Thinking about buying a franchise, but don’t know where to go for unbiased information?
Two Web sites are interviewing franchise owners confidentially and getting their unvarnished opinions, reports the Wall Street Journal. These sites, www.fransurvey.com and www.franchisebusinessreview.com, ask critical questions like, “would you recommend this franchise to others?” Franchise systems that receive positive reviews are awarded a seal of approval. So what franchises should a prospective buyer avoid? Fast-food restaurants and automotive-related franchises typically score at the bottom of the satisfaction surveys. This is due to franchisers overselling their systems and not providing enough support. Conversely, systems that rank high on the surveys are very selective about who they recruit.
$1 burger fiasco. In what’s turning out to be the franchise scandal that just won’t quit, Burger King president Charles Fallon warned that the $1 cheeseburger controversy is threatening to deep-fry his fast-food chain. “This negative publicity is detracting all of us from running our business, and just as important, lowering the value of our individual businesses,” he wrote in an e-mail to franchisees. “Bankers, landlords, suppliers and potential new franchisees are watching and listening — potentially leading to less lending, at higher rates.” Of course, the email was immediately leaked to the press by franchisees who are furious about having to sell the $1 burgers at a substantial loss. They have filed suit against the company. We have a strong feeling thing will get a lot worse for the burger chain before they get better.
Technology gone wild. We’re all for embracing technology in business. But you better make sure it works before unleashing it on the public. Take, for example, the recent Pizza Hut commercial that offered a discount to customers who ordered online — but then never delivered on the reduced rate. One angry customer wrote an open letter to the chain describing his frustration. Maybe Pizza Hut should get their Twitter intern to contact this guy personally and offer a formal apology.