Imagine you had just invested your life savings into a Fresh Slice Pizza Franchise location when you read the headline in your local rag “FreshSlice Pizza owner had affair with employee before she was fired, judge rules”. Chances are you won’t be feeling a lot better than Ray or his family.
Some people might argue that those kind of stories are not important and that they don’t affect the business.
Those people are wrong.
The first question I’d ask is ‘Did Mr. Russell have a prenuptual in place?” If not, the ownership structure of their chain might quickly change.
The second question I’d ask is ‘If this is how Mr. Russell conducts himself in his personal moral life, might he also compromise on business ethics issues – like how he deals with looking out for his Franchisees’ best interests.”
Everything just became very shaky, and a gambling man might make a wager that the FreshSlice stock, if traded on the exchange, just lost a few percentage points.