1. Case summary
On the afternoon of April 13th at 4:30 p.m. Tim McIntyre, the Vice President of Corporate Communications at Domino’s Pizza, received an e-mail informing him of employee misconduct. Damaging videos posted on YouTube by Domino’s employees prompted the webmaster of www.GoodAsYou.org to e-mail McIntyre to alert him of the crisis at hand. There were five videos posted; “opus piece”, “Domino’s Pizzas Special Ingrediants”, “Sneeze Sticks”, “Poopie Dishes” and “Domino’s Pizza Buger”. In each video, the employees were wearing Domino’s Pizza uniforms, which could put the company at legal risk and damage the reputation of the fifty year old company.
Kristi Hammond and Michael Setzer, employees at a Domino’s Pizza franchise in Conover, North Carolina, were responsible for the videos. The videos they posted were vulgar and included the contamination of food while preparing orders for customers. It should also be noted that customer information was included in one of their videos, which is a violation of privacy for those involved. Domino’s Pizza is publically traded company that is made up of franchises and company-owned stores. They operate in over sixty countries and in 2009 they were the market leading pizza delivery provider worldwide. Franchisees “are required to operate their stores in compliance with written policies, standards and specifications drafted by Domino’s corporate headquarters…” (Schwom, Gueldenzoph Snyder and O'Rourke 21). However, this is not to say that franchise owners cannot make important decisions regarding their stores. These decisions include “setting menu prices and hiring employees” (Schwom, Gueldenzoph Snyder and O'Rourke 21). It is up to the franchise owner to then uphold the Domino’s brand name and ensure that they are running their franchise up to code.
Social media websites are so vast that the damage to the Domino’s brand happened within hours and thus, containing it was not an option. Three sites were immediately involved with the postings and from there other people and sites shared the videos on other websites and pages.
The most critical issue that Domino’s Pizza will face is the economic factor. Domino’s recognizes that their customers’ opinions are very important and we must act immediately to address the public. The videos are very damaging to the Domino’s Pizza brand and affect not only the location where they were filmed, but also the 8,700 other locations worldwide. The franchise in which the videos were filmed will have to be closed and sanitized and all products within the franchise will have to be disposed of. This will be expensive for the franchise owners and may devastate the franchise to the point of closure. Other locations will be affected as well due to the fact that the most popular video has already received over 250,000 hits on YouTube and has been viewed worldwide. If customers lose trust in the Domino’s Pizza brand, sales numbers will drop, customer acquisition will become more expensive, and the value of the company as a whole will decrease.
Another issue involves the legal implications of the videos. Domino’s Pizza operates in the food service industry and food safety is always a concern for the company. The videos show direct tampering with food products and a clear disregard for food safety regulations. Tampering with consumer products is considered a federal criminal offense in the United States and these two employees should be charged for the crime that they have committed. Further investigation should also be taken to determine if any other employees were involved in the creation or distribution of the videos. The third issue involves maintaining employee-management relationships within the company. It’s important to recognize that Domino’s Pizza has 125,000 employees and most of them have contributed to the success of the company, not the detriment. This incident involves the behaviour of two