A further three months have passed.

A further three months have passed. Pizzatime now has 15 franchised restaurants in C-land, mainly in large towns and cities. You have received the following email:

From: Monica Lall, Chief Executive

To: Financial Manager

Subject: press report

Hi,

Have you seen the latest news story? I have attached a copy to this email just in case.

We need your advice. As you know, the franchise agreements that we have signed with restaurants in I-land and P-land specify that there will be a standard employment contract for all employees. Franchise holders are required to offer their restaurant staff the same terms and conditions as we have in the restaurants that we own ourselves. We have always been regarded as responsible employers and we pay more than the minimum 'living wage' that has been calculated by the governments of both I-land and P-land.

Potential franchisees in C-land refused to grant us the right to set a minimum rate of pay or to standardise terms and conditions. We were forced to permit them to decide for themselves in order to have them sign up. Legally speaking, none of the restaurant staff in C-land work for us, they are all employees of the franchise owners. Perhaps we should have foreseen this, but we did not appreciate that the culture in C-land was quite so unsympathetic.

Regardless of what has gone wrong in the past, we are clearly going to have to make changes. We have already written to all franchisees in C-land to inform them that we will be monitoring their employment practices closely. Unfortunately, we have not yet decided how we are going to do that.

I need you to brief me on two issues.

Firstly, how big an impact can national cultures have on business practices? Was it unethical of us to have agreed to permit franchisees in C-land to set their own employment terms?

Secondly, what reporting systems might we put in place to ensure that C-land's franchisees treat their staff in a manner that would be deemed acceptable in terms of our corporate values? Explain how we could make this monitoring effective.

Regards

Monica Lall

Chief Executive

Pizzatime