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SEPTEMBER 2010, Volume
25 Issue 9
Franchise News
DQ promotion draws
a blizzard of coverage
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Media mob a DQ Blizzardmobile in Torono. The machine
was on a North American-wide tour this summer.
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To mark the 25th anniversary of selling the Blizzard ice cream treat, Dairy Queen built a custom Blizzardmobile to travel North America and distribute free Blizzards. The colourful van is designed to represent the dessert and is fully adorned in larger-than-life spoons, cups for rear-view mirrors, faux Oreos in ice cream, Blizzard signage and comedic clips from DQ's latest advertisement campaign.
But the response to the mobile promo may have surprised even Dairy Queen. The Blizzardmobile drew a mob of media during a stop in Toronto and driver Tom Fronmuller said the public reaction during his U.S. tour was "crazy."
"Everywhere you go, down the highway, down the interstate, every gas station, every hotel, people are waving at you, honking at you," said Fronmuller.
"They overtake you on the interstate and then wait for you to come by just so they can take a picture."
The high-tempo Blizzard crew that travels with the now-world-famous van hands out free Blizzard treats, music and MC interaction and special games. Some events include the Blizzard Blaster: a giant, upside down inflatable Blizzard cup with coupons flying around inside. People enter the blaster and try to grab coupons swirling around. The Blizzardmobile even comes equipped with its own snow-making machine to cool off anyone waiting in line for a free treat. The van is scheduled to make 25 stops throughout North America and hand out over 75,000 Blizzards.
The Blizzardmobile has been on U.S. and Canadian morning TV news shows and in New York hit both the Late Night studio and Times Square. Celebrities stopping by included Caressa Cameron, Miss America 2010, and investment guru Warren Buffet, whose parent company owns Dairy Queen.
The Children's Miracle Network has a fundraising component that is running in collaboration with the Blizzardmobile's tour. Dairy Queen is one of the top contributors to Children's Miracle Network, having raised more than $81 million since 1984.
"The Blizzard is our signature product and such a huge part of our Dairy Queen culture that it was imperative that Canada be a part of the 25th anniversary tour," said Denise Hutton, Dairy Queen Canada's vice-president of marketing. Stops within Canada include Toronto, Calgary and Vancouver.
The success of the mobile promotion may convince other franchises to take their marketing on the road.
Poutine franchise
seeks backers
Serving 22 kinds of poutine, Smokes Poutinerie is now launching its 10th franchise location in Kingston, Ontario, having already set up shop around Toronto, London and Ottawa, and at Mont Tremblant, Quebec, as well as a mobile location called Smoke's on Wheels. Owner Ryan Smolkin holds interest in some of these but says the majority are 100 per cent owned by the franchisees.
Currently, Smolkin's problem isn't finding customers - it is finding money to fuel a western expansion.
Despite a track record as a successful entrepreneur, the big banks told him he was growing too quickly to receive any financial assistance. So, like a growing number of franchisors, Smolkin is turning to the private-equity market. "For the first time, I've started considering equity investment and alternative sources of finance," he said.
When the banks say no, private-equity groups and venture capitalists are the next source of financing, and some are realizing the upside of investing in franchises. "When times are tough, entrepreneurs are often looking for other sources of financing to help sustain their business and keep it going," said Jeff Hanlan, spokesman for the Canadian Franchise Association. "If [the banks] aren't panning out, then as an entrepreneur your job is to survive and do everything you can to support your business."
Increasingly, that means turning to private-equity firms that will invest in a franchisor for long-term cash flow or buying up under-performing chains and turning them around for a tidy profit.
Smolkin's goal is to take his venture national in the next year with 30 to 40 locations, and "global domination" by the third year. While the cost varies with location, he requests pre-approved financing or equity, plus financing of $250,000 for a franchise outlet. He leaves it up to the franchise partners to find whatever financing they want to pursue, but is trying to establish a financing program.
While he won't give up controlling interest in the business, he is willing to take on the right partner for a long-term relationship, said Smolkin, who opened the first Smoke's Poutinerie in November 2008.
Poutine, a Quebec invention sometimes known as a "heart attack on a plate," is composed of french fries, gravy and cheese curds.
Pantry outlines
expansion plans
New ownership of the B.C.-born Pantry Restaurants brand means nationwide expansion over the next seven years. RAMMP Hospitality Brands, run by senior executives of well-known Canadian brands, is the new owner/operator of the Pantry and plans an aggressive expansion that will add 100 new locations across Canada.
The expansion includes updating restaurants and rebranding to improve the customer experience and broaden the appeal of the family restaurant chain.
Mike Cordoba, partner/owner of Pantry Restaurant Group Inc. said, "Our vision is to have the Pantry Restaurants expand nationally from the foundation of its core values that have made this restaurant a prominent player in family dining over the past 35 years."
The new owners plan on expanding the franchise through hospitality chains, as well as with free-standing restaurants. Currently, over half the 18 Pantry locations in B.C. operate out of hotels.
In 1975 Mike and Violet Hoffman opened the first Pantry Family Restaurant in Abbotsford, B.C. It was a built on a concept to provide friendly service and quality food at affordable prices. RAMMP Hospitality Brands acquired the Pantry Restaurant along with the Rockwell's Bar & Grill chain in December 2009.
- Compiled by Kevan O'Brien
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