LOW EGGSPECTATIONS: How NOT to Handle a Franchise Dispute

December 12, 2008 Franchise Publicity

On its website, Canadian restaurant franchisor Eggspectation claims it is “a company committed to innovation and eggcellence.” It claims that its team members are “energetic, friendly and well trained… brand ambassadors.”

Last Thursday, according to the Canadian Press, the Eggspectation “Brand Ambassadors” emptied the contents of one of their franchisee’s restaurants onto the Montreal city sidewalk.

Stunned passersby had to navigate through a half-block of tables, lockers, equipment, food, documents and furnishings. Pedestrian opportunists grabbed personal items out of lockers, bottles of liquor and food items until the police arrived to shoo them away.

Employees showed up to work only to see the possessions of the Eggspectation franchisee (whom one cook described as a “good boss”) being turned into a public junkpile by the corporate brand embarrassers.

The co-founder of Eggspectation explained his motivation to the Canadian Press:

“Legally, we asked the operator to come and pick up his equipment because it belongs to him,” said Enzo Renda, the chief executive of Eggspectation Canada Inc., the Montreal-based restaurant chain that franchised the outlet. “He refused and he said he didn’t care.”

…Renda said things just boiled over between the company and franchisee after a simmering dispute. He said the chain had been having difficulties with the franchisee so it got a court order and executed it.

“It was either that or another three years in court and we didn’t have an option, to tell you the truth,” Renda said in an interview.

“We’re repossessing the actual location and we’re going to reopen within the next few weeks,” he added.

Publicly dumping the franchise restaurant contents on the sidewalk for the city’s garbage cops to deal with was the ONLY option CEO Renda could come up with?

Navigating a franchise dispute is extraordinarily difficult and requires leadership skills that this franchisor clearly does not possess. A franchisor CEO must be able to justify to other franchise owners, stakeholders, employees and sometimes customers that the harsh action they must sometimes take is necessary in order to protect the brand image that is their greatest asset.