Heat of the Moment

Stayin' Alive

Call it imperialism. Call it the armed forces. In franchising, we call it strength via dual-branding and mergers and acquisitions. Take a look at how franchisors have transformed and teamed up this past year:

  • Houston's Deck the Walls Inc. changed its name to Franchise Concepts Inc. after acquiring Framing & Art Centre and The Great Frame Up, and entering into a joint venture with Ashley Avery's Collectables.
  • Diedrich Coffee Inc. became the second-largest company in the specialty retail coffee market after ac-quiring Coffee People Inc., which franchised the 281-unit Gloria Jean's Gourmet Coffees concept.
  • To diversify its market reach, leverage infrastructure and serve more customers worldwide, McDonald's acquired Midwestern pizza chain Donatos Pizza Inc. and London-based sandwich chain Aroma Ltd.
  • Combined sales of $3 billion in 1999 were the result of a merger between the Pennzoil Co. (parent company to Jiffy Lube International) and Q-Lube Quaker State Corp. Pennzoil-Quaker State Co. is now one of the largest automotive consumer products companies in the world.
  • Farmington Hills, Michigan-based A&W Restaurants Inc. signed a multimillion-dollar deal to merge with Lexington, Kentucky's Long John Silver's Restaurants Inc. Reason? Dual-branding pluses.
  • Other dual-branding alliances: Great American Cookies and Freshens Smoothie Co., and PostalAnnex+ and U-Haul. Santa Ana, California-based Winchell's Donut House is currently seeking dual-branding opportunities with fast-food franchisees.

The aligning of franchisor forces has only just begun--strange combinations are ahead. "It's not just tacos with ice cream anymore," says Wilkerson. "Different industries that have some kind of nexus [will unite] to keep consumers from going somewhere else." We're talking dry cleaning and video rentals. Oil changes and take-out. Add a drive-thru to that equation, and Wilkerson predicts some happy time-pressed individuals.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: Heat of the Moment.

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