6 percent and franchised locations declined by 4 percent. Global systemwide sales in total came to $1.23 billion, an 8 percent decline from quarter four, 2023. But excluding 2023’s additional week, sales were flat.
The same was true with the brand’s total revenue, which came to $531 million in the fourth quarter, a 7 percent decline from 2023. Without the extra week, the total revenue difference was flat.
It was a similar factor for the full year, with North American sales down 4 percent from 2023, company-owned sales falling by 5 percent and franchise unit sales declining 4 percent. Global system-wide sales came to $4.85 billion, a 3 percent rise over 2023. But without the 53rd extra week, sales were down just 1 percent.
For total revenue, the amount came to $2.06
billion, down $76 million or 4 percent. The lower revenue was partially due to the extra week factor, as it added $41 million in 2023. There was also a $20 million decline because of lower sales at domestic company-owned restaurants. Additionally, there was a $12.9 million decrease in other revenues, primarily related to preferred marketing.
For 2025, Papa Johns is projecting a systemwide sales increase between 2 percent and 5 percent. Adjusted EBITDA, meanwhile, is expected to come in between $200 million and $220 million.
Experiencing the largest decline over the period, meanwhile, was Denny’s. The all-day diner concept’s stock fell from $7.10 on February 10 to $4.06 on March 10, a 43 percent drop. Yearto-date, it’s shown a 33 percent decline.
—Matthew Liedke
Health & Wellness,
Global Flow Major restaurant group brings YogaSix to Japan
Tokyo-based Sunpark Co.’s restaurant portfolio stretches across eight countries and 118 locations, and it’s leaning on that development experience to introduce YogaSix to the market. Boutique fitness is growing in popularity, says the CEO of Sunpark Wellness, and YogaSix is prepared to capitalize on the demand.
By Laura Michaels
Anew era is underway in Japan, and Sunpark Wellness CEO Atsuyuki Tsuchiya believes the company and its fitness franchises are ideally positioned to serve modern consumers.
In the 40 years after the end of World War II, Japan grew as an economic powerhouse, Tsuchiya said in emailed comments, “peaking in 1985 when the yen reached its strongest value.” The economy declined over the next 40 years, he continued, but today “we foresee the beginning of a new era where Japan moves beyond being just an economic nation and starts shaping itself under a new set of values.
We believe that these new values will center around ‘physical well-being’ and ‘human connection.’”
Enter YogaSix, one of eight concepts under Xponential Fitness. Sunpark Wellness is the brand’s master franchisee in Japan, and in January opened its first location, in the Shinagawa neighborhood of Tokyo. Dozens more are slated to open across the country as YogaSix is primed to appeal to a society that needs to manage stress, the effects of constant digital connection, busy lifestyles and overall mental health, said Tsuchiya.
“YogaSix’s mission to change the way people think about and understand yoga—and give them a mind-body experience that is empowering, energizing and fun, making it more accessible to a broader audience—aligns perfectly with our vision and values,” he said.
Tsuchiya knows Japan’s fitness landscape. From his time as a sports club manager to his involvement founding Anytime Fitness in Japan, he has decades of experience overseeing development, client services, marketing and facility management.
Sunpark Co., a multi-brand operator and global franchisor of restaurants, entertainment concepts and fitness
Top: YogaSix touts a welcoming environment in its studios, and in Japan, class lineups will include more introductory offerings.
Above: Atsuyuki Tsuchiya is CEO of Sunpark Wellness, which is opening dozens of YogaSix units in Japan.
Expect healthy competition in Japan
Location: An island nation in the Pacific Ocean, Japan is slightly smaller than California.
Language: Japanese. Most Japanese students study English starting at age 12, but many of them learn to read and write it, while English speaking skills aren’t as strong. Plan to use a trained bilingual negotiator for deals.
Total Population: 123.2 million
Capital: Tokyo
Government: Parliamentary constitutional monarchy
Religion: Shintoism (48.6%); Buddhism (46.4%)
Economy: Japan, with the fourth largest economy in the world (after the United States, China and Germany), is a key global player and member of the international trade system. It’s the fourthlargest importer of U.S. products with a large and sophisticated consumer economy strengthened by per capita income of $35,390. Effective January 1, 2020, the U.S.-Japan Trade Agreement eliminates or reduces tariffs on approximately $7.2 billion in U.S. agricultural exports. In more recent years, Japan’s government sought to open the country’s economy to greater foreign competition and create new export opportunities for Japanese businesses. The government still faces the challenge of balancing its efforts to stimulate
Flag Facts
The red disk in the middle of the flag represents the sun without rays. The sun plays an important role in Japanese mythology and religion as it is said the emperor is a direct descendant of the sun goddess, Amaterasu. The flag itself is called Hinomaru, which means “circle of the sun.”
growth and institute economic reforms with the need to address its sizable public debt, which stands at about 250 percent of GDP.
News note: Nine Japanese citizens in March were permanently banned from entering Russia, according to a list published by the Russian
Foreign Ministry. Japanese Foreign Minister Takeshi Iwai, along with Shinsuke Minami, the president of carmaker Isuzu, are among those on the list. Russia’s ministry said the move was in response to Japan’s sanctions against Russia related to the war in Ukraine. Russia has similar lists for the U.S. and Canada.
GDP (official exchange rate): $4.2 trillion
Currency: Japanese yen (conversion rate at press time: 1 JPY equals $0.0067 USD).
Franchising in the Japan: U.S. restaurant and retail concepts make up more than half of franchises in Japan, while the country’s aging population presents opportunities for healthcare and in-home senior care companies. The U.S. Commercial Service, however, does report U.S. franchisors have encountered challenges finding franchisees in recent years as the country deals with some economic stagnation and more local competition. The U.S. Commercial Service in a market intelligence report noted, “While the market is open and relatively easy to enter for foreign players, succeeding in this mature and extremely competitive market is very difficult.” Although consumers, in continued, “are receptive to new, foreign foods and concepts, they have very high expectations in terms of food quality, taste, safety, service and experience.”
— Laura Michaels
Shrine Island
While officially named Itsukushima, this island is called Miyajima for “shrine island,” and is home to the UNESCO World Heritage Itsukushima Shrine and its famous “floating” torii gate.
Samurai History
Sendai, the capital of the Miyagi Prefecture, was founded in 1600 by famous samurai and feudal lord Date Masamune, whose cultural legacy is evident in castles, temples and shrines throughout the region.
Strategic Alliance
Japan’s deep economic integration with the U.S. presents opportunities for franchisors, which must still invest in thorough market research and prepare to make a long-term commitment.
Consumer Economy
Japanese consumers with considerable purchasing power seek high-quality, trend-setting, innovative goods and services.
Rev Up
Nagoya, Japan’s fourth largest city, is a major manufacturing hub and the area produces about 51.7% of the country’s total automobile output.
Trade Boost
U.S. goods exports to Japan total about $80 billion, with service exports of approximately $38 billion.
centers, established Sunpark Wellness in spring 2023 when it signed a master franchise agreement for Xponential’s StretchLab brand. It added fellow Xponential concept Pure Barre in December 2023 and has one Pure Barre and two StretchLab units open.
Boutique fitness, noted Tsuchiya, is still new in Japan, but Sunpark Wellness sees an opportunity to capitalize on a growth market as more people look for ways to maintain their health and well-being.
“We are confident that the wave is coming. Traditional gym formats have struggled to foster strong communities, but boutique fitness studios provide an excellent environment for building them,” he said. “A big focus for us will continue to be developing and nurturing a sense of community in our studios.”
While Japanese consumers are still learning about boutique fitness concepts, yoga is hugely popular. The practice, however, is still thought of as an activity for women and the elderly, Tsuchiya explained, and many people perceive it as an extension of stretching.
“We believe YogaSix has the power to change that perception with its modern approach to the ancient practice where a variety of heated and non-heated fitness-focused yoga classes are available,” he said. “For those who have given up on their yoga practice or thought it wasn’t for them, YogaSix offers a sensory yoga experience that is energizing, empowering, modern and fun.”
Localization of the concept, meanwhile, is crucial, from translation of the messaging to adaptations that account for differences in physique, healthcare systems and fitness culture
between Japan and Western countries, Tsuchiya said. Sunpark Wellness is learning from its first studio to emphasize that YogaSix is designed for the Japanese audience.
The company is focusing its early development efforts on Tokyo, with a population of 37 million people. The company benefits from a strong real estate network, Tsuchiya said, and its broad variety of food businesses mean it has expertise in the full opening and operating process.
Sunpark Co.’s portfolio stretches to eight countries and across 21 brands in the food, e-commerce and wellness sectors. In addition to its own brands, which include Takagi Coffee, Maji Curry and Belle-Ville Pancake Café, it’s a franchisee of bubble tea brand Gong Cha and Japanese cream puff concept Beard Papa, among others.
Staying intentional with international
While some of Xponential’s brands have an established international presence—Club Pilates has about 200 locations in more than a dozen countries—YogaSix didn’t go outside the United States until September 2024. That’s when LifeFit Group, led by Christophe Collinet and Daniel Hoffman, opened the first German studio in Frankfurt.
Growth beyond U.S. borders has been “selective and careful at the beginning” for YogaSix, said Bob Kaufman, Xponential’s president of international.
“That’s to make sure we believe that it can resonate and do well for everyone, for our franchisees in those markets,” he said.
Germany and Japan are strong economic markets, he continued, and the experienced operators
in each (LifeFit operates six Club Pilates studios in Germany) made the countries “great places to start.” Yoga as a fitness modality, meanwhile, is “pretty universal.”
“I think YogaSix is a very accessible brand, which I think broadens its appeal or makes it appealing to a broader audience,” said Kaufman. “But then you also have to look at the market and find a way to match what we do to what the local need is. And build locations that will resonate with people in each market. I think that’s a trick to growing internationally. It doesn’t matter how great a concept is without understanding where you’re taking it to and how you need to introduce that brand in these markets.”
In Japan, studio development is focused on neighborhoods with both residential and business traffic, and layouts will likely be less standardized to allow for nuances in real estate availability. The class lineups initially will include more introductory formats, Kaufman said, and Xponential is “constantly pressure testing with the team in Japan” to evaluate class options and scheduling.
Sunpark Wellness is especially focused on its studio-level staff.
“That is so key, because we can talk strategically all we want. But if a member walks into a studio and they’re not greeted warmly and feel welcome, then none of the other work matters, right?” said Kaufman. “You’ve got to make sure at the studio level the execution is strong, and so that gives us great confidence that when you have a franchisee in the market that has a hospitality background, the experience of the member is above everything.” YogaSix continued from 67
The first YogaSix is in the Shinagawa neighborhood of Tokyo and opened earlier this year.
Bob Kaufman is president of international at Xponential Fitness, which owns YogaSix.
Long Drive
Existing franchisees sign Five Iron Golf’s largest deal
After a successful launch in Louisville, Kentucky-based entrepreneurs Alex Zega and Peter McCormick are doubling down withtheirFiveIronGolfcommitment.Plus, moremulti-unitnewsfromSmallsSliders, PayMore and Re-Bath.
By Matthew Liedke
For much of Alex Zega’s life, golf has been a constant. From his youth to golfing at the collegiate level at Ohio State University before earning his business finance degree from the University of Kentucky, he’s spent years on the course.
He was also intrigued by the industry that revolves around the sport, but after graduation, wasn’t convinced there was profitable model that would work for him as an entrepreneur.
Instead, Zega decided to go into the medical field and later commercial real estate. In a
roundabout way, though, it was through the latter industry that Zega was able to get back into the sport via Five Iron Golf. Through his real estate company, Zega learned about the indoor golf concept and, with business partner Patrick McCormick, became a franchisee.
They opened their first location in spring 2024 in Louisville, where they’re based, and followed it up by inking a deal to open 12 units in Florida. Zega said pulling off the development of a dozen units isn’t daunting, either, thanks to the experience both owners bring.
While in the medical sector for nearly a decade at an orthopedics company, Zega built a background in management as the head of a sales team. Then in real estate, he worked with a boutique brokerage firm where he handled both multi-family and retail clients.
McCormick, meanwhile, came from a career in construction as the owner of a general contracting firm, where he specialized in commercial work. As their paths crossed and Five Iron Golf came on their radar, they visited three locations in Chicago.
“We were blown away,” Zega said. “I felt like it was something missing in the golf space. There’s Top Golf, which is more on the entertainment side and doesn’t have as much of a golfer focus. This offers both worlds. It has the entertainment value, but also a commitment to golf. We found it very appealing and it’s why we took the leap of faith into the business.”
The signing by the franchisees is a major step for the brand, too, as it marks the largest deal to date for the company. Founded in 2017 and
THE LATEST MULTI-UNIT DEVELOPMENT DEALS, FROM FRANCHISE TIMES
Alex Zega
franchising since 2023, Five Iron Golf has 34 units in 15 states and five countries. For the 12 additional units, the brand will open in Orlando, Tampa, Jacksonville, Boca Raton, Fort Lauderdale, Coconut Grove and St. Petersburg.
“Florida is one of the pillars of the southeast when looking at the country as a whole,” said Josh Frankel, Five Iron’s head of franchise development. “There’s a traditional thought that golf is almost overly accessible in the state, but I think that’s an old school way of thought.”
“Indoor golf is bringing the sport to different types of populations and demographics,” he continued. “We don’t even look at it anymore as indoor versus outdoor, it’s just golf. You have a generation of golfers who are learning to play this game indoors because of the accessibility.”
development, McCormick said the duo are going to continue doing what they’ve done, which is trusting the process.
“That’s two-fold,” McCormick said. “Trusting yourself and the team that we’re going to execute, and also having faith in the franchisor that they have the successful model that we can recreate. Over the last nine months, Five Iron has brought on new investors and partners who are continuing to cultivate what the brand offers. They’re continuing to improve the whole spectrum.”
As the franchisees embark on the Florida
Five Iron in late 2023 attracted a $20 million investment from Shake Shack founder Danny Meyer’s Enlightened Hospitality Investments.
To successfully apply the franchisor’s model, Zega said hiring the right people is critical, and they’ve developed a management system called the “core four.” It includes a general manager, an assistant general manager, a director of golf and assistant director of golf.
“We have the GM who has management experience and knows food and beverage,” Zega said. “Then there’s the director of golf who’s in charge of all things related to the sport, from leagues to lessons. They treat members like they’re at a country club. Those two then meet in the middle and see how they can best serve the customers.”
Frankel said it’s precisely the type of approach Five Iron Golf is looking for from owners.
“We want franchisees to be guest-obsessed,” Frankel said. “Those who want to do right by their customers. People have a choice in how they spend their well-earned money. They come in and they want to see value, not just in dollars, but in time. These guys get that.”
Perspire Sauna Studio inked several deals to expand its footprint in California. The wellness concept
The Wire continued from 71
Five Iron caters to serious golfers and novices alike, and locations offer full food and drink menus.
Peter McCormick
signed a pair of agreements for the San Diego market. One is with Jing He, who has a background in accounting and plans to open three locations. The other is with Kiki Barnes, a former Perspire employee, who signed on for five locations. In Los Angeles, franchisee group Daughters del Fuego inked a deal to open three Perspire units. The new locations will add to the 17 existing units in California for the brand, founded in 2010. Today the concept has more than 75 studios open nationwide.
Pickleball concept Dill Dinkers inked a deal for 20 locations in Florida’s Tampa metro area. Behind the agreement is Martina Kochli, Dill Dinkers’ global brand ambassador and a former professional pickleball player who’s opening the units with her husband Andrew, a U.S. Army veteran. Established in 2022, Maryland-based Dill Dinkers has five company-owned locations.
Smalls Sliders, an Atlanta-based QSR brand, signed a deal to enter Indiana with 15 locations. The agreement is with Indy Craves, helmed by entrepreneurs Ellen Broyles and Justin Ruetz.
The Wire continued on 74 Perspire Sauna Studio is growing in San Diego and Los Angeles via three multi-unit agreements.
The duo, who bring experience in financial services and insurance, are partnering with consultant Alex Yeater. Founded in 2019, Smalls Sliders has 24 locations open, with the majority in Louisiana.
Barrio BurritoBar, the American counterpart to Canada’s BarBurrito, inked a master franchise agreement to develop the state of Georgia. The deal, which targets the opening of 110 locations, was signed with a franchisee group including Madhu Sundara, Sai Bandaru, Srinivas Madhamshetti and Radhika Mukka. The four bring experience in foodservice and franchising. BarBurrito launched in 2005 and has more than 360 locations across Canada. Barrio BurritoBar, meanwhile, launched in the U.S. in 2020.
Re-Bath, a bathroom remodeling brand, signed an agreement for three territories in the Chicago area. Partnering with Re-Bath is the husbandand-wife duo Brian and Anna Soik, who bring healthcare industry and technology management experience, respectively. The duo has also worked
as landlords. Founded in 1978 and franchising since 1991, Re-Bath has more than 100 units across the country.
Electronics retail concept PayMore signed two
multi-unit agreements to grow in Illinois and Florida. In Chicago, former medical sales professional Brian Penar plans to open five stores, while experienced retail strategist George Nahra agreed to open three in Fort Myers, Florida.
BurritoBar, based in Canada, is looking to Georgia for the next phase of growth in the United States.
Joe and Christy Rivera, entrepreneurs with Amazon Delivery Service Partners, signed another Chicago deal, with an agreement for two stores. Founded in 2011, PayMore has nearly 60 locations open nationwide and is expanding internationally.
Staffing brand AtWork signed an agreement for two locations in Greenville and Spartanburg, South Carolina. The deal is with Jason Grant, a former human resources executive who also brings experience in manufacturing. The first office is set to open in Greenville in April, followed by the second at a later date. Based in Knoxville, Tennessee, AtWork has more than 100 units worldwide.
The Swing Bays, a golf and fitness concept based in Colorado, will expand into North Carolina with a five-unit agreement. The deal is with the husband-and-wife team Phil and Nancy Gugliotta. The two owned a staffing and recruiting firm a few years ago before becoming franchise brokers in fall 2024, launching Pivot Franchise Advisors. Founded in 2022, The Swing Bays started franchising last year and has one flagship location in Parker, Colorado.
Pita Pit is expanding in Alaska via a two-unit agreement. The deal, with franchisee Kaleb Crawford, will bring the restaurants to the cities of Wasilla and Palmer. Crawford has business experience from a career in healthcare foodservice management. Founded in 1995, Pita Pit has 68 locations across the country.
The Wire is the place to find news of multi-unit development agreements, brought to you by Senior Writer Matthew Liedke. Want more? Sign up for the e-newsletter at franchisetimes.com/enewsletter. To share your brand’s multi-unit deals, email details to mliedke @franchisetimes.com
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Pita Pit is back in expansion mode, with new locations coming to Alaska.
Executive Ladder
Liberty Tax welcomed Clayton Clarkson as its franchise development manager.
Subway CEO John Chidsey retired at the end of 2024, with Carrie Walsh taking over as interim CEO.
Floor Coverings International named Wes Sattler as senior director of franchise development.
Massage and facial spa concept Hand & Stone announced Jim Atkinson as vice president.
Indoor Active Brands announced the following hires: Chris Kuehn , president; Sean Naughton , chief financial officer; Robert Morris , vice president of franchise development; Joseph Steen , vice president of technology.
Kumon , a math and reading education franchise, named Angelo Chavez as assistant vice president of franchise development.
Crust Club , a pie franchise owned by Crumbl , named Stacie Nieves as director of operations.
7 Brew appointed Nick Chavez as its first chief marketing officer.
European Wax Center hired Chris Morris as CEO after he resigned as Dave & Buster’s CEO. Dave & Buster’s, which franchises outside of the United States, named Kevin Sheehan as interim CEO.
Marriott International elected Taco Bell CEO Sean Tresvant to its board of directors.
Crunch Fitness appointed John D’Anna as its chief development officer.
Ziggi’s Coffee announced Stacey Kane as chief marketing officer and Tom Seeker as chief technology officer.
A &W Restaurants named Meredeth Jones as vice president of franchise development and design.
Re/Max Holdings welcomed Travis Saxton as executive vice president of strategy.
Panera Bread announced Brian Krause as its chief development officer.
Vibe Restaurants hired Michael McDonald as vice president of learning and development.
Riko’s Pizza named former BurgerFi CEO Carl Bachmann as president and chief operating officer.
Budget Blinds made the following changes to its executive leadership team: Tracy Christman, chief operating officer; Amy Campbell , vice president of marketing, product design and strategy; and Nicholas Petropoulos , director of information technologies.
Payroll Vault, a payroll and workforce management franchise, announced Tricia Petteys as CEO and Tim Loehfelm to vice president of sales.
100% Chiropractic named Tyler Doolittle as chief growth officer and Madeleine Zook to its board of advisers.
Restore Hyper Wellness named Matt Vonderahe as CEO.
Regis Corporation appointed Susan Lintonsmith to its board of directors.
Bathroom remodeling concept Re-Bath announced Amy Cantwell as vice president of marketing.
D1 Training appointed Dom Bonvissuto as director of media and content and promoted Brandon Borah as vice president of real estate development.
American Family Care named Jeremy Morgan as CEO after announcing the retirement of former CEO Randy Johansen . The company also named David Prokupek as executive chairman.
GoTo Foods announced the following executive appointments: Mike Freeman, president, brands; Shelley Harris, executive vice president and chief operating officer; Bobby Morena, chief development officer; Danielle Parra , McAlister’s Deli chief brand officer; Urvi Patel , SVP, brands, and chief brand officer of Cinnabon
Pest control concept OhDeer announced Jereme Shelton as vice president of franchise development and Todd Lamson as senior director of operations.
Assisted Living Locators welcomed Felicia Sanders as brand leader.
Franchise Services appointed Richard Lowe to CEO.
Purpose Brands , the parent company of Orangetheory Fitness and Anytime Fitness , named Lauren Cody as brand president of Orangetheory.
EverLine Coatings announced Jay Hartley as director of national accounts.
Perkins named Kimberly Bean as VP marketing.
Unleashed Brands named Josh Wall as chief operating officer and Mark McAndrew as general counsel.
Yum Brands promoted Scott Mezvinsky to KFC Division CEO.
Church’s Texas Chicken named Navin Sharma as chief marketing officer and Alisa Cleek as chief legal officer and corporate secretary.
La Madeleine appointed John Dillon to president.
Threshold Brands announced Erin Iglehart as senior director of franchise development.
Pickleball Kingdom promoted Rob Streett to president and chief global officer.
iCryo, a recovery and wellness concept, named Phillip Singer as chief medical officer.
Send promotions and new hire news in franchising to Alyssa Huglen, ahuglen @franchisetimes.com
John D’Anna
Danielle Parra
Neighborly CMO leverages data to advance franchise system
Data is at the center of Stacy Lynn Bourgeois’ priorities.
Bourgeois joined home services platform company Neighborly in December as chief marketing officer, building on a career of leadership roles at Amazon and Yum Brands. Her interest in Neighborly grew after connecting with CEO Mike Davis, whom she credits as educating her more on the company and exchanging ideas with her.
“I’m really excited about the data opportunities here. I’m a bit of a nerd,” Bourgeois said, “and I think there’s just so much opportunity to improve for both sets of our customers … as well as grow the business for our franchise owners.”
Bourgeois “grew up” in marketing, particularly in the brand management space. Early on, she recognized her love of how operations and finance mesh with marketing to better serve customers and businesses.
“The constant or connective thread for me has been that I love leveraging data to solve cus -
tomer pain points and drive growth,” she said. “Neighborly has so much data to help improve the customer experience and help grow our franchise owners’ business, and that was a really exciting problem for me to dig into.”
Storytelling becomes an important element as a result, she added. Bourgeois plans for data to assist in generating compelling stories that connect with customers and franchisees.
“I think franchise owners are more excited to hear from one another and their peer set than necessarily from our side,” she said. “Data paired with a story or anecdote from a franchise owner tends to be a really powerful way to galvanize the system.”
franchised units across more than 30 brands.
She noted the importance of asking the right questions about the full customer funnel, from finding Neighborly to booking and onsite experiences to follow-up procedures.
Bourgeois’ experience at Amazon stoked her interest in optimizing the website experience and how customers search for and discover Neighborly’s brands. The company has 5,500
Making the company’s brands “ridiculously easy to do business with” earns customer trust and drives sales growth, Bourgeois said. Cultivating a value-adding marketing team builds trust with franchisees, another critical focus in her role with Neighborly.
“We’ve just got a ton of great people here that really want to do the best thing for our franchise owners,” she said. “I was really inspired by the franchise owners that I’ve met so far … and it’s an incredible and truly honored opportunity to be able to help grow their business.”
—Alyssa Huglen
Kiddie Academy CEO stresses need for fresh curriculum
Casey Miller has no qualms in taking over the family business. “I’m very blessed to be in this position, and I don’t take it for granted,” he said. “I have really just embraced it and enjoyed it.”
Miller is the newly appointed CEO of educational child care concept Kiddie Academy. The franchise has 347 locations nationwide and plans to open another 30 units this year.
Miller joined Kiddie Academy in 2013, working in franchise development, operations and construction, most recently serving as executive vice president. A Kiddie Academy graduate himself, Miller’s connection goes further back; his grandparents founded the company in 1981, and his father is its executive chairman.
“I’ve always had an interest in the business,” he said. “I grew up with my dad always telling me about the business, and he would actually sit down with me and my brother and give us little business courses.”
These experiences, along with fatherhood, drive Miller’s philosophy as CEO. “It’s such an important time of socialization for kids to learn how to work with others and play with others and share … Actually being a parent now, knowing how deeply you feel and love your child and want the best for them has been a huge positive influence on me,” he said.
Driving franchise growth is at the forefront of Miller’s initiatives.
Kiddie Academy increased its corporate headcount by more than 20 percent in 2024, growing learning and development departments aimed at training franchisees and directors and providing teachers with training materials. The company also reinforced its education team and operations support.
Keeping curriculum fresh and up to date is important to Miller, and he hopes to achieve accreditation for the entire system. The curriculum aligns with Kiddie Academy’s “Life Essentials” campaign, which emphasizes six values: character, confidence, curiosity, connection, critical thinking and creative expression.
A self-described “lifelong learner,” Miller’s desire to know the ins and outs of Kiddie Academy is all the more possible as CEO.
Kiddie Academy is prioritizing its regional training programs, with 22 two-day trainings scheduled across the country this year for franchisees to network and learn.
“I don’t want to be out of the know with any particular part of the business,” he said. “I think that you’ll never fully learn every aspect of everything, but my goal is to continue to work closely, not just oversee teams, but work side-by-side with the teams on particular projects so that I can really understand and assist as best I can.”
— Alyssa Huglen
Stacy Lynn Bourgeois
Casey Miller
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Less than a year after I reported on the Ponzi scheme allegations against exterior lighting brand Blingle, parent company Horsepower Brands is receiving similar complaints from franchisees of its other brands.
In August 2023, a group of eight franchisee LLCs filed a lawsuit against Blingle, calling it a scheme to “get rich quick by preying on unsuspecting consumers,” while charging owners exorbitant and unnecessary fees and not providing adequate training.
Though the Blingle lawsuit was dismissed, franchisees of fellow Horsepower brands iFoam, an insulation brand, and Mighty Dog Roofing are making many of the same claims.
The Blingle case was dismissed in March 2024 because the franchisees were required to mediate with the brand outside of court, per their franchise agreements, according to court documents. Many franchisors include a mediation or arbitration clause in agreements to keep disputes out of court, which can save money on legal fees and quickly resolve issues—though the provisions often work in the franchisor’s favor.
In an emailed statement about the similar allegations across other brands, Horsepower said, “Unfortunately, there appears to be an industry problem with prospective franchisees failing to take the time to carefully review and understand these legally mandated pre-sale disclosures— hence the copycat style claims and allegations. As with investment in any franchise system, there is no guarantee of success or profitability.”
Josh Skolnick and Zachery Beutler founded Horsepower in 2020 with the goal of acquiring 25 home service brands by 2025. The company owns nine home services franchises, including Gatsby Glass and Bumble Bee Blinds.
All of the dozen or so former and current HPB franchisees who contacted me requested anonymity because they feared retaliation from Horsepower. A handful of them agreed to talk and later decided against it on recommendation from their attorneys.
Mighty Dog and iFoam operators say the same problems franchisees allegedly experienced at Blingle are happening systemwide. They say they were sold a business and told they didn’t need experience to operate it, but the training they received was unhelpful and didn’t prepare them for the work they’d be doing.
Corporate staff members allegedly misrepresented investment costs, so franchisees spent more upfront than they were told.
A former iFoam franchisee who had territo-
ries southeast of Houston admitted to me that he made his share of mistakes, but none of them should have resulted in him filing for bankruptcy, which he did in October 2023. He realized after signing his agreement that the spray foam truck he was required to purchase was $225,000 when he was told it would be closer to $180,000.
A military veteran, this franchisee didn’t have experience in insulation services, which he said corporate staff told him wasn’t an issue. “The training, that was awful,” he said. The trainer “was freaking useless” during training. He recalled a situation during another operator’s first job in the field, in which workers made what could have been a disastrous mistake of sealing in an attic with an HVAC unit. “One, you saw combustible appliances. And two, it was a shit job, but you didn’t even do anything to step in and help them out,” the franchisee recalled.
‘Inflated and unachievable’
Former iFoam franchisees Werner and Leah Schaefer of Shepherd International Innovations filed a lawsuit against iFoam and Horsepower in Pennsylvania in November. The suit also lists Skolnick, now Horsepower’s chairman, cofounder Beutler and CEO Tony Hulbert as defendants.
LEGAL BEAT
advertising—to which Horsepower provided “no meaningful assistance,” according to the suit. Horsepower filed a motion to dismiss the suit in February on grounds that the Schaefers “cannot establish justifiable reliance on alleged pre-sale misrepresentation as a matter of law,” among other reasons. Texas and Pennsylvania, where this suit was filed, have statutes that give franchisees a private right of action; the FTC’s Franchise Rule does not have such a guarantee. Horsepower responded to a list of detailed questions about the lawsuit and accusations from franchisees with this statement: “Horsepower Brands will not comment directly on pending litigation and will continue to vigorously defend against the baseless allegations asserted in the two pending cases. Horsepower Brands does question the timing of this article, which is positioned for publication while a motion to dismiss is pending. Is the timing of this article designed to influence the court’s decision?”
By Emilee Wentland
(An online version of this article appeared on Franchisetimes.com in late February. At press time, there were no updates to Horsepower’s motion.)
As for allegations about misrepresenting future financial performance numbers, Horsepower said it puts time into complying with regulations.
The Schaefers want their franchise relationship with Horsepower rescinded and their financial losses paid back, which they allege total $2.2 million in out-of-pocket and lost opportunity costs.
The franchisees allege Horsepower “illegally oversold” them on iFoam with a five-unit agreement in the Houston area based on misrepresentations in the franchise disclosure document. Horsepower allegedly provided the Schaefers with “inflated and unachievable” annual projections, according to court documents.
Lastly, the franchisees allege that Horsepower breached its contract by allowing another iFoam franchisee to open their warehouse in the same ZIP code as the Schaefers’ warehouse, despite them owning the territory.
To rectify the situation, the Schaefers reportedly reached out to Horsepower “on multiple occasions” for help with training, marketing and
Every business, franchised or otherwise, comes with risk. “Success requires hard work, dedication, and an understanding of, and compliance with, contractual commitments,” Horsepower wrote. “Success, however, is never achieved by throwing in the towel early and pointing fingers at your franchisor for business failures.”
Yes, franchisees must work to achieve success, but when the franchisor won’t provide assistance if the model isn’t working, how are they supposed to move forward? When operators keep making the same claims, I can’t help but wonder if it’s not the franchisee who’s totally at fault.
Emilee Wentland is managing editor of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to ewentland @franchisetimes.com.
Illustration by Jonathan Hankin
There are no franchise lifeguards, and don’t expect PE to save the day
If you’re a franchise founder or leader, play a long game if you want to win. There is too much short-term thinking out there and attempted short cuts taken when it comes to building lasting a franchise business.
Despite all training and sector advice to the contrary, too many brands still sign any franchisees they can get, rather than holding out for the ones they really need. Management teams along the way sometimes forget that unit profitability and franchisee satisfaction should be their primary focus. Then unit economics falter and franchisee enthusiasm seizes up. Suddenly validation chills, and unit growth slows or stops.
The math is clear. Thousands of franchise launches never break out to relevance, and others later stall (at all stages and sizes) and get stuck. It’s not just a problem for small brands. Large brands can stall, too.
Enter private equity. Capital to expand! Smart help to fix nagging issues! Right?
Let’s dispel a common myth. Private equity sponsors active in franchising generally can’t buy sub-scale companies. They also don’t want “projects” or turnarounds. Otherwise, we’d see a bunch of deals among the thousands of brands languishing without a clear path forward.
PE sponsors have a clear mandate to try to find proven companies with some scale already achieved that they can accelerate, then later exit for a profit. They jostle amongst themselves for the opportunity to acquire brands with momentum, with solid growth prospects and a backable team. They’re not cherry picking the Island of Misfit Toys looking for “opportunities.” There is simply too much risk.
This is because the small number of firms that tried to pick up weaker brands at a discount price have largely gotten burned. Any issues that need to be addressed always cost more and take longer than planned. Think the franchising world is small? The PE world is smaller. And it’s got all the gossip and “friendly” competition as you would expect from any club of interconnected people who seek to outdo each other and win at scale.
Unit economics first
Founders and management teams must be prepared to play a long game. It’s tough to get from launch to relevance, much less to a strong valuation. Mistakes along the way can make finding capital later much more difficult, if that’s your objective. For those who say they’ll never bring in PE, that’s fine, but you must retire at some point.
Keep your options open.
Here’s your checklist: 1) Hone the operating model before going fast. 2) Focus on sustainable growth. 3) Open 100 percent of what you sell. 4) Ramp unit sales quickly and constantly improve cash-on-cash return for franchisees. 5) Be very selective recruiting franchisees. 6) Nurture your franchisee relationships. 7) Constantly improve unit performance—drive positive same-store sales trends and unit profitability.
Remember, great unit economics solve or avoid most problems in franchising. If you need to make changes, involve your franchisees. Franchising is a brilliant business model with a fascinating twist: management must ultimately retain franchisee engagement and buy-in. Reluctant franchisees can humble and frustrate management teams and sponsors, drag their feet on development, tie up the company in litigation or otherwise remind us that entrepreneurs aren’t pushovers.
PE firms themselves are increasingly pushed, either by market forces or by their own choices, to play a longer game. Evidence can be found in the proliferation of continuation funds.
assets, meaning they have become a well-established waiting room in some PE portfolios.
We have seen this play out in franchising as well, especially because platforming (i.e. pulling many brands together under one parent hold-co and sharing some resources and customers) is a proven success model. Continuation funds make it easier to accomplish over the multi-year period often required to find, successfully integrate, and grow a multi-brand platform.
DEVELOPMENT SAVVY
By Alicia Miller
The problem? It’s tough to find great exits right now. Only the top-quality companies have buyers fighting over them. For the middle of the pack, buyers aren’t leaning in. Sellers are pulling their offerings and regrouping, hoping for better valuations ahead. And if a PE fund overpays on the front end, a delayed exit may be necessary to achieve the right return on investment.
Continuation bright spot
How do PE firms handle the pressures of an extended gratification period? These firms will often set up what’s known as a continuation fund. This allows early investors to exit and new investors in a separate fund managed by the same PE firm to come in.
In a study by liquidity solutions advisory firm MCAM Group, 42 percent of PE firms now have continuation funds, a shift from the traditional five- to seven-year buy-build-and-sell cycle. And 32 percent of continuation funds hold multiple
I see the positives here. You know I’ve never liked the “build-to-flip” model of creating brands solely to flip to PE. Fast re-trades between PE sponsors can also be distracting to management and franchisees alike. If continuation funds encourage longer-term thinking and investment horizons, that’s likely to create more positive outcomes for stakeholders, especially franchisees.
Sellers rolling equity forward should note for estate planning purposes the much anticipated “second exit” cashout could be farther in the future than they imagined. But having a more flexible investment horizon and building franchise value patiently may ultimately create a bigger payday for both founders rolling equity and for franchisees in those systems.
The reputation PE has for fast re-trading companies amongst themselves isn’t supported by the data, at least within franchising. Instead, what we’re seeing is a general trend toward longer hold times and a more long-term approach to value creation. PE will sell sooner if market conditions are favorable, but longer hold times are trending.
Alicia Miller is the founder and managing director of Emergent Growth Advisors. Her Development Savvy column covers smart ways to market and grow a franchise. She is also the author of “Big Money in Franchising: Scaling Your Enterprise in the Era of Private Equity.” Reach her at amiller @emergentgrowthadvisors.com.
Illustration by Jonathan Hankin
The bots are coming, the bots are coming … eventually. But until they do, sit back and relax.
Autonomous delivery robots are no longer a futuristic fantasy—they’re already roaming sidewalks and university campuses, and flying through our skies in drone form. Young people are even getting bored with them and seem to be going to Chili’s en masse for hot not-bot food.
Companies such as Starship Technologies, Serve Robotics, Nuro and Kiwibot have made significant strides in scaling pilot programs and expanding their operational footprints. But it’s hardly the transformative promise of just a few years ago when delivery bots were grabbing attention, billions in investor cash and making delivery drivers sweat. These bots are moving a lot slower than I hoped.
In the bot heyday, Franchise Times sibling publication Food On Demand sounded a weekly drumbeat of investments, technology breakthroughs and incredible predictions about our imminent bot bonanza.
I still haven’t seen a single bot, drone or autonomous delivery car out in the wild and, dear reader, I have tried.
The impact remains vanishingly small in the context of the overall food delivery world.
By land and air, bots are on their way, but ‘zees should take a deep breath TECH STACK
According to the largest player, Starship, its bots have completed 7 million deliveries. That’s 58,333 deliveries per month since it launched in 2014. That has accelerated to about 145,000 deliveries a month, according to company data from the fall of 2024, but it’s still a sliver of the delivery ecosystem. For context, DoorDash reported 42 million monthly users who bought 228 million orders. Domino’s alone slings more than 30 million orders a month.
This is the leader of the delivery bot army? According to the “Terminator” movies, the bots were about done wiping us out by now and I can’t even get a cold burrito to my stoop.
Evolution continues
Advancements continue, as do big promises. Starship envisions “thousands” of delivery robots on British streets in the coming years. The company launched a reusable program for students to return their food delivery packaging by bot.
Serve Robotics announced its third - generation models—now twice as fast and with enhanced cargo capacity—are being deployed in Los Angeles as part of its Uber Eats partnership. The new bots also got some cutting-edge laser eyes to improve visual ability and help map
the city sidewalks as well.
As for the aerial companies, Flytrex is the dominant leader in the United States. It just reached 100,000 deliveries in the fall of 2024, but remains in just four highly controlled pilot areas. It is enhancing economics with a new design philosophy that drastically reduces the cost of drones.
“We’ve managed to reduce the amortization cost to just a few cents per delivery. This isn’t just an incremental improvement—it’s a fundamental reimagining of how drone delivery can be economically viable,” noted the company in a blog post.
Globally, Wing (Google’s aerial drone delivery spinoff) expanded its drone delivery trials in southeast Australia. The service now delivers items including coffee, groceries and small meals, taking advantage of Australia’s easier regulations for flights beyond visual site.
Zipline is gradually broadening its service scope. The company’s fixed-wing drones have long been used to transport blood, medicine and critical supplies. Recent pilot initiatives are exploring the inclusion of food and beverage items.
many brands’ employee manuals.
To be fair, true automated driving is a wildly difficult challenge. Companies must contend with regulatory challenges, variable weather conditions (I personally love watching videos of do-gooders saving bots from snowbanks), and the complexities of navigating unpredictable urban environments. Many of the ongoing delivery operations should still be classified as pilots.
Like the Flytrex test areas, almost all of these pilots remain in extremely controlled environments.
By Nicholas Upton
And there is plenty of aerial expansion. According to PriceWaterhouseCoopers, drones are completing about 14,000 deliveries a day globally, or 5 million-plus in 2024, moving $250 million in goods. In 10 years, the firm predicts 800 million deliveries a year, valued at $65 billion.
There are some Darwinian developments. Nuro, which wowed all sorts of partners including Domino’s, seems to be pivoting away from food delivery. The company laid off more than 600 people in 2022 and 2023, and is talking up a pivot into driverless taxis and personal automated vehicles. It’s sending vehicles out into traffic in several cities, but it’s not the delivery darling it seemed in 2020, when it reached a $5 billion valuation.
Several delivery companies vanished, including Marble and Refraction, two favorites for investors that seem to have been scrapped.
I expected these bots to be ripping up sidewalks by now, and many operators were eager to test and operationalize robot delivery. I imagine there are some forgotten bot-delivery pages in
Avride partnered with Grubhub to roll out its food delivery robots on U.S. college campuses. The initiative targets the high-density, compact environment to streamline deliveries, reduce labor costs and lessen reliance on cars. It’s in good company. Starship and Kiwibot have concentrated on campus and a few industrial site deployments, where the confined geography and predictable traffic patterns vastly reduce the risks associated with autonomous navigation. Uber’s robotic delivery experiments are focused on select urban areas with well-defined boundaries. And while Serve boasted about truly being out there on the streets of L.A., the delivery ranges are short and as defined.
From an operator’s standpoint, there are several considerations. For something like Flytrex, a staffer comes to get the food, loads the bot and sends it flying along. But for fully autonomous solutions, there is a chain of things to figure out. The packaging needs to be robust but fit in the limited capacity. Bots need somewhere to park. Staff still needs to load the items. It’s not exactly hard stuff, but the vast majority of operators don’t need to think about it all.
Unless operators are in these pilot zones, have food that fits in the bots and have staff bandwidth to muck about with robots, sit back and wait. There’s more impactful work to do.
Nicholas Upton has reported on retail and restaurant technology for more than a decade. His Tech Stack column aims to distill complex ideas into actionable insights. Send interesting tech topics to upto0013 @gmail.com.
Illustration by Jonathan Hankin
‘Golden Girls’
One
and dark chocolate are favorites for Burn Boot Camp’s COO
Who is an actor you would watch in anything?
Dolly Parton. I’m from East Tennessee, like her, and I just think she’s built such a career on being an entrepreneur, having a great deal of tenacity, her support of communities. She has so many great qualities. ‘9 to 5’ is a favorite.
What’s something not many people know about you?
I used to play the violin. That was in middle school, and I really enjoy fine arts and music. I had a small photography business for a while called Mama Razzi. I would do newborn photography, weddings and family photos.
What’s your biggest pet peeve?
Ignorance. Self-induced ignorance. Mainly because it’s 100 percent up to you if you’re uneducated about something. There’s so much information at our fingertips, but then also there has to be diligence on everyone’s part to research, find out what’s true and what’s real, and formulate your own opinion. Also loud chewing. I can’t stand it when my kids smack their lips.
What’s something you would seriously stockpile if you found out it wasn’t going to be sold anymore?
Dark chocolate chips. I like Lily’s, their sugar-free dark chocolate baking chips. I use them for baking, yes, but they’re also my little sweet treat right outta the bag after dinner. I always have at least one bag around.
“I can cry like an actual baby. It sounds so obnoxious. I used to do it to annoy my older brother.”
Which time period in history would you want to visit?
I have always appreciated early America. Growing up in East Tennessee, I was always around farms and I love horses and just being out in an open field. There’s something really satisfying about growing things. When I was in high school, we had a bed and breakfast that was built in the 1900s, and then we moved to a home that we restored that was built in 1792. I would love to someday buy a farmhouse, fix it up and have something like a hobby farm.
—Amber Burke, COO, Burn Boot Camp
If you could be a member of any TV show family, which would it be?
‘The Golden Girls.’ Betty White is hysterical and I always appreciated Dorothy. She reminds me of my grandmother. She had the best facial expressions. Like think of David from ‘Schitt’s Creek,’ his expressions, but she was the original, before ‘Schitt’s Creek.’
What’s the most useless talent you have?
I can cry like an actual baby. It sounds so obnoxious. I used to do it to annoy my older brother. And no, I won’t do it now.
What superhero power would you most like to have?
Flying. Definitely for transportation purposes, but it also seems like it would be very freeing to just take to the sky and cruise around.
What’s your guilty pleasure?
Probably watching ‘Love Is Blind’ with my daughter. It’s so ridiculous. My first declared major in college was anthropology, so as an experiment it’s very interesting, testing the boundaries and your own preconceptions and then seeing what happens when reality hits.
What chore do you absolutely hate doing?
Cleaning the shower. In general, it’s just difficult, with so many right angles. I’m a bit of a perfectionist, and you need like three different implements to clean it. You need a scrubber, a toothbrush for all the crevices and a sponge to wipe everything down.
Editor in chief Laura Michaels asks the tough questions—What superhero power would you most like to have?
What’s the weirdest thing you’ve ever eaten?—to show a side of franchising execs you don’t normally see. To suggest an industry professional, email lmichaels@franchisetimes.com.
Illustration by Jonathan Hankin
Save the Date
April 21-24, 2025
Let’s talk growth with top dealmakers
Join Franchise Times and Restaurant Finance Monitor editors as they discuss some of the year’s biggest deals with the people who made them happen. During each onehour session, we’ll explore amazing careers and strategies for driving growth, while learning what it takes to get these major franchise deals across the finish line.
