1. Overcome Your Fear With Knowledge

Learning about real estate will help to manage your fear of the unknown, uncertainty and unexpected events.  Arming with right education, you’re more likely to take the leaps necessary to progress to the next level. More importantly, it will help to reach your investment objectives or goals.

​Where do you learn about real estate? A good place to start is to read books, newspapers, magazines and online articles on related topics. One resource will lead to another, and then another.  You find yourself asking questions or wanting more information on a specific topic, it will guide you to the next article, book, blog or webinar.

2. Ordinary People Can Be Successful

​You don’t need to have any innate real estate talent or know-how from beginning. You will truly see that most people can learn to invest. You don’t need a degree in law, finance, business, investment or real estate.  In fact, you don’t need huge sums of cash. Ordinary people just like you, with ordinary reserves of cash, have achieved great results in real estate investment.
 
3. Select a Category of Real Estate

It will help you to narrow down which area of real estate you’d like to concentrate. There are two main categories:  Residential and Commercial.  When you understand some of the unique qualities of each category of real estate, you’re more likely to discover the type and location that best align with your investment strategy.
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4. Work with Experts to Assist with Your Investment Strategy

It will also help you to identify which experts might be best for your particular kind of investment strategy. When you assemble your team of advisers, one of them will be your real estate agent. He or she will be an expert in one particular sector—the one you’re investing in—but most likely will not be an expert in other sectors. For example, he or she might specialize in duplexes (residential), but not strip malls (commercial). So by focusing with one category, you can retain the same team of advisers.
 
If you want exploring further, please contact us.
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Summary: 

At the current pace of spending in a context of conflict and insecurity, Libya will either exhaust foreign exchange reserves or be forced into ad hoc adjustments necessary to stave off crisis, but far from sufficient to reestablish growth foundations.

The economic and social outlook assumes that political strife is resolved and a unified government can ensure macro-stability and launch a comprehensive program to rebuild the economic and social infrastructures.

In this context, it is expected that oil production will progressively increase to reach its potential (around 1.5 million barrels per day (bpd)) by 2020, which is the time necessary to restore the heavily damaged oil infrastructure.

Growth is projected to rebound at around 15% in 2018 and an average 7.6% in 2019-20. Both the fiscal and current account balances will significantly improve, with the budget and the current account running surpluses expected from 2020 onwards.

Foreign reserves will also start building up by 2020. They will average US$72.5 billion during 2018-2020, representing the equivalent of 27.5 months of imports.

However, high inflation coupled with weak basic service delivery are likely to have increased poverty and exacerbated socio-economic exclusion. In 2017, inflation accelerated, exacerbating further the hardship of the population.

Prices of all commodities continued to increase, mainly driven by acute shortages in the supply chains of basic commodities, speculation in the expanding black markets, and the strong devaluation of the Libyan dinar (LYD) in the parallel markets. Consequently, inflation hit a record level of 28.4% in 2017 following the 25.9% in 2016.
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Full Report

The relative economic improvement in 2017 remains fragile, as sustaining this dynamic depends crucially on a political resolution that in the current context seems hard to reach. The macroeconomic framework is unstable. It is characterized by record inflation and unsustainable twin deficits, mostly driven by rising budget expenditures. Dwindling savings are keeping pressure on foreign reserves and the LYD continued to lose its value in the parallel markets. To stabilize the macroeconomic framework, Libya needs to launch budget reforms and diversify the economy for growth and job creation.
 
Recent developments

Following four years of recession, the Libyan economy grew strongly in 2017, driven by a welcome recovery in oil production. However, sustaining this dynamic to reach economic potential depends on the resolve of the political strife. Exceptional but fragile implicit arrangements between the parties in conflict allowed the oil sector to more than double its production to an average 0.820 million barrels per day (bpd) in 2017, compared to only 0.380 million in 2016. The non-hydrocarbon sectors remained sluggish inhibited by lack of liquidity and security. GDP is estimated to have increased by almost 27 percent in 2017 allowing income per capita to substantially improve to 63 percent of its 2010 level after losing more than half of its value.

Inflation accelerated, exacerbating further the hardship of the population. Prices of all commodities continued to increase, mainly driven by acute shortages in the supply chains of basic commodities, speculation in the expanding black markets, and the strong devaluation of the LYD in the parallel markets. Consequently, inflation hit a record level of 28.4 percent in 2017 following the 25.9 percent in 2016. High inflation coupled with weak basic service delivery are likely to have increased poverty and exacerbated socioeconomic exclusion.

Despite higher hydrocarbon revenues, public finances remained under stress, given the high and rigid current expenditures driven by political motives. Budget revenues almost tripled in 2017 (31.8 percent of GDP) compared to 2016, but remained at half of potential. However, revenues were not even enough to cover public wages (36.4 percent of GDP), which increased due to political hires and higher salaries. Inefficient subsidies (9.2 percent of GDP) continued to absorb a significant amount of budget resources while capital expenditures remained weak (4.8 percent of GDP). Consequently, a high budget deficit persisted at 26 percent of GDP in 2017 (63.1 percent of GDP in 2016). The deficit is being financed mainly through cash advances from the Central Bank of Libya. The domestic debt has quickly increased to reach LYD 59 billion end September 2017, up from LYD 1 billion in 2010.

Although improving, the balance of payments continues to suffer from politically constrained production and export of oil and high consumption-induced imports. Libya managed to substantially increase oil export in 2017 (0.7 million bpd), but remained at half of potential. This relative performance is not enough for a sustainable current account considering the high dependence of Libya on imports to meet consumption and intermediate goods requirements. As a result, the current account deficit remained high at an estimated 9.4 percent of GDP. This deficit was fully financed by net foreign financial inflow, allowing foreign reserves to remain unchanged in 2017 at around US$ 72.6 billion. While the pegged official exchange rate was kept stable, the Libyan Dinar lost around 85 percent of its value in the parallel market due to the weak macroeconomic fundamentals and an illiquid banking system. 
​

Outlook
​
At the current pace of spending in a context of conflict and insecurity, Libya will either exhaust foreign exchange reserves or be forced into ad hoc adjustments necessary to stave off crisis, but far from sufficient to reestablish growth foundations. The economic and social outlook assumes that political strife is resolved and a unified government can ensure macro stability and launch a comprehensive program to rebuild the economic and social infrastructures. In this context, it is expected that oil production will progressively increase to reach its potential (around 1.5 million bpd) by 2020, which is the time necessary to restore the heavily damaged oil infrastructure. Growth is projected to rebound at around 15 percent in 2018 and an average 7.6 percent in 2019 -20. Both the fiscal and current account balances will significantly improve, with the budget and the current account running surpluses expected from 2020 onwards. Foreign reserves will start building up by 2020. They will average US$72.5 billion during 2018-2020, representing the equivalent of 27.5 months of imports.
​

Risks and challenges
​
The baseline macroeconomic scenario presented above is very fragile because it requires upholding the implicit agreement between the parties in conflict to ensure minimum security around oil infrastructure. Moreover, an improved macroeconomic outlook is unlikely to be sustained and is not sufficient to bring about significant change, unless immediate and targeted actions are taken to address the humanitarian crisis. The country needs humanitarian aid and specific programs to address the destruction and lack of basic services that a large part of the population faces.

Immediate challenges are to restore peace that would lead to macroeconomic stability and to improve basic public services. This calls for immediate actions to bring current expenditures under control, especially the wage bill and subsidies, and improve governance of the financial sector, which will also contribute to price stability. Over the medium term, the country needs broader and deeper structural reforms to stabilize the macroeconomic framework and promote private sector-led job generation. Other medium term priorities should focus on promoting the development and diversification of the private sector for job creation through policies to reorient the economy away from hydrocarbon dependence, reforming the financial sector, and improving the business environment.
​
Libya’s economic fragility has important consequences for the people’s well-being. Although there is no systematic study on poverty and very little evidence on the current well-being of Libyan households, it is not unrealistic to think that for most of Libyans living conditions are dire. Since hydrocarbons account for a large share of GDP and government revenues (40 and 86 percent respectively), the sharp decline in oil exports started in 2011 has severely impacted public services. The erratic power supply and the recurrent food shortages also contribute to worsening conditions for people. In the current situation, large share of the population is either vulnerable to poverty or has fallen into poverty.
 
Source:  World Bank
​

Know your tenant’s company profile and its ratings before you decide to invest (Tenant is who pays and guarantees the lease for you)

One of our criteria selections for net lease commercial real estate investment (NNN CRE) is to select the right tenant very carefully according to their rating. In fact, it is also one of our required selections to mitigate our capital risk.

Our typical selected tenant is Dollar General, you can find out this company profile as follow:
Dollar General Corporation is a United States chain of variety stores headquartered in Goodlettsville, Tennessee.

Dollar General Corporation is an American chain of variety stores headquartered in Goodlettsville, Tennessee. As of August 2017, Dollar General operated over 13,000 stores in all U.S. states except: Alaska, Hawaii, Idaho, Montana, Washington, and Wyoming.
​
The company first began in 1939 as a family-owned business called J.L. Turner and Son in Scottsville, Kentucky by James Luther Turner and Cal Turner. In 1968 the name changed to Dollar General Corporation and the company went public on the New York Stock Exchange. Fortune 500 recognized Dollar General in 1999 and in 2017 reached #128. Dollar General has grown to become one of the most profitable stores in the rural United States with revenue reaching around $21 billion in 2017.

Formerly called:  J.L. Turner and Son Wholesale

Type:  Public

Traded as:  NYSE: DG S&P 500 Component

Industry:  Discount retailer

Founded:  1939 in Scottsville, KY

Founders            

• James Luther Turner
• Cal Turner

Headquarters:                  100 Mission Ridge, Goodlettsville, Tennessee, United States

Number of locations:     14,000 stores (October 2017)

Areas served:                    Contiguous United States except for the Northwest

Key people:                      

• Michael M. Calbert (Chairman)
• Todd Vasos (CEO)
• John W. Garratt (CFO)

Products:                            Clothing, cleaning supplies, home decor, health & beauty aids, pet supplies,                                                toys, seasonal items, and grocery.

Revenue:                             Increase $20.369 billion (2015)

Operating income:          Increase$1.940 billion (2015)

Net income:                      Increase$1.165 billion (2015)

Total assets:                       Increase$11.258 billion (2015)

Divisions:                             Dollar General Market

Subsidiaries:                      

• Dolgencorp, LLC.
• Dollar General Financial
• Dollar General Global Sourcing
• Dollar General Literacy Foundation

Website:                              www.dollargeneral.com

This data is for general information purposes only.  DAJK cannot be held responsible for the accuracy of this information. All parties should verify details and ratings independently.

If you would like to invest in net lease commercial real estate (NNN CRE), please contact us.

If you do not see what you like, please send me your ‘wish list’ with specific investment criteria, we will locate and match your investment wish list.

If you would like to learn more how to invest in net lease commercial real estate in USA, you can discover more at NNN CRE USA.

PROCEDURE:  When you select what NNN CRE(s) you are interested, please send me your Letter of Intent (“LOI”) and Proof of fund (“POF”) to engage the acquisition/investment.  The closing time frame is from 30 to 90 days at this point if the Seller accepts our offer.  The escrow instructions will be provided for wiring of your investment funds once the Sale and Purchase Agreement is executed.  Please note your POF can be a Bank Comfort Letter (“BCL”) from Tier 1 bank or a copy of your deposit with First American Title.

Please note our escrow service is with First American Title,

Website: http://www.firstam.com/title/commercial/about/index.html

​The London Bullion Market Exchange’s latest Precious Metals Forecast Survey has split analysts on the likely direction of precious metals in 2018.

The annual forecast brings together a group of experts to predict the high, low and average price of gold, silver, platinum and palladium during each 12-month period.

This year 34 participants were asked for their views. Notable factors that divided the group’s projections included the level of U.S. real interest rates, the likely impact of geopolitical factors and the pace of global economic growth.

For gold, the different opinions prompted forecasts in a trading range of US$390 – from a low of US$1,120 per ounce to a high of US$1,510 per ounce.

With similar divergences in the other estimates, including a silver low of US$14 rising to a high of US$23, the LBMA said we could be in for “a dramatic year in precious metals”.

The extremes at either end of the forecast, however, effectively cancelled each other out with average price predictions for each metal in 2018 little different from those actually seen in the first half of January.

If the combined wisdom plays out, the average price of gold across 2018 would be US$1,318, with silver averaging at US$17.81.

In the 2017 forecast survey analysts predicted that the average gold price for the year would be US$1,244. As it transpired, they were just 1% out with actual average price of US$1,257.
​

​The full survey and what the individual analysts had to say about precious metals prices in 2018 will be available upon your request.  Please contact us for the full survey.

The firms that make clients the happiest face a challenge in getting millennials to stick with them.

That's the key takeaway from J.D. Power's 2018 U.S. Full Service Investor Satisfaction Study. 

The survey also identified out what hard-to-please millennials are going to demand as they come to dominate the marketplace — lots of personal interaction, not just high-tech tools. 

​Financial firms were ranked based on a December survey of 4,419 investors who work with financial advisers for at least some of their investments. Firms were measured on a 1,000-point scale based on how they fared in categories including account information, investment performance, firm interaction, product offerings, commissions and fees, information resources and problem resolution.
​

​Score: 839

With a score that came in precisely at the average of all firms, Northwestern Mutual made it to the Top 10. If it's any consolation, the firm's score was higher than the 838 that won Schwab top honors last year.
 
The Northwestern Mutual is an American financial services mutual organization based in Milwaukee. The financial security company provides consultation on wealth and asset income protection, education planning, retirement planning, investment advisory services, trust and private client services, estate planning and business planning. Its products include life insurance, disability income, and long-term care insurance; annuities; investments; and investment advisory products and services.

Type                                       Private (Mutual)

Industry                                Financial Services

Founded                               1857

Headquarters                      Milwaukee, Wisconsin

Key people                           John Schlifske, chairman and CEO, Greg Oberland, president

Products                               Insurance and investments

Revenue                               Increase$28.158 billion USD (2016)[1]

Net income
Increase                               $818 million USD (2016)

Number of employees     7,500 (2017)

​Website                                www.northwesternmutual.com
​

​Score: 842

The firm slipped from eighth place in last year's survey, but its satisfaction score was much higher than the 819 it posted last year.

Raymond James Financial is an American diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies that engage primarily in investment and financial planning, in addition to investment banking and asset management.
​

Type                         Public

Traded as               NYSE: RJF S&P 500 Component

Industry                 Investment services

Founded                1962; 56 years ago

Founder                 Robert James

Headquarters      St. Petersburg, Florida, United States

Key people           Tom James (Chairman Emeritus) Paul Reilly (Chairman and CEO)

Products               Financial services, securities and insurance brokerage, investment banking, asset                                      management, banking and cash management, trust services.

Revenue               Increase 6.37 billion USD (2017)

​Net income
Increase               $636.3 million USD (2017)

​Website                www.raymondjames.com  
​

Scores: 851

The three-way tie belies some key differences from last year. UBS, for instance, fell from fifth place last year, but its score rose from 827.

Fidelity fell from its No. 2 position last year, but its score also rose — from 835.

And last year, LPL wasn't among the Top 10.
​

​
​Score: 852

The giant moved up sharply from ninth place last year, and its satisfaction score jumped from 819.

​Merrill Lynch Wealth Management is a wealth management division of Bank of America. The firm is headquartered in New York City, and occupies the entire 34 stories of 250 Vesey Street, part of the Brookfield Place complex, in Manhattan. Merrill Lynch employs over 15,000 financial advisors and manages $2.2 trillion in client assets.
 
The firm has its origins in Merrill Lynch & Co., Inc. which, prior to 2009, was publicly owned and traded on the New York Stock Exchange under the ticker symbol MER. Merrill Lynch & Co. agreed to be acquired by Bank of America on September 14, 2008, at the height of the 2008 Financial Crisis.[5] The acquisition was completed in January 2009[6] and Merrill Lynch & Co., Inc. was merged into Bank of America Corporation in October 2013, although certain Bank of America subsidiaries continue to carry the Merrill Lynch name, including the broker-dealer Merrill Lynch, Pierce, Fenner & Smith.

Score: 863

RBC is another instance of a firm making the Top 10 list this year after having a less-than-stellar ranking in 2017.

​For more than a century, RBC Wealth Management has provided trusted advice and wealth management solutions to individuals, families and institutions. We are a global organization, bringing our diverse expertise and deep knowledge to the sophisticated financial needs of our clients around the world. We are committed to earning our client’s trust by building lasting relationships and confidence, putting your interests first in everything we do. Every interaction with us is defined through our core values and culture of doing what’s right for our clients and the communities we operate in. Forward-looking, innovative and committed helping our clients thrive and communities prosper – we are the partner you can depend on to help you achieve your financial goals.

​

​Score: 865

The firm improved its leadership position, moving up from last year's sixth spot and its 2017 score of 826.
 
Stifel Financial Corp. (NYSE: SF) is a financial services holding company created under its present name in July 1983 and listed on the New York Stock Exchange on November 24, 1986. Its predecessor company was founded in 1890 as the Altheimer and Rawlings Investment Company and is headquartered in downtown St. Louis, Missouri.
 
Stifel offers securities-related financial services in the United States and Europe through several wholly owned subsidiaries. Its clients are served through Stifel, Nicolaus & Company, Incorporated (Stifel Nicolaus) in the U.S., a full-service retail and institutional brokerage and investment banking firm, through Stifel Nicolaus Canada Inc. in Canada, and through Stifel Nicolaus Europe Limited (SNEL) in the United Kingdom and Europe. Its other subsidiaries include Thomas Weisel Partners LLC (TWP), Century Securities Associates, Inc. (CSA), an independent contractor broker-dealer firm, and Stifel Bank & Trust, a retail and commercial bank. The company's broker-dealer affiliates provide securities brokerage, trading, investment banking, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. offers trust and related services.

Type                             Public

Traded as                   NYSE: SF S&P 400 Component

Industry                     Investment services

Founded                    1890; 128 years ago

Headquarters          St. Louis, Missouri, U.S.

Key people                Ronald J. Kruszewski (Chairman of the Board, President, and CEO)

Products                    

• Asset management
  
• Financial Services
  
• Investment Banking
  
• Investment Managing

Revenue                    US$ 2.2 billion (2014)

No. of employees   5,266 (2012)

Website                    www.stifel.com
​

Score: 866

The St. Louis-based giant inched up from the No. 3 spot last year and improved its satisfaction score from 833.
 
Edward D. Jones & Co., L.P., since 1995 simplified as Edward Jones is a financial services firm headquartered in Des Peres, Missouri, United States and serves investment clients in the U.S. and Canada, through its branch network of more than 14,000 locations and currently have relationships with nearly 7 million clients and $1 trillion asset under management worldwide. The firm focuses solely on individual investors and small-business owners. Edward Jones is a subsidiary of The Jones Financial Companies, L.L.L.P., a limited liability limited partnership owned only by its employees and retired employees and is not publicly traded.
​

Type                                        Partnership

Industry                                 Investment services

Founded                                1922

Founder                                 Edward D. Jones

Headquarters                      Des Peres, Missouri, United States

Revenue                                US$6.632 billion (2016)

Net income                          US$746 million (2016)

Total assets                         US$19.424 billion (2016)

Number of employees     43,000 (2016)

Parent                                  The Jones Financial Companies

Website                                www.edwardjones.com
​

​Score: 867

Schwab not only retained the lead position that it held last year, it also increased its customer satisfaction from a score of 838.
 
The Charles Schwab Corporation is a bank and brokerage firm, based in San Francisco, California. It was founded in 1971 by Charles R. Schwab and is one of the largest banks in the United States and is one of the largest brokerage firms in the United States. The company provides services for individuals and institutions that are investing online. The company offers an electronic trading platform for the purchase and sale of financial securities including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed income investments. It also provides margin lending, and cash management services, as well as services through registered investment advisers.

Type                                            Public

Traded as

• NYSE: SCHW
• S&P 500 component

Industry                                    Financial services

Founded                                   1971; 47 years ago (as Charles Schwab & Co., Inc.)

Founder                                    Charles R. Schwab

Headquarters                           San Francisco, California, U.S.

Number of locations              345 branches

Key people

• Charles R. Schwab
• (Chairman of the Board)
• Walter W. Bettinger II
• (President & CEO)
• Peter Crawford
• (Executive VP & CFO)

Services                                      Brokerage firm

Revenue                                     US$8.62 billion (2017)

Operating income                   US$3.65 billion (2017)

Net income                               US$2.35 billion (2017)

AUM                                            US$3.36 trillion (2017)

Total assets                               US$243.27 billion (2017)

Total equity                               US$18.53 billion (2017)

Number of employees           17,600 (2017)

Website                                      Schwab.com
​

​Brand value (in millions): $32,421
Last year's rank: 1
Value last year: $25,615
Percentage change from last year: +27 percent

Starbucks was given top marks thanks to a Brand Strength Index of 89.2 percent, up 3 percent
from 2017. Starbucks U.S. same-store sales increased just 2 percent in the first quarter, but it's
global potential and growth is robust. China boosted revenues 30 percent in Q1, thanks in large
part to the $1.3 billion record-setting acquisition of the remaining 50 percent share of its East
China business. Comps were up 6 percent in China and there's no reason to expect that growth to
taper off. CEO Kevin Johnson said in the Q1 conference call that China's GDP is expected by many
economists to exceed $15 trillion by 2021. In addition to this, Starbucks is preparing to open
1,000 or so global retail Reserve stores and reignite its U.S. business through several tech-driven
initiatives, as well as gain share of at-home coffee.
​

Starbucks' new premium retail store in Seattle is part of the long-term growth plan.

Much has been said about Starbucks’ slowing U.S. business in recent months. The company’s same-store sales increased 2 percent in the first quarter, which underwhelmed investors and even led one analyst to downgrade the coffee chain’s stock, as well as trim its price target to $64 from $67.
​
For the first time since that 1Q report, Starbucks executives shared the brand’s strategy to revitalize these comps and offer perspective into what the company has accomplished during a transformational five-year period. Scott Maw, Starbucks’ chief financial officer, delivered a presentation to more than 200 analysts and investors as part of the UBS Global Consumer and Retail Conference. Maw highlighted the company’s six operational priorities for long-term growth, and also spoke about Starbucks’ efforts to stabilize and ignite U.S. sales. Needless to say, some major changes are coming.
​

Here were some of the highlights.

​To start, Starbucks’ sheer size and infiltration into the marketplace has clouded its growth a bit. Customers understand it’s an accessible part of their lives, in nearly every market across America. And perhaps that’s muddied the story. A snapshot: in the past five years, Starbucks’ store count has increased from 18,066 to 27,339. It has gone from serving 61 million customers per week to 91 million. Revenue is up to $22 billion from $13 billion and the company’s market cap has ballooned from $39 billion to $78 billion.
​
In explaining this growth story, Maw said Starbucks adjusted its operational procedures to not just meeting the rising customer base, but also to evolve with the industry on multiple fronts. He shared Starbucks’ six operational priorities:

• Operational excellence to accelerate U.S. comps across all dayparts
• Innovate across food & beverage
• Accelerate the power and momentum of Starbucks’ digital flywheel
• Enable long-term growth in China
• Elevate the Starbucks Experience through Roasteries and Reserve
• Gain share of at-home coffee

Let’s focus on No. 1. About a year ago, Starbucks recorded a significant slowdown in traffic at peak.
“It actually turned negative in our busiest stores that had a lot of MOP [mobile order and pay] transactions. And so, what we did is we focused on training on specific roles, on really getting the partners that were in the stores pointed at where the biggest activity was and where the biggest bottlenecks were,” Maw said.

This bottleneck issue has been a critical one for Starbucks. Maw said the brand has used LEAN principles (this typically means creating more value for customers with fewer resources), and, within three months, began to see comps turn.

“And they went from negative to flat to positive over a relatively short period of time. And actually for the last three quarters, those busiest stores that had the biggest challenges a year ago have actually grown comps faster than the average, and again that's that focus around operational excellence,” Maw said.

Maw added that Starbucks saw its peak hold strong in the past quarter, despite the lower-than-expected comps. More so, for the first time in five years, Starbucks launched an update nationally to what it calls labor deployment known as Deployment 2.0. “But it's really how we position our partners at different dayparts within the store to drive throughput and service our customers,” he said.
​
The old system, launched five years ago, was based on average product mix, food, beverage, and an average daypart mix.

“But our stores aren't average. So, you can have stores that have 30 percent, 40 percent food, you can have stores that have 60 percent, 70 percent cold beverage, and you can have anything along that spectrum,” he said.

Back then, Starbucks’ food was 15–16 percent of total sales. Now, it’s over 20 percent, Maw said. In some units it’s even gone from 15 to 30 percent over that five-year period. Cold beverages as a percent of total beverages was in the mid-30s five years ago. It’s above 50 percent currently. And again, Maw said, some Starbucks have seen the mix double.

“And yet we were running the same plays and the same deployment based upon average from five years ago,” he said.

So the new deployment, the 2.0 iteration, is organized daypart-by-daypart, store-by-store, mix-by-mix, Maw explained. The goal: having employees in the right places at the right time.
​

Starbucks' beverage innovation will focus on core offerings, not short-term "sparks."

"We haven't always grown as fast as perhaps we'd like to on the digital side. But that doesn't take away from the size of the opportunity." — Scott Maw, Starbucks chief financial officer.

“We'll take a partner off a support role that they may be cleaning and restocking and we'll put them at the warming oven at peak because we know that store has a high mix of breakfast sandwiches at peak. Or where we might have had one partner on the espresso machine, then turning around and making cold beverages, we now have two partners working back to back servicing a high cold mix store,” he said.

The new system is only three weeks in, but Maw said there has been positive employee feedback.
“We've seen a tremendous amount of enthusiasm because it just makes sense. It frees them up to do what they should be doing and it makes them a lot more efficient. So, again, we used LEAN principles, we used training, we used a lot of the things we used—learned at peak to sort of optimize that and it's off to a good start,” he said.
​

The tech side of Starbucks’ business remains a moving—and lucrative—target. Starbucks added 1.4 million Rewards members in the U.S. in Q1, up 11 percent year-over-year, bringing the total to 14.2 million active members. It’s about 15 million now, Maw said. Mobile payment in the U.S. has grown to more than 30 percent of total tender.

This still leaves about 60 million customers, per month, who don’t have a digital relationship with Starbucks.

“This isn't about Starbucks Rewards growth slowing. It's about an opportunity that is at zero today from a revenue standpoint on customers outside of rewards getting digital relationship,” Maw said.
Starbucks has a three-pronged plan to capitalize on this opportunity—two that the company shared as being active and one it’s still investigating behind the corporate curtain.

The first is opening up Mobile Order and Pay to all customers. Anyone who downloads the app will be able to order to ahead. Maw said this is coming by year’s end.

“Everyone will have access to it. But today, a select customer base that downloads can order ahead. And when they do that, we obviously have the ability to capture their contact information and give them either in-app or e-mail marketing and start to track their spend behavior, so that we can then get them into the personalization engine and serve up offers,” Maw said.

No. 2 is reactivating. That 15 million-customer pool is 90-day active, and there are millions of customers who are 91-plus-day active. “Those customers. We've been marketing to them for a while now and having some success in converting them, but we're going to go far deeper. The offers will be richer, because we know they pay off, and we're going to try to get that previously active base reactivated,” he said.
​

Maw highlighted the third, which again, is in the experiment phase. This is what Starbucks calls WiFi signup.

It looks like this: Guests who want to use Starbucks’ WiFi in stores enter an email once, and then every time they walk into the store it automatically connects to WiFi and you don’t have to accept the terms and conditions again.

“It allows us to have the ability to have those e-mail addresses. And so, across those ideas and others that we're considering, we've said we'll have several million non-Starbucks Rewards digital relationships by the end of this year. And if you think about that 60 million, I would expect that number to continue to grow at a relatively rapid clip over the next handful of years,” Maw said.

Maw said Starbucks is increasingly opening drive-thru locations “because that gets at an opportunity and an occasion for customers to have the faster experience, and our investment in throughput at peak, which has had a big pay-off for us over the last nine months or so, all goes to that kind of convenient side and the digital side of that spectrum.”

It’s part of Starbucks’ plan to solve America’s retail puzzle. Another is the chain’s unique experiential nature. “If not more frequent and not as big a piece of the total timeframe, it becomes more important, that sense of connection, that sense of a place to engage with others and engage with our partners,” Maw said.

Starbucks’ answer: Siren Retail. The term is an easier way to explain the Reserve Roastery and Princi development. Starbucks debuted its first Reserve store February 27 in Seattle, and plans to open 1,000 of these. Designed in an open, marketplace style, customers can engage with and order from employees at the Princi counter or Reserve coffee bar, then gather with family and friends at community tables or lounge areas around two fireplaces. Siren Retail also encompasses Starbucks Reserve bar locations, like the Shanghai and Seattle stores, and Princi bakeries.

“What we believe is, if you look at—look in the retail world out there and certainly if you look in the restaurant retail world, there's not another brand out there with this many stores at scale that can win on both sides of this spectrum,” he said. “… We haven't fully executed on everything that we can. We haven't always grown as fast as perhaps we'd like to on the digital side. But that doesn't take away from the size of the opportunity, and I think that's important not to get lost in the monthly and quarterly view of U.S. comp.”

On the innovation side, Maw said Starbucks’ “Sparks,” or short-term promotions (think crazy Frappuccino flavors) “just haven’t worked well” lately. “They haven’t paid off,” he added. “They haven’t paid back. Frappuccino Happy Hour is probably the biggest extreme of that, not really paying back. So, we're going to do very different things around Happy Hour this year. Basically, the Frappuccino Happy Hour that you know is going away and something new is coming in.”
​

Starbucks is going to invest marketing dollars and time around core platforms. Nitro Cold Brew is an example. This was an extension of Starbucks’ popular cold brew platform. The company is currently testing items like Nitro tea lattés and Nitro milk lattes in some stores, which Maw said might or might not make it nationwide. Earlier in the year, Starbucks said it’s accelerating the rollout of Nitro cold brew from 1,300 stores currently to 2,300 restaurants in the U.S. by the end of 2018. CEO Kevin Johnson said the brand has seen about 1 point of additional comp growth in stores offering Nitro cold brew this past year.

“But it's an extension of that core capability that we have, an extension of what customers already sort of know and love, and importantly in our stores, it allows us to market behind those platforms for longer,” he said.

In January, the company launched its first new espresso in over 40 years with the Blonde offering. Maw said Starbucks has emphasized the product far longer than most of its launches—a sign of things to come with these core changes and more platform-based marketing. “Look for more things in Cold Brew, look for more things around Teavana iced teas, and we think that's a way for us to be able to extend core innovation of those platforms,” he said.

In regards to food, Maw said Starbucks’ protein-forward Bistro Boxes and Sous Vide Egg Bits were successful launches. Recently, the company introduced a chicken sausage biscuit sandwich.
​

On the growth side, Starbucks is targeting 750 openings. Average-unit volume in company-owned stores is $1.5 million, Maw said. Maw wanted to clear up what this growth plan really looks like.

“I think a lot of the folks say that—look at that number and say, well, their comps are slowing, they must be moving sales from one store to another. But the reality is our licensed stores—and this is so important, our licensed stores and our company stores are different. They are not the same. It's not like we go into a downtown area and we open five licensed stores and five company-owned stores and they kind all look the same. They're totally different,” he said.

Starbucks is opening 350 company-owned stores. Those licensed locations includes grocery stores, airports, Target, hotels, and other units that typically don’t feature outward facing doors. “Now, there's some sales transfer from licensed stores. I don't pretend that isn't the case, but it is just so much different and so much lower. I worry that sometimes we're not getting that message across. So, those licensed stores do not look like our company-owned stores,” he said.

Sales transfer is what happens when Starbucks opens a company-owned store and sales and transactions move from one store to the other.
​

Maw compared a store in Fort Collins, Colorado, without a drive thru doing 700 transactions, and one 2–3 miles away with a drive thru.

“That existing store, before we opened it, had 700 transactions. A year afterwards, it had 600 transactions. The new store captured about 1,000 transactions. Again, that's the convenience of drive-thru, and about $2.5 million of revenue. So, this is just one year after. You can see the total transactions in the trade area went from 700 to 1,600 and revenue more than doubled. That's a highly profitable trade for us and it's all dependent on our ability to target real estate, have a minimal amount of sales transfer … What happens with this new store is it's going to comp at 2 times to 3 times the rate of the rest of the Starbucks stores. So, you're going to have three or four years built-up of stores that drive outsized comps. If I was to take the weighted average impact of those comps, it's meaningful compared to an average store. On the flip side, you obviously have negative comps in that existing stores, right. And if I take the weighted amount of that, it's a meaningful number. When I add those two numbers together, the lift from the new store and the comp impact from existing, it nets to basically zero.”

This leaves virtually no impact on comps, Maw explained, since there’s an outsized comp in the new store offsetting the negative comps in existing stores.

“It's all new on a relatively low ROI store, high profit beverage store, high AUV. It just works.
​
We're not falling asleep on this. We're not closing our eyes and saying everything is good. We still look at it store by store. We learn from every store we open and we make adjustments,” he said.

​Brand value (in millions): $24,872
Last year's rank: 2
Value last year: $20,291
Percentage change from last year: +23 percent

McDonald's topped the strongest brands index list at 89.9 to buoy its overall mark. It's growth over last year's rankings shows how the fast-food company's adjustments this past year have paid off. Despite reports that its new $1 $2 $3 Value Menu was slow out the gate, McDonald's still enjoyed a watershed calendar year. When McDonald's reported its fourth quarter and fiscal 2017 earnings in late January, shares were trading around $177—up an eye-opening 44.5 percent over the past year. The company's global comparable sales climbed 5.3 percent, giving the chain its best sales performance in six years. Systemwide sales were up 7 percent and McDonald's reported positive guest counts in all segments. McDonald's also said after the fourth quarter that it plans to invest about 52.4 billion of capital in 2018, the majority of which will go to deploying the "Experience of the Future" design at U.S. locations, and open about 1,000 new locations. So do not expect this momentum to slide anytime soon. 
​

​
Brand value (in millions): $8,083
Last year's rank: 3
Value last year: $8,400
Percentage change from last year: -4 percent

The study pointed to Subways reduced revenue forecasts related to store closures as a reason for its decline, although it held firm at the No. 3 spot. There are a lot of changes underway at the 44,000-unit-plus brand right now, which serves about 7.5 million customers per day. Subway's domestic store count dropped by some 900 stores in 2017. That is still less than 4 percent of its nearly 26,000-unit U.S. presence. CEO Suzanne Greco said she expects closures to continue somewhat over the next three years as Subway shutters poor-performing stores and relocates others to more desirable locations. This as traffic patterns continue to shift. At the same time, Subway is rolling out its Fresh Forward design complete with vivid color palette, updated beverage stations, new ordering kiosks, and digital menu boards. Subway might absorb growing pains during this process, but it's clear the chain is making significant moves to remedy its largest concerns. 
​

Brand value (in millions): $8,049
Last year's rank: 4
Value last year: $6,155
Percentage change from last year: +31 percent

As you can see by that healthy improvement, KFC's comeback story is in full effect. KFC has been a global power in recent quarters. Global same-store sales lifted 3 percent at KFC in Q4. Internationally, the chain showed robust 5 percent growth in international emerging markets and 3 percent in developed markets. KFC opened 539 new international restaurants in the quarter and 1,247 in 84 countries for the year, including 1,042 in emerging markets. The YUM! Brands chicken giant did report disappointing 1 percent same-store declines in the US. in Q4 and 1 percent growth for the year, marking four straight years of positive same-store sales. But KFC has several initiatives set to invigorate its stateside business. Included: the massive GrubHub partnership expected to bring delivery to thousands of restaurants. KFC also plans to remodel another 600 stores in 2018, resulting in nearly 40 percent of the base being updated by year's end. 

The iconic big Chicken in Marietta, Georgia, embodies the kind of loyalty and enthusiasm the greater KFC brand is trying to capture.

The Big Chicken silently clucks its beak and rolls its eyes. At 56 feet tall—about five stories—it peers over not just the nearby interstate, but almost all of Marietta, Georgia. At the chicken’s base, a marching band plays as people gather on an impromptu red carpet and take pictures. The mayor, Steve “Thunder” Tumlin, is at hand, dressed in an all-white suit. Beside him is a similarly clad man, this one a bit shorter and donning horn-rimmed glasses, a pointed goatee, and black necktie. Nearby, a “Little Chicken” mascot makes the rounds, posing with visitors.

If it sounds like a circus has come into town, that’s because it has—or rather, it has returned after a short hiatus. In May, KBP Foods reopened the fabled KFC franchise location after closing in January for more than $2 million worth of renovations. The revitalized “Big Chicken” store is just one example—albeit a sizable one—of KFC’s latest play at reincarnation.

Over the past decade, the fried chicken titan has watched its star decline as long-time adversaries like Chick-fil-A and Popeyes were on the upswing. Within the Yum! Brands family, KFC has lagged far behind top achiever Taco Bell and even trailed Pizza Hut, which has been beset with its own woes.
​

But over the last couple of years, KFC has taken a multipronged approach to turning things around, proving that this bird still has some pluck in it.

“As we started this brand turnaround, we really went back and started with, What’s the DNA of KFC? And what’s our brand positioning? And how do we bring this great, iconic brand to life in the U.S.?” says Brian Cahoe, chief development officer at KFC. “That’s the lens that we’ve taken everything through in this journey.”

In 1991, the brand had jettisoned its original name of Kentucky Fried Chicken in favor of the snappier acronym. But as consumers find themselves nostalgic for days bygone, many brands are following suit, leaning back toward classic and authentic. For KFC, the decision to return to its roots also made sound business sense.

“When Kentucky Fried Chicken was at its best and growing the fastest, the colonel and his values were at the center of everything we did. … Those values are critical to what makes Kentucky Fried Chicken so great,” says Kevin Hochman, brand president and chief concept officer.
​

Hochman, who was promoted from chief marketing officer earlier this year, helped spearhead the company’s comeback. It seems fitting that a marketing specialist would be such an integral player in KFC’s renewed growth; after all, Harland “Colonel” Sanders called himself the No. 1 chicken salesman.

At first glance, KFC’s turnaround might appear as nothing more than smoke and mirrors: off-the-cuff ads, flashy new flavors, and refurbished stores with screaming-bright colors. But for all of its staging, the process has been a serious one with high stakes. Over the past six years, the company has closed more than 1,000 domestic stores. Ten years ago, KFC ranked No. 7 on the QSR 50, besting the likes of Chick-fil-A and sister concept Pizza Hut with system-wide sales of $5.3 billion.

Today paints a very different picture. Like many other legacy brands, KFC did not fare so well through the Great Recession as emerging fast casuals presented a more indulgent yet economical option for cash-strapped consumers.

But for the first time in nearly a decade, the vitals are showing signs of recovery. Over the past two fiscal years, system-wide sales have finally grown, and the brand has posted 11 consecutive quarters of same-store sales growth. KFC also climbed one spot on the QSR 50 list this year (owing in no small part to the lingering damage from Chipotle’s food-safety woes, which knocked it down a rung).

Skeptics might dismiss these numbers as an anomalous bright spot in an otherwise dim future, but other brands have proved it’s possible to surmount the odds.

“It’s tough to take a legacy brand and turn that big ship in the right direction. It’s not easy to do that, but [KFC] is doing it well,” says Tim Hackbardt, CEO of BrandTrip Partners, a consulting group that works with restaurant groups. “Similarly, Arby’s has been doing a fantastic job. I think those guys are right in that same space. … They’re legacy brands, and they have good stories in there. [KFC] is very similar; they’re just a little behind that Arby’s curve.”

So what are the keys to KFC’s reinvention? While not an exhaustive list, its efforts can mostly be distilled into three categories: branding and marketing, menu development, and design, including the functional and the flamboyant.
​

A crowd of Colonels

Wallpaper. That’s how Hochman describes the KFC’s TV ads before today’s campaign of colonel-clad celebrities. The commercial featured an Orlando-based KFC cook hand-breading and frying the chicken on-site. “Nobody even noticed it,” Hochman says. “We have to meet the customer where they are. They want to be entertained or they want something that’s going to get their attention, because if you don’t get their attention, it doesn’t matter what you’re saying.”

Accordingly, the company transitioned to an education-plus-humor strategy and tapped “SNL” alum Darrell Hammond as the first in what has since proved to be a long string of Colonel impersonators. Although some consumers were initially perplexed by the whole campaign, KFC’s brand engagement is stronger than it’s been in years. The company’s own internal testing suggested that only 43 percent of fast-food ads were correctly linked to the corresponding brand. Thanks to the new Colonel ads, KFC’s numbers were close to double that (74 percent), Hochman says.

He expects the series of ads will be a “slow burn” over time, meaning the rotation of Colonels isn’t going to slow any time soon. In one of the more recent commercials, actor Rob Lowe puts a tongue-in-cheek spin on JFK’s famous space-race speech, asserting that KFC would put a sandwich into space. The company made good on its promise; in June, it launched a chicken sandwich into the Earth’s stratosphere with a high-altitude balloon from private space-aiming company World View Enterprises.
​

If launching a sandwich into space seems a bit excessive, remember this is the same brand that built a logo large enough to be picked up by satellites in 2006. Like Sanders himself, KFC subscribes to a go-big-or-go-home philosophy. It’s a major asset, one that the brand has learned to yoke other company initiatives to.

Hackbardt is full of praise for the commercials and says he could see the series continuing for years. “What they’ve created here is an episodic marketing campaign worth tuning into, worth finding, and ultimately—the big part—worth sharing,” he says. “How often do you get a marketing campaign where people are actually seeking it out and listening and wanting to know when the next one’s coming out? It’s a beautiful thing.”

The overall dilution of media means it’s especially difficult for advertisers to reach their audiences, Hackbardt adds. Like many companies, KFC has made a big push into the world of social media to woo uninterested young consumers who make up a steadily growing slice of the consumer pie.
Globally, the brand boasts more than 46 million followers on Facebook, while the U.S. Twitter feed is nearly 1.2 million. In the past two years, the TV ads have garnered more than 160 million views on Facebook and YouTube.

“Our intent is to make the brand younger over time while still making sure we’re driving our core customer base,” Hochman says. “Obviously, young people don’t watch and consume as much TV as older customers do. We still have to reach them … and so, in order to do that, we had to diversify our marketing investments across several media, and not just TV.”

Already the move is showing promise. Hochman says that three years ago, before the turnaround began, three out of five millennials had never tried KFC. According to data from YouGov, the brand has since posted a 45 percent increase in millennial consideration.
​

Southern, spice, and everything nice

KFC’s zany new marketing strategy may pander to a certain consumer group, but it is not a simple case of lip service. The company also got down to the, uh, meat of its business.

Like all facets of the brand revamp, the menu tweaks play at the retro and the über-trendy in tandem. On the traditional side, Hochman says, it was important to focus on something that would excite franchisees and customers alike: the Original Recipe with its proprietary blend of 11 herbs and spices. Amid an industry in flux, the Original Recipe chicken remains the No. 1 item to bring guests into KFC, followed by its box meals, Hochman adds. At the same time, the menu required more than its star attraction to stay relevant.

“Younger people and their eating habits don’t necessarily lend themselves to eating chicken on the bone. Many meals are consumed in a car or on the go, which [makes it] harder to eat,” he says. “Our Original Recipe will always be our bestseller … but we are going to need to diversify beyond that.”

To the brand’s credit, it has made several attempts to do just that—it just hasn’t been able to stick many landings. In 2009, the Fiery Grilled Chicken piqued interest; a year later, the Double Down—a sandwich with fried chicken fillets standing in for bread—turned heads (and some stomachs). In response to industry-ubiquitous chicken tenders, KFC fried up Original Recipe Bites. It’s even tried to challenge Chick-fil-A’s no-bones-about-it dominance with the Original Recipe Boneless Chicken. None succeeded, and none have a spot on the menu today.
​

Despite a near decade of misses, KFC might have finally hit the mark. In early 2016, it became the first major fast-food brand to incorporate the regional favorite Nashville Hot into its menu. KFC even sent a food truck out on a two-week journey around the country to build buzz around the limited-time offer.

The road trip also presented an opportunity for KFC to improve its foodie reputation. “The customer knows a higher quality of food comes out of food trucks. They’re typically hand-prepared by chefs that are just starting out or can’t afford to have a restaurant,” Hochman says. “The reason we did the food truck for Nashville Hot was to communicate that.”

To further tick up the quality quotient, KFC invested 100,000 hours retraining cooks to bring their techniques back to “Colonel standards.” In April, it also set a deadline to stop using chicken treated with antibiotics for human medicine by the end of 2018. The pledge is a couple of years behind competitors, but as KFC points out, it is the first major chain to make such a commitment for bone-in chicken.

KFC hit gold again this year with another LTO. While steeped in regional flavors like its predecessor, the Georgia Gold Honey Mustard BBQ Chicken eschewed a strict template. “We did the Georgia Gold with the regional flavors of the Carolina mustards and the Georgia mustards, and created our own little homage to that,” says corporate chef Bob Das, who has been with KFC for about 17 years.

Indeed, the new menu strategy is all about paying homage to Southern flavors and approaching them as Sanders would have himself. The brand’s not disregarding increasingly adventurous consumer preferences, though.

“We’re trying to meet the demands of the customer. Obviously there are flavor seekers, and spice is a big thing. As you saw with Nashville Hot, we had people really craving that heat and that distinct flavor you can’t find anywhere else,” Das says. “Instead of trying these outlandish flavors typical to the Southwest or things that are even Pacific Rim or Latin flavors, we’re going to be right where we’re supposed to be [with] Southern-inspired.”
​

To that end, the brand recently imported an international favorite, the Zinger Spicy Chicken Sandwich. First launched in Trinidad and Tobago in the mid-1980s, the Zinger has since expanded to 120 countries. Now KFC is testing its appeal stateside and farther afield (the Zinger is the sandwich the brand sent to the stratosphere).

Again honoring Sanders and his palate, the Zinger adds hot spices to the proprietary 11-herbs-and-spices mix. For all its global fanfare and out-of-this-world aspirations, the Zinger is not a guaranteed slam-dunk.

“[KFC has] always struggled with sandwiches for some reason,” BrandTrip Partners’ Hackbardt says. Whereas fast-casual players like Slim Chickens and Starbird extol the merits of their chicken sandwiches—cooked-to-order, buttermilk-marinated, purposely sourced, etc.—the Zinger isn’t sufficiently promoted, he adds. In the commercial featuring Rob Lowe, “hand-breaded” is only mentioned a single time. “If you take a look at the Zinger and the Double Crunch, there’s not a big story about that other than being hand-breaded.”

Nevertheless, Hackbardt says it’s something that can be easily remedied; after all, the 77-year-old brand has great stories to tell.

But for all the heritage, creativity, and adaptation to consumer trends, KFC holds one distinct advantage over the competitors: its buckets.

“Bone-in chicken is something that’s great for a large party purchase. … They have that advantage, because there aren’t a lot of chains that are offering that,” Hackbardt says. “That drives the average check exceptionally high, because now we’re talking $20–$30 or even higher purchases. There are very few [quick serves] or fast casuals that are getting those kinds of purchases.”
​

Putting on a show
Marietta’s Big Chicken may be an outlier, but it is representative of big changes throughout the system. Last year, KFC announced its “Re-Colonelization” plans, which encompass not only a recommitment to quality, but also a pledge to upgrade its stores.

On the consumer-facing side, the brand combined the ostentatious with the inviting. Dubbed the American Showman style, the new design ratchets up the brightness of the exterior with bright red-and-white stripes, which were specifically designed to resemble a chicken bucket. The overall appearance is sleeker than older stores, and it manages to mix the old with the new: The iconic Colonel sketch remains, while block letters declaring KFC’s “World Famous Chicken” have been added.
“If nothing happens to the exterior of your building, no one knows you did anything on the inside,” Hackbardt says. He recalls a focus group BrandTrip conducted for one of its limited-service clients; not a single participant could describe the interior of the restaurant, because they so rarely went inside. “To spend more money on the interior of your location doesn’t tend to pay off, because so much of your business goes through the drive thru.”
​

Nevertheless, Hackbardt says a comfortable environment is always more inviting, especially if the company wants to encourage more dine-in business.

The interior of the American Showman design also sports the signature color combo, but in a more understated manner. The Original Celebrity Chef wall sets old photographs of Sanders against a red background, pendant lights are interspersed around the store, and wood finishes on the tile floor and furniture imbue a warmth not uncommon in the fast-casual scene, but far rarer in fast food.
The new stores even added a chalkboard to show the name of the cook working that day, as well as the farm from which the chicken was sourced.

“There’s that flash of the Colonel boldness, carnival red-and-white atmosphere that draws your attention and creates that appeal to come in or go to the drive thru. But then we balanced that out with his pragmatic sensibilities, and certainly a real desire to have quality control on his products,” Cahoe says.

Unlike the other turnaround efforts, the redesign falls squarely on the shoulders of franchisees. Company-owned stores account for just 4.8 percent of the domestic system, meaning it’s up to the operators to revamp their stores and make the American Showman style the default look of KFC stores. So far about 500 locations (a little over 10 percent) have made the upgrade. Cahoe says the plan is to have the new design in 70 percent of stores around 2020 since franchisee obligations come up for renewal within different time frames.
​

“The partnership and the change with the franchise system arguably happened on the front end of all this. I don’t know that we would have the traction in the turnaround … if we didn’t have that relationship and partnership in place upfront,” Cahoe says. “You’ll hear a consistent theme that the relationship has never been stronger—and you need the strength of that relationship to have the type of success that we’re having in the space.”

Thankfully, franchisees like KBP Foods are jumping in head first. The company plans to upgrade dozens of units and employ the new design with all future growth.

As for the Big Chicken location, it required a higher price than building a completely new store. But considering what a beloved fixture it is in the community—and the larger KFC system—the price seems well worth it. From the adjoining gift shop to the statue of Colonel Sanders to its very own AM radio station featuring “deep thoughts from the previously silent bird,” the Big Chicken has the pop-culture prowess and deep connection to consumers that KFC is still chasing. But if the legacy brand can maintain this newfound momentum, the famed Marietta location will be just one of many feathers in its cap.

“We’re still on this journey. We know that we have a long way to go to get to where we all want to be, our north star,” Hochman says. “Despite having very good success the last few years, Kentucky Fried Chicken’s best days are still ahead of us.”
​

Brand value (in millions): $5,033
Last year's rank: 5
Value last year: $4,108
Percentage change from last year: +23 percent

Restaurant Brands International's chain came in as the fifth best brand in Brand Score Index at
83. Tim Hortons has no shortage of brand equity in Canada. U.S. growth has turned out to be a
challenge for the Burger King and popeyes parent, however. Tim Hortons posted comparable
same-store sales growth of 0.1 percent in Q4 and 0.1 percent declines in fiscal 2017. The chain
has sped up its international growth. Tim Hortons opened its first restaurants in Asia, Europe, and
Latin America, in fiscal 2017. The chain achieved 3 percent systemwide sales growth for the year,
primarily driven by net restaurant growth. In the U.K., and the Philippines, RBI opened 13 and 10
restaurants in 2017 respectively, and also opened its first two restaurants in Egypt, Spain, and
Mexico. "These international stores continue to perform well and our partners have been building
robust pipelines for additional openings in 2018 and beyond. We continue to work closely with
these partners to accelerate development in these international markets over time," chief
technology and development officer Josh Kobza said in a conference call. 
​

Brand value (in millions): $4,846
Last year's rank: 6
Value last year: $3,983
Percentage change from last year: +22 percent

Another strong year widened Domino's gap as the most valuable pizza chain in the world. The brand posted same-store sales growth of 3.8 percent and 4.2 percent at company-owned and franchised stores, respectively, in Q4. These numbers actually underwhelmed Wall Street, which shows you the kind of calendar year Domino's had. For fiscal 2017, Domino's domestic comps increased 7.7 percent, making it 27 consecutive quarters of positive domestic same-store sales growth. Despite the fact Q4 was the chain's lowest quarterly growth rate in four years, Domino's has built momentum on top of momentum in recent reports, especially overseas. Comps growth of 2.6 percent gave Domino's 96 consecutive quarters of positive international sales gains. The company attributed its numbers to both a more volatile international market and sales dilution across an expanding system. Domino's only closed 13 stores domestically and 62 abroad, collectively the lowest level in two decades. The fourth quarter ended with a net addition of 422 stores. One note of uncertainty: the company will forge ahead without president and CEO J. Patrick Doyle, who was instrumental in the brand's turnaround since taking over in 2010, When he assumed the role from David. A Brandon, who stepped down March 7, 2010, Domino's shares were trading for $11.90 on the stock market. They were sitting at $227.47 midday Monday. Domino's board of directors announced that Richard Allison, 50, the president of Domino's International, would succeed Doyle as CEO. 
​

Brand value (in millions): $3,150
Last year's rank: 9
Value last year: $2,568
Percentage change from last year: +23 percent

RBI's Burger King brand is another fast-food icon enjoying a strong surge of late. The chain reported impressive comparable same-store sales growth of 4.6 percent in the fourth quarter. Perhaps even more notable: Burger King's comparable sales stateside were up 5.1 percent in the fourth quarter compared to just 1.8 percent in 2016. Right now, Burger King is thriving in the value wars thanks to a balanced approach. Schwartz said the brand's Bacon King and Crispy Chicken Sandwich lit up sales in 2017. Success could be seen across the board. Systemwide sales growth was 12.3 percent in the three months ended December 31. Burger King posted 6.5 percent net restaurant growth compared to 4.9 percent in the year-ago period. There were 7,226 Burger King in the U.S. as of December 31 after the company added a net of 70 new restaurants. Internationally, Burger King was strong as well. The chain ended 2017 with more than 875 restaurants in China, up from about 650 at the end of 2016. Burger King opened its 500th restaurant in Russia this past year and closed 2017 with more than 520 units—growth of about 100 restaurants. France grew its footprint over 200 locations. Brazil ended 2017 with nearly 700 locations compared to about 600 the prior year. 
​

Brand value (in millions): $3, 101
Last year's rank: 7
Value last year: $3,295
Percentage change from last year: -6 percent

Pizza Hut took its lumps early in the year as it began to transform. But results began to shine through in the later part of the fiscal calendar. In Q4, global same-store sales lifted 1 percent and were flat for the year. Its U.S. comps hiked 2 percent in the fourth quarter. Pizza Hut had posted five consecutive quarters of declining sales before turning positive in the third quarter. Back-to-back growth quarters is a direct reflection of YUM!'s $130 million plan to reinvigorate Pizza Hut announced last spring after the company’s same-store sales dropped 7 percent in the U.S. in Q1. Some improvements: the chain rolled out 145,000 new pouches made with 3M Thinsulate Insulation thermal technology designed to deliver pizza 15 degrees hotter. Pizza Hut also hired 14,000 delivery drivers in 2017 and there are now more than 24,000 new car toppers on the road. The Hut Rewards program was launched in August. Growth wise, Pizza Hut opened 340 new international restaurants in Q4 and 826 units in 77 countries, including 592 restaurants in emerging markets. It wouldn't be surprising to see Pizza Hut climb back up the charts next year. 
​

Brand value (in millions): $2,677
Last year's rank: 10
Value last year: $2,401
Percentage change from last year: 1 percent

Dunkin' has a pretty bold three-year plan: 18,000 total IJ.S. units, including about 1,000 new stores in the next two—more than 90 percent of which will be built outside of its Northeast base. When you consider how much Dunkin' is growing right now, and how it plans to enter markets where it doesn't have a strong presence, you can understand some of the other changes. Like Dunkin's decision to drop the "Donuts" off the branding in certain new locations. Dunkin' sees this opportunity as a chance to win in categories it's historically not given credit for—places beyond convenience and breakfast. Dunkin' wants to chase afternoon guests with Dunkin' Deals (a medium hot or iced latte for $2 from 2 to 6 p.m. is one such offer). It also expects to play a larger role in the craft coffee culture With Cold Brew, additional espresso products, and an extension of its premium tea and frozen beverage lines. Also expect more sandwiches. On the previous note, however, Dunkin' isn't abandoning its breakfast and convenience strengths. In fact, the company is opening new next-gen stores with double drive thrus, where the second lane is for mobile orders. Its breakfast business has never been better, either. Currently, Dunkin's morning business accounts for about 60 percent of systemwide sales. That segment has reported positive for Dunkin year-over-year and increased sequentially each quarter in 2017. In the fourth quarter, Dunkin' posted same-store sales growth of 0.8 percent.
​

Brand value (in millions): $2,541
Last year's rank: 8
Value last year: $2,935
Percentage change from last year: -13 percent

Chipotle's post food-safety issues have been well documented. The burrito chain's comeback fluctuated but mostly dipped in the wrong direction last year. This after a promising first quarter that saw same-store sales boom 17.8 percent, year-over-year, and revenue jump 28.1 percent to $1.07 billion. This prompted Steve Ells to say Chipotle had made "incredible progress." But then the same tricks reared up.  A Sterling, Virginia, location suffered a norovirus incident that affected more than 130 customers. A video of rodents falling from a ceiling went viral. An LA store was investigated for food safety. Even a TV actor took aim at the brand on Instagram. Legitimate or not, these public relations hits showed the sensitivity in Chipotle's armor. In early March, Chipotle's new CEO Brian Niccol, took the helm, with Ells moving to a chairman position. The former head of Taco Bell seems like a perfect fit given his resume as a marketing maven. Can he right the ship? Are new campaigns or value menu items coming? We will see soon enough.
​

What will former Taco Bell CEO Brian Niccol accomplish at Chipotle? It shouldn't take long to find out.

When Chipotle announced Taco Bell’s Brian Niccol as the next CEO of the fast-casual burrito chain, RJ Hottovy was surprised. Not by the choice, but that it hadn’t been obvious all along.

“I was kind of surprised that his name hadn’t popped up earlier as a potential candidate for the position,” says Hottovy, restaurant analyst at Morningstar. “As you look at success stories in the [quick-service] space, Taco Bell is certainly at the top of the list. Frankly, it was kind of interesting his name hadn’t popped up.”

As CEO of Taco Bell, Niccol’s tenure was defined by unique menu innovations and bold marketing strategies that helped reposition the Mexican fast-food chain. Hottovy believes that experience should help him breathe new energy into Chipotle, which is still struggling to overcome food safety issues and lagging sales.

“I think the biggest problem Chipotle’s had is there has really been no positive news for really three years,” Hottovy says. “Brian is the kind of guy who can find a way to bring some positive energy into the company.”
​

Hottovy sees potential for Chipotle’s stock price to shoot up and down over the next year as Niccol makes his mark. He’s skeptical that it will reach its all-time high of more than $700 per share in 2015, but he thinks Niccol can at least deliver a stable stock price for investors.

For consumers, he says, the concept has simply grown tired. Even new product launches—like Chipotle’s roll out of queso—came well after other competitors had unveiled their own versions. Overall, the look of Chipotle stores and menus have gone largely unchanged for years.

“It pains me because I grew up two blocks from the original one in Denver,” Hottovy says. “So, I’ve been following this since day one. I was probably one of the first couple thousand customers at Chipotle.”
Niccol’s selection underscores that Chipotle founder Steve Ells understands the brand needs more changes than he can orchestrate, Hottovy says. Ells, who founded the chain in 1993, announced in November 2017 that he would step down as chief executive as the brand looked for a new leader with “proven turnaround expertise.”

In a Chipotle news release announcing the new hire, Ells said Niccol would help bring Chipotle to the next level, while also staying true to the brand’s values.

“Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business,” Ells said in the February 13 news release. “His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant.”
​

In the news release, Niccol acknowledged that he would join Chipotle at a “pivotal time in its history.” He laid out plans to attract customers, return the brand to growth and deliver value for shareholders.
“At Chipotle's core is delicious food, which I will look to pair up with consistently great customer experiences,” the new CEO’s statement read. “I will also focus on dialing up Chipotle's cultural relevance through innovation in menu and digital communications.”

"I think the changes will be significant. They won’t be deck chairs moving around the Titanic. They will be a helicopter taking off from the back deck." — Gary Stibel, founder and CEO of the New England Consulting Group.
​

Experts believe a value menu of some sort will be part of Chipotle's future.

Gary Stibel, founder and CEO of the New England Consulting Group, applauded the selection of Niccol with some advice: “I would buy stock.”

“And if I wasn’t going to buy stock, I’d just say this is the right person at the right time,” Stibel says. “This is a win-win for Chipotle. And candidly, it’s a little overdue.”

He likened Niccol’s previous experience at Procter & Gamble to “basic training in the Marine Corps.” Alumni of such consumer packaged goods companies deeply understand supply chains, consumers and marketing strategies, he says. But moving from products to food service is often a difficult transition.

“Here you’ve got a guy who crossed the chasm successfully. He is about the best pick we can think of for that job,” Stibel says. “And it’s important to make the change.”

Stibel expects to see positive headlines for Chipotle soon. He predicts Niccol will push out announcements about new products, pricing or delivery options by the third quarter of 2018. 

“I think you will start seeing the new Chipotle. And I think the changes will be significant,” he says. “They won’t be deck chairs moving around the Titanic. They will be a helicopter taking off from the back deck.”

One of Niccol’s biggest challenges will be to bring back once-loyal customers, Stibel says. He expects him to employ a new value proposition to drive traffic, but not one that resembles a fast-food dollar menu.

“I think it will be a value menu for people who enjoy the quality of Chipotle and will react to value promotions,” he says. “What he needs to do is bring people back who left and stayed away and create a reason for those people still coming to Chipotle to come more often, spend more money and bring their friends.”
​

Jason Moser, a stock analyst at the Motley Fool, expects the new CEO to reshape Chipotle’s brand identity with a refreshed marketing strategy (On March 14, 2018 Chipotle’s Chief Marketing and Strategy Officer Mark Crumpacker announced he would step down).

For years, Chipotle has relentlessly leaned on its “Food with Integrity” pledge, highlighting the sourcing and quality of ingredients.

“It seemed like whenever Chipotle wanted to do something on the marketing side it was always based on the quality of ingredients and putting themselves on a pedestal,” Moser says. “I think it’s going to be a very delicate balance he’s going to have to strike to help Chipotle bring a new marketing game to the market. But I also wouldn’t expect Chipotle to roll out a Doritos Loco Taco. We’re not going to see something beyond those lines, but I do think he’s going to bring more of an identity to Chipotle beyond just that food with integrity message.”

While he doesn’t expect a traditional [quick-service]-style value menu, he believes Niccol will try to make some play at value. And he’s all but certain that Chipotle will roll out some new menu items to build excitement. And he says a new breakfast menu is almost a must at this point for Chipotle.
“I’m stunned they haven’t yet. The name of the game in restaurants is traffic,” Moser says. “If you’re not selling breakfast, you’re telling the world that there are five or six hours of the day we don’t want your business, we don’t want you in our store.”

Moser doesn’t expect the brand to abandon its focus on quality ingredients any time soon. But he believes the selection of Niccol must have been a “wake-up call” of sorts for Ells, who has often held up the quality of food at Chipotle against that of the value-driven fast-food chains.
​
“My first reaction was kind of like, oh, the irony. It was a bit surprising to see that they would be bringing someone in from a concept like Taco Bell given the sort of the language Steve Ells had used in prior years,” Moser says. “He wasn’t very complementary of concepts like Taco Bell. I think he considered Chipotle a cut above them because of the food quality. So, I have to believe that was probably extremely hard for Ells to do. But I also thought that maybe he finally came to grips with the fact that he maybe doesn’t have what it takes to bring this business to the next level.”
 
Source:  Restaurant Magazine

Financing Option:

The TGG’s Patron Incentives:  To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

Confidential Consultation: Contact us

​1. Jan-Pro
​
Entrepreneur Franchise 500 list rank: 37
Initial investment: $3,985 to $51,605
Initial franchise fee: $2,520 to $44,000
New units in 2016: 375 units (4.8 percent)
Jan-Pro provides a commercial cleaning services for businesses, and there are two types of franchises in the company's business model. The first is a home-based or unit franchise, which represents the person who is responsible for actually doing the cleaning. The second is a master franchise, which oversees a cluster of units.

Founded: 1991
Franchising Since: 1992 (26 Years)
Corporate Address: 2520 Northwinds Pkwy., #375 Alpharetta, GA 30009 USA
CEO: Eddie Curry
Parent Company: Premium Franchise Brands LLC
Financial Requirements

1. Initial Investment: $3,985 - $51,105
2. Net-worth Requirement: $1,000 - $14,000
3. Liquid Cash Requirement: $1,000

Ongoing Fees

1. Initial Franchise Fee: $2,520 - $44,000
2. Ongoing Royalty Fee: 10%

Financing Options

1. Jan-Pro Franchising Int'l. Inc. offers in-house financing to cover the following: franchise fee
2. Veteran Incentives: 20% off franchise fee
3. The TGG’s Patron Incentives:  To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery  

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
Jacques Lapointe founded Jan-Pro in Providence, Rhode Island in 1991. Jan-Pro began franchising the following year, offering both master and single-unit franchises, and has since grown to over 10,000 units throughout the United States and Canada.

​Jan-Pro franchisees offer commercial cleaning services to businesses such as car dealerships, gyms, banks, churches, schools and offices. The company's "Cleaning Greener" initiative emphasizes the use of cleaning products that require fewer chemicals to clean more.
​

2. Stratus Building Solutions
​
​Entrepreneur Franchise 500 list rank: 71
Initial investment: $3,450 to $64,550
Initial franchise fee: $2,700 to $53,800
New units in 2016: 79 units (6.8 percent)
Like Jan-Pro, Stratus Building Solutions is a commercial cleaning service that offers unit franchises and regional master offices. 

Founded: 2004
Franchising Since: 2006 (12 Years)
Corporate Address: 10530 Victory Blvd., North Hollywood, CA 91606 USA
CEO: Afshin Cangarlu
Financial Requirements

1. Initial Investment: $3,450 - $48,350
2. Net-worth Requirement: $5,000 - $40,000
3. Liquid Cash Requirement: $2,000 - $20,000

Ongoing Fees

1. Initial Franchise Fee: $2,700 - $37,600
2. Ongoing Royalty Fee: 5%

Financing Options

1. Stratus Building Solutions offers in-house financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll
2. Veteran Incentives: 10% off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S. and in the following regions/states: Canada
BIO
Franchising since 2006, Stratus Building Solutions has unit franchises and regional master offices nationwide. Franchisees provide "Stratus Green Clean" services, using proprietary chemicals and equipment, to office buildings, shopping centers, restaurants, retail businesses, dealerships, medical offices, religious centers and more.
​

​3. Coverall
​
Entrepreneur Franchise 500 list rank: 73
Initial investment: $16,498 to $51,361
Initial franchise fee: $13,500 to $40,320
New units in 2016: 0 units (0 percent)
Another commercial cleaner, Coverall has been franchising for over 30 years and had 8,575 locations across the world at the start of 2017.

Founded: 1985
Franchising Since: 1985 (33 Years)
Corporate Address: 350 S.W. 12th Ave., Deerfield Beach, FL 33442 USA
CEO: Richard Ascolese
Parent Company: Coverall North America Inc.
Financial Requirements

1. Initial Investment: $16,498 - $51,361
2. Liquid Cash Requirement: $4,000 - $22,257

Ongoing Fees

1. Initial Franchise Fee: $13,500 - $40,320
2. Ongoing Royalty Fee: 5%

Financing Options

1. Coverall offers in-house financing to cover the following: franchise fee, startup costs, equipment, accounts receivable
2. Veteran Incentives: 10% off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S.
BIO
Founded in 1985, Coverall has cleaned work environments for more than 40,000 customers worldwide. Coverall franchisees use a program designed to help reduce the spread of illness-causing germs in the workplace.
​

​4. Cruise Planners
​
Entrepreneur Franchise 500 list rank: 75
Initial investment: $2,095 to $22,867
Initial franchise fee: $495 to $10,495
New units in 2016: 361 units (17.4 percent)
The first franchise on the list that isn't a commercial cleaning business, Cruise Planners is pretty much exactly what it sounds like. The home-based travel agent network sells full-service travel packages.

Founded: 1994
Franchising Since: 1999 (19 Years)
Corporate Address: 3300 University Dr., #1 Coral Springs, FL 33065 USA
CEO: Michelle Fee
Financial Requirements

1. Initial Investment: $2,095 - $22,867
2. Net-worth Requirement: $10,495
3. Liquid Cash Requirement: $5,500 - $10,495

Ongoing Fees

1. Initial Franchise Fee: $495 - $10,495
2. Ongoing Royalty Fee: 3%

Financing Options

1. Cruise Planners offers in-house financing to cover the following: franchise fee
2. Veteran Incentives: 25% off franchise fee, free training for co-owner/associate, $250 marketing credit, $60 design credit, 3 months free technology access, free software license, 1 year free errors & omissions insurance
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S.
BIO
Cruise Planners, an American Express Travel Services Representative, is a home-based travel agent network. Cruise Planners travel agents work from home selling full-service travel packages, including cruises, land-based vacations, travel insurance, car rentals and more.
​

​5. Jazzercise Inc.
​
Entrepreneur Franchise 500 list rank: 81
Initial investment: $3,530 to $12,900
Initial franchise fee: $1,250
New units in 2016: 181 units (2.1 percent)
The dance and aerobics classes of Jazzercise Inc. do serious business. First founded in 1969, there were 8,880 locations across the world at the start of 2017.

Founded: 1969
Franchising Since: 1982 (36 Years)
Corporate Address: 2460 Impala Dr. Carlsbad, CA 92010 USA
CEO: Judi Sheppard Missett
Financial Requirements

• Initial Investment: $3,700 - $32,750

Ongoing Fees

1. Initial Franchise Fee:$1,250 - $1,250
2. Ongoing Royalty Fee: 20%

Financing Options

• To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery 

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S. and in the following regions/states: Asia, Australia/New Zealand, Canada, Eastern Europe, Middle East, Mexico, South America, Western Europe
BIO
While teaching traditional jazz dance classes in Evanston, Illinois, in 1969, Judi Sheppard Missett turned her students away from the mirrors and started a "just for fun" class that incorporated dance moves to provide aerobic exercise. After moving to Southern California, she started training other instructors in the Jazzercise program in 1977. Six years later, the company began franchising. Now Jazzercise's CEO, she continues to teach weekly Jazzercise classes and choreograph new dance routines. Based in Carlsbad, California, Jazzercise's instructors teach its total-body conditioning program to almost half a million participants each year in the United States and more than 30 other countries. Jazzercise instructors are trained and certified before becoming franchised.
​

​6. Anago Cleaning Systems
​
Entrepreneur Franchise 500 list rank: 84
Initial investment: $10,440 to $68,548
Initial franchise fee: $4,590 to $32,348
New units in 2016: 132 units (10.0 percent)
Anago Cleaning Systems unit franchises provide regularly-scheduled office cleanings and periodic commercial cleaning services.

Founded: 1989
Franchising Since: 1991 (27 Years)
Corporate Address: 5203 N.W. 33rd Ave., Fort Lauderdale, FL 33309 USA
CEO: David Povlitz
Financial Requirements

1. Initial Investment: $10,440 - $68,548
2. Net-worth Requirement: $4,590 - $32,348
3. Liquid Cash Requirement: $1,000 - $25,925

Ongoing Fees

1. Initial Franchise Fee: $4,590 - $32,348
2. Ongoing Royalty Fee: 10%

Financing Options

1. Anago Cleaning Systems offers in-house financing to cover the following: franchise fee, equipment
2. Anago Cleaning Systems has relationships with third-party sources which offer financing to cover the following: 
franchise fee, startup costs, equipment, inventory, accounts receivable, payroll
3. Veteran Incentives: 10% off franchise fee
4. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
David Povlitz founded Anago in 1989. The company began franchising in 1991, and now has master and unit franchisees throughout the U.S. and internationally. Unit franchisees provide regularly-scheduled office cleanings as well as periodic commercial cleaning services.
​

​7. Vanguard Cleaning Systems
 
Entrepreneur Franchise 500 list rank: 144
Initial investment: $10,930 to $39,400
Initial franchise fee: $9,630 to $35,700
New units in 2016: 58 units (1.9 percent)
Vanguard Cleaning Systems is yet another commercial cleaning franchise. It's worth noting that five of the top seven affordable franchises on our Franchise 500 list are cleaning franchises. They might not be glamorous, but they're good investments.

Founded: 1984
Franchising Since: 1984 (34 Years)
Corporate Address: 655 Mariners Island Blvd., #303 San Mateo, CA 94404 USA
CEO: Raymond Lee
Financial Requirements

1. Initial Investment: $10,930 - $39,400
2. Net-worth Requirement: $50,000 - $250,000
3. Liquid Cash Requirement: $7,000 - $45,000

Ongoing Fees

1. Initial Franchise Fee: $5,000 - $5,000
2. Ongoing Royalty Fee: 10%

Financing Options

1. Vanguard Cleaning Systems offers in-house financing to cover the following: startup costs, equipment
2. Veteran Incentives: 10% off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S. and in the following regions/states: Canada
BIO
Founded in 1984, Vanguard Cleaning Systems' 3,000-plus franchised commercial cleaning businesses are licensed and supported by a master franchise network of 50-plus independent regional offices throughout North America. Vanguard franchisees service more than 15,000 businesses, healthcare companies, educational facilities and non-profit organizations.
​

​8. Dream Vacations
​
Entrepreneur Franchise 500 list rank: 156
Initial investment: $3,245 to $21,850
Initial franchise fee: $495 to $9,800
New units in 2016: 80 units (7.9 percent)
Like Cruise Planners, Dream Vacations is a home-based travel agency network. Both travel agencies -- and many of the franchises on this list -- also offer discounted investment prices for military veterans. So, if you have served in the armed forces, research whether the franchise you want offers those discounts.

Founded: 1991
Franchising Since: 1992 (26 Years)
Corporate Address: 1201 W. Cypress Creek Rd., #100 Fort Lauderdale, FL 33309 USA
CEO: Brad Tolkin
Parent Company: World Travel Holdings
Financial Requirements

• Initial Investment: $3,245 - $21,850

Ongoing Fees

1. Initial Franchise Fee: $495 - $9,800
2. Ongoing Royalty Fee: to 3%
3. Ad Royalty Fee: to $1K/year

Financing Options

• The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S.
BIO
CruiseOne/Dream Vacations franchisees sell travel packages, including travel protection, shore excursions, hotels and tours to individuals, couples, families, businesses and groups.
​

​9. Chester's
​
Entrepreneur Franchise 500 list rank: 170
Initial investment: $8,639 to $296,598
Initial franchise fee: $3,500
New units in 2016: -1 units (-0.1 percent)
Chester's has one of the widest ranges for initial investment -- you will need to invest anywhere between $8,000 to almost $300,000. However, depending on your current assets and plans for the fried-chicken franchise, there's a chance you could start a new location for less than five figures, which makes it worth investigating.

Founded: 1952
Franchising Since: 2004 (14 Years)
Corporate Address: 2020 Cahaba Rd., Birmingham, AL 35223 USA
CEO: Ted W. Giles
Financial Requirements

• Initial Investment: $12,000 - $296,600

Ongoing Fees

• Initial Franchise Fee: $3,500

Financing Options

1. Chester's has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment
2. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
W.O. Giles started Chester's in 1952, and though he started out frying doughnuts with his patented fryers, it was fried chicken that became the focus of his business. His son, Ted Giles, is the current CEO of the company, which began franchising in 2004, after previously following a licensing business model. Chester's has locations in college campuses, airports, convenience stores, truck stops and supermarkets.

​10. Property Management Inc.
​
Entrepreneur Franchise 500 list rank: 288
Initial investment: $19,850 to $86,800
Initial franchise fee: $15,000 to $45,000
New units in 2016: 49 units (46.2 percent)
Property Management Inc. franchises find tenants for rental properties, process rent payments, provide inspections and more. Basically, you'll work as a flexible landlord who can collaborate with multiple property owners, real estate agents and more.

Founded: 2008
Franchising Since: 2008 (10 Years)
Corporate Address: 2940 W. Maple Loop Dr., #104 Lehi, UT 84043 USA
CEO: Steve Hart
Financial Requirements

1. Initial Investment: $19,850 - $86,800
2. Net-worth Requirement: $50,000 - $500,000
3. Liquid Cash Requirement: $50,000 - $100,000

Ongoing Fees

1. Initial Franchise Fee: $15,000 - $45,000
2. Ongoing Royalty Fee: 6%
3. Ad Royalty Fee: to 2%

Financing Options

1. Property Management Inc. has relationships with third-party sources which offer financing to cover the following: 
franchise fee, startup costs, equipment, inventory
2. Veteran Incentives: 10% off standard ($35,000) franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.

​11. Dale Carnegie Training
​
Entrepreneur Franchise 500 list rank: 295
Initial investment: $19,700 to $174,500
Initial franchise fee: $10,000 to $30,000
New units in 2016: 4 units (1.8 percent)
If you have a passion for teaching, then a Dale Carnegie Training franchise might be a good investment. Franchises help build new thought leaders by teaching important business subjects like self-improvement, leadership, investment and sales.

Founded: 1912
Franchising Since: 2000 (18 Years)
Corporate Address: 290 Motor Pkwy., Hauppauge, NY 11788 USA
CEO: Joe Hart
Financial Requirements

1. Initial Investment: $51,200 - $186,500
2. Net-worth Requirement: $250,000
3. Liquid Cash Requirement: $50,000 - $200,000

Ongoing Fees

1. Initial Franchise Fee: $10,000 - $30,000
2. Ongoing Royalty Fee: 12%
3. Ad Royalty Fee: 3%

Financing Options

1. Dale Carnegie Training has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory
2. Veteran Incentives: 50% off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
Dale Carnegie, author of How to Win Friends and Influence People, first began began teaching adult continuing-education programs in 1912. Today, franchisees of Dale Carnegie Training offer instructional programs on subjects such as self-improvement, strategic skills, leadership, sales, communication and interpersonal relations for both individuals and businesses.
​

​12. Buildingstars International
​
Entrepreneur Franchise 500 list rank: 298
Initial investment: $2,245 to $53,200
Initial franchise fee: $995 to $46,995
New units in 2016: 41 units 6.4 percent)
Buildingstars International is the sixth of seven commercial cleaning franchises in this slideshow, but unlike some of the other options, Buildingstars offers three investment paths: the technician, who works part-time; the onsite manager, who oversees larger buildings and a bigger team; and the corporate manager, who takes on a still greater share of responsibility and revenue.

Founded: 1994
Franchising Since: 2000 (18 Years)
Corporate Address: 33 Worthington Access Dr., Maryland Heights, MO 63043 USA
CEO: Chris Blase
Financial Requirements

1. Initial Investment: $2,245 - $53,200
2. Net-worth Requirement: $500
3. Liquid Cash Requirement: $1,000

Ongoing Fees

1. Initial Franchise Fee: $995 - $46,995
2. Ongoing Royalty Fee: 10%

Financing Options

1. Buildingstars Int'l. Inc. offers in-house financing to cover the following: franchise fee, startup costs, equipment, accounts receivable
2. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units in the following regions/states:
Illinois, Indiana, Missouri, Midwest, Northeast, South, Southeast, Southwest, West
BIO
Buildingstars, a commercial cleaning company founded in 1994, is headquartered in St. Louis, Missouri. The company began franchising in 2000 and now has regional offices in Charlotte, Chicago, Houston, Austin, Phoenix, Tampa Bay, Pittsburgh and New York. Services include nightly cleaning, green cleaning and consulting, and carpet and floor care.

​13. SuperGlass Windshield Repair
​
Entrepreneur Franchise 500 list rank: 336
Initial investment: $9,910 to $31,000
Initial franchise fee: $9,500 to $28,500
New units in 2016: 6 units (1.9 percent)
SuperGlass Windshield Repair has three main concentrations: windshield repair (of course), scratch removal and headlight restoration. So, if you like working with cars, this might be a good investment.

Founded: 1992
Franchising Since: 1993 (25 Years)
Corporate Address: 6220 Hazeltine National Dr., #118 Orlando, FL 32822 USA
CEO: David Casey
Financial Requirements

1. Initial Investment: $9,910 - $31,000
2. Net-worth Requirement: $15,000
3. Liquid Cash Requirement: $15,000

Ongoing Fees

1. Initial Franchise Fee: $9,500 - $28,500
2. Ongoing Royalty Fee: 4%

Financing Options

1. SuperGlass Windshield Repair offers in-house financing to cover the following: franchise fee
2. Veteran Incentives: 10% off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
SuperGlass Windshield Repair was founded in 1992 by David Casey, Bill Costello and Bill Mitchell in Atlanta. The company began franchising in 1993 and has locations throughout the world, including South Africa, Spain, France and Germany. The private company is based in Orlando, Florida.
​

​14. Coffee News
​
Entrepreneur Franchise 500 list rank: 354
Initial investment: $9,750 to $10,750
Initial franchise fee: $8,500
New units in 2016: -1 units (-0.1 percent)
Coffee News is a free weekly publication, which is distributed among local restaurants, coffee shops and hotels. It makes money by selling ads for local businesses, but the publication also contains news stories, jokes and more.

Founded: 1988
Franchising Since: 1994 (24 Years)
Corporate Address: One Cumberland Pl., #102 Bangor, ME 04401 USA
CEO: William Buckley
Financial Requirements

• Initial Investment: $9,750 - $10,750

Ongoing Fees

1. Initial Franchise Fee: $8,500 - $8,500
2. Ongoing Royalty Fee: $40-$80/week

Financing Options

1. Coffee News offers in-house financing to cover the following: franchise fee
2. Coffee News has relationships with third-party sources which offer financing to cover the following: franchise fee
3. Veteran Incentives: Three-year 0% financing for 2nd through 5th units
4. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units worldwide.
BIO
Coffee News was started by Jean Daum in Winnipeg, Manitoba, in 1988. She began franchising in 1994. In 1995, Bill Buckley became the first U.S. franchisee. He bought the company from Daum in 2008, and Coffee News headquarters is now based in Bangor, Maine. Coffee News is a free weekly publication distributed in restaurants, coffee shops and hotels. In addition to ads for local businesses, it contains news stories, jokes, trivia and horoscopes.
​

​15. Little Kickers
​
Entrepreneur Franchise 500 list rank: 343
Initial investment: $20,000 to $35,000
Initial franchise fee: $15,000
New units in 2016: N/A
Little Kickers provides pre-school soccer classes. So, if you have a passion for sports and a love for children, then check out this franchise.

Founded: 2002
Franchising Since: 2004 (14 Years)
Corporate Address: 22 Munro Park Ave., Toronto, ON M4E 3M3 CANADA
CEO: Christine Stanschus
Parent Company: Little Kickers Canada Holdings Ltd.
Financial Requirements

• Initial Investment: $23,175 - $34,550

Ongoing Fees

1. Initial Franchise Fee: $16,000 - $16,000
2. Ongoing Royalty Fee: 10%
3. Ad Royalty Fee: 2%

Financing Options

1. Veteran Incentives: 10% off franchise fee
2. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

BIO
Little Kickers franchisees run educational preschool soccer classes. In addition to introducing children under seven to soccer, classes promote the development of gross motor skills, balance, coordination, social skills such as taking turns and sharing, as well as English language skills.

​16. Padgett Business Services
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Entrepreneur Franchise 500 list rank: 423
Initial investment: $20,200 to $99,975
Initial franchise fee: $15,000 to $56,000
New units in 2016: -7 units (-1.9 percent)
Padgett Business Services franchises offer tax advice, business advice, payroll solutions and other business services. So, if you're an accountant looking to leave an established business and work for yourself, but you need a recognized brand to help make the transition, Padgett could be a good investment.

Founded: 1965
Franchising Since: 1975 (43 Years)
Corporate Address: 160 Hawthorne Pk., Athens, GA 30606 USA
CEO: Steven Rafsky
Parent Company: SmallBizPros Inc.
Financial Requirements

1. Initial Investment: $20,200 - $99,975
2. Net-worth Requirement: $100,000
3. Liquid Cash Requirement: $100,000

Ongoing Fees

1. Initial Franchise Fee: $15,000 - $56,000
2. Ongoing Royalty Fee: 9%+

Financing Options

1. Padgett Business Services has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment
2. Veteran Incentives: $4,000 off franchise fee
3. The TGG’s Patron Incentives: To Be Determined (case by case) such as Initial Investment, Initial Franchise Fee, Net-worth Requirement, Liquid Cash Requirement. More details from The Global Gallery

WHERE SEEKING FRANCHISEES:
Franchisor is seeking new franchise units throughout the U.S. and in the following regions/states: Canada
BIO
The first Padgett Business Services office opened in the 1960's to help small business owners with their taxes. In 1975, the company began expanding through franchising, and its services have expanded as well. In addition to tax advice and preparation, Padgett franchisees offer business advice, management financial reporting, credit card processing, payroll solutions and other business services.
​

Please contact us for a complete list from #51 to #150

Your preparation is the key. In other words, the time to get all your ducks in a row is not only an essential step for your success  but it is also a tremendous gain an insight which will help to reduce  your  risk.
 
1. Start Reading  &  Studying.

Reading books on these topics will help you get a better understanding of business, and what it’s going to take to succeed.  You want you to read books about:

• Starting a business
• Entrepreneurship
• Franchising
• Business plans
• And if you really want to get a leg up, read an accounting book.

2. Financials

Before you take the time needed to search for a franchise to buy, it’s important to see where you stand, financially.  The best way to do it is by putting together a financial statement.
 
Generally speaking, the most time-consuming part of doing a financial worth statement is gathering all the information you need.
 
You’ll need your mortgage loan and credit card statements, information on all of your investments, and more. In a nutshell, you’ll need to gather everything that lists all of your assets and all of your liabilities.
 

3. Learn About Small Business Loans
 
If you’re like most of the people who are considering franchise business ownership, you’ll need a small business loan for the lion’s share of your startup capital needs.
 
That’s why it’s crucial to learn all you can about the types of loans that are currently available. And the information you need is only one-click away.
​

4. Share Your Plan In Franchising With Your Family's Member

Transitioning from employee to franchise owner is a big deal.
 
That’s why it’s essential to discuss what you’re thinking of doing with the people who will be affected the most; your family.
 
And when you have the discussion, don’t hold back. Tell them why you want to be your own boss. Tell them how you’re going to get the money. Tell them how careful you’re going to be-and that you promise to do great research.
 
In the long run, as long as you’re upfront with them, and communicate with them during the entire process, chances are they’ll support your decision.
​

5. Eliminate Distraction

The last thing to do, before you start your search for a franchise opportunity is to eliminate all unnecessary distraction.
 
Specifically, take an internet-social media break. Spend a few months with you.
 
Refrain from answering emails, logging into your social media networks, or reading articles about franchising-or business. Instead, spend some time away from your Smartphone. Maybe you can spend time outdoors, or at least somewhere that will provide a change of scenery. But, it has to be distraction-free.
 
Doing what I just recommended will force you to take a hard look at what you’re thinking of doing.
​

Summary 

To sum things up, deciding to become the owner of a franchise business is a big decision. The preparation you do before you begin your franchise search really matters. That includes talking about your idea with your family, and spending a period of distraction-free time alone. Combined, all these action items will go a long way in preparing  yourself up  for success as the owner of a franchise.
 
When you are ready, please contact us

​Growth in the metals and mining sector typically requires large capital investments, which naturally garner considerable top-management attention. Yet these big projects account for only 50 to 60 percent of the sector’s $350 billion in annual capital spending. Many companies struggle to manage another category of capital expenditure with sufficient rigor: small investments to maintain existing assets, as well as small and midsize growth projects. And therein lies an opportunity.

Projects with a value of $50 million or less (frequently less than $10 million) make up a significant portion of capital spending for mining and metals companies: these projects typically account for 80 percent of all capital projects by number, and up to 50 percent of capital spending value. Yet many of these projects fall below the executive radar. According to the CFO of a diversified mining company, “We have a very solid central process to align capital allocation with corporate strategy, but [we are] primarily focused on major projects while the individual mines have a lot of autonomy in planning small capital projects.” As a result, these small projects can contribute to low investor returns. For example, the return on invested capital in metals and mining companies averages just 4 percent—typically below the cost of capital and much lower than the typical small-to-medium project, which have pay-back periods of less than 3 years.

But that’s just part of the equation. As demand for basic materials decreases, metals and mining companies dramatically reduce their capital investment; the industry reduced its capital expenditure (capex) by more than 25 percent between 2012 and 2016. The CFO of an international mining company recently confirmed that “in downtimes, we strictly limit capital allocation to safety and production, and reduce in-house project execution capabilities to reduce costs.”

However, we have found that decreases in capital spending rarely come with additional on spending (i.e., more robust processes to plan and manage small and medium capex). As a result, companies miss out on capturing additional value when demand returns—an opportunity they could seize by developing a through-cycle mentality to capex and increasing spend discipline.
​

In dealing with small and medium capex projects, mining and metals companies face the following specific challenges:

• Time-force approvals. Management teams are asked for hundreds of approvals every year during the budgeting cycle.
• Weak business cases and risk assessment. Many business cases are poor or nonexistent, with no clear benefits or revenue impacts, underestimated costs, and optimistic schedules. Risks are not fully assessed and mitigation plans are insufficiently robust, leading to delays and cost overruns.
• Bundling of small projects into large packages. Many projects are bundled together under one large topic, and decisions are made for the entire package. Limited granularity means that low-return projects end up being approved.
• Poor tracking. Executives frequently lack transparency into real-time project progress, preventing timely management intervention.
• No feedback loop. Most companies do not have a structured review process, which inhibits future opportunities to learn from mistakes.
• Low productivity. Construction productivity often falls short; there is not enough true lean construction/execution.

​

We observe mixed approaches among mining and metals executives when it comes to planning and managing small and medium capex. Some confirm that the prioritization process is “nonexistent” and that capex budgets are defined from the top down. “We do not have a specific process for prioritizing small and medium capex,” affirmed an international mining company CFO. Others describe a structured process in which projects are selected based on business logic, designed with optimal scope, and executed under stringent timelines with sufficient internal and supplier engagement. In many cases, these companies have robust stage-gate governance frameworks with clear requirements in place that would, if followed, lead to well-designed and executed capital projects.

The reality of the industry, however, is often different. Many companies overestimate returns, basing decisions on inconsistent assumptions or relying on unclear criteria for prioritizing small and medium projects. Project sponsors are often overburdened and may lack time or technical capabilities to effectively stress-test proposed small and medium projects. As a result, many of these projects do not generate the expected value or end up being relegated during the final approval process.

Best-in-class companies and executives overcome these problems by developing small-to-midsize capital-management dedicated programs and teams around six core building blocks: aligning capital strategy and allocation with corporate strategy; optimizing portfolios; streamlining project concept and design; implementing lean project governance; implementing effective procurement and contractor-management processes; and instituting sustainable organizational enablers (exhibit). In doing so, we have observed that they can deliver 15 percent to 30 percent additional value by improving the way they select and manage small-to-midsize projects.

Align capital strategy and allocation with corporate strategy

To achieve desired outcomes, mining and metals companies must translate overall corporate strategy into individual business-unit, regional and then mine/asset strategy, taking into consideration the risk-return profile of each entity. Best-practice companies ensure that projects are properly aligned with their overall strategy and are appropriately prioritized. Most recently, those companies are also incorporating lessons from the last few years and using a through-cycle mentality to determine optimal annual expenditure levels. Because many projects are small, the allocation is often made at the business-unit or even mine/asset level, which requires companies to adopt disciplined processes to ensure that expenditures align in the aggregate.
​
Leading companies in the industry also examine projects in terms of the value they create for the company overall, not only for the mine/asset. Often, this approach leads to the conclusion that a project should not be approved and that the value-creation goal can be achieved in other ways. This process also constitutes an important release mechanism, enabling companies to escape from the “engineer’s mind-set”—a focus on implementing the best engineered solution regardless of value. In addition, best practices also call for establishing systems to regularly monitor capital spending.

Optimize portfolios

​Management teams often lack the data or processes to evaluate the merits of one project portfolio over another. Instead, they may pursue a default basket of projects year after year or make blunt, across-the-board spending cuts without actively shaping the portfolio for optimized growth and operations maintenance. In contrast, the most successful companies identify an optimal portfolio of projects, basing their assessment on two main factors:

A. Prioritization. Best-practice mining and metals companies require a business-case evaluation for each project. This brings transparency to the business problem the project aims to solve, and also helps to determine which projects can be delayed or canceled. This in turn frees up funds for projects with the most attractive returns. Companies should also classify projects to ensure that the mix aligns with their strategic goals. Typical classifications include “must do” investments to comply with safety or environmental regulations; “sustaining” projects to improve an asset production process and reduce the likelihood of outages; “strategic” projects to open up future growth directions; and “growth” projects to increase margins or revenues. Once again, developing a clear business case that demonstrates a suitable return on investment helps prevent executives from advancing projects simply based on a classification. Across all these categories, committed and work-in-progress capital expenditures are generally prioritized to minimize cost escalations.
​
Experience in the mining and metals industry shows that quality, safety, and environmental projects—typically mandated by regulators—are often inefficiently executed. Yet when viewed through the prioritization prism, they can yield cost savings ranging from 10 percent to 30 percent. A large precious metal miner recently realized 37 percent cost reduction through the capital scrubbing of its quality, safety, and environmental projects—savings that could then be reallocated to higher-value projects.

B. Financial- and nonfinancial-indicator trade-offs. Trade-offs are based on financial measures such as net present value (NPV), internal rate of return, and profitability index, as well as nonfinancial indicators such as emissions levels or environmental impact. Best-in-class companies apply NPV calculations not only to greenfield mines or new plants but to all projects, including those with no revenue component as well as those that suffer from production-outage induced reductions in profitability. Applying a range of measures enables mining and metals companies to make refined trade-offs in terms of project choice.

Streamline project concept and design

​In streamlining project concept and design, managers must scrub the business cases for each project to ensure they are realistic and robust. Companies must ensure projects meet key objectives, such as:

• Does the proposed project fix a real problem (safety, environment, operations, maintenance) or can noncapital solutions address the root issue?
• Is the project based on complete, error-free data?
• Are the underlying assumptions reasonable?
• Have all dependencies been identified?

In addition, managers should keep an eye out for common pitfalls. Examples we commonly observe in the mining and metals industry include teams tacking on “nice-to-have” but costly features or capabilities, exaggerating the impact of not doing the project by considering a worst case scenario, proposing major modifications when easy work-arounds are possible, and proposing expansions when additional capacity is still available.

Projects should also be optimized for cost and value over their life span. In doing so, managers should analyze key cost drivers by asking questions including:

• Can the project be done with less capital by optimizing the project scope, simplifying technical specifications, or buying from lower-cost sources?
• Can the project be made to generate revenue faster—for example, by reducing construction or ramp-up time or by introducing a phased implementation process?
• Can operational cash flows be enhanced by improving yields or reducing running costs?

Careful evaluation with technical or commercial experts can often reveal lower-cost solutions that yield the same benefits. Companies should conduct design-optimization reviews as a project progresses, starting with design and continuing through equipment selection once basic engineering is completed. By optimizing its portfolio of projects and project scopes through a minimum-technical-solution approach, a large chrome producer reduced its “stay in business” (SIB) capital expenditure by 19 percent. In addition, a PGM mine operator achieved savings on a series of mid-size capital investments by systematically applying value improvement principles during the feasibility stage; their savings included a 17 percent reduction on an infrastructure project, and a 50 percent reduction on a tailing dam extension cost.

​Implement lean project governance and stage-gate processes

Many mining and metals companies have effective stage-gate processes for managing large projects such as new mines or process facilities expansions; yet many smaller projects are managed with a one-size-fits-all approach, which leads to frustration and process or bureaucratic overload. Companies with effective portfolio management tailor their approach to each project based on its size and complexity. For example, for smaller, simpler projects, they streamline the number of stage gates and stakeholders involved. By redeploying engineering and project-management staff to the most complex or costly projects, they maximize value.
​

We observe mining and metals companies often missing a crucial step in governance when it comes to smaller projects: stress-testing or challenging project-proposal objectives and their underlying assumptions. Examples include using internal or external benchmarks for cost estimates instead of precise project-specific calculations, or failing to consider multiple design solutions. Stress-testing provides another opportunity to verify that the project will truly meet strategic objectives. This work is best done by subject matter experts independent from the mine/asset and its traditional engineering partners. Formally introducing external challenges at each stage gate is fundamental to delivering required outcomes.

But there is also another issue affecting optimization. Due to labor cuts during commodity downturn, SIB projects—projects that are required to maintain profits, operations, and safety at existing levels—suffer from a significant project management skills shortage. This results in an increase in SIB spending, as the operations teams rarely possess the skills to effectively execute the project. This puts significant production pressure on the business and further reduces capex efficiency. Typically, the recruiting process in the industry is also significantly slower than the ramp-up required to maintain or improve current mine/asset effectiveness. In addition, mining and metals engineering and construction contractors experience a similar skilled-resources shortage, exacerbating the problem, as contractors can no longer serve as a source of skilled labor to effectively execute projects.

​Use effective procurement and contractor-management processes
Many mining and metals companies tout excellent capabilities in managing their capital procurement. In reality, many fail to integrate procurement professionals into the front end of the project life cycle. As a result, they miss opportunities to incorporate the latest supply-market insights or technological advancements. Companies also fail to capture synergies by procuring projects individually as “spot” purchase. In the procurement of equipment, materials, or services, the industry’s best-performing companies:

Regardless of the contracting model, effective owner oversight is critical to not only mitigate the frequent information asymmetry between owners and contractors, but also to create room for additional contractor margins.

A fertilizer mining company reduced its spending on small and medium capital projects by 15 percent by challenging its insourcing and outsourcing labor strategy; by developing new procurement processes (for example, rules for using time and materials rather than fixed-cost contract structures); and through new contractor management approaches (for example, level of contractor supervision).
​

Institute sustainable organizational enablers

​Small to medium capex management in a highly cyclical industry like mining and metals is often most successful when senior management treats it as a priority. Leading companies actively manage their process with regular performance dialogues between project teams and senior management. In addition, these companies do not treat smaller project optimization as a one-off event. Rather, they invest in team capabilities that promote project optimization and higher standards of execution throughout the company. They invest in training a cadre of project and portfolio-management experts. They also create centers of excellence, which they use to train small-project teams from different mines/assets to be more effective and efficient in leveraging resources. Over time, such training programs can be rolled out across the entire company. This “Capex Academy” model spreads expertise across all sites, which is essential for small-scale projects that are typically driven at the mine/asset level, in contrast to major projects that receive abundant attention from headquarters. Using this approach, one company put all of its project teams through thorough training on the prefeasibility and feasibility phases, resulting in substantial increases in project quality.

Many companies manage large-scale projects effectively, but few apply the same discipline to small-to-midsize projects. By implementing appropriate rigor in their evaluation, prioritization, and optimization of their small-to-midsize portfolio, companies can unearth significant savings and develop a strong organization rooted in capability building.


Source: Mc & Company

Pizza Hut knows that hot pizza and cold beer is a great combination, so the chain wants to bring both items to your front door.

Pizza Hut on Tuesday started testing beer delivery in Phoenix and intends to add wine in January. It hopes to expand alcohol delivery to other markets next year.

The pizza chain, owned by Yum Brands, already offers beer and wine at many of its locations, so the delivery option was a natural extension, said Stacy Lynn Bourgeois, director of brand marketing for Pizza Hut.
​
Phoenix was selected as the test market because it already had locations that served beer and wine and is in an area that consistently mimics customer behavior patterns seen nationwide, Bourgeois said.

Customers will be able to order six-packs of Budweiser, Bud Light, Shocktop and a local craft beer. As the program expands, Pizza Hut will tailor its selections to each geographic area, Bourgeois said.

The beer will arrive cold in a specially designed cooler, and drivers will check IDs to ensure the purchaser is over 21.

The decision to add alcohol comes as Pizza Hut looks to distinguish itself from its competitors. The pizza chain has been a major drag on Yum Brands' earnings, so much so that some analysts have suggested that executives divest the brand.
​
Strong delivery sales are key for Pizza Hut as competition in the pizza segment has stiffened and more restaurants outside the group begin to deliver. In addition, Pizza Hut has typically split its sales between delivery and in-store dining.

Whether it's by the slice or a whole pie, here's a ranking of where pizza is most affordable. Time
Annual Technomic data released in May showed that Pizza Hut's share of the pizza category declined from 25% in 1995 to just 14.3% in 2016.

The gap between Pizza Hut's share and its closest competitor, Domino's, was less than 1%, with Domino's holding onto 13.6% of the sales in the market last year.

Domino's has had 22-consecutive quarters of positive growth in the U.S. and has been taking share not only from national chains like Pizza Hut but also regional and independent locations.
In April, Yum invested $130 million into Pizza Hut in an effort to upgrade equipment, improve technology and bolster its advertising.
​
Pizza Hut has since launched a loyalty program, made plans to hire 14,000 delivery drivers by the end of this year and has revamped its pizza boxes to keep their product hotter for delivery.
 
Source:  USA Today

PHOENIX — PetSmart has opened its 1,600th store in North America. The newest store opened Thanksgiving week in El Paso, Texas. In addition, the pet specialty retailer opened its Casper, Wyo., store in October, marking PetSmart’s presence now in all 50 U.S. states.

The store in El Paso features nearly 18,000 square feet of space and includes a Pinnacle Pet Nutrition Shop, which is a new feature in all new PetSmart stores. The shops are about 550 square feet and offer 400-plus items across several brands, and an expanded collection of pet food.
​
PetSmart, Inc. is specialty pet retailer. The company operates more than 1,500 pet stores in the United States, Canada and Puerto Rico, as well as more than 200 in-store PetSmart PetsHotel dog and cat boarding facilities.
 
Source:  REBusiness

Colorado is the next frontier for In-N-Out Burger.

The Irvine-based burger institution, founded in 1948 in Baldwin Park, confirmed plans to build a beef-patty production facility and distribution center in Colorado Springs, which will serve up to 50 restaurants within 350 miles of the facility.

“In-N-Out Burger is excited to be in the early planning stages of its expansion to the state of Colorado,” company spokesman Carl Arena told the Register in a statement early Thursday. “Colorado Springs is an ideal community for us to locate facilities to serve surrounding markets with fresh ingredients, including meat patties produced locally.”

The expansion marks another major milestone for the chain. Its burgers are craved from coast-to-coast by loyal fans that range from Hollywood celebrities to corporate giants. Colorado represents the seventh state the chain has entered in 69 years.
​
In-N-Out operates 328 restaurants in California, Utah, Arizona, Texas, Nevada and Oregon.

To maintain quality standards, the company does not like to open restaurants too far from its distribution and beef production hubs. The first Colorado restaurants will likely take several months, if not more than a year, to materialize.

“Because we are still in the early development phase, we don’t yet have a timeline for the construction of either our support facilities or future restaurants,” said Arena, who is traveling in Colorado.
For years, In-N-Out has steadfastly remained a regional chain despite having a legion of  cravers begging for expansion outside its core Western market.

Arena, vice president of development, said the company is “extremely fortunate to have a number of loyal customers in Colorado and they have been encouraging us to open locations there for some time.”

The first Colorado store will open in Victory Ridge, said Andrew Klein, principal at Westside Investment Partners. Klein said a Denver In-N-Out will open shortly after.
​
“This is actually happening. We’re under contract to sell land to In-N-Out Burger,” said Klein. “I’ve had to keep my mouth shut for six weeks now; it was not easy.”

When Harry and Esther Snyder opened the first In-N-Out burger stand, they served hand-pressed burgers in a clean, friendly environment. Those same high standards have not changed in 69 years.

The company does not franchise and is owned by Lynsi Snyder, the granddaughter of the Snyders and the sole heiress to the burger empire.

Snyder is the president of the company. Her estimated worth increased by hundreds of millions when she turned 35 earlier this year and received the remaining shares of her trust. She has been in full control of the company since 2010.
​
In 2011, the company created huge buzz when it opened its first restaurants in Texas. To accommodate that expansion, the chain built a beef processing plant. Today, Texas is home to 36 restaurants with more in the works. In 2015, In-N-Out added locations in Oregon.
 
Source:  OC Register

Someone forgot to tell Dollar General that physical retail is dead. Next year alone the company plans to build more new stores than Macy's, Sears and J.C. Penney combined shuttered in 2017.

Neil Saunders, managing director of GlobalData Retail, said in comments emailed to Retail Dive that the company's Q3 numbers shows Dollar General "is finally back on track" after a (relatively) soft start to the year. And all those stores the retailer is building? They are likely a smart play for the discounter.
"We believe that Dollar General will continue to benefit from convenient smaller shopping locations, making it faster to shop than larger format discounters," Moody's Vice President Mickey Chadha said in comments to Retail Dive, adding that "the combination of low prices, broad assortment and convenience" will help the retailer grow.

"With well over 14,000 stores across the U.S., almost 75% of the population now lives within five miles of a Dollar General store," Saunders said. "This makes the company the closest and most convenient general merchant for millions, especially those living in rural areas."

Analysts at Gordon Haskett note that the recent store build out gives Dollar General a high level of visibility, helping push its comparable store sales higher, while mature stores have seen their best comp numbers in four years. The analysts also note that "the core [Dollar General shopper] is feeling a touch more upbeat" of late, which is also helping to push sales forward.

Along with the store changes and build out, the discounter has broadened its assortment and added brand-name products, helping Dollar General "to shift quality perceptions — especially among non-traditional shoppers" and also driving transaction values, Saunders said. Along similar lines, he noted that adding more fresh food to some of its stores "appears to be working well, improving both customer traffic and spending."

"In our view, rolling fresh out across the bulk of the estate would give Dollar General more of a destination status —although executing this in some of the smaller stores may prove challenging," Saunders said.
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It all paints a picture of a retailer trying to beef up existing stores and make itself into a destination, while building new stores at a furious clip. "The frantic activity does come with costs attached," Saunders points out, but the strong sales numbers would seem to justify the discounter's ambitions.

​Source:  Retail Dive

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• Five Below reported that third quarter net sales rose 28.9% to $257.2 million from $199.5 million in the year-ago quarter as same-store sales rose 8.5%. Operating income in the quarter rose 71.6% to $14.8 million from $8.6 million in the third quarter last year, and net income rose 81.4% to $9.9 million, up from $5.4 million in the year-ago period, according to a company press release.
• The retailer is aggressively expanding its footprint: In the quarter the company opened 41 new stores to end the calendar year with 625 stores in 32 states, an increase of 20.9% from the end of the third quarter last year, the company also said. The company doesn't break out digital sales except to say that it's a "very small" part of its business.
• For the fourth quarter of fiscal 2017, the company expects net sales to fall between $491 million and $503 million, and assumes a 4% to 6% increase in same-store sales. Net income in the quarter is expected range between $60.8 million to $64.6 million. For the full year, the company expects net sales to range between $1.264 billion to $1.276 billion based on opening 103 net new stores and assuming a 5.7% to 6.5% increase in same-store sales. Net income for the year is expected to range $95.9 million to $99.7 million, the company said.

Five Below is a super-charged retailer, capturing sales thanks to low prices, super-on trend merchandise and a treasure hunt atmosphere, all with very little e-commerce to speak of. That means customers are coming in for the fidget spinners but leaving with much more, executives have said. Even more salient is Five Below’s depth of analysis about trends, according to CEO Joel Anderson.

"We've always been a trend right retailer," he told analysts last week, according to a transcript from Seeking Alpha. "That's what Five Below was built on."
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Trends, specifically three current trends, are helping to drive momentum, like fidget spinners and Silly Bandz, that Anderson called a "craze." The other two are licensed trends, like Disney’s Frozen or Star Wars, which last three or four years, and merchandise that remain popular, like blankets, but have trends within, like color or pattern. All forms of trends worked in the company’s favor in the third and second quarters, he said.

Anderson, touting close relationships with vendors and a concerted effort on the part of merchandising teams to improve the company’s offering, expressed confidence that, despite a certain lack of data because the retailer at the moment has no loyalty program or credit card, the trends’ ability to bring in customers who buy more and return for more will continue.
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"We do a lot of surveys with our customer. And the surveys tell us that the spinner craze brought in a lot of new customers in the Five Below, and those customers have returned and shopped at Five Below," he said. "The reason we think they returned is they come back, they have a great in-store experience, the like the product, it’s trend right. We assume that they will continue to come with us and that halo effect will continue for many quarters to come."

But the company may begin bumping against its own stellar performance and the costs of opening a new distribution center, warns Gordon Haskett analyst Chuck Grom. "Despite mounting evidence that Five Below’s brand momentum and augmenting buying power are translating into both strong traffic and amazing [stock performance]… we don’t want to get greedy," he said in an email to Retail Dive.
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The retailer's merchandising chops will deliver a strong fourth quarter, Anderson maintained. "I would tell you from second quarter to the third quarter and now leading into the fourth quarter, we continue to get better with the merchandise offering, our marketing efforts, and what our store operators are doing to make the experience better than ever," he told analysts. "And when you factor all that in, as you can tell by our results and our forecast for Q4, we think we’re going to have a great Q4."
 
Source:  Retail Dive

1. Banks Are Still Lending

Not only are banks lending for U.S. commercial real estate projects, but that lending has surpassed pre-recession levels, according to an August study conducted by the Federal Reserve Bank of Richmond. Analysts attributed this boost in commercial lending activity to three key factors — low interest rates, foreign investors’ robust appetite for U.S. property and strong renter demand that has led to an apartment building boom.

The Fed finds that bank CRE exposure today is far less risky than it was in 2007. Traditional lenders have become more strategic in how they lend to commercial real estate players, making sure not to allocate too much of their credit to any one developer, sector or geographic area.
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“They have tightened their standards somewhat, but they still have plenty of capital to lend and can be very competitive for certain types of loans,” Cushman & Wakefield Vice Chairman and President of Equity, Debt & Structured Finance Steve Kohn said. Kohn is speaking on a panel at NAIOP’s Office Evolution 2017 event Nov. 9.
 
The gradual increase of short-term interest rates has not tempered overall lending activity. CBRE’s Lending Momentum Index jumped 16.9% year-over-year in Q3, though it fell 4.7% quarter-to-quarter.

2. CMBS Issuance Skyrockets

CMBS issuances took the cake in Q3. New CMBS loans amounted to $66.6B for the year as of the end of Q3, up significantly from the $49.9B issued during the same time period last year, CBRE reports.

There has been a whirlwind of activity in the CMBS market this year as lenders settle in to risk retention rules that took effect last year. The market was in an uproar in 2016 as strict lending regulations forced lenders to keep more money on the books when underwriting loans. Fear that this tightening would deter banks from issuing loans was rampant in 2016, but that uncertainty has lessened significantly since the beginning of the year. In August lenders issued 335 loans totaling $10.65B, a huge spike compared to zero loans issued in January, further signaling a dramatic shift in lender mentality.
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3. The Rise Of Alternative Lenders

Alternative lenders are no longer the black sheep of the debt financing market. These nonbank lenders are stepping in and filling a void left by big banks by offering bridge and mezzanine loans for assets in the interim while borrowers seek more permanent financing.

"They became a major player in the capital markets several years ago,” Kohn said. “They compete favorably on high [loan-to-value] loans of all types, mezzanine loans, construction loans and heavy transitional loans, where banks and insurance companies are much more conservative.”

The country’s top five nonbank lenders — Blackstone Group, Mesa West Capital, Starwood Capital Group, TPG Capital and Mack Real Estate Credit Strategies — together funded $20B in bridge loans in 2016, according to Trepp data.

Some of the country’s top developers are expanding their businesses to include debt to fund their peers’ projects. Developers like White House adviser Jared Kushner’s family business, Kushner Cos., Moinain Group, Related Cos. and SL Green Realty have shifted to the debt side of the business as good deals on the development side grow harder to find.
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4. Two Buckets Of Capital

Traditional bank lenders and alternative lenders are becoming increasingly competitive. JCR Capital Managing Principal Jay Rollins said there are two primary buckets of capital in the commercial lending game today — price leaders (balance sheet lenders) and proceeds leaders.

Price leaders consist of life companies, insurance companies and traditional lenders in the space. Proceeds leaders are where the debt funds and alternative lenders hang out, Rollins said. With price leaders, borrowers are getting a lower rate, but only about a 60% loan-to-value ratio, which means they have to put in more out-of-pocket capital. Debt funds cannot compete with traditional lenders on rates, but can compete with a higher LTV ratio, often 80%.

“It’s really become a fine line between those two things,” he said. “The market is becoming divided. Debt funds and balance sheet lenders are trying to find their niche.”
 

Source:  Forbes
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