When Multi-unit Franchisees Go Bad

The global expansion of Burger King continues, but it’s had to deal with a brand catastrophe by having to close 89 (or 13%) of its stores in Germany.


When Multi-unit Franchisees Go Bad

Back in November 2014, Burger King announced that it was terminating contracts for 89 German stores after reports of poor hygiene and poor treatment of staff, whose holiday pay, bonuses and sick pay were being withheld. What made the blow harder was that all of the 89 stores were run by the largest franchisee in the country – Yi-Ko.

Undercover reporter reveals violations

During an undercover reporter assignment, it was discovered the restaurants were serving expired food and violating sanitary standards, accusations that will be hard for the brand to shake in coming months and years, even after the scandal resulted in improvements.

While the move serves to protect the brand as a whole and the 599 remaining German Burger Kings will continue to operate normally, the closures will affect up to 3 000 employees.

This is not the first, nor the last franchise scandal that has made headlines and others, including McDonald’s, Pizza Hut, and KFC are still recovering from the food-safety scandal in China, where one supplier was revealed through undercover reporting, to be selling expired meat.

 

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

Related Articles

© Franchise Zone / Entrepreneur Media SA (Pty) Ltd. All rights reserved.

Disclaimer: Reliance on the information this site contains is at your own risk. Readers are advised to consult their attorney and/or financial advisor prior to pursuing any investment. Please read our Editorial Disclaimer and Terms & Conditions of Use.

Is this information out of date or incorrect? Report it to our webmaster.