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When Pizza Hut bought out Straw Hat Pizza nearly 10 years ago,Straw Hat franchisees faced a dilemma: Either convert or goindependent. For a number of franchisees, neither option wasappealing, so they came up with another alternative. They opted outof the Pizza Hut franchise and established a cooperative to retainownership of the Straw Hat name, operating systems, recipes andlogo.
Today, Dublin, California-based Straw Hat Cooperative Corp. isgoing strong, with 50 members and 65 locations throughoutCalifornia, Nevada and Washington. An average of six new stores areadded each year. All decisions guiding the company are made by anelected board of directors.
"It's a shared strength," says Joshua Richman,president and CEO of the cooperative. "The idea is that thesepizza restaurants will be stronger as part of a group than on theirown."
The benefits are numerous. The backing of 60-plus stores helpswhen negotiating deals with suppliers. Co-op members also savemoney because Straw Hat manufactures its own cheese, dough, meattoppings, sauce, boxes and cups. The royalties are low, and allmarketing materials are provided.
Says Richman, "We've found it is a real formula forsuccess in our industry, which is extremely saturated andcompetitive."
Quintuple Or Nothing
By Holly Celeste Fisk
Dual branding is one of the hottest trends in franchising. NowEd Blair, founder of Dallas-based Main Street Concepts LLC, isturning up the heat. Blair launched the first quintuple-brandinglocation, dubbed Main Street, in July. The Farmers Branch, Texas,location combines a Shell Oil gas station with a five-restaurantfood court.
"We found out that fast food generates three times as muchrevenue per square foot as a convenience store," says Blair,who spent almost two years persuading franchisors to give hisconcept a shot. Most were reluctant to allow Blair to build unitswhere employees would work side by side with employees of competingfranchises, a problem Blair addressed with a unique point-of-salesystem that ensures each franchisor receives its due royalties.
"I look at it like coaching," says Blair. "Ifeverybody works as a team, we're likely to win thegame."
The Farmers Branch Main Street includes Pizza Inn, Hardee's,Popeyes, La Creme and Taco John's outlets, but future MainStreets will be customized to best match the customer demographicsin their areas.
Blair and Monty Whitehurst, Main Street's vice president,are working on the rights to three more franchises, includingBaskin-Robbins, and permission from Shell Oil to build 17 moreunits in Texas.
With fuel for the fire, quintuple-branding just might be thehottest thing since the drive-thru window.
Piece Of The Pie
By Lourdes Aguila
Like most entrepreneurs, Stephen Hanulik, 36, had to overcomeobstacles to business ownership. Unlike most, the Springdale,Pennsylvania, man had to triumph over one extra obstacle--gettingpeople to look past his wheelchair and see him, not hisdisability.
Hanulik, who has muscular dystrophy and is a quadriplegic, wasworking at a hospital when a colleague told him about BusinessEnterprise Venture. The federally funded program, run by thePittsburgh Blind Association, helps people with disabilities becomeentrepreneurs by providing guidance with feasibility studies,business plans and financing.
Hanulik didn't waste any time. "I've always dreamedof owning my own business," he says. Through the program hemet advisory board member Jim Fox, founder of Fox's Pizza Den.Then fate stepped in: A Fox's Pizza Den franchise right downthe block from Hanulik's home was up for sale.
"I knew that this deal was going to work," recallsFox. "[Hanulik] is a very inspiring person." Withbusiness start-up assistance from Business Enterprise Venture, plusa home equity loan, Hanulik bought the franchise in May 1995.
Today, with 1996 sales projected at $100,000 and eight part-timeemployees, Hanulik is living his dream. And his enthusiasm has beencontagious: Fox has added a whole subdivision to Fox's PizzaDen to attract franchisees with disabilities.
Tis The Season
By H.C.F.
Franchisee philanthropists know it's better to give than toreceive. Some of the projects franchises are involved in:
- Super 8 Motels' Rooms at the Inn program offers free roomson Christmas Eve to holiday travelers visiting friends in nearbynursing homes, veterans' homes, hospitals and treatmentcenters. The program was started by franchisee Linda AamoldTharaldson in Fargo, North Dakota, in 1987; Super 8 adopted theprogram in 1990. More than 650 Super 8 motels donated about 1,500rooms last year.
- Franchisee P.K. Sindwani displays a Christmas tree decoratedwith cutout angels in his Trappe, Pennsylvania, Little ProfessorBook Center as a part of the Adopt an Angel program he began in1994. Each angel bears the name of a needy neighbor and either abook they would like or a list of their interests. Customers whopurchase the books receive a 25 percent discount, and a star withtheir name replaces the angel on the tree. Last Christmas, all 150angels were purchased.
- Auto appearance franchise Maaco Enterprises donates anyleftover toy cars, which are usually sold to franchisees to use aspremiums, to the U.S. Marine Corps' Toys for Tots program.Started at Maaco's King of Prussia, Pennsylvania, headquartersin 1993, the campaign has picked up speed, with 12 more franchisesdonating their stocks of the popular toy cars.
Tasteful Idea
By C.M.
Customers got all the pizza they could eat, charities gotdonations, and pizzerias got a slew of new customers. The settingfor this win-win-win situation? The first Buffalo Grove Chamber ofCommerce Pizza Challenge in Buffalo Grove, Illinois.
Michael Jonas, a sales representative for direct-mailadvertising franchise Coupon-Cash Saver in Deerfield, Illinois,came up with the idea as a way to help charities and businesses atthe same time. The all-you-can-eat tasting, held in February, gavelocal pizza restaurants the chance to showcase their pizzas.Attendees either paid a $3 entry fee or donated six cans offood--then chowed down. Both cash and food were later distributedto five local food pantries; and at the end of the day, consumersplaced their votes for the town's best pizzas.
"The purpose was to help the charities out, but it wasobviously a very good value for consumers who wanted to try all thepizzas in town," says Jonas, who is also a chamber member."Win or lose, the pizzerias had a great time and earned a lotof new customers." Approximately $1,000 and 1,500 pounds offood were collected at the event, which drew about 800 more peoplethan Jonas expected.
The second annual Pizza Challenge is again set for February."I want to help raise money during a [slow] time for the foodpantries," explains Jonas. "They get inundated with foodduring the holidays, but when spring comes, there's no realpush to donate."
Contact Sources
Coupon-Cash Saver, 1020 N. Milwaukee Ave., Deerfield, IL60015, (847) 537-6420;
Fox's Pizza Den, 540 Pittsburgh St., Springdale, PA15144, (412) 274-6797;
Fox's Pizza Den (headquarters), 3243 Old FrankstownRd., Pittsburgh, PA 15239, (412) 733-7888;
Little Professor Book Center, Trappe Centre, 130 W. MainSt., #102, Trappe, PA 19426, (610) 454-0640;
MAACO Enterprises, (800) 521-6282, ext. 6180, fax: (610)337-6176;
Main Street Concepts LLC, 5220 Spring Valley Rd., #525,Dallas, TX 75240, fax: (972) 392-0722;
Pittsburgh Blind Association, 300 S. Craig St.,Pittsburgh, PA 15213, (412) 682-5600;
Straw Hat Cooperative Corp., 6400 Village Pkwy., Dublin,CA 94568, (510) 829-1500;
Super 8 Motels Inc., 339 Jefferson Rd., Parsippany, NJ07054, (800) 889-8847, (201) 952-2956.
