After seeing a Quiznos franchise recruitment infomercial to recruit franchisees, you are tempted to apply to open your own Quiznos sub shop. However, your research on the company turns up some disturbing information. Many current franchisees are unhappy with the company’s management and practices, among them excessive food costs, lack of promised support, and selling new franchise locations that are too close to existing stores. A group of New Jersey franchisees sued Quiznos for selling them franchises but not providing locations 18 months after taking their franchise fees. Some franchise owners question Quiznos’s purchasing tactics, choosing food and beverage suppliers based on the referral fees it receives instead of the lowest-cost provider. Other franchisees have suffered major financial losses.
Quiznos, which owned or operated more than 5,000 sub-shops at one time and now has less than 1,500 locations worldwide with less than 900 in the United States, disputes the various claims. The president of the company points out that in a franchise operation, there will always be unhappy franchisees and those who can’t make a success of their units. Besides, Quiznos’s franchise offering materials clearly state that the company may open stores in any location it selects.
1. Create a T-chart that illustrates the ethical and unethical options of opening new franchisees close to each other. Include a minimum of 3 bullets on each side of your T-chart.
2. Write a short summary explaining your T-chart.
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