Crisis Management: Is Your Franchise Prepared?

The great thing about being part of a franchise is that you’re part of a team and far from alone. The bad thing about being part of a franchise is that, should a crisis strike the company or a fellow franchisee, you’re directly tied to the brand and not considered an independent entity.

Take Domino’s Pizza, for example. When a YouTube video went viral showing Domino’s employees spitting in the food, the brand faced a major blow. It didn’t matter that it had happened at one location. Franchisees worldwide were directly affected. Or consider when BP was responsible for a major oil spill and franchisees were caught in the crossfire as they became the victims of customer boycotts.

Knowing how to deal with potential crises before they happen is important in any business, but especially so in franchises, where one wrong step in one location can cause a chain reaction throughout the entire franchise system.

The need to be prepared might seem logical yet, amazingly, it’s often overlooked. “Executives of all stripes often assume crisis public relations is common sense,” says Babak Zafarnia, president of Praecere Interactive, a PR firm. “That mindset is the precursor to jeopardizing a franchise company’s bottom line, brand equity, and goodwill in one fell swoop.”

So how can you prevent or put out the fire? Experts offer these tips for both franchisors and franchisees.

How franchise companies can deal with a crisis

1. Stay focused on the customer

Whether your customers are aware of the bad press or not, making sure that they leave your location happy is the best thing that you can do to decrease the potential damage. “If [customers] are experiencing only good service and good product, then they are less likely to be influenced by what they hear about another outlet somewhere else,” says Larry L. Smith, president of the Institute for Crisis Management, a research-based crisis communications consulting firm.

2. React quickly

With the power of social media, news can spread like lightning; therefore, you’ll need to act with lightning speed.

“Don’t wait to see how ‘bad it gets out there,’” says Karen J. Kessler, president of Evergreen Partners, a reputation management and public relations business. “By then, your competition will have jumped all over this, and your efforts will have less impact.”

3. Have a crisis management plan in place

It is the franchisor’s responsibility to have a plan in place for their franchisees. “The franchise company must provide a clear and easy-to-understand crisis management plan, offer training sessions to franchisees on how to implement these steps and protocols, and show solidarity with the franchise,” says Zafarnia. “If bad acts can happen at one franchise, they can happen at any franchise, and that must be the operating assumption of the franchise company.”

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4. Franchisors/franchisees need to be on the same page regarding the answers to the following questions

“If the answer to any of these is ‘no,’ [or if you haven’t considered the issue], then both the franchisor and franchisees are unprepared,” says Zafarnia.

• Is there one person who is in charge of issuing public statements?
• Is it better to have the CEO, media liaison, general counsel, or independent owners talk on the record, and why?
• Do we have an intake system to prioritize and respond to the full range of media inquiries?
• What do we do if protests suddenly erupt at our franchises, with news cameras in tow?
• Do we have a “dark website” ready to go live with our company statements should the crisis escalate into a full-blown PR disaster?
• Are confidentiality and non-disclosure agreements in place to protect trade secrets?
• Have you run a “fire drill” to make sure everyone’s on the same page, despite your assumptions?

5. Franchisors and franchisees need to act as a team

“Customers blur any distinctions between franchisors and franchisees,” says Zafarnia. “Forget that plaque by the front door that says ‘independently owned and operated.’ If the franchisee ruins the customer experience, the franchisor will also bear the brunt, and no amount of legalese will absolve you in the court of public opinion.”

6. Look for support from the outside

“Use third-party supporters [such as] public officials, prominent clients, and fellow business owners to stress the high standards your business represents,” says Kessler.

Most crises are preventable

Take the right measures and you may never have to deal with a crisis.

“Based on our annual ICM Crisis Report and years of experience, we maintain that two-thirds of all business crises are preventable,” says Smith. “It's all about training everyone, at every level of an organization, to be vigilant and when they see an issue that could grow and become a crisis, to fix it immediately or tell someone who can.”

RELATED: Important Factors to Consider Before Franchising Your Business

About the Author

Sara Wilson is a freelance writer who specializes in issues related to small businesses. Contact her at wilson.sara@gmail.com.