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Franchising guru' Kestenbaum: Businesses grow when franchisees are making money consistently

By MILFORD PREWITT

(Feb. 18, 2008) Known for keeping his franchisor clients out of legal trouble, attorney Harold Kestenbaum says those he represents have honored him with the nickname “the franchising guru.” He wears the title proudly, especially given that in 30 years of specializing in franchise law, he has argued cases in a courtroom only twice. Based [at Ruskin Moscou Faltischek] in Uniondale,

N.Y., on Long Island, Kestenbaum has represented scores of national, international and regional restaurant companies, among them Sbarro, New York Burrito, Burritoville, Brother Jimmy's BBQ and Gators Dockside Restaurants. He can be reached at 516-663-6613 or hkestenbaum@rmfpc.com.

What’s the key to keeping franchising disputes out of court? Communication. It’s so important that the franchisor stays in touch and be honest about what is right and wrong in the relationship.

If that’s true, then why is encroachment tearing some chains apart? Problem is, the franchisees are not reading the contracts they are given. Nobody’s giving out protected areas anymore or rarely do so. You don’t read your contract, well, tough noogies, as we used to say in Queens.

What makes franchisees happy? At the end of the day, there’s only one question that matters. Are the franchisees making money? If the franchisees are not making money, the concept will not survive.

What should franchisors do to make sure franchisees make money? As I always like to say, franchisees sell more franchises than any franchisor ever will. Assuming they are making money, of course, because a franchisee will tell their friends and other business associates.

What does a restaurant operator need to accomplish to become a franchisor? If a guy comes to me with three or four units and says they are ready to franchise and can I help them do that, I ask them how long have they been in business. Are you making money? If they tell me we been around a couple of months and are cash-flow positive, I say, “OK, come see me in eight months to a year. Let’s see what the seasons and the economy do to your business.” I can’t tell you the number of guys who walk in here thinking they are ready to roll just because they’ve been making money for a few weeks. 

What franchised segment of the restaurant business do you find the most interesting? It has to be pizza. You got [15,000 to] 16,000 outlets between four or five giant chains, and yet every day someone opens a new franchised pizza concept that goes on to make millions. Everybody says pizza is saturated, that there’s no growth. But the fact is franchisors and franchisees are making money with new pizza concepts all the time.  

Couldn’t you say the same thing about fast casual? The beauty of fast casual though is that they don’t have a Dunkin’ Donuts or a Subway dominating the category. Which means you don’t need a 15,000-unit international chain to be successful. Most of the fast-casual chains have under 200 

Harold L. Kestenbaum, P.C.
1425 RexCorp Plaza
Uniondale, New York 11556
hkestenbaum@rmfpc.com
Website: franchiseatty.com
Tel: (516) 745-0099
Fax: (516) 745-0293

 

Do you want to Franchise your business?  Do you have any questions about Franchising?  Submit your question and get a FREE CONSULTATION with Harold L. Kestenbaum, he will be more than happy to contact you and go over your franchise concerns.
 

       

FRANCHISES

Sbarro - The Italian Eatery, Boulder Creek Steaks & Saloon, Nathan’s Famous, Bagel Boss, Manhattan Bagel, New World Coffee, Dallas BBQ, Yogurteria, Hot & Crusty Bakery, Zaro’s Bake Shoppes, Sandella's, Firkin’s Pubs, Sylvia’s Soul Food Restaurant, Crescent City Beignets, Arthur Treacher’s Fish & Chips, Five Guys Burgers, Buttercup Bake Shops, Marvelous Markets, Dominic’s, Sedutto Ice Cream, Yogen Fruz, Yogurt & Such, Wall Street Deli, BurritoVille, Original Ray’s Pizza, Patsy’s Pizza, New York Subs & Sandwich, Ranch*1, Desert Moon Café, Pudgie’s Famous Chicken, New York Burrito, CoolBrands International (Tropicana Smoothie’s, Swensen’s, Bresler’s, I Can’t Believe It’s Yogurt, Golden Swirl and Yogen Fruz), Eskimo Pie Stores, Gator’s Dockside Restaurants, Camille's Sidewalk Café, Kudu Restaurants, Kudo Beans Coffee Cafes, Jersey Mike’s, Sobiks, The Original SoupMan, Pacific Lawn Sprinklers, Zyng International, Fastbucks, Wicks ‘N Sticks, Marad Fine Art, Hometown Threads, Marsha Scott’s Hair Loss Clinic for Women, Lemon Tree, The HomeMag, Island Inkjet Systems, King Bear Auto Service Centers, GarageTek, Blasting Juices, Travel Network, ReCeil-It, Herman's World of Sports, , Uniforce Temporary Services, Dashing Diva, DCAP Insurance, Re-Bath, DEI Franchise Systems, The Cravery, Crown Trophy, Foliage Design Systems, Sheds Barbeque, Tech Hero, Soundbox Studios, Hand And Stone Spas, Sea Tow Services International, Medstock, Honest-1 Auto Care, Little Scoops, ShapeXpress, Coney Beach Hot Dogs, Energy Kitchen, Rockin Baja Lobster, Rustic Ranch, Fresh Berry Yogurt, Taco Maker, Angels Ice Cream, Mama Mio (Maternity Spas), New England Hot Dog, Eola Wine, Pyros Grill, Wayne Works Marine, The Gutter Guys, Tasti D-Lite, Sushi Go!, Bevinco, Rachel’s Kitchen, Elevation Burgers, The Counter, Vivoli’s Italian Restaurants, Creative Playthings, Maki of Japan, i9 Sports, Math Monkey, National Jean Company, Under the Sun, A $49.95 Any Sewer and Drain, Banna Strows, Bilstens Appliances, Blue Moon Mexican Café, City Wok, Clutterbusters, Clix, Froots Smoothies, Fusion Wireless, HMHTTC, Humitech, IM=Pilates, Chicken Dijon, Vapiano's, Tastings, Generous George's Pizza, Knockout Hair Cuts for Men, Sharkey’s Hair Cuts for Kids, We Olive, Trick Shots Billiards, Peterbrooke Chocolatier, Prime Pubs, Whata Lot A Pizza, Zpizza, Smart Brain, Sonoma Chicken, Personal Training Institute, My Kitchen Salad Bars, Parisi Speed School, Obees Subs, Central Park, Volcano’s Coffee Bar, Fetch, Nothing Bundt Cakes, Burger Hut, Brother Jimmy’s Barbeque, Tommy Pastrami Delis, , Newks Restaurant, North American Hot Breads, Mr. Greek, Little Chefs, UMAC Martial Arts Centers, The CrepeMaker, TruServe Groundscare, Valdiano’s Italian Restaurants, Green Cactus, Chyten Educational Services, Fotozine, The Tutoring Center, Tutor Doctor, Motion Golf and Cactus Salons.


Harold L. Kestenbaum | 1425 RexCorp Plaza, East Tower, 15th Fl., Uniondale, NY 11556
Phone: (516)745-0099 | Fax: (516)745-0293

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