POLITICAL RISKS

In the immediate aftermath of the 9/11 attacks, symbols of America became targets all over the world. As the most recognized American icons, franchises were high on the hit list of those protesting against the bombing campaign in Afghanistan and later the war in Iraq. The franchised operations were a representation of the American Way. In Karachi, crowds chanting "Death to America" made their way through the streets of Pakistan's largest city and, when turned away at the US consulate, headed straight for one of the 18 Kentucky Fried Chicken units and set it alight. In Indonesia, home of the world's largest Muslim population, three KFCs were looted. Similar actions and boycotts of American products spread well beyond Muslim countries , too.

Consider the widespread problems faced by McDonald's - a pipe bomb in Istanbul; a bombing in Xian, China; a revelation the following July that militants arrested for a bomb attack on the US consulate in Karachi had also been planning to bomb McDonald's; a bombing of a franchised unit in a suburb of Beirut; another blown up in Moscow in October, 2002; one torched in Riyadh, Saudi Arabia the following month; three people killed at a McDonald's at an eastern Indonesian town on the occasion of the breaking of the Ramadan fast. Indeed, since 1990, franchises have been bombed or burned by various groups in France, Belgium, Mexico, Britain, Chile, Serbia, Colombia, South Africa, Turkey, and Greece. The most recent attack to the date of writing, following the beginning of the Iraq war, wounded five in a suburban store in Beirut. Such actions were unlikely to have been considered at the risk assessment planning stage when franchising in these countries was being evaluated.