‘Timbit incident’ casts light on HR and franchises

One bad move by a franchise can damage the brand
By Uyen Vu
|Canadian HR Reporter|Last Updated: 05/30/2008

When it comes to strong Canadian brands, Tim Hortons is among the elite. That’s why the firing of a worker at a London, Ont., outlet who gave a Timbit to a fussing toddler was so damaging.

Within a day, the firing of Nicole Lilliman, 27, made headlines across the country and even beyond. Head office acted swiftly, rehiring Lilliman at another location. However, she told the

Toronto Star

she is actively looking for another job because she feels awkward in light of what happened.

The Timbit incident highlights a particular quandary for a franchise organization. Although matters related to employee relations such as hiring and firing are typically the purview of the local franchisee, it’s the franchise organization as a whole that’s damaged when such matters are poorly handled.

“What franchisors can do is require a franchisee to comply with labour laws as part of their agreement, but that’s often the extent of the franchisor’s involvement,” said Lorraine McLachlan, president and CEO of the Toronto-based Canadian Franchise Association, which represents about 40 per cent of the franchise organizations in Canada.

Franchisors can set out certain standards related to employee issues — for example, that employees wear a particular uniform or that employees limit the number of earrings they wear for health and safety reasons.

“The nature of a franchise business is it can be replicated time and again. Based on that, you can have an expectation of consistent quality, look and experience regardless of the franchise location you go to. That can be mandated by the franchisor,” said McLachlan. But how to deliver on that standard is up to the franchisee.

Given the hands-off approach franchisors must take when it comes to HR issues, the way to instill a certain culture of staff relations is to choose franchisees who share head office’s vision.

“The trick is in the awarding of the franchise in the first place. When you’re interviewing the franchisee or meeting them for the first time, you’ve got to make sure that you’re getting the people who share the same values as your organization,” said Jim Croteau, executive vice-president and chief operating officer of Keg Restaurants, a Richmond, B.C.-based chain with 50 franchise and 48 corporate-owned restaurants.

At that initial phase, both the vice-president of franchising and the president will spend the time to get to know the prospective franchisee. As a result, it may take longer to award a franchise, but it’s worth it, said Croteau.

Reinforcing corporate standards happens every year at the operational review, where head office assesses a franchisee’s adherence to the corporate standard.

“We would also talk about how they handle guest issues and things like that. We monitor guest complaints at our corporate office, so if we’ve got a guest complaint we would follow up and say ‘Hey, that’s not the company way,’” said Croteau. “But that’s after the fact. It’s not like we’d have something written that says, ‘Don’t fire someone for giving away a Timbit to a crying child.’ It’s something we wouldn’t even think about.”

If a franchisee is consistently unable to hold up the company standard, then head office could revoke the franchise license — but that’s something Keg Restaurants has not had to do, said Croteau.

In recent years, Keg Restaurants has participated in employer-ranking exercises, initiatives that require broad-based buy-in from the franchise owners. To get this co-operation, the directors of franchising regularly share head office initiatives with franchise owners. Also, franchise owners are invited to participate in monthly regional meetings.

“That way, the franchisees are involved from the start. When we roll out our initiatives, they would have already given their feedback,” said Croteau.

Getting franchisees to believe in the company’s systems and culture is the favoured approach at 1-800-Got-Junk?, a Vancouver-based junk removal business with 300 franchise partners in Canada, the United States and Australia.

“We’re a very culture-oriented organization. We’re nothing without highly engaged people,” said Simon Lowe, manager of Australian operations who works out of Vancouver. That’s why, in the process of reviewing a franchise application, the company would go through the applicant’s history of people management.

And during the week-long training for new franchise partners, the company goes over such topics as the company’s way of hiring and retaining.

“Who you put on the truck, how you train them and how you take care of them will determine how successful you are,” said Lowe. “It’s the impression the drivers make on the customers that will mean whether people will call them back the next time.”

The standards set out in the franchise agreement include clean trucks, upfront rates, friendly drivers who wear their uniform and show up on time. If a franchisee consistently fails to deliver on that, “then we’ll have a conversation and if it continues, we’ll look at other recourse,” said Lowe.

Franchisees typically leave training sessions excited to implement the business practices they learned from CEO Brian Scudamore — practices such as sharing daily numbers, setting goals and sharing profit with employees, said Brad Whitmore, a franchise partner based in Montreal.

“If you don’t share your numbers, if you don’t have a morning meeting everyday, you wouldn’t lose your franchise by doing this. But a lot of people in this franchise know that Brian has seen success through those methods. These are good business concepts and they get people engaged,” said Whitmore.

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