Franchisee vs franchiser-Who is responsible for worker welfare?

The on-going tussle between the employees and owners of franchise operators for better working conditions for the formers, especially hourly wages, can impact on the very existence of the fast food industry in the US. Though the crisis is largely relevant to that country, the outcome may set new conventions and practices that may spread to other countries also. At present large fast food brands strike deals with far flung independent operators called franchisees for making their products and selling the same to the public, getting royalties based on sale volumes. Beyond some perfunctory supervision to ensure the reputation of their brand image, the franchiser does not have too much liability on their hands. Under classical employee-employer obligations, the working conditions including wages are determined by the franchisee with no over sight by the franchiser. Recent agitation by the fast food workers to increase their wages does not seem to be affecting the franchiser to the least. This is being contested by the workers union and the labor authorities are in the process of deciding this issue soon. Here is a ring side view of the tussle in the country and a possible outcome.  

"Thefast-food franchise model is under attack, and the culprit is an under-the-radar legal dispute currently being considered by the National Labor Relations Board. Though the case itself is relatively mundane, the outcome could set a precedent that would make fast-food chains legally responsible for workers who had previously been the liability of their franchisees. Experts say that such a ruling could cost the fast-food industry billions of dollars and alter the power dynamic in a long-running struggle between McDonald's and its workers. The case revolves around whether the court will overturn a 30-year-old legal ruling that says companies can't be held liable for unfair employment practices toward workers that the company is not directly in charge of hiring and firing - including the nearly 8 million American workers employed by franchise businesses ranging from car dealerships to restaurants."

Probably the workers may win this battle as continuous focus on hourly wage rates in the US is due to the political clout the workers' unions across all sectors enjoy in that country. In a country like India this issue may not be very relevant as franchising system is still at an early stage of development. However this issue will become critical once the manufacturing and marketing environment assumes critical size in the coming years. Franchising is in vogue in some sectors like retailing, automobile fuel dispensing, restaurants, warehousing and distribution, automobile sales stores etc.  It is going to take a long time for the workers to achieve critical size vis-a-vis unionizing. Still it is not logical to decide that local franchisees can escape the responsibility to their employees appointed by them based on the "hire and fire" system. With the employee's provident fund system taking deep root in the country, such responsibilities for the welfare of the workers by the local operators cannot be evaded in this country. That does not mean that the big franchisers can be a mute spectator to maltreatment and exploitation of labor when they are working tirelessly to promote their brands locally. Probably government can come up with a legal frame work involving shared responsibilities between the franchisee and franchiser. Worker welfare cannot be left entirely to the franchisee as abrupt termination of franchise arrangement by the franchiser could throw the workers out of employment with no safety net..     

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

THE FAST FOOD "CONUNDRUM"-HOW SAFE ARE FAST FOODS?

Whether it is really a scoop or was already known to many people, the so called expose by a whistle blower regarding some of the practices being indulged in by restaurants and fast food chains may yet persuade some consumers to cut down their frequency of eating out side. Recycling old foods is a practice followed by many restaurants due to economic considerations though there are countless others who are scrupulous in rejecting any old foods, not sold within a few hours after its preparation. Of course food spoilage might not be an issue in recycling prepared old foods but flavor and taste can be affected to some extent due to repeated exposure to heat during reformulating and preparing another product from the old one. The advanced refrigeration system and facilities available to day make it possible to keep foods for relatively longer periods without any major deterioration and there fore consumers should not have any worries about safety aspects. Nonetheless if restaurants claim that their preparations are made from fresh ingredients, they must avoid the temptation of recycling old foods which should be donated to the local Food Banks. After all to day's consumer attaches great value to freshness and the faith he reposes on the restaurant for transparency and fair play should not be violated  Here is a gist of the expose which made headline news recently.  

"While the way that Wendy's recycles overcooked hamburgers into the next day's vat of chili may be frugal, Cozmo23's description of it isn't exactly appetizing. (Though the rest of the thread, with riffs on British celebrity chef Gordon Ramsay's possible reaction? Awesome.)  It's not limited to Wendy's, either: Lethal_Lunacy77 reports that the Chick-Fil-A he worked at did something similar with their chicken salad, stripping old chicken patties of their breading before chopping them up and mixing in mayo. And fast-food places aren't the only ones that recycle, apparently. "Being a dishwasher in an Italian eatery, i am instructed to throw garlic bread that looks untouched after being put out on the customers table into a separate bin where they are taken from, then used in meatballs," writes Burkey217. "Years ago my older brother was a busboy at a local well-respected restaurant. He let me know that the uneaten dinner rolls that were brought to each table (in a basket w/ packages of butter) were saved and placed into new baskets to go out to guests later in the evening," Chef_Brokentoe adds". 

In India where there are millions of small restaurants, operating on a limited budget, recycling is a big temptation too good to be resisted. Since almost all foods are heated to high temperatures before consumption, here again danger from microbiological hazards, per se, is very remote. However there is one area of danger in foods offered in Indian restaurants which involves the quality of cooking oil used for preparing fried and roasted products. Deterioration of cooking oil when exposed to temperatures as high as 180-200C is an established fact and some of the artifacts generated during prolonged exposure to heat can pose health risks with serious short term and long term health consequences. Scientific advise that heated oil should not be reused is not taken seriously and no restaurant seems to be willing to discard the frying oil after a couple of use considering the high prevailing prices for edible oils in the market. Fortunately the predominant cooking medium happens to be Palm oil and Palmolein, both relatively stable fats compared to others. Why the recycling may not become a controversial issue is due to the market reality that restaurants indulging in such practices, offering foods with reduced quality due to recycling, will be in danger of being elbowed out of the market place over a period of time.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

A "DESI" FAST FOOD CHAIN IN INDIA-WILL IT SUCCEED?

Exciting days are ahead in the fast food chain sector in India with the announcement by Reliance group to enter into this business. As a truly Indian organization Reliance can be expected to know what Indian consumer wants and accordingly tailor make the offerings to suit local palate. However the "pardesi" food chains which have already established their foot prints in India are not going to present the leadership in this sector on a platter without a fight. If the new "desi" food chain is going to imitate the menu and models of the existing players the going can be expected to be tough. Late entry may also cause problems in securing strategic locations in many urban areas besides them being very expensive calling for high investment. One of the shining examples of success in chain restaurants in India is that of Cafe Coffee Day which has established itself as a major player with standardized menu, excellent quality coffee and high class ambiance. If Reliance can adopt the same strategy and carve out a separate and distinct identity for its food offerings, probably there can be reasonable chance of success. Here is a take on this new development.

'Reliance Industries became India's biggest company by fueling the subcontinent's cars and homes with oil and gas. But for its next venture, the $50 billion conglomerate has its sights set on another kind of energy altogether: fast food. According to The Economic Times, Reliance, which is headed by multibillionaire Mukesh Ambani, is gearing up to launch a new chain of fast food restaurants for Indian consumers within the next year. Reliance Industries has recruited Rishi Negi, the COO of movie theater company Fame Indian and a former Pizza Hut India executive, to develop and run the new fast food brand. Sources close to Reliance have said that the chain's style of food has yet to be determined. But the business model is said to be based on companies like McDonald's, with a standardized menu and hopes of national domination. Sources have said that delivery will be a key part of the chain's revenue model. The Indian fast food sector has been growing quickly over the past few years. But India, as compared to China and Russia, whose industries have also experienced rapid expansion, has been relatively slower to warm up to international fast food chains. For example, Yum Brands, the owner of KFC, Taco Bell and Pizza Hut has been hugely successful in China for more than a decade, but just launched an independent Indian division a few weeks ago. But if the Indian fast food market is in some ways an unusually difficult one, Reliance's new entrant will also have some unusual advantages. The chain will be a subsidiary of Reliance Retail, which has already become a major player in Indian consumer goods since its founding in 2006, and so knows the market well".

It is true that Reliance, through its retail arm, has an established resource base that can serve to feed the food business but the fact remains that in spite of 5-6 years presence in the retail market, it has not been able to achieve even 5% of its targeted business so far raising troubling questions regarding the ability of this group in successful diversification. Earlier fiasco in retail petrol business is still fresh in memory and one can only hope this time the new venture will become landmarks across the country with pan-India foot print and a distinct aura of its own.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FAST FOOD BECOMING "FASTER"-THANK THE INTERNET!

Fast foods in many western countries are at the receiving end because of their suspected role in contributing over weight, obesity and many life style health disorders. But this industry has shown remarkable resilience in overcoming such adversities and continue to thrive. They have become all the more visible these days when the economic melt down has reduced the buying capacity of many middle class families who can afford these foods easily as they are priced low due to the large business volume generated. Besides industry continuously strives to be sensitive to consumer concerns in modifying their products removing promptly any ingredient that has safety uncertainties as per consumer perception. The industry serves a useful purpose by providing highly standardized and tasty preparations within a matter of few minutes using most modern processing technologies. Recent revelation that this industry is increasing the convenient content further shows that it is not easy to demolish them from the mind of the consumer.

"Mos Burger branches across school campuses and Taipei City (around 20 in total) have already tested out the on-line meal order service. By mid-March, the new service will be available for the fast food establishment nationwide. According to Mos Burger representatives, the new service was created to shorten the waiting period for its customers. Although the company has a call-in service for orders, customers have complained that their calls often fail to go through. The prevalence of Internet-based services caused Mos Burger to roll out their on-line ordering process, testing it in January across Taipei City branches and those located on school campuses. The results were positive, and the company predicts that by mid-March, all 180 or so Mos Burger branches will take on-line requests. The Mos Burger website has two options for on-line orders: systematic and time-based. If the customer doesn't specify a time, his food will be made within ten minutes of his order, which will be ready to be enjoyed in the restaurant or for pick up. However, if the Mos Burger restaurant is at capacity, the customer may still have to wait".

Those who patronize joints like Taco Bell, McDonald's, Pizza Hut, Burger King, KFC or any other fast food serving place cannot fail to notice the quality of service and the premium on time accorded to their service. For many professional and busy people time is definitely a factor that determines their choice of eateries and these outlets fit admirably with the consumer expectation. Though the new innovation cannot be considered very novel, putting into practice the IT technology for providing faster service is some thing that does not exist till recently. Ordering of food through telephone can reduce the waiting time significantly but in a country like the US it is next to impossible to get a live human voice to listen to consumer needs. Therefore Internet is a possible practical medium that can allow the consumer to send across the order very fast and little time is lost between ordering and taking delivery of the menu items ordered. What is noteworthy is that this development is happening not in Europe nor in the US but in Taiwan in Asia! Three cheers.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com