Bribes, Encroachment and Ponzi Schemes in Franchising
Three neat stories from the franchising world.
First, a story about how not to improve the supply chain. McDonald's Executive Arrested For Taking Bribes In Hong Kong
"A McDonald's executive in Hong Kong has figured out that the best way to ensure a transparent supply chain is to have food suppliers pay him money in order for the fast food company to use their food products.According to the Ming Pao Daily News, the Big Mac's managing director in Hong Kong Joseph Lau has been arrested by Hong Kong's Independent Commission Against Corruption for taking bribes from food suppliers and then using their products. Other media however say the fast food company reports Lau is on leave.
If convicted of taking bribes while working at McDonald's, Lau faces up seven years in prison and a HK$500,000 fine."
Second, Dunkin Donuts is going to start competing with its own franchisees over the sale of coffee. From Jim Coen, at BlueMau Mau, writing about the Dunkin Donuts franchisee's reaction (Read the entire article and comments.)
"Dunkin' Brands has opted to contract with Proctor & Gamble to sell Dunkin' Donuts coffee in mass distribution channels, bypassing standard (franchisee) outlets in the process. This distribution program was created in the name of "increased brand awareness."DDIFO, the independent assocciation of Dunkin Donouts owners believes if the brand wanted to do better expose Dunkin' Donuts Coffee in unrepresented or underdeveloped markets, this strategy could make considerable sense. DDIFO also feels to do so in New England, Dunkin' Donuts oldest and mature market (with franchised restaurants approaching one retail site for every 6,000 in population), to be disingenuous, at best, or shear lunacy, at worst."
Note to Seth Godin to get a new example, as he recently said:
"The opposite of Starbucks is Dunkin Donuts.Not an independent coffee shop, and not coffee at home.
On the other hand, the opposite of Dunkin Donuts is not Starbucks. The opposite is 'not having coffee out."
That's because when someone considers getting their morning coffee, the choice is usually home or Dunkin. That person doesn't have Starbucks as part of their choice set. Defining your brand in this way makes it easier to ignore the irrelevant competition and easier to figure out what you are (and aren't).
Finally from Franchise Pick, not really a franchise story, but a discussion about online Ponzi schemes and e-Gold, and not really Sean's story, but rather Mark Hemel, another b5Media Blogger, writing about Ponzis schemes who says:
It is widely discussed in my Internet circles and suggested in many others that ‘online porn’ helped to fuel the Internet’s growth during it’s early years. Not something that makes us all proud, but you can’t argue with the facts no matter how ugly they are….It is also very well documented that Ponzi scams, online Pyramid schemes and other ‘high yield investment’ fraud has not only helped to expand the use of digital gold currency but for years now Ponzi scams have been the life blood of some big industry players. E-gold is a particular favorite of these online schemes
