What-Franchise-Issue-20.1

88% 86% 85% 85% 84% 83% 82% 6% 6% 5% 6% 7% 9% 9% 6% 8% 10% 9% 9% 8% 9% already resulted in layoffs and budget reductions. Adding to the financial strain, 42% of UK business executives had invested more in PR and sustainability efforts in order to prevent or mitigate consumer disgruntlement.While 33% of business owners had pivoted their strategy in response to consumer pushback, according to McKinsey & Company. It’s clear for franchisees, there’s likely to be a huge amount of plate spinning and upheaval. “From what I’ve seen, surviving a franchisor boycott requires a high level of resilience and strategic decision-making,” confirms Riley, who recommends leaning into the local community rather than national conversations. “By diversifying your revenue streams and engaging with loyal customers, you can strengthen your local marketing efforts and mitigate any impact the boycott might have. In the meantime, I suggest exploring partnerships with other businesses, or seeking temporary support from industry networks.” Time to cut ties? How you respond to a boycott and what actions you take will ultimately depend on your individual franchise agreement. In most cases, control over messaging and any legal action taken against the boycott will be with the franchisor, which reiterates the importance of maintaining clear communication channels. “You’ve got to talk to the franchisor,” says Gill Hunter, managing partner at Square One Law. “Don’t go off and respond independently because you could then put yourself in breach of your agreement. You will normally have to negotiate with the franchise on what you can and can’t say.” There’s no legal obligation for a franchisor to help you navigate a boycott, unless stipulated in your agreement. However, it’s likely to be viewed as a moral obligation which franchisees may argue forms part of a franchisor’s common law duty of good faith. However, this is a developing part of UK law and so the first place to look is where there are any general contractual obligations on the franchisor to provide support and assistance which can be construed to extending to boycott assistance. “There are usually provisions in the standard franchise agreement which are general assistance obligations and support obligations,” says Gill. The franchisor may choose to carry out legal action against the organisers of the boycott. However, many opt against this course of action, as it can ‘poke the bear’ – lengthening a turbulent period and placing the brand under further scrutiny. Although, the franchisor may take action if employees are coming under attack. In the worst-case scenario, should you wish to terminate your contract due to financial loss or misaligned values, Gill encourages franchisees not to immediately head in this direction. “People shouldn’t jump to trying to terminate agreements or bringing claims against the franchise without getting proper legal advice,” she says. “If it’s not justified, you might end up in a position where you’re in breach of your agreement because you’re not complying with its terms. Sometimes there are also provisions that kick in post termination that may have a cost associated with them.” A new call and response The parameters around consumer feedback and complaints have changed, with boycotts increasingly becoming a part of this. “What I’m finding more and more is that the world is becoming more partisan or ambiguous,” explains David, who has recently written Confronting the Storm: Regenerating Leadership and Hope in the Age of Uncertainty – a book which dissects how businesses must find different ways forward in this new environment. No doubt, franchises will be among those encountering this challenge, and time will tell which brands are ready and willing to experiment and develop new responses to consumer unrest. The majority of UK customers are prepared to boycott, according to YouGov. 0 10 20 30 40 50 60 70 90 80 100 Will boycott for assorted reason Don’t know Will never boycott UEA Indonesia Hong Kong Australia Canada Denmark UK HOWMANYCONSUMERS ARE PREPARED TO BOYCOTT? 70% OF BUSINESS OWNERS ARE CONCERNED ABOUT BOYCOTTS 42 WHAT FRANCHISE Issue 20.1 Ana lys i s | FEATURE