Woolies upsets its franchisees


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Unhappy franchisees want a word with Woolworths chief executive Simon Susman after his company’s “hostile” bid to buy them out. The JSE-listed retailer plans to stop franchising local stores and buy them back at what it terms “fair value”.Susman said this week franchises were “no longer in the best interest of Woolworths”.

Pretoria franchisee Dennis Hamer, who has three Woolworths stores, said the offer was “unfair” and an “uninvited hostile take-over”.

“The offer needs to be improved. We are not willing sellers,” he added.

Franchise body ‘very sorry’ to see Woolworths leave franchise industry

Last year Hamer headed a group of franchisees who threatened legal steps against Woolworths after an attempt to nominate one of their members to the board was declared invalid.

The Woolworths Franchise Committee – which represents the franchisees – is due to discuss the matter tomorrow with John Fraser, the head of selling operations at Woolworths.

The retailer refused to disclose how much it will spend to acquire its 76 franchises. The buy-back excludes Engen and international franchisees.

Franchise Association of SA executive director Vera Valasis said the body was “very sorry” to see Woolworths leave the franchise industry.

Woolworths said it had become “more complex and expensive” to operate a separate franchise business model with its own systems.

It said franchising was not core business, “complicates” operations and created extra costs.

The group intends to complete the exercise by 30 June 2011.

Source: The Times
 

 

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