In the past month two well-known brands have been dragged through damaging claims of underpaid worker entitlements and unlawful actions against employees.
In the first one, Italian restaurant chain La Porchetta was forced to intervene after two of its franchises were found to have paid workers in pizza and soft drink. The Fair Work Ombudsman found that 111 employees had been underpaid a total of $258,000 between 2009 and 2012 when they worked at La Porchetta franchise outlets.
The second case implicated the Gloria Jean’s brand after one of their franchises unlawfully terminated the employment of a worker who had queried her pay rate. This followed an earlier complaint in a separate Gloria Jean’s franchise where allegations were made that they had paid employees as little as $8 an hour – which is subject to a Fair Work Ombudsman investigation.
Franchise Brand Damage
All cases received widespread media coverage – as emotive workplace relations issues tend to do. This highlights the dangerous impact that reckless actions of individual franchises can have on a franchisor’s brand.
Your brand is a symbol of your reputation – which can evoke an immediate reaction from current and prospective customers. And while a brand is completely intangible, it can be the single most valuable asset in any business.
Franchisors can and should do more to prevent such damaging issues arising – such as providing essential services and training to franchises or partnering with service providers to ensure compliance and mitigate risk across their network – leveraging their economies of scale in the process.