Gaspar
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« Reply #22 on: May 21, 2013, 09:10:37 am » |
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Interesting update article from Unhappy Franchisee.
How Franchisors Should – And Shouldn’t – Respond to Internet Criticism May 10, 2013 How Franchisors Should – And Shouldn’t – Respond to Internet Criticism by Sean Kelly, UnhappyFranchisee.Com
No company offering franchise opportunities enjoys having to publicly defend the image that they’ve carefully crafted through their marketing and public relations efforts. No franchise company wants to air or discuss its dirty laundry in plain sight of customers, employees, shareholders, franchisees and prospective franchisees. But now, thanks to the Internet, blogs like UnhappyFranchisee.Com and BlueMauMau.com, and social media sites like Facebook and Twitter, public discussion and scrutiny of franchise opportunities is a fact of life… and it’s not going away.
Here’s the story of two franchisors of fast-casual cafes that reacted very differently to similar complaints against them. The first company reacted with anger, threats and legal action.
The second company reacted by taking the complaints seriously, by publicly addressing factual errors, and by acknowledging and taking steps to correct its shortcomings. In the end, the way the franchisors chose to react to criticism will have a greater impact on their public images and ability to grow than either the original criticism or their well-crafted marketing/PR personas.
In July, 2012 UnhappyFranchisee.Com posted that, according to a Small Business Administration report, Beautiful Brands International (BBI)’s Camille’s Sidewalk Café had a 58% SBA franchise loan default rate.
In the post CAMILLE’S SIDEWALK CAFE Franchise Complaints, we also published that, according to the company’s own disclosure document, the Camille’s U.S. franchise network has shrunk 60% since 2008.
The post attracted an outpouring of comments from a number of former Camille’s franchisees, who claimed that Camille’s and BBI CEO David Rutkauskas had misrepresented the opportunity, had failed to provide the necessary franchisee support, and was indifferent to whether they succeeded or failed once the initial check cleared.
Camille’s franchisees reported having lost as much as a million dollars, and many recounted the personal financial struggles, including bankruptcy, they endured as a result of investing in the Camille’s franchise.
UnhappyFranchisee.Com contacted David Rutkauskas, CEO of Beautiful Brands International, and offered to publish his response, clarification, or rebuttal to the allegations. We told Mr. Rutkauskas that if there were merit to some of criticism, that we would be happy to report what steps he and Beautiful Brands have taken or were taking to address and correct these problems.
Instead of responding to numerous offers to join the conversation, David Rutkauskas had his attorney send threatening letters to the former franchisees who had shared their experiences and posted comments under their real names.
UnhappyFranchisee.Com did not take down the comments. We once again offered Mr. Rutkauskas a chance to address the criticism. Beautiful Brands then filed a lawsuit against me (then later dismissed it) for expressing my opinion on another website.
In subsequent interviews, David Rutkauskas tried to maintain the success-story façade he had created for his chain, and, when confronted with the unavoidable facts, he blamed the franchisees themselves, he blamed the economy, he blamed partners for backing out of deals, he blamed misrepresentations on writers printing “off-the-record” comments, and he blamed UnhappyFranchisee.Com for focusing on the 70+ Camille’s franchisees that failed instead of the 28 or so that have survived.
In frustration at not being able to control the story, David Rutkauskas posted dozens of fiery personal Twitter attacks on me that included vulgarities, profanity, threats, homophobic (though I’m not gay) and anti-semitic (though I’m not Jewish) insults and invitations to come to Tulsa to fight him (“settle this like men”).
Instead of expressing concern for the plight of the franchisees who failed, instead of taking some responsibility or at least addressing the concerns that were raised, Beautiful Brands and David Rutkauskas’ responded in such a way that reinforced the franchisees’ claims that BBI is indifferent to their struggles, and will use bullying, threats and intimidation to hide their shortcomings.
Since this article was published, Mr. Rutkauskas has deleted his Twitter account. Probably a good thing, because he had some pretty strange tweets flying around out there.
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