Franchise File

Franchisors need to be prepared to defend their brand against one-sided media, says Simon Lord.
If I run a headline on my website that reads ‘Franchise consultant goes to jail’, I know that it will attract many times the number of readers that would click on a story headed ‘Franchise consultant wins award’. It’s a sad fact that bad news sells.

As it is an editor’s job to maximise the audience for their medium, this truth necessarily affects what we see and hear. But when it starts to affect how the media actually researches, composes and presents its stories, we should all be concerned.
Just recently, Brian Edwards attacked Fair Go, the programme he helped found. He criticised the ‘vigilante mentality’ of its reporters, said there was a presumption that companies featured were guilty, and accused the programme of an inherent imbalance where complainants were given more time and support to outline their complaint than those who were forced to defend themselves.

This approach will come as no surprise to many, especially franchisors. Because franchises tend to be better-known brands than independent operators, they make ideal targets for ‘consumer’ programmes. To say that ‘A Green Acres or Jim’s franchisee was caught doing xxx’ makes for a much bigger story than ‘Fred of Fred’s Cleaning did xxx.’ The fact that so few of these programmes actually catch out franchisees as opposed to independents speaks volumes for the quality of most franchisors’ selection and training processes. I have spoken to several franchisors whose franchisees have been included in such ‘consumer tests’ and they all speak of the same thing: a set-up that amounted to entrapment, limited opportunity to defend themselves and an editorial approach that is often less than even-handed.
It’s worth bearing this in mind when considering the coverage given recently to accusations by former franchisees of the Hell Pizza franchise of ‘bullying’. A television programme, TVOne’s Sunday, painted an alarming picture of a franchise where the inevitable imbalance of power in a franchise relationship was abused by the franchisor. Hell declined to appear on that programme but sought an interview with Campbell Live the following evening for which it appeared ill-prepared and which did little to redress the balance; in fact, the report ended by inviting other Hell franchisees to contact the programme. Two Hell directors fronted for a second Campbell Live, but the bulk of the 12-minute segment focused on the complaints of three more ex-franchisees. The reporter did note that ‘In the course of researching this story, we spoke to several Hell franchise owners who stand behind the brand and say it’s been very successful.’ However, none of these franchisees were actually interviewed on screen nor were their comments reported.

Research suggests that the franchisor may have had good grounds for declaring a breach of the franchise terms and terminating the contracts of the first two complainants. These emerged in advance on blogger Cameron Slater’s Whale Oil website, which also predicted that the Sunday programme would skate over these aspects – as it did. The result was a bigger story and better ratings for the programme, but not necessarily a fair outcome for the franchise – and especially for other, current Hell franchisees.

After the programme, Hell’s Facebook page ran hot with hundreds of comments from angry and upset viewers. Many stated that they would never buy from Hell again, or called for a boycott to support franchisees, totally misunderstanding that the people who would be most affected by such actions would be local business people ­– the very franchisees they claimed to support. These viewers were previously avid fans who felt betrayed by the brand.
It’s not my place to defend or condemn Hell – some of the language and attitudes in the emails quoted are beyond defence and the Hell directors made the choice not to appear on the first programme to defend themselves. Even had they appeared, however, they would have been legally restricted: as part of our coverage of this issue on, we asked a respected franchise lawyer what a franchisor could and couldn’t say to the media in defence of a dispute. His answer came to four pages and still concluded that every case required individual consideration.

There is another aspect to this issue. When a franchisor recently tried to get one of the consumer TV programmes interested in the case of a so-called consultant who they felt had taken them, and several other companies, for a ride, the programme refused to touch it on the basis that it was a commercial dispute. Well, franchisees run businesses too and a franchise agreement is a commercial contract. As academic lawyer Gehan Gunasekara comments in another article on the Franchise New Zealand website, ‘Compliance with the franchise’s operating manual is not an optional extra; it is critical in maintaining uniformity and discipline across the network.’
By failing to represent that fact properly, and to present a balanced view, the programme makers did no favours to anyone ­– franchisors, existing franchisees or potential franchise buyers alike. Truly, as Mark Twain said, ‘If you don’t read the newspaper, you are uninformed. If you do read the newspaper, you are misinformed.’

Simon Lord is publisher of Franchise New Zealand magazine and website.