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The Mershimer Group’s Mike Mershimer on some franchisees and store owners selling fake products from donuts to handbags and how companies investigat...
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Never guess that that's delicious jelly -- that you get with your morning coffee might actually be a fraud some big brand franchise owners are take major heat really.
They're selling their company issued products to stores and restaurants and passing -- imitation products instead.
My next guest is Michael marriage where he's the founder of -- of our group and CEO of each asked brands both companies.
That create loss prevention programs for a lot of well known brands even needed to do that Michael.
-- -- coming on I mean our our -- -- a huge problem.
Well -- that's outside just the brand of -- -- that that the industry of bonuses -- across industry the fact that counterfeiting is going on.
And what we do is we try to work with brands major brands that help make sure that the standards that are issued by the Brandon how you provide -- server product.
Is being followed to the -- by those people trusted with the brand.
I have so many questions I mean first of all it.
It seems like so much work to go out there and sell off.
What you've been given as a for what you purchased as a as a franchise are and then go and create fake products like are they really making that much money.
OK let's be clear Melissa it's not the franchise is sort it's going out there and they're up knock off products.
It is the people they Entrust with the brand admit it's a very small portion of the folks that that.
This -- tightly regulate so we're talking about what problem -- the -- right up its -- and a very small portion.
But -- and so they make -- money.
They make money shoring -- -- some of them are very among the majority of franchise owners out there to a great job make a lot of money into a great job and represented brand but there's as as any in any industry.
-- -- -- -- -- There's a small portion of those folks that are gonna try to get a little bit more out of the brand and they really should be getting out so they might -- on the products elsewhere.
Or providing something that they.
That they don't have access to or shouldn't be selling and -- Think they'd make extra money on the side and that's not fair to the hard -- and franchise owners out there that are paying their fair share of the marketing funds.
And Citi royalty -- and a royalty funds.
-- because they're caught they're basically paying for that other persons.
The marketing and advertising.
So would seem the most problems I mean where does this where's this most likely to occur where all we -- talking about Dunkin' Donuts about -- -- visualizing and I.
I'm still trying to figure out how making at -- don't have -- cheaper needed but regardless racing the most of this.
Was not industry specific so let's -- -- where I see the biggest issue is with brands that don't that are trying to set -- franchising -- -- thing.
They don't have specific controls some place and they don't have things some place to monitor.
How those people they Entrust of that brand are serving their product like well that's the biggest risk.
But what kind of products -- If it could be anything -- can be anything from purses to shoes to pizza to.
Ice cream you -- what's happening out there in some cases is the folks are cutting corners just like in any other industry.
And what my organization tries to do is identified -- for the brand measure that that the impact of that to of that.
Don't miss branding that's going on out there and then they have wasted a lot and take care of it.
So how do you do what's a typical day like for -- Well a typical day like for -- as we have -- shoppers across the country that when a brand has that concerns -- We're typically just have a you have program a place for mystery shopping at our -- shoppers go out and they might go visit -- restaurant and have a meal.
And in -- during the course of the mail they've got to provide feedback on that the service on the quality of food.
And call it food can be anything from there's not enough pickles on late on this on his murder -- -- -- pepperoni on my.
This isn't the right product.
And so that's the what happens and -- that report gets funneled back to the brand executives and they make the decision on whether of what they wanna do now.
And in my -- ticket he's about to go back and -- headed to a lab to see if it's not.
The real don't -- the real -- or whatever that the place has been sold.
Well they suspect that that's the case what they'll do is typically set at one of their own employees or one of our folks what might go -- and buy that product.
And then ship it to back to wherever they want so a lot of these brands these brands all have the wrong kitchens where they develop new products and -- quality assurance testing the products before they release that.
And what we do is you know what what they'll do is they will use those same labs to determine whether they feel that's -- as it is legitimate product yeah.
And diligent -- product they're not manufacturing.
Products they're typically using.
Unapproved.
Materials to pressure to make that product so might be a different mix for -- for baked goods that might be different bagel brand a might be a different a -- rice -- and they've been passed often a premium ice cream retailer.
But there are two problems with -- -- we have front -- -- -- -- it could be dangerous -- -- it could be.
Adding -- have three -- was have peanuts are just not representing what's really being sold the -- also.
Is damaging to the brand because they've been sold -- franchise to uphold the certain standard right.
That's exactly right and that's that is that in in in -- is the the problem.
Is the brands are zealous about protecting those brand names as the most important thing to just think about your favorite restaurant brand your favorite retail brand.
You don't you double the last thing they wanna have happen is have a black cloud over the head because of something that they had no control over being and being manipulated being done by one of the sample that is supposed to direct so you're absolutely right to be a brand -- If it gets out there especially.
In a viral environment that -- and.
Absolutely Michael -- -- thanks for coming on interesting stuff we appreciate your time.
Thank you know.
