Little Caesars: Ist U.S. discount program Imported for Canadian military veterans

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Canada has always been the first country that U.S. franchise systems export their concepts.

Congratulations to Franchise-chat.com for catching the product of two press releases this week:

  1. U.S. franchises may lose 10,000 locations and
  2. Little Caesars Pizza Announces Industry-Leading Franchise Program for Canadian Veterans.

1. The International Franchise Association, IFA which bills itself as “ the world’s oldest and largest organization representing franchising” is quoted as saying:

The national group estimates the number of franchise establishments will decline by 1.2 percent this year, or an estimated 10,000 locations…Franchise closings will cost 207,000 jobs this year, the group says.

This report is interesting to those 1st time business investors risking their life savings as a civilian because the IFA both:

  1. funded this 2009 economic forecast by PricewaterhouseCoopers and
  2. is the industry association which is controlled by the sellers of franchises (eg. franchisors).

The IFA promotes a veterans program called VetFran in America which I wrote  about in July. Carol Cross and I share both a similar military/franchising background and a little bit more than ambivalent view of this marketing program.

Little Ceasars while participating in the IFA/VetFran program in the United States, offers a discount from $10,000 to $68,000 for a business that has a startup cost of $50,000 to $150,000 and a total investment of $185,050 to $519,000. Source

2. To the best of my knowledge, Little Caesars is the 1st franchisor to offer a program (with a difference) to Canadian retiring military personnel. Their press release states:

The Little Caesars Veterans Program was launched by Little Caesars in the U.S. in 2006 and is making a difference for veterans,” said Richard Greville, general manager and vice president, Little Caesars of Canada, “Little Caesars wants to provide a similar opportunity to Canadian veterans…

The Same with a little Difference:  Little Caesars will give a bigger discount if the veteran is “medically released“. Actually, if you qualify, you can get up to a $35,000  discount rather than the $10,000 for able-bodied Canadian soldiers.

  • That is a 250% bump in discount franchise sales qualifies under the joint Department of National Defence and Veterans Affairs Canada, Transition Assistance Program, TAP.

The press release states:

Little Caesars has developed relationships with the Transition Assistance Program (T.A.P. part of the Department of National Defense [sic] – Veterans Affairs Canada Centre for the support of injured veterans and their families), Veterans Affairs Canada and Right Management (a job placement partnership contracted by Veterans Canada to help honorably released veterans transitioning to work in civilian life).

Please note the difference in range of discounts (U.S v. CDN) while being silent on both the CDN startup costs and total investments. Little Caesars Canada appears not to be a member of the Canadian Franchise Association, CFA and therefore chooses not to, necessarily,…

“…abide by this Code of Ethics and to further the Associations goals in encouraging and promoting ethical franchising in Canada” [Quote].

Followup: When I called Veterans Affairs Canada at 866-522-2122, they knew nothing of this program but were very helpful. A call to the TAP (800-883-6094) has not been returned just yet.

  • The Honourable Peter MacKay is the current Minister of National Defence.

I will be following this discounting to Canadian military veterans very, very closely.

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2 Responses to Little Caesars: Ist U.S. discount program Imported for Canadian military veterans

  1. Carol Cross says:

    This PR for franchising concerns me also! Canadian Vets will be returning home and jobs will be scarce, etc… because I’m sure the Recession has spread to Canada as well. The NEED for a job and income will put many at great risk when they buy a franchise that is sold as if there was almost no risk involved.

    I have been trying to warn VETS about The Patriot Express Loan Initiative passed by the US Small Business Administration in mid-2007, no doubt in view of the recessioin to come in 2008. I think the VetFran Program sponsored by the IFA in the United States is highly misleading but I’m sure the head of the VA, like The Congress, has no idea of how franchising is REALLY conducted. Once, every four or five years, franchisees come into the Congress and BLEED on the floor but they just mop up the blood and allow the “opportunism” to continue.

    Retired military and returning Vets who will be discharged are always good prospects for franchisors because of their “disability pay” or their “retired pay” that means that they can work for an indefinite period of time, perhaps, without paying themselves a wage of any kind for their labor and yet, perhaps, make enough to pay on their debt for their startup, after they have exhausted their estimated “startup capital.” If not, of course, they will have to give their businesses away to another franchisee or to the franchisor in order to avoid personal bankruptcy because of the “personal guarantees” his little corporation will have to provide to get a loan to buy the franchise.

    Since Lil Caesars, like all of the big QSR franchises do not make earnings claims in their disclosure document in the USA, and since it is against the law to provide any unit performance statistics outside of the actual UFOC/FDD under US law, I really don’t know what this franchisor
    offers in terms of success rates. profitability, etc.. for its franchisees. Do you, Les?

    Will the Canadian Banks do any “due diligence” on the franchisors before they make loans to the franchisees? Or, will special lenders take the chance because of the ability of the franchisors to churn discounted units as well as to get the personal guarantees of the franchisees with good collateral?

    Governments have always used franchising job numbers to make things look better to the public and to try to jump start the slowing economies in recessions but, of course, franchisees are merely expendable resources for franchisors to achieve and maintain visibility in local economies, and to maintain or even grow the franchisors’ cash flows, even during recessions.

    Let’s continue the march, Les!

    Like

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