#14 “Franchise Woes”

There’s plenty of benefit in owning a franchise outlet which has name recognition, but…

Along with all the many reasonable compliance standards, (you have to use the same color scheme as all other locations under the brand, and you have to have the same pricing structure, etc.), there are some edicts which sting!

-I remember a pizza chain back when I was a kid which was struggling with this exact problem. The owners HAD to buy pizza dough from a single, licensed supplier. It was a closed market. You couldn’t shop around for the best deal. It was the approved supplier or nothing. (And that one supplier may or may not have been owned by a friend of the company.) Anyway.., the markup was nuts! It was something like 20x what a blob of pizza dough should ever reasonably have cost, but if you owned one of their pizza locations, you HAD to buy it or you’d lose your franchise license! What a scheme!

I don’t remember how that story panned out, but watching it happen in real time but this time with computer parts makes for a frustrating experience.

Now.., to be fair, compliance with regard to shipping software and hardware makes a lot of sense. Computers are touchy things, so for reasons of security and reliability, making sure that everybody is on the same page, using the same system and the same rules, can be a matter of corporate survival.

However.., when the markup on a new ‘company’ computer is many times what you could buy the exact same hardware for on your own… And if your old computers are perfectly capable machines with nothing wrong with them… Being asked to swallow a $15,000 bill can be a lot to take..!

For those retailers out there who decided to go it alone, who put their own name on the store front and build up their own client base through hard work.., not having to deal with these kinds of hassles certainly has a certain appeal!

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