August 2, 2007
Beliefs and Business at Odds
Religious and moral dilemmas are no longer the sole territory of pharmacy employees dealing with whether or not to dispense contraceptives. According to a Chicago Tribune report, a Dunkin’ Donuts franchisee, who happens to be an Arab Muslim, has run into a conflict with the company over his refusal to sell products containing pork in his stores.
“What is life without dignity and your beliefs?” said Mr. Elkhatib, who emigrated to the U.S. from Jerusalem in 1971.
According to Mr. Elkhatib, the donut chain had long allowed him to operate his stores without any apparent concern over his no pork policy. The company even provided signs for the shops that told customers that meat products were not on the menu.
“That’s why I bought a Dunkin’ Donuts, because I never had to handle pork or alcohol,” Mr. Elkhatib told the Trib.
In 2002 with business doing well, Mr. Elkhatib asked Dunkin’ Donuts about moving one of his shops to a busier location. The chain declined the request and followed that up with a letter informing Mr. Elkhatib that it would not renew his franchise agreements when they expired. The reason was because of his refusal to sell the company’s complete line of products.
Dunkin’ Donuts has maintained this case is not about discriminating against Mr. Elkhatib for being Muslim or Arab. In papers filed with the court, the company argued, “A Dunkin’ Donuts franchisee can no more refuse to sell breakfast sandwiches based on the Muslim faith, or Arab ancestry, than a McDonald’s franchisee can refuse to sell hamburgers because they are Hindu or Indian.”
The 7th Circuit Federal Court of Appeals has questioned Dunkin’ Donuts’ motives, suggesting the company has not always applied the same rules to franchisees. The three-judge panel pointed to three other Chicagoland Dunkin’ Donuts shops that do not serve breakfast sandwiches with pork. These were all allowed to continue operating without pushback from the chain. The three locations that did not serve the sandwiches did so because of lease restrictions, space issues and, in one case, a demand for kosher food.
“There is significant evidence that the carrying of breakfast sandwiches generally, and the carrying of meat products specifically, was not a factor that was important to Dunkin’ Donuts in the franchise decisions,” the court wrote in its opinion.
Discussion Questions: What is your reaction to this case? Is Dunkin’ Donuts or Walid Elkhatib in the right here? Should Dunkin’ Donuts be concerned about the reaction of the Arab and Muslim communities?
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Once again we see divisiveness masquerading as diversity. Foreign outposts in our country masquerading as assimilation. And attempts to remake the U.S. in the image of the countries immigrants ran away from.
The Chicagoland Double Ds not forced to sell pork breakfast sandwiches were following lease and space restrictions, and one offered a kosher product that sold better. No problem. But, establishing a precedent in which Double D franchisees could pick and choose their menus for subjective reasons should not be allowed. Sure, test new products on your own as McDs franchisees do. But don’t refuse to offer something that, for instance, is being advertised and promoted. Why would Double D move a franchisee to a better location only to see that franchisee refer customers to the “where available” clause in an ad for the breakfast program? That would be Double Dumb.
Recently, I visited my local KFC and while waiting for my order, another customer came in, asking for an advertised deal that he had seen on TV. The young girl behind the counter had no idea what he was speaking about. But this customer was tenacious. He reviewed for over two minutes the very confusing KFC/A&W menu and finally found it. “AHA, there it is, big as life.”
Think of the customer coming into Dunkin’ Donuts and not able to find the breakfast sandwiches which are advertised and promoted. Don’t you think he or she will give pause to whether to go into a DD again or not?
I think that any franchisee has to live up to the brand of the franchise, or don’t buy the franchise. My advice is that DD should never have allowed the franchisee to not sell the complete menu in the first place. Now they have to give advance warning to other franchisees that the menu must match the corporate policy, and begin a buy-back program for those franchisees who conscience or religion won’t allow them to abide by these rules.
I’m reminded that it’s a good idea to get matters related to ethical, moral, or religious parameters discussed and in writing when entering any sort of work or business agreement. Several faiths don’t permit working on Saturdays, for instance, and this can come up as a problem when someone is expected to travel on behalf of their employer. I saw some fantastic practices for balancing multi-ethnic, multi-faith needs within the context of business while in Silicon Valley. Anybody who’s stumped can learn from veteran companies like HP and Intel.
I must have a different slant on this. Using products and selling them are two different processes. Just one example…can you imagine the Marriott Hotels never having sold coffee or alcoholic beverages because the founder was Mormon? A business makes considerable investment to try and market its products and services to a diverse group of consumers. A franchisee or employee should be subject to a contract or employment agreement which stipulates they have no objection to delivering the company’s entire line of products.
Franchises are always a problem: maintaining the integrity of the franchise without alienating franchsiees (and potentially illegal tieing restrictions)
As a general rule, “reasonable accommodation” should be the guiding principal: if the conflict involves a key element of the franchise identity (e.g:a TGIF-type restaurant not selling alcohol) then a relationship isn’t possible, if it’s minor (one item out of dozens) then it can probably be worked out.
Before reading the story, I thought the DD case was the former; after reading it, I feel it is the latter…and a case of corporate arrogance and/or stupidity turning what would (at worst) be a small problem into a much bigger one.
DD is solving a problem by creating a bigger one. They should simply be more creative in finding a solution. If true, allowing for a “kosher” store and not a “halal” store is just incredibly stupid and wrong-headed.
I can certainly see and empathize with Mr. Elkhatib’s feelings on this subject. He is not being treated right by DD in my opinion, but at the same time I can see their point too. If you have ever inherited another manager’s decisions that you disagree with, you can put yourself in DD’s place. It’s hard to always be totally consistent in a national business with all the local issues but you have to try in order for your rulings to hold up in a court of law.
I would rule in favor of DD on this one but feel very bad for the poor way that Mr. Elkhatib is being treated. He deserves fair compensation for this injustice done to him in my humble opinion. DD should have to pay to gain the right to enforce their rules in this manner.
If it’s true that Dunkin’ Donuts has not been consistent in its application of this policy, then they have no case. I do have some sympathy for the franchisee because Dunkin’ used to be exclusively pastries and now they are branching out into other areas. However, since their mission does appear to be changing and if they apply this policy across the board (as is their right), then it may be time for the franchisee to part ways with them.
I definitely smell discrimination here. Either DD enforces its requirements to sell pork products from the beginning, and with all its franchisees, or it doesn’t.
In this case, it never made an issue of it with this franchisee or three others until this one, a Muslim who was explicitly refusing to sell pork for religious reasons, made himself visible by wanting to expand.
BTW–there’s also an alternative solution here that’s a big win-win for everyone, If DD wants to do a little testing in the labs: turkey products!
Turkey bacon and sausage have more flavor, because they have more meat, and less fat and calories. And they could open the market for breakfast sandwiches up to segments that haven’t had the chance until now.
Dunkin’ Donuts should be concerned. It’s in their best interest to keep their franchisees happy so they need to find ways to get along. Many owners are Arab Muslims so if they want them to keep adding more units, DD needs to go along to get along.
DD was wrong–they must detail precisely what’s involved in owning and operating a DD franchise. Now they are probably regretting their lack of candor.
However, I believe that the sign on the door prevails in terms of what is offered and the store environment. Otherwise brand can’t maintain image and consistency. It’s a nail in the coffin of their brand if every franchisee determines the product assortment.
This is definitely a “grandfather” opportunity for all involved. If Dunkin’ Donuts allowed no sale of pork in the past and was happy with the franchise fee they were generating from the store they should not change the rules and expect a franchisee who they obviously allowed to not sell pork in the past to now have to conform. This is the “right” thing to do.
Legally DD probably has the right to force their franchisees to sell all products in the stores. If DD enforces this policy they will, no doubt, undergo some public pain over this issue.
Let’s take the emotion out of the decision by Dunkin’ Donuts not to renew the franchise and the decision of the franchise owner not to handle some part of the product that disagrees with his religious belief. If Dunkin’ Donuts had been up front when they sold the franchise that this was a requirement, then that would be fine. But since they have allowed the process to go forward, I don’t think they are acting with real integrity toward their franchisees.
Yes, you can require a new franchisee to accept a new agreement but this is someone who has helped you build your brand over the years and the corporation has accepted his beliefs. Now they want to change them.
All franchises and other business owners should be watching this closely and thinking about it a lot, because there are huge customer service aspects. Now, on a personal level, the odds of my running out to DD for a yummy sausage sandwich are slim to none. However, if I was a consumer who DID want to purchase one, (or any other product DD advertises nationally) made the effort to locate a DD and drove there only to find out the item is not available, I know I would be unhappy…and I would be unhappy at both the franchisee AND at the parent company.
Possibly, DD could equally accommodate halal and kosher franchise owners by allowing them to clearly post that they are so on outside signage and in internet and yellow page listings. However, the franchisee should not be shocked if DD allows another “full service” version of the franchise to open up nearby.
There are published stories of grocery checkers in Minnesota slowing checkout lines by refusing to ring up customers’ pork products. There was an account this week of women on a recent British flight holding up departure for 4 hours for a whole planeload of passengers because (using their coach tickets) they were unwilling to be seated next to unknown male passengers, and now this (minor) DD sandwich issue. All this suggests that businesses will need to figure out a way to show respect for cultural differences while not being unreasonable and unaccommodating to the majority of their paying customers.
Money isn’t everything. People have to have convictions and stand by them, whether it’s behind the pharmacy counter or the donut counter. If you sell out your beliefs, you stand for nothing.
Normally I’m against any religious restrictions but I’m strongly not sure on this. If the law is to be general the fact that, because of “restrictions,” another Dunkin’ Donuts is allowed to sell only Kosher confuses me.