So the news broke this week that after years of working out the details, Amsterdam Falafelshop will finally start franchising its delicious fried chickpea concept. As Joe Spinelli told me on Monday, the Adams Morgan falafel operation could soon become a monster, with more than 100 shops within the next seven years.

"This is going to [be] a very hot concept," Spinelli e-mails me.

So who is Joe Spinelli and what does he have to do with Amsterdam Falafelshop?

Good question. Spinelli is the co-owner of FranPoint Partners, a restaurant franchise and development firm based in Annapolis. He and his business partner, Richard Sharoff, have been working with Scott and Arianne Bennett, owners of the Falafelshop, on setting up and running the company that will oversee the many future Amsterdam franchises.

They're also the guys responsible for the long delay in getting this project off the ground. It seems that Sharoff and Spinelli know a few things about franchises. They know that unless you have all your systems in place, the new franchise concept could fall flat on its face. So Sharoff and Spinelli examined every facet of the Amsterdam Falafelshop business, from ordering to accounting, and made sure that each procedure was as streamlined and efficient and profitable as possible.

"It was a process that we knew would take a long time," says Arianne Bennett. "But we didn't know it would take this long."

The most minute details are important in the franchise business, Bennett notes. Things that a typical small business would never notice, like a .2 percent rise in food costs, can apparently have a dramatic impact when you start dealing with the large orders involved with franchises. FranPoint helped the Bennetts develop a system to track even the tiniest changes in food costs.

But some things the Bennetts had to do on their own. Like break down every recipe, including those for the nearly 20 different salads on the toppings bar, to make sure that the proportions were exactly right and could be easily replicated, even by some high-school flunkie making minimum wage. They also had to write several different franchisee manuals, including an employee handbook and a recipe book.

"I just sat here and banged this out at night," Arianne Bennett says. Lawyers, of course, had to review everything.

Perhaps most interesting of all, the Bennetts paid for all these franchising costs without taking on partners or investors. "We've used the majority of the profits from the last three years to do it," Arianne Bennett says.

The Bennetts are going to start franchising with a focus on the East Coast, even though they have had interest from operators on both the West Coast and in the Midwest. "They don't have to be right here in D.C.," Arianne Bennett says, but for now, the company would like future franchisees to be within a short plane flight so the owners can visit quickly, if need be.

The FranPoint crew is currently vetting possible future franchisees, including some in D.C. and Virginia, to make sure they're the right fit and have the right experience. But there's also a hidden benefit for the Bennetts now that their franchise company is up and running: They can start working on opening another Amsterdam Falafelshop of their own.

The Wall Street Journal published a smart, counter-intuitive piece today that suggests fast-food giants, in an effort to stay ahead of the recession, are squeezing the hell out of their franchisees, leaving them with little to show for their efforts.

So much for the idea that McDonald's is making a killing in this bad economy.

The gist of the story is this: Fast-food companies are trying to lure customers back by demanding that franchisees add new, sometimes "gourmet" items, which then require new machines and new overhead costs.  These same franchise operators also got hit with a minimum wage hike in July. There apparently just isn't that much margin in franchise operations to make those numbers work.

Reports the Journal:

To boost sales, franchisors are taking a scattershot approach. "Franchisors are trying to be everything to everyone right now," Riggs says. Given that penny-pinching consumers are eating more meals at home, franchisors are pulling out all the stops to reel them back in. They are asking franchisees to pitch cut-rate sandwiches and burgers and dreaming up premium, often exotic menu items to lure consumers back.

Just ask Mike Wright, a McDonald's Corp. franchisee in Shalimar, Fla. To make way for McDonald's new McCafé espresso-based coffee drinks, which launched nationally in May, he was looking at paying upwards of $125,000 to remodel the interiors of each of his seven stores. The company eventually changed its tune – after substantial pushback from franchisees – but Wright and his fellow franchisees were still strongly encouraged to purchase the necessary coffee and frappucino-style drink equipment. "At $14,000 a pop, you've got to sell a lot of coffee to make it up," Wright says.

In Southern markets, selling hot coffee isn't easy, Wright says. "When you start selling Bubba a cappuccino, it's like trying to sell grits to a New Yorker," he says. "They forced everyone to put this in their stores regardless of profitability."

Image courtesy of The Consumerist via Flickr Creative Commons, Attribution License