Hotline: 1800 102 2007
X
Loading
Search Business Opportunities
Advisory 2009-08-07

Replacing over charging vendors

A franchisee takes a franchise to put his money to good use and gain profit. Being overcharged by company vendors is a situation that is witnessed by a large number of franchisees. So if you are a franchisee, and you feel that your money is being swindled

By Neha Malhotra Sub Editor, Franchise India Holdings Limited, Web Division

In a franchise arrangement, the franchisee is required to buy merchandise from vendors specified by the franchisor only. This is done to uphold a level of touchstone. But in certain cases, some franchisees feel that these vendors at times over charge for certain supplies which are available in market for a lesser price. In such a situation, the franchisee feels that he is not putting his money to good use. Some franchisees also feel that the franchisor should allow them to make purchases from other vendors offering a better deal, but as the franchisor needs to maintain standardisation across his outlets he may not permit this to happen.  So, what can be the probable solution in such a situation?

As a franchisee, you can at such times suggest the franchisor about availability of same quality products at a better price with another vendor. Instead of waving off the idea, the franchisor can act upon it. The franchisor can deploy an inspection team to visit the named vendor with the franchisee who has made the proposal. The team can then ascertain if the supplies made by the vendor meet the requisite company standards. In case they do, the company may allow you to carry on the purchases from the vendor, or else you may have to continue to procure from the vendor recommended by the franchisor. If the rates and the standard of goods by the suggested vendor bear  advantage, the franchisor may allow all his franchisees to buy products or services  from him. This in a way will be beneficial to the franchisor also.

When we asked Pawan Gadia, Vice President Ferns N Petals about such a situation, he said, “Absolutely, why not! If we can get the same product and quality at a cheaper price than what is being currently offered by the company vendor, then we shall definitely adopt a pragmatic approach towards it. Such a deal is favourable for the franchisee, the company and the customer.” He further said, “If your competitor can provide better price, then what’s the fun of doing business?” Ferns N Petals has also been in such a situation where they did change a vendor on the suggestion of a franchisee. Ajay Saini, COO, Yo! China, opines, “It is not very easy to change a vendor every now and then as a lot of things need to be considered before making such a decision. However, there is no hard and fast rule, that it cannot be done at all; just that the probability of such a situation is five to 10 per cent. Franchisors need to be flexible and such a thing is definitely possible.”

Forcing such decisions on the franchisor or not talking about them at all is not the way to solution. The franchisor should be given ample time to work out details and act on them. Just wait and watch to see if it was meant to be or not.

Comment
Cathy 05, Jan 2012 at 11:48 AM
How neat! Is it really this spilme? You make it look easy.
Related opportunities
  • Cosmetics & Beauty Product Stores
    Cosmesis India is headed by Dr. Surindher, the Principal Plastic..
    Locations looking for expansion Karnataka
    Establishment year 2000
    Franchising Launch Date 2015
    Investment size Rs. 20lac - 30lac
    Space required 800 - 2000 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Bangalore Urban District Karnataka
  • Pizzeria
    Start your own pizza joint by becoming a Go69 Franchisee:..
    Locations looking for expansion Uttar Pardesh
    Establishment year 2014
    Franchising Launch Date 2015
    Investment size Rs. 2lac - 5lac
    Space required 400 - 800 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Lucknow Uttar Pardesh
  • About UsValtellina & Welhouse  is a brand of Bhatia International..
    Locations looking for expansion New Delhi
    Establishment year 2002
    Franchising Launch Date 2017
    Investment size Rs. 30lac - 50lac
    Space required -NA-
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater South Delhi New Delhi
  • After School Activities
    Become a Franchisee of the fastest growing SIP Abacus programme..
    Locations looking for expansion Tamil Nadu
    Establishment year 2003
    Franchising Launch Date 2003
    Investment size Rs. 2lac - 5lac
    Space required 800 - 1500 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Chennai Tamil Nadu
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories