YAKIMA -- For the salads that Don Copp sells at seven Papa Murphy's stores in the Yakima Valley, he opts to purchase romaine hearts and cut and clean them in-house.
The parent company doesn't require it; it's fine with pre-cut, pre-washed lettuce.
But with strict food safety standards, Copp prefers to exceed them when he can.
So for Copp and others in the restaurant franchise industry, seeing a business owner lose a franchise for not meeting food safety standards is a rare occurrence.
Meeting standards in food safety and other areas, including cleanliness, store appearance, sales volume and store design, is a universal part of aligning with a popular national brand.
So it was noteworthy when Wendy's International terminated BZB Enterprises' franchise agreements for several Northwest locations -- including in the Tri-Cities -- for failure to meet food safety and sanitation standards.
That led to the sudden closure of some of those locations last month.
Paying royalties
Many national brand quick-service eateries in the Yakima Valley, including McDonald's, Subway, Burger King, KFC, Quiznos and Pizza Hut, are run by franchisees, which pay a royalty, usually along the lines of 4 percent to 10 percent of sales, to associate with that brand.
Franchisees include everyone from a mom-and-pop business owner operating a single location to a regional company running locations in multiple states.
Regardless of size, most franchisees are subject to an extensive operations manual that outlines standards to ensure franchisees are preserving the brand. Such standards include everything from how a store is designed to exact temperatures expected for different food items.
While national brands want all standards to be met, meeting food safety standards is particularly important, said Tony Rizzo, regional manager for Inland Northwest Business Development, the franchisee for 33 Subway locations in Washington and Idaho.
"That is non-negotiable," he said.
That's why Inland Northwest Business Development conducts internal inspections in addition to the ones done by Subway, he said.
"We use (the inspection) as a tool to become better franchisees," Rizzo said.
Brand promotion
Despite strict standards, most brands do try to work with franchisees when they notice violations.
With increased competition from other eateries and challenges from a faltering economy, Wendy's doesn't want interruption in the revenue it earns from franchisees, said Howard Bundy, owner of Bundy Law Firm in Kirkland. Bundy has practiced franchise law for 30 years.
Last week, Wendy's reported that profits during the fourth quarter of 2011 dropped by 30 percent from a year ago, despite a 6 percent increase in revenues.
"In the current economy, franchisors, I think, are bending over backward to give franchisees as much time as possible to fix things," Bundy said.
To resolve problems internally, corporations may send letters outlining issues of noncompliance, provide extra inspections from a company representative or allow those representatives to provide informal feedback.
"They're more anxious to help me than to fire me," said Greg Luring, who runs 12 McDonald's locations in Yakima and Kittitas counties.
Termination of a franchise agreement is a last resort, especially if the franchisee runs multiple locations.
"In the 30 years I've been practicing, I've only seen a handful of cases where the franchisee was terminated for food safety issues," said Gary Duvall, of Dorsey & Whitney in Seattle.
According to a lawsuit filed by Wendy's International late last month, it said it extended the deadline for BZB Enterprises to resolve issues at its restaurants.
During inspections in November, Wendy's reported that the North First Street and South First Street locations had 307 and 152 deficiencies, respectively. Some of those deficiencies included not properly keeping a food safety log, the presence of rodent droppings, and mold in the interior of an ice machine.
Thirty days is the standard deadline to make corrections, Duvall said.
But by the time of the Jan. 11 audit of both stores, the North First Street and South First Street stores had had at least 40 days to resolve issues.
The extra days didn't seem to make much difference. The North First Street store corrected only 57 percent of its issues, well below the 80 percent rate requested. The South First Street fared better at 73 percent but still fell below the requested rate.
That led Wendy's to immediately terminate the company's franchise agreements for those locations.
Other problems
Some in the franchise industry wonder if the food safety issue was indicative of other underlying issues.
"What my gut is telling me is that something else was going on," said Joel Libava, a Cleveland-based franchise ownership adviser who runs "The Franchise King" website for those interested in finding and running a franchise. "There might have been some late payments in royalties."
Luring, the local McDonald's franchisee, had a similar speculation. The franchisee may have had low sales or a lack of profitability that may have led to lax operation standards, he said.
"When I've seen an operator fail, it's because of a whole host of problems."
The company has remained mum on why it violated standards.
When calls seeking comment were made by the Yakima Herald-Republic last week, the voicemail box of the Whitefish, Mont., company was full.
Toeing the line
At this point, it's unclear whether BZB Enterprises will gain a new franchise agreement and reopen the locations, or if a new franchisee will take the helm.
One thing is more certain: It's unlikely that national brands will let up on standards, especially for food safety. If anything, they will likely increase.
"There's a lot of changes in our franchise," said Copp, the Papa Murphy's franchisee. "The ones that continue to innovate and are more proactive -- than even the government -- on what their standards are will be better off."















