No good deed goes unpunished. That’s what Heidi Heise, a Subway sandwich employee in Canada, discovered after she gave a free Footlong to two neighbors whose apartment complex had just burned down, leaving them without food or money. Her good deed was caught on camera and the owner of the franchise immediately fired her after he saw her handing out the free meal. It turns out, Heise was allowed one free sandwich a day for her own consumption — but it had to be recorded as a staff meal. In this case, she simply forgot to do that. But rules are rules, and the owner sacked her anyway. But here’s the twist: a rival Quiznos owner caught wind of the story and promptly hired the experienced sandwich maker. “Heidi is a person who was trying to do the right thing,” said the Quiznos owner. “My store had an opening, so we tracked her down.” Kind of restores our faith in humanity. Ok, not really.
Further proof there’s no such thing as a free lunch: Burger King was handing out free lunches — or nearly free — for nearly a year with its $1 double cheeseburger promotion. But that turned into an unmitigated disaster. Now, the chain is focusing on more expensive fare like its rib offering – priced as high at $7.19 for an eight-piece serving. And guess what. The stuff is flying off the grill. In fact, the ribs have proven so popular that Burger King is literally about to run out of them. No joke. The company will even have to cancel ads that were scheduled to run through June 20 promoting the ribs. The success of the ribs has caught the chain completely off guard. But, as the Wall Street Journal points out, it’s a problem that beleaguered BK is happy to have, especially after franchisees went into full scale revolt over the steep discounting of previous menu items. The lesson here, of course, is that consumers aren’t as price sensitive as everyone thinks. Or at least not as price sensitive as Burger King franchisees, who simply can’t stomach $1 burgers.
Desperate times. The New York Times is the latest publication to run a story about how franchisers are becoming an important source of capital for franchisees who can’t score funding from traditional sources — like banks. The latest chain to join the trend is Marco’s Pizza, which is offering a leasing program. One franchisee mentioned in the story financed the $250,000 he needed to open his pizza restaurant entirely through Marco’s. The reality is that franchises may have no choice but to act like banks. That’s because franchisees are looking to borrow $10.1 billion this year, but banks are expected to lend only $6.7 billion, according to the International Franchise Association. But here’s a radical thought: maybe the market is telling the franchise industry to go slow. If franchisers insist on fast growth, it’s only fair they bear some of the risk themselves. Maybe after they’ve been burned a few times, they’ll start getting more selective about where they place new franchises, and who they put in charge.