A disgruntled franchisee lashing out at their parent company is certainly cause for concern, as they are in a unique position to do massive amounts of damage due to either actual information or the perception that they hold privileged information about the operations of the entire organization.
Sometimes crises are "big deals." Sometimes they're situations that can crop up in any industry,
but fit the Webster's Collegiate dictionary definition of crisis as "an unstable or crucial time or state of affairs whose outcome will make a decisive difference for better or worse." If mishandled, the situation below, modified to preserve confidentiality, COULD have become a "big deal."
Situation
A franchiser suddenly started getting calls from concerned franchisees. They had been contacted by a relatively new franchisee who had pointed out a number of things he felt were illegal or unethical about the franchiser's business practices. He had also alleged that some of the franchiser's board of directors had been involved in multiple past lawsuits -- the implication being that they were previously accused of wrongdoing and shouldn't be trusted.
Initial Management Reaction
Management, appropriately, told the concerned callers that they could understand how such information might upset them and asked for a little time to check out what was being said, and by whom, before responding. They wisely did not immediately deny allegations, knowing that they were hearing second-hand information, and that there was some limited truth regarding the issue of past lawsuits.
Crisis Management
Response, from that point on, proceeded on two concurrent fronts: legal and PR. The franchiser's in-house counsel contacted the franchisee who had made the allegations and found that the franchisee was worried that he'd committed to his franchise too fast and, actually, was looking for a way out. His initial inquiries to the franchiser on this subject had been rebuffed simply because he was asking to get out entirely at the franchiser's expense. He had then twisted the facts about business practices and thrown in some facts -- that board members HAD been involved in past lawsuits. What he didn't say was that those lawsuits had not involved the board members while they were with the current franchiser and all had been minor civil cases resulting, at worst, in very low-cost settlements. In other words, "routine business experiences."
However, damage had been done. The disgruntled franchisee had already contacted approximately one dozen of his peers and the company knew the rumor mill would spread the word to many others.
The in-house counsel and PR/crisis management consultant put their heads together and, ultimately, what resulted was:
The disgruntled franchisee was asked to write a letter to all whom he had contacted, one actually drafted by legal and PR counsel, apologizing for causing alarm and correcting the facts. In return, the company offered a more-than-generous method by which the franchisee could get out of his deal. This avoided a lawsuit against the franchisee that would have been negative PR for the company, even if they "won" in court.
His letter was accompanied by one from the company, offering to answer any questions the recipients might have and communicating, in essence, that they were forgiving of the disgruntled franchisee's trespasses.
The same letter was kept on standby for use with any other franchisees who heard via the rumor-mill.
A contingency statement was written for use with trade and franchise media if they got wind of the rumors.
The situation calmed and has not returned to haunt the franchiser.
