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DEALING WITH BAD PRESS

by Simon Lord,
last updated 29/08/2014

Bad publicity can happen to any company at any time. We look at some recent situations and offer practical advice for franchisors and franchisees on being prepared

The 2007 case of Jackie Lang, the Subway worker fired and subsequently charged with theft after sharing her free staff drink with a friend, made headlines not just in New Zealand but on international news channels too. A demonstration featured protestors chanting Subway, Subway, what's the score? One law for the rich, one law for the poor' and ‘Subway bosses go and hang! Justice for Jackie Lang!' Online activists united against the chain and advocated boycotts of all Subway stores. Franchisees everywhere were affected.

For franchisors and franchisees, it's the stuff nightmares are made of. Franchises are seen by the media and the public as big companies, and that makes them fair game. The fact that a situation may have arisen just in one locally-owned small business, which is what most franchise outlets are, is irrelevant. Having a big brand only makes it a better story. It's because of this that every franchise system needs to have a plan in place for dealing with crises of this type and clear protocols for handling media enquiries. If you get it wrong, not only is the brand damaged - so is the value of each franchisee's investment.

There are, of course, two sides to every story, and one of the most important things that any franchise under media seige can do is ensure that their side is heard. This requires immediate attention in order to address issues before the media angle (and public opinion) are entrenched. The Subway case provides an example of that: when, after a few days, the company issued a statement advising that, ‘As a franchisor, the Subway chain... is not involved in matters between the franchisee and staff. Subway restaurant staff are employees of individual franchisees and not of the Subway chain' this was seen as ducking for cover and was reported as such by the media as ‘Multinational fast-food giant Subway is distancing itself from one of its own franchises in the fall-out.' Similarly, an explanation that the decision to prosecute the unfortunate Ms Lang was made solely by the police was largely ignored. The media's angle was ‘Subway calls the cops over $2 drink' and they saw nothing to make them change it. The statement made no impact on the story or the public perception of the company's attitude. And although the police charges were dropped, in the end it was only the emergence of a much bigger story about ‘corporate abuse' - the death of Folole Muliaga following the disconnection of her power supply -  that drove the Subway story into the archives.

Getting It Right

It will always be the case that companies, their franchisees, their staff or their contractors make mistakes. An action that seems reasonable at the time has an unintended consequence, or a genuine accident may throw the business into the spotlight. What matters then is how the company deals with it.

A good example of this came on Jim Mora's National Radio programme last month when panellists talked about two franchising issues. One was the Subway employment story, the other was the second-time failure of the Signature Homes franchise in Wellington. The whole segment could have been damning for franchising, except for one thing. Philip Howe, Signature's general manager, fronted up on air. He corrected a factual error in reporting that it was the same franchisee who had failed each time, he explained the circumstances and talked about the monitoring processes the franchisor used. He agreed that these could and would be improved and, vitally, he apologised to the home-owners affected by the collapse and guaranteed that they would have their homes completed by the company.

The result of this preparedness to front up, admit the problem and promise to set things right was impressive. The response of the panellists was very positive and one referred to Signature as ‘one of our top home-building companies.' Overall, it was the best possible outcome and that is reflected in the fall-out. Shortly after the stories broke, if you Googled ‘Signature Homes Wellington collapse' you found very few references indeed. Do the same for ‘Subway Jackie Lang' and you found 159,000 results. Signature Homes' franchisees should be relieved and delighted that their franchisor took some media training and handled the situation so well. Many don't.

Getting It Wrong

People read newspapers and watch television. Bad news travels faster than ever in these days of emails and the Internet. Activists organise and the mud sticks. If you aren't prepared in advance to handle problems and the resulting media enquiries, before you know it people will be thinking twice about doing business with your franchise.

The problem is that most big trouble usually starts small. It could be an unhappy customer with not much to do and a passion for complaining on talkback radio. Or it could be a disgruntled franchisee having a whinge to their next door neighbour who just happens to be a consumer affairs reporter. Either way, the situation you hoped would never happen won't go away - it will hang around and gain momentum until, before you know it, you've got a full-blown crisis on your hands. How you communicate at that point can be the difference between riding out the storm and losing everything that franchisor and franchisees have worked hard to create.

Unfortunately, without a prior plan to handle bad press, many people find themselves considering the following, often fatal, communications options.

‘If I do nothing it will all blow over'
Wrong! It is human nature to gossip and embroider. Lack of information creates a vacuum in which stories (correct or otherwise) spread. Your only defence against the rumour mill getting out of control is to make sure the correct facts are available and shared. Waiting only makes it worse, and can turn a small misunderstanding into a front page reputation-killer.

‘It's my business and I don't have to explain myself to anyone.'
You might think it's nobody's business if one of your managers is arrested for possession of drugs. In fact, you could consider it a personal matter. The problem is, the news media won't. They'll feel quite free to print his or her name and even where they work in bold type.

Or you might take the view that if you want to sell your company to an overseas buyer it's your business and no-one else has the right to comment. Wrong again. Without clear and effective communication about why you're making the sale, gossip and innuendo could turn your once-in-a-lifetime deal into a dead dog.
And you won't just hurt yourself. You'll hurt franchisees, the franchisor, staff and suppliers. You owe it to them be more responsible than that.

‘I'll just make something up and they'll never find out.'
That's what you think. History is full of examples where lying just hasn't worked. In fact it never does, and when you get found out (as you will) the credibility of your company is unlikely to recover. Ask GlaxoSmithKline, the makers of Ribena. After being caught out making misleading claims by two 14 year olds, they were fined $217,500 - but the cost to their sales and their reputation will have been much higher - and will continue to be for some time.

‘I'm a positive person and I'm not prepared to dwell on disasters that might never happen'
Otherwise known as the ‘head in the sand' approach, this tactic is a short-sighted one adopted by business people who think crisis planning means you're going to have a crisis. Actually it can work the other way around. Planning for a crisis often means you'll never have one - but if you do, you'll be ready.

Prepare For Problems

If you have ever watched the news - or Target - and thought ‘thank God that isn't my franchise,' you'll be aware that some companies handle negative situations better than others. Those tend to be the companies that have rejected the options outlined above and instead adopted a pro-active approach. Here are four critical steps that can help your company to be prepared for problems.

Step 1
Write a list of all the business disasters you could ever face - it needn't be a long one. Start by checking the list below to see if any of these situations could ever come up.

  • merger, acquisition, take-over
  • franchisee failure
  • legal action
  • sale of part of company
  • recall of products
  • bankruptcy
  • scandal (theft, assault, contaminated products, fraud, etc)
  • environmental problems

Step 2
Decide that your company is committed to communicating frequently and honestly with all your audiences.

Plan always to start by telling your franchisees or franchisor of an issue at the earliest possible stage. The franchise grapevine works faster than the speed of light, and unless you tell your colleagues the facts you run the risk of mis-information reaching them first. Whether you tell them via an email, a newsletter, a personal letter or a phone call, make sure that when you have something to tell them they hear it from you first.

Step 3
Agree who speaks for your company. Is it you, your partner, or could any franchisee talk to the media as the ‘official spokesperson'? This is not a matter of status or celebrity; the official spokesperson needs to be able to present the facts of any situation in a calm manner, and not be ruffled by hostile interviewing. It's not easy, and it may take special training, including role play. Good media training makes a difference.
Carry out this appointment before you need to. Discussing these issues in the heat of a crisis is the very worst time to make an effective decision.

Once you have appointed someone, agree the rules and make sure everyone - franchise staff and franchisees - knows them. Make sure they understand the reasons, too. A media spokesman can't be expected to know everything that has just happened, so it is usually acceptable for him or her to say ‘I don't know, I'll call you back in ten minutes' - providing they actually do so. That time gap gives them the opportunity to find out the facts of any situation and to work out how best to present them in a clear and honest way.

Remember: facts are the enemy of bad journalism. If your company has made a mistake, admit it and explain what you are going to do to put it right. In that way, you can enhance your franchise's reputation as a company keen to do the right thing.

Step 4
What if the worst happens and you find yourself in the early stages of a crisis? Well, if you feel you need help, ask for it. Communications professionals (usually found in public relations consultancies) have faced these situations before and can help you avoid making the wrong decision. If you do approach a PR company, ask them to tell you about other crises they've handled to make sure they do have the expertise you need.

While the best defence is to get immediate advice from communications professionals who know the ropes, here are some helpful Do's and Don'ts to keep in mind when dealing with disaster.

Do:

  • Make sure you have all the facts before you start commenting to the news media. And make sure you have one spokesperson who is distributing the information from one central information centre.
  • Choose credible spokespeople, make sure they have had media training and make sure they have all the facts about the situation.
  • Be available to the media so they won't go to other sources for news.
  • Report your own bad news. If the media has to dig it out, they may be mis-informed by your competitors, disgruntled franchisees or customers.
  • Tell your story quickly, honestly and openly to minimise suspicion and rumours. ,
  • Decide what the key facts are and communicate them clearly. The fewer the points you try to make and the simpler the way in which you make them, the more likely it is that your side of the story will be fairly put.
  • If you can't discuss something, explain why.
  • Provide sufficient evidence to back up your statements.
  • Record events as the crisis evolves, including photographs and videotapes, so you have a history to learn from later.

Don't:

  • Don't say ‘no comment' - it only leads to speculation.
  • Don't debate the subject - share the facts.
  • Don't attempt to lay blame: rather address and solve the problems at hand.
  • Don't over-react and don't exaggerate the situation.
  • Don't make ‘off the record' statements - there is no such thing.

You may be lucky and never need any of this crisis planning advice. On the other hand, the phone could ring tomorrow morning with the kind of customer complaint that can turn into an avalanche of consumer unrest. Being prepared is your best - perhaps your only - defence.

This article was first published in Franchise New Zealand magazine Volume 16 Issue 2 

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