Carrols posts profit in Q3 amid pandemic

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SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST) — the largest Burger King franchisee in the U.S. — reported net income of $3.5 million, or 6 cents a share, in the third quarter that ended Sept. 27. The figures are an improvement from a net loss of $6.8 million, or 15 cents a share, during […]

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The figures are an improvement from a net loss of $6.8 million, or 15 cents a share, during the same quarter in 2019, the company said in its Nov. 5 earnings report.

Net income in this year’s third quarter included $2.9 million of impairment and other lease charges. The net loss in the third quarter of 2019 included $500,000 of impairment charges and other lease charges.

Carrols generated total restaurant sales of $407 million in the third quarter, an increase of 2.2 percent from $398.4 million in the prior-year quarter.

Comparable restaurant sales for the company’s Burger King restaurants increased 0.8 percent. Comparable restaurant sales for the company’s Popeyes restaurants, a much smaller part of its business, jumped 5.5 percent.

Adjusted EBITDA increased to

$34.1 million from $25.7 million in the year-ago quarter. EBITDA is short for earnings before interest, taxes, depreciation, and amortization. Adjusted restaurant-level EBITDA increased to $52.8 million from $43 million in the prior-year quarter, Carrols said.

Syracuse–based Carrols Restaurant Group is one of the largest restaurant franchisees in the U.S. and currently operates about 1,088 restaurants. It has 1,023 Burger King restaurants and 65 Popeyes restaurants. Carrols has operated Burger King restaurants since 1976.

CEO comments

“The sequential quarterly improvement in comparable restaurant sales of 720 basis points at our Burger King restaurants is demonstrative of Carrols’ resiliency in the face of the unprecedented current environment. We believe our business model is well-suited to meet the needs of customers seeking great value and convenience and we have been able to serve them effectively and efficiently through our drive-thru, at-the-counter for take-out, and delivery channels,” Daniel Accordino, chairman and CEO of Carrols Restaurant Group, said in the report. “Over the past two months, we have seen modest softening in comparable sales at our Burger King restaurants driven primarily, we believe, by a strain on consumer spending due to a weakening ‘Main Street’ economy. Despite this year’s challenges, we have been extremely adept in managing food costs, optimizing labor hours despite higher wage rates, and controlling other restaurant-level and corporate-overhead expenses. Third-quarter results reflect the strength of our positioning and operational acuity as we once again delivered improved restaurant-level profitability and increased adjusted EBITDA compared to the prior year period.”

The Carrols CEO noted that “more importantly, looking further into the future,” the company is poised to re-engage in “strong but balanced” organic and non-organic growth strategies beginning later in 2021 while “keeping our leverage in check.”

“In terms of organic growth, we are in the process of negotiating a restructuring of our Burger King area development agreement with our franchisor. The remodel and new restaurant build commitments that required elevated levels of capital spending on our part under the current agreement are expected to be significantly reduced under the new agreement. Also, we anticipate that we would give up our right-of-first-refusal provision which we believe has diminished value in the current QSR [quick service restaurant] business environment,” said Accordino. “Under this new arrangement, we believe we will have added flexibility to grow our business as we believe best optimizes our profit growth potential while generating consistent and enhanced free cash flow. It is important to note that while we believe such new agreement will be entered into, it is still being negotiated and there is no assurance that such new agreement will be entered into on such terms or at all.”

Accordino went on to say that although Carrols is still “firming up specific new” construction and remodel plans for 2021 and beyond, the company is “committed to executing on our message last quarter” of spending $40 million to $50 million annually in capital expenditures over the next three years.

MVCC Trustee Mathis leads national organization of community college trustees

Health Care, Subscriber Only

UTICA — Mohawk Valley Community College (MVCC) Trustee David Mathis was recently selected to lead the nation’s largest organization of community college trustees, the college announced. Mathis on Oct. 2 was elected chair of the Association of Community College Trustees (ACCT), which represents more than 6,500 trustees at over 1,200 community, technical, and junior colleges

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VIEWPOINT: 5 Signs that it’s Time to Sell the Family Business

Business Mentors, Small Business, Subscriber Only

Owning and operating a family business is a big part of the American dream. The U.S. Census Bureau reports that 90 percent of all North American business enterprises are family-owned. But along with realizing that dream comes a bittersweet reality for some family business owners — knowing when it’s time to sell. And that can be

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Owning and operating a family business is a big part of the American dream. The U.S. Census Bureau reports that 90 percent of all North American business enterprises are family-owned.

But along with realizing that dream comes a bittersweet reality for some family business owners — knowing when it’s time to sell. And that can be a challenge as they wrestle with deep emotional ties to the business and various selling options.

One of the most challenging parts of owning and operating a family business is succession planning. While many family-business owners may dream of passing ownership of the business onto future generations, keeping the business within the family isn’t always a viable option.

There are many other reasons owners come to the often hard, sometimes-easy decision to sell — burnout, profitability, dramatic changes in their industry, a favorable tax climate, etc. But with the economy rapidly changing, it’s a reckoning for some, a fork in the road for others, while some need to read the signs.

Here are five signs that it’s time to sell the family business:

• Your children are not interested in the business. If you put your kids through college, thanks mainly to a profitable small business, chances are they have their sights set on bigger goals when they graduate. This realization can be painful to a parent. There is nothing wrong with laying out the facts regarding the opportunity that the family business presents to them but forcing the company on your children will only result in resentment or poor performance, or both.

• Your children are not capable. Not everyone has what it takes to run a business, and when unqualified children are allowed to take over, the results can be disastrous. This is where the saying “Thunder, Blunder, Under” came from. It means the first generation made the business successful, the second generation floundered and somehow kept the business together, and the third generation let the business go under.

• Ownership has become too diluted. Unless the company is always growing, it’s hard to support a growing number of owners. This is true whether they work in the business or not, because the company can’t keep paying salaries, dividends, or bonuses to those not in the business or individuals who are not working full-time there. And having too many owners often disrupts the process of managing of the company.

• You receive an offer you can’t refuse. This is rare, but when it happens you should know it is a great offer and take it. Markets go up and markets go down. Regardless what kind of business you are in, you should always know what the market value of your business is in your industry.

• Members of the next generation don’t like working together. Perhaps all of your children are capable, but they can’t seem to get along. If they are not getting along now, it will only be worse once they are in business together. Turning the business over to them will impact your retirement plans, affect their lives, and possibly destroy the relationships they have with each other.

Sometimes the difficult but smart decision is to sell the family business. It’s important to give yourself enough time to adequately plan, and you may want to consult with some specialists to ensure that you have as much information as possible before making a decision.

Terry Monroe (www.terrymonroe.com) is founder and president of American Business Brokers & Advisors (ABBA) and author of “Hidden Wealth: The Secret to Getting Top Dollar for Your Business” with ForbesBooks. Monroe has been in the business of establishing, operating, and selling businesses for more than 35 years.

VIEWPOINT: SBA’s troubling new requirements for PPP borrowers of more than $2 million

Business Mentors, Health Care, Insurance & Financial Services, Small Business, Subscriber Only

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The U.S. Small Business Administration (SBA) has circulated Paycheck Protection Program (PPP) loan-necessity questionnaire forms that it intends to require borrowers with PPP loans in excess of $2 million to complete. It is expected that nonprofit-entity borrowers will be required to complete Form 3510 (https://www.bsk.com/uploads/SBA-Form-3510.pdf) and for-profit entity borrowers will have to complete Form 3509 (https://www.bsk.com/uploads/Form-3509.pdf). These troubling new questionnaires specifically require borrowers to disclose information regarding their operations and liquidity during their covered periods.

The SBA asserts that the purpose of the questionnaires is to assist with the “review of your good-faith certification that economic uncertainty made your loan request necessary to support your ongoing operations.” However, some of the additional information aims to evaluate the borrower’s business during the pandemic in hindsight and rather than at the time of the PPP application. It appears that the SBA may determine that borrowers did not satisfy the good-faith certification as to the loan’s necessity in situations where their business ended up not being as negatively impacted by the economic effects of the pandemic as anticipated at the time of their application. This is a concerning development for many PPP borrowers and the consequences can range from a denial of the loan-forgiveness application to criminal prosecution.

Recall that in the PPP application, borrowers were required to make the following need certification: “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Regardless of the SBA’s stated purpose for the new questionnaires, the requirement to complete these new questionnaires and the information that the SBA is seeking from borrowers contained therein is seemingly a departure from the SBA’s previous position that the need-based certification is evaluated at the time of the application.

You may also recall that this same necessity certification was the subject of much controversy and ultimately resulted in a safe-harbor period to return PPP funds back in May. Borrowers with loans under $2 million were automatically deemed to have made this certification in good faith. Borrowers with loans exceeding that amount were allowed to return their PPP funds before the safe-harbor date if they determined that they were ineligible for the loan based on additional guidance regarding the interpretation of this certification. That additional guidance clearly indicated that when making the necessity certification, borrowers should consider their “current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.” While the new questionnaires contain questions clearly aimed at business activities and liquidity, many of the questions ask what actually happened to the borrower’s business and liquidity, not what was anticipated or uncertain at the time of the application.

Specifically, Form 3510 (for nonprofit entities) asks borrowers questions regarding their business activities, such as: (1) their gross receipts and expenses from certain quarters in 2019 and 2020; (2) if the borrower was subject to a state or local shutdown order or was forced to alter its operations; (3) if the borrower voluntarily ceased or reduced operations; and (4) if the borrower recently undertook any capital improvement projects. Form 3510 also asks nonprofit entities questions regarding the borrowers’ liquidity, such as: (1) how much the borrower had at the time of the application in cash, savings, and cash investments; (2) how much debt the borrower had prepaid during the covered period; (3) if the borrower paid any employees salaries of $250,000; (4) if the borrower is restricted from using funds in certain ways; (5) information regarding the borrower’s endowments; (6) information regarding the borrower’s non-cash investments; and (7) if the borrower received funds from any other CARES Act program.

Additionally, universities and colleges are required to provide tuition information and information regarding decreases in revenue. Health-care providers are required to provide information regarding their program-service revenue as well.

Form 3509 (affecting for-profit entities) seeks similar information from for-profit borrowers. Form 3509 asks borrowers questions regarding their operations, which include: (1) gross revenues in certain quarters of 2019 and 2020; (2) if the borrower was subject to state or local shutdown orders, was forced to significantly alter its operations due to compliance with those orders, and other information regarding those orders; and (3) if the borrower voluntarily ceased or reduced operations and why. The form also asks for-profit entities questions regarding the borrowers’ liquidity, which include: (1) how much the borrower had at the time of the application in cash and cash equivalents; (2) how much the business paid its owners in dividends during the covered period; (3) how much debt the borrower had prepaid during the covered period; (4) if the company paid any employees or owners compensation in excess of $250,000; (5) if the borrower’s equity securities are listed on the national securities exchange; (6) if any owner is publicly traded or a private-equity firm; (7) the book value of the business; (8) information regarding the parent company of a borrower if it is a subsidiary; and (9) if the borrower received funds from any other CARES Act program.

Not surprisingly, the borrower will need to make new certifications regarding the accuracy of the information disclosed in the questionnaire and the authorization to sign the questionnaire. There is also an acknowledgment regarding prosecution pursuant to federal law for making false statements to obtain a PPP loan or obtain forgiveness of a PPP loan. The completed questionnaire form, along with supporting documentation, is due to the lender servicing the borrower’s PPP loan within 10 business days of borrower’s receipt of the questionnaire from its lender.

As a reminder, there is still the opportunity to return monies during the SBA review period if the necessity of the loan is questioned. According to SBA FAQ 46, if the SBA in the course of its review determines that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, the SBA will not pursue administrative enforcement or referrals to other agencies, as long as the borrower repays the loan after receiving notification.

Kate Chmielowiec and Elizabeth L. Lehmann are associate attorneys in the Syracuse office of Bond, Schoeneck & King PLLC. Contact them at kchmielowiec@bsk.com and elehmann@bsk.com, respectively. Jeffrey B. Scheer is a member (partner) in the law firm. Contact him at jscheer@bsk.com

Innovation/Entrepreneur Resource Directory

Small Business, Subscriber Only

Welcome to the 2020 Innovation & Entrepreneur Resource Directory. The following organizations foster innovation and provide funding, consultation, training, information, and other support to entrepreneurs across Central New York. CASE at Syracuse University 2-212 Center of Science & Technology Syracuse, NY 13244 - Phone: (315) 443-1060 - Website: case.syr.edu - Year established: 1984 - Organization type: incubator, funding source

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Arvantides takes over as Mohawk Valley SBDC director

Regional News, Small Business, Subscriber Only

UTICA, N.Y. — Paul Arvantides is settling into his new role as director of the Mohawk Valley Small Business Development Center (SBDC), having started in the top job on Nov. 9. The Mohawk Valley SBDC operates in the Mohawk Valley Community College (MVCC) thINCubator at 326 Broad St. in downtown Utica. MVCC’s thINCubator provides programming

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UTICA, N.Y. — Paul Arvantides is settling into his new role as director of the Mohawk Valley Small Business Development Center (SBDC), having started in the top job on Nov. 9.

The Mohawk Valley SBDC operates in the Mohawk Valley Community College (MVCC) thINCubator at 326 Broad St. in downtown Utica. MVCC’s thINCubator provides programming to support local entrepreneurship efforts from interest to acceleration, per its website.

Arvantides is succeeding previous director Roxanne Mutchler, who retired after 11 years with the Mohawk Valley SBDC. In those years, Mutchler worked in capacities that included New York SBDC government-contracting coordinator and acting director.

As director, Arvantides will oversee the Mohawk Valley SBDC, which provides free one-on-one counseling and training to support local small-business enterprises.

Arvantides has been a business advisor with the Mohawk Valley SBDC since 2017. During that time, he has provided business-advisory services to a variety of small businesses and entrepreneurs working toward starting, managing, growing, or purchasing a business.

Before the SBDC, Arvantides was a business manager at Northwestern Mutual; served as VP and head of U.S. services at E4E Healthcare Services LLC in Towson, Maryland; and was the president and owner of Medical Coding Services, Inc. in Baldwinsville.

SBDC recent activity

The Mohawk Valley SBDC has been helping area small businesses deal with the effects of the COVID-19 pandemic, including a decline in revenue, the economic shutdown, and a lack of customers, says Arvantides, who spoke with CNYBJ on Nov. 16.

The office’s “primary” focus has been helping small businesses with the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program and Paycheck Protection Program (PPP).

It has been concentrating on “really helping business owners navigate the application process and the uses of those funds to help sustain their business and survive in what has been a very difficult time for small businesses,” says Arvantides.

The small-business clients that the Mohawk Valley SBDC has been working with since the spring are “trying to reinvent themselves a little bit,” he notes.

For example, clients have wondered how restaurants move to online ordering and takeout services or how do businesses sell online when they weren’t used to selling online in the past.

“They’re trying to hold on until we can get through this period and trying to come up with creative ways to do that,” says Arvantides.

As the pandemic has continued, the Mohawk Valley SBDC employees have been working remotely much of the time.

Before adjusting to this crisis, the SBDC met with clients face-to-face. But over the last several months, the SBDC has learned that working in a remote environment can be “efficient and productive” to both the organization and its clients.

“We can get on a Zoom meeting … and get a lot accomplished in a short amount of time without the client having to take so much time out or their day to drive to our center or to drive to one of our satellite offices and meet directly one-on-one with an advisor,” says Arvantides.

The Mohawk Valley SBDC currently has five employees, including Arvantides.

It moved to MVCC’s thINCubator in February 2019 from its previous location at SUNY Polytechnic Institute in Marcy.

Arvantides calls it a “great collaboration” because thINCubator is a business-entrepreneurship startup space. Entrepreneurs can use a shared space so they don’t have to go out and secure office space right away. They can also take advantage of the services that can benefit a startup business.

“So, it’s been a great blend of services for young, fledgling businesses to have the SBDC and the thINCubator here together,” he says.

About SBDC

The New York Small Business Development Centers offer free business-advisory services. They’re a collaboration between the U.S. Small Business Administration, New York State, and colleges and universities. New York has 22 SBDCs. Many SBDCs are part of SUNY facilities, such as Mohawk Valley Community College or Onondaga Community College. SBDCs help both startups and existing businesses and provide one-on-one confidential business counseling to any small business that needs the service.

The Agency unveils Broome County economic-data dashboard

Regional News, Small Business, Subscriber Only

DICKINSON, N.Y. — Those interested in keeping tabs on the economic progress of Broome County amid the COVID-19 pandemic have a new consolidated window into that data. The Agency says it has developed a new Broome County dashboard to provide a snapshot of how the local economy is doing emerging from the virus crisis. The

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Tompkins Connect seeks nominations for 2020 Fab5 Young Professional Awards

Regional News, Subscriber Only

ITHACA, N.Y. — Tompkins Connect, a local young-professional organization in Tompkins County, announced it is now accepting nominations for the sixth annual Fab5 Young Professional Awards sponsored by Tompkins Trust Company. The Fab5 Awards celebrate the achievement of young professionals ages 21-40 in Tompkins County. This year, the Fab5 Committee says it is seeking young

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The Fab5 Awards celebrate the achievement of young professionals ages 21-40 in Tompkins County. This year, the Fab5 Committee says it is seeking young professionals who have been able to “shine and excel despite the unprecedented challenges” the community has faced.

New to this year’s awards, the committee has added a sixth Essential Worker “Hero” award to recognize a young professional who was considered “essential” by government officials to maintain public health and safety and keep critical-infrastructure operations working when parts of the economy were shut down because of COVID-19. Examples of essential workers may include frontline workers in the health care, food service, education, government, or other service industries.

The other Fab5 Awards categories are: Entrepreneur of the Year, Not-for-Profit Leader of the Year, Businesses Leader of the Year, Volunteer of the Year, and Rookie of the Year. Judges will be encouraged to consider individuals in all categories who have been a 2020 superhero by “showing strong leadership, resilience, and creativity” in a way that has benefitted a social-justice cause, helped the community during the pandemic, or has made a positive impact on society this past year.

Those interested in nominating an individual, can visit the Tompkins Chamber’s webpage at www.tompkinschamber.org/fab5awards. Nominations are due by Tuesday, Dec. 15. The winners will be announced in February.

Under normal circumstances, Tompkins Connect would hold an awards celebration at the Ithaca restaurant, Coltivare. This time around, the organization plans to hold a virtual ceremony.

“In early March, we will be streaming a professional production of the awards ceremony to attendees free of charge,” Katie Shaw, marketing and community relations specialist at Tompkins Trust Company and member of the Fab5 planning committee, said in a statement.

Tompkins Connect is a local young-professional organization, which was formed in 2010 and currently has more than 700 members. Tompkins Connect is housed within two organizations — United Way of Tompkins County and the Tompkins County Chamber of Commerce. The mission is to connect young professionals and emerging leaders through networking, community building, and volunteerism in Tompkins County.

CEO Focus: Support Small and Locally Owned Businesses this Holiday Season

Business Mentors, Small Business, Subscriber Only

CEO Focus: Across our region, small and locally owned businesses have borne the brunt of the COVID-19 economic crisis. These businesses are critical economic drivers that support livelihoods and create a unique sense of place within our communities. With this in mind, CenterState CEO and its partners have developed events and programs to drive patronage

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CEO Focus:

Across our region, small and locally owned businesses have borne the brunt of the COVID-19 economic crisis. These businesses are critical economic drivers that support livelihoods and create a unique sense of place within our communities. With this in mind, CenterState CEO and its partners have developed events and programs to drive patronage of small businesses during the busy holiday-shopping season.

The virtual Buy Local Bash Marketplace, [which runs from Nov. 18-24 and is] presented by AmeriCU, provides an opportunity to support local businesses this season. [The event allows] vendors to get visibility for their one-of-a-kind products and services across a larger community of potential customers during the week-long event. Shoppers that visit locally owned, independent businesses through the Buy Local Bash Marketplace website (https://buylocalbash.syracusefirst.org/) gain access to special deals available from this unique lineup of merchants.

Then, starting Nov. 29, the Greater Oswego-Fulton Chamber of Commerce will kick-off its Small Business Stroll, presented by Novelis (http://www.oswegofultonchamber.com/small-business-stroll.html). This week-long event also encourages community members to shop, eat, and save locally this holiday season. Participating Oswego County businesses will provide specials and deals throughout the program. Local, large employers, including Oswego Health, Eastern Shore Associates, and Pathfinder Bank, will also rally their teams to shop small by providing incentives to visit participating locations.

The Downtown Committee of Syracuse will also support small businesses and promote holiday experiences throughout downtown Syracuse. Every Monday, starting Nov. 23, the Downtown Committee will send out a special edition of its News & Events newsletter, focused on business specials, events, and holiday activities. You can learn more at www.downtownsyracuse.com.

When you shop local, your dollars stay in this community and help us drive a faster recovery from the COVID-19 crisis. I encourage you to think about how you can make a bigger impact this holiday season by supporting the region’s small and locally owned businesses.

Robert M. (Rob) Simpson is president and CEO of CenterState CEO, the primary economic-development organization for Central New York. This viewpoint is drawn and edited from the “CEO Focus” email newsletter that the organization sent to members on Nov. 12.

Tompkins Financial to pay Q4 dividend of 54 cents on Nov. 13

Banks & Credit Unions, Subscriber Only

ITHACA — Tompkins Financial Corp. (NYSE: TMP) recently announced that its board of directors approved payment of a regular quarterly cash dividend of 54 cents a share for the fourth quarter. The dividend is payable on Nov. 13, to common shareholders of record on Nov. 3. The dividend represents a 3.8 percent increase over the

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