Dunkin' Takes Spying High Tech

Under fire by its franchisees for spying on their business and private lives in order to coerce them into settlement payments and compliance, the New York Post reports this morning that Dunkin' is pushing hard to launch a high-tech surveillance system. It wants franchised stores to be monitored seven days a week, 24 hours a day.

The system links security cameras, including live feeds and hours of footage stored on digital video recorders, to cash register activity to spot suspicious transactions. While owners can log into the system remotely through the Internet and keep tabs on their employees, Dunkin' also can access the system through which it can monitor franchisees. – NY Post

Owners are instantly notified if there is an anomaly in ringing up a doughnut sale. Within minutes they can plug into an Internet connection to see through their store's linked-in video system if an employee put the missing money into their own pocket, or was simply not wearing a proper uniform. That is construed as a useful tool by many Dunkin' franchisees.

The problem is that it is uncertain if the franchisor, who can see the same thing, will use this as a pretense to terminate or punish the franchisee no matter what employees of the franchisor currently say. Although Dunkin’ emailed franchisees some six months ago declaring, “Dunkin’ Brands will not be watching your stores through the March Networks System," it now says it will. Karen Raskopf, spokesperson for Dunkin’, today stated:

Dunkin' is notifying store owners -- those it deems "substandard" -- that they are required to install the system, and that they must either allow Dunkin' to monitor them through it or pay to have their stores inspected. "Video cameras are optional at Dunkin' Donuts," she said. ... "We only insist on a video system for franchisees -- a small number -- that failed to meet basic standards."... Out of Dunkin's 6,500 domestic locations, 800 have been put through the so-called "compliance" program. Dunkin' said about half have "graduated" or are about to graduate. Those that fail are put into another phase, where they are required to install the March Networks system.

Although the spokesperson insists that the majority of franchisees love their franchisor, Dunkin’ is using strong financial incentives to get franchisees to install the spy system:

According to one Dunkin' letter, the franchisee was required either to allow Dunkin' to monitor the stores "24 hours a day, 7 days a week" or pay to have each store inspected every other week at a cost of $350 a visit. ...One franchise owner in New York agreed to install the cameras after Dunkin' offered to keep his royalty rate at 4.9 percent under the old agreement, rather than raising it to 5.9 percent. "I feel like I have to do it," the franchisee said...

Notice who gets the full March Networks System with video cameras – those marked problem franchisees. One would think that the franchisor's management team might realize that such a practice is a recipe for very poor reception. But maybe a few franchise owners may point at the video cameras and wear it as a badge of honor to advertise that they are a problem child.