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Green Means Caution

Tough new FTC rules add peril to franchisors’ eco-friendly claims


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Franchisors face a new set of guidelines when claiming they’re environmentally correct. But customers pose the tougher test, quick to blast companies they deem insincere as so-called greenwashers.

New Federal Trade Commission rules dictate what franchisors can and can’t say about whether their products and services are eco-friendly. But more formidable are consumers quick to blast companies they believe to be greenwashing, what Greenpeace calls the “cynical use of environmental themes to whitewash” corporate misbehavior.

“They are going to probe you, a full medical checkup from top to bottom,” says Carl Griffenkranz, vice president of marketing for Granite Transformations in Miramar, Florida, about consumers. “Don’t greenwash to make it seem like it’s something it’s not. I get very passionate about it, because I don’t think it’s right to lie to the consumer.”

Tony Lamb and Ava Lamb

Kona Ice founder Tony Lamb, with daughter Ava, built his own truck to cut the fumes.

Granite Transformations is one of countless franchise brands trying to stake out a position in a new age of environmental awareness, and among four whose methods are profiled here: Cava Grill, which tries not to boast about its green practices; Kona Ice, which built its own shaved-ice truck to belch much less exhaust than existing models; and Instant Imprints, which changed its screen-printing method to reduce the space needed in its stores.

They’re all benefiting from improvements in the supply chain, says one distributor, Scott Attman of Acme Paper & Supply, which he says has come a long way in a decade.

Lasagna on the floor

It was 11 a.m. and lunchtime that day in 2003, and the cafeteria at the U.S. House of Representatives was proudly debuting its first one-week test of compostable dinnerware—but then the lasagna started plopping on the floor.

“I don’t think it was 11:01 yet, and my phone rang and they said, ‘All the food is falling through the cases,’” recalls Attman, the Acme executive who had distributed the compostable plates, in the days when such products were new.

“These are like the first virgin products off the line. I called the manufacturer and he said, ‘Let me call R&D.’ They called back and said, ‘No hot foods. The product melts at 100 degrees.’ And they’re serving lasagna! So we were the guinea pigs for them.”

Attman can laugh at the story today, after a decade when manufacturers churned out scores of products deemed to be better for the environment and still hold up to hot food and other requirements.

Now the challenge has moved beyond melting plates, to include fines that can be imposed by the FTC since it published new rules October 2012. The revised FTC Green Guides mean marketers can’t make claims about products that they can’t back up, a development that Attman welcomes but believes doesn’t go far enough. (See related stories, pages 37-41.)

Among other changes, the guides “caution marketers not to make broad, unqualified claims” that a product is environmentally friendly or eco-friendly, because an FTC study shows that consumers perceive many more benefits than typically exist. “Very few products, if any, have all the attributes consumers seem to perceive from such claims,” according to the FTC.

The guides also advise marketers “not to make an unqualified degradable claim for a solid waste product unless they can prove that the entire product or package will completely break down and return to nature within one year after customary disposal.”

This is key to Attman, who says the word “biodegradable,” popular during the last 10 years, should be excised from the vocabulary. “By definition just about everything is degradable, but it doesn’t make it green,” he says. “Compostable” is the preferred word today.

“It’s the first time that they’re holding people responsible for the way that they’re marketing products,” Attman says about the FTC. “Up until now everything could be labeled green, and if it was better than something that was used before it could be called green. They’re saying now, that’s not enough.”

‘We just live off cheap oil’

Griffenkranz said Granite Transformations built a manufacturing plant in Florida seven years ago, designed among other things to capture the wind for keeping it cool—it has no air conditioning. A water recycling plant is on site to claim water from the marble and granite polishing lines. “The Department of Transportation picks it up from us and they put it in roadbeds,” he says about the runoff.

Granite Transformations is owned by an Italian firm and does business around the globe, which Griffenkranz says makes the difference in its attitude toward the environment. “It’s culturally ingrained within the organization,” he says. “I travel outside the country, and we think differently in the U.S. in terms of the environment. I love my country so I don’t want to criticize, but we just live off cheap oil.

“We built our whole country on the idea it will always be cheap and plentiful. Now we’ve had to readjust our thinking.”

Another franchisor, Instant Imprints in San Diego, has moved away from the company’s roots in its newer stores—it was started by screen printers—to a process for decorating T-shirts that takes up less space and generates less wastewater, says Jay Holguin, vice president of marketing. Stores that once needed 1,500 square feet to accommodate screen-printing services can now fit into about 1,000.

The stores have added service lines, now numbering six, to become a one-stop shop for businesses. Its primary apparel supplier offers organic cotton T-shirts, bamboo blends and some products made only in the U.S.A. Its advertising specialty products include charging units for phones and iPods that use solar power.

Holguin believes customers like the green offerings when they see them. “They’re not coming in with that top of mind, but in the discussion that will be drawn out,” he says.

A new fast-casual restaurant chain called Cava Grill, based near Washington, D.C., is working to make its practices environmentally friendly, but doesn’t want to shout about it. Brett Schulman, managing partner, says the company has built four corporate-owned stores and may consider franchising in the future.

They recycle bottles and cans, of course, plus all their dinnerware is compostable and goes into special waste bins along with food scraps. It costs about 10 percent more than usual to pay a hauler to take away the compost, something that Schulman is working to change.

He says landlords don’t always believe in compost, which he says is managed like any other trash, in a container but with only organic material. “They picture a big pile of stinking garbage with flies buzzing all around it,” he says with a laugh.

Schulman believes it’s best to put food and service first at the restaurants, and then “as a second tenet” to put in place sustainable practices and let consumers discover those on their own. Bragging can backfire, as companies from McDonald’s to BP to Toyota have learned—McDonald’s, for example, once drew criticism for painting its famous golden arches green.

Build your own truck

Kona Ice, the mobile shaved-ice franchisor based in Florence, Kentucky, provides the final tale of franchisors going green—although the list of examples is much longer than can fit in this story. Its founder and president, Tony Lamb, decided on a trip to New York that he wanted a better model than the typical exhaust-belching truck.

“There’s an ice cream truck on every corner, and they’re running a diesel generator on every corner, and every corner smells like diesel fuel,” he says. “We used to own a Mr. Softee truck, and what a diesel does is pump out the fumes. We were burning 20 gallons of diesel a day on our Mr. Softee trucks.”

He decided he needed an expert to build something new, so on the advice of his father he contacted Prevost, the luxury motorcoach maker. “We flew an engineer out here and he gave us these great finishing touches.” Then he convinced a manufacturer in Elkhart, Indiana, to make a handful of prototypes, even though “it’s hard to get a guy to build three prototypes.”

Much tinkering and many changes later, the 300 Kona Ice trucks on the road today have among many features a single diesel engine rather than the typical two, and when parked run off a 12-volt battery rather than a generator. Franchisees can park and service customers with zero emissions.

Lamb is pleased with his invention, but sees the truck as just part of a franchise that restores the frozen-treat vendor to its rightful place in society, before any tattooed, pierced guy in a broken-down Chevy could drive around selling Popsicles with freezer burn, as he puts it.

“We didn’t build a cheap ice-cream truck. We built a $100,000 shaved-ice truck. We were coming in to do it at a higher level,” Lamb says.

“For me it was about taking something that had been a great American icon, which is the ice cream man and the ice cream truck,” he says. “This was a guy who wore a tie, who was respected in your community, and it had evolved down to the lowest common denominator. And we said, let’s take it up a notch.”

 

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