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Why You Should Pay Attention to Chipotle's Problem

I’m going to go out on a limb here: In my opinion, if Chipotle was a franchised concept (they are all company operated) it’s not likely they would have found themselves in the mess they are in.

I am not casting aspersions, only repeating what has already been said…they took an untenable approach to their marketing by suggesting that their food was locally sourced when in fact much of it was not. In addition, positions taken on antibiotic-free beef and genetically modified foods appear disingenuous on their face but popular among their customers.

What does that have to do with franchising? Those of us who have been involved with franchisors in concepts where the franchisees were respected and management had them inside the tent, know that franchisees keep the concept honest and hold management accountable for its actions.

Franchisors of concepts that use the inclusive model strongly urged by the International Franchise Association, know that they have to explain their actions and defend their positions based on tested results and a well thought out strategy. They are a lot less likely to charge down a unilateral path without tested support and an assessment of the impact on all aspects of the business. In the Chipotle case, the concept of locally sourced, natural food was a brilliant marketing strategy but obviously not supported with workable purchasing, distribution, and food safety tactics.

When a chain CEO controls all aspects of the brand; operations, purchasing, and marketing included, with no external source of dissent (franchisees that have their lives invested in the business) decisions often get made in a resistance vacuum: no one challenging the downside of the direction.

In the case of Chipotle, there is little doubt that if there was a franchise component to the brand, there would have been a challenge to its more specious claims, or concerns raised about the food safety aspect of its fractured supply chain.

Any restaurant concept could have a foodborne illness event. Almost all are the result of improper training or poor food handling procedures. They are also almost all preventable. But, the Chipotle events were the apparent result of fulfilling a marketing promise that, as the chain expanded, couldn’t be safely kept.

Chipotle’s problem went beyond preventable. If there had been a robust source of checks and balances from within, insisting on efficient distribution and local sourcing without excessive risk, it’s likely none of this would have happened. Steps are being put in place now but…too late.

So, Chipotle serves as an example of one of the advantages of franchising, checks and balances to protect the brand from employing strategies without considering all the ramifications and risks.

What can be learned? Here are a couple thoughts.

IF YOU ARE A FRANCHISEE OR CONSIDERING BEING ONE

  • Resolve to get involved. Be a part of your franchise advisory council. Go to the meetings and let your franchisor know what you think. It’s your brand, too!

IF YOU ARE A FRANCHISOR

  • Be particular about the franchisees you select.Pick aggressive, passionate, experienced people who love your industry.
  • If you don’t have a franchise advisory council, start one. You will be amazed how much you will learn about your own brand.
Bob McDevitt CFE,Senior Vice President, Franchise Development
The Importance of Human Resources in Franchising

Human resources is the division of operations that manages human capital. A franchisee is responsible for ensuring human resources issues are handled in a manner that reduces risk and ensures a stable workforce.

THE EEOC Issues a Report and Recommendations on Workplace Harassment

Accordingly, the EEOC recommends that the EEOC and NLRB confer, consult, and attempt to jointly clarify and harmonize the interplay of the NLRA and the laws the EEOC enforces with regard to the permissible confidentiality of workplace investigations and workplace civility rules

What’s a franchise fee worth?

To start a new business you need an idea. With a franchise, the idea already exists, and it’s been developed as a real business. What’s that worth? So let’s take a look at that.