Daphne Unilaterally Cancels The Contract And The Franchisee Angrily Accuses It Of "Destroying The Bridge By Crossing The River"

In the afternoon of September 3 Daphne The store was crowded, and there was a huge promotional poster on the window, which said 99 yuan for the whole store. The shop assistants obviously can't cope with it, and the goods that are usually placed meticulously appear to be numerous and messy. Like the shop assistants, Daphne Group, a Hong Kong listed company, was a bit busy in the "tail" of this summer: besides clearing the inventory at a low discount, it also had to deal with franchisees. Recently, Daphne unilaterally announced that she would terminate the contract with the franchisee to promote the development of direct marketing, which led many franchised stores to gather in Shanghai to discuss.

　　 "De joining" has become the norm

Daphne above, located in Rushan Road, Pudong New Area, is a direct sale store. It is understood that Daphne's franchise stores are mostly located in county-level cities. Previously, in order to expand market Scale: Daphne has recruited a large number of franchisees in the second and third tier cities and below. It is reported that Daphne has 4958 direct stores and 1010 franchise stores in China.

This year's interim performance announcement shows that Daphne will adopt a strategic store opening plan focusing on the development of direct stores, and believes that this will not only strengthen the long-term development of the brand, but also help the company quickly respond to market changes.

In fact, before the public announcement, Daphne's "de franchising" has traces to follow. Daphne's 2010 financial report data shows that from 2009 to 2010, the growth rate of direct stores was 9.4%, while the growth rate of franchise stores was as high as 25.5%. By the end of 2011, Daphne's direct stores had increased by 16.05%; In terms of franchise stores, the growth rate was only 7.21%.

It is understood that in order to speed up the transition from franchise to direct marketing, Daphne has made a "killer attack" on franchisees: on the one hand, shorten the contract period and transition period, Daphne will give franchisees a one-year "transition period", and will not renew the contract after the expiration of one year; On the other hand, reduce the profit space of franchisees. Daphne recently held the "full 99 yuan" activity in full swing, which broke the sales bottleneck, but also forced the franchisee to a dead end; The third is the exclusive product line of the direct store. Daphne headquarters intends to narrow the sales scope of franchisees and force franchisees out.

This is done in Franchisee It seems that it is really "destroying the bridge by crossing the river", because they were the collaborators who helped Daphne open up the county market and made contributions. In fact, not only Daphne, but also many well-known brands have abandoned their "vanguard forces" one after another after using franchisees to expand the market. For example, the Danish fashion giant Lingzhi Fashion Company terminated the agency agreement between its ONLY brand and its franchisees, while domestic well-known enterprises such as Li Ning, Sima Youngor, Little Fat Sheep, Quanjude, Goubuli, Yonghe Soymilk, Suning, etc. also began to transform from a franchise system to a direct marketing system.

　 The development direction determines the business model

Li Zhe, the management consulting partner and vice president of Zhenglue Junce, told reporters that the franchise chain business model is more suitable for the expansion of enterprise brand size, and can better penetrate into the third and fourth tier city markets. However, if an enterprise only needs to operate its own brand products in the first and second tier markets, the direct unified management model will have greater benefits, Because it is easier to feedback market information and improve product quality according to market trends.

It is reported that joining can help brand enterprises that have just entered the market with unstable foundation reduce sales and management costs, expand brand awareness and reduce competition risks. However, with the increasing number of franchisees, many drawbacks have also emerged, which has caused a negative impact on brand enterprises in the market development.

In contrast, the direct marketing model can be very good for the company to implement unified management and planning, and is conducive to the effective and rapid implementation of company management. Therefore, when the market development entered a stable period, the former "meritorious officials" gradually became a shackle to the development of enterprises, and enterprises began to embark on the transformation road of "de franchising".

"There are two reasons for enterprises to do so, one is the change in the direction of enterprise development, the other is that today consumers pay more attention to the brand and quality of goods, and the change in consumer demand is also the reason for the change in the business model of enterprises." Li Zhe said.

Niu Haipeng, a professor of Renmin University of China Business School, told the reporter that this was determined by the development of the enterprise itself. At different stages of development, the enterprise will inevitably choose different business models. Franchise chain has led to the weakening of enterprises' control over products, which is a disadvantage for some enterprises to develop their own brands.

However, as for the contradiction between the enterprise and the franchisee in the transformation, Niu Haipeng believes that in the long run, the enterprise should ensure that it is "easy to get together and disperse" with the franchisee. After all, the franchisee also lays the foundation for the development of the enterprise brand.