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Jon Luther, Dunkin’ Brands & Arby’s Restaurant Group chairman, on the shortfall in lending for potential franchisees.
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Billion dollars -- joining us now is the group's chairman John -- he -- in the non executive chairman.
A Dunkin brands and Arby's and John it's great to have you on -- we're talking some pretty staggering statistics.
You know the president just signed in debt into -- the jobs act is talking about raising taxes as a way -- sort of spurred this economy.
But you find a solution with franchisees.
-- -- missing picture here.
Well what's happened is that the demand.
Franchising by the way is growing at a 2% rate so it is a growth.
Scenario the economy's recovering a bit and people -- a lot more confidence in high demand for.
Opening franchise operations.
But the demand is about twelve billion in for capital to invest in opening these businesses.
And we feel the shortfall.
It knew that we we think the supply be around nine half billion so -- a shortfall.
And the shortfall we believe is going to have an impact to the economy of that thirteen billion talk about.
As result one achieve those additional 94000.
Jobs.
However that 2% growth will probably still create about 400000 jobs we'd like to get it up all the way.
And that's the reason that the IFA is hosting the international franchise association.
Is hosting their second annual small business lending summit.
We're bringing lenders together with franchise stores and franchisees.
And members of the administration's so we can all work together and educate.
The world I -- great opportunity franchising is so we can continue that growth.
John franchising is a big part of what Dunkin brands does -- -- -- Dunkin' Donuts and your other various partners out there.
How do you -- -- and and make sure that your your business isn't suffering as a result of these lending practices because I imagine.
That's something that's big gotten and it's big bad -- that you're watching on your radar screen.
Absolutely.
The growth for all brands is important.
However what we're doing in light of that and many of our Duncan franchisees and our -- its franchisees.
Have existing banking relationships and they're good work and their good performance helps them in that area it's it's when they wanna grow -- new areas we're gonna go to new markets or.
New franchisees want to join and go into new markets that's where we have the lending -- -- what we try to do is facilitate.
Good lending practices by by educating the banking community what it good premise.
That franchising is up so it's like nine out of ten franchised stores succeed over time.
So the risk is very very low for banks and other lenders to step into the franchise lending world.
Watching one thing right is that right now may not be lending but we are seeing commodity costs rights John and that's something that -- -- you late close attention to as well.
How's it affecting your business how's it affecting your customer.
Well it's you know obviously commodity prices and commit -- that supply chain which would pressure on our costs of operating our business.
At Duncan.
You know for us it was that we costs at one point coffee -- up.
But we're -- value player and what we try to do is rework our menus so that we provide new products to offset some of those cost increases to protect the franchisee profits.
Thereby we don't have to raise pricing severely.
However over an Arby's because -- roast beef primarily roast beef brand.
That beef costs are getting very very high so again we're taking our menu.
And broadening it to appeal to wider group of people so that our menus are more balanced and that helps the franchisee.
Because it protects the bottom line and that's really -- franchising business since -- franchisees of that and that means an electro.
And that means more -- -- more fish diet n.'s John a live writer -- Dunkin brands are reason international franchise association thank you very much for being on the show today thanks for having --
