10/23/2008 10:48:00 AM
Tensions between O2 and franchisees
Tensions are surfacing between O2 and some of its 96 franchise partners.
Several of the franchise partners have complained of the rising costs from handsets and oppressive licensing fees, coinciding with low footfall and a freeze on opening new outlets.
Franchise partners pay a one-off fee of £40,000 to trade as O2, with further costs payable to O2 on top of the standard costs for leases, staff and handsets.
O2 charges its franchisees £329 for an N95 8GB, while the recent trading price from the GSME trading board is £279.
Franchisees are also questioning the calibre of mystery shopping, which can make or break profitability.
One said: ‘You can get a big bonus up to £25,000 if you hit your volume and mystery shopping score, or you can get nothing. The quality of mystery shoppers is appalling. Everyone challenges the outcomes.’
Jason Phillips, head of retail franchise at O2, said: ‘Customers will have more complex requirements as we move into products such as fixed and mobile broadband. We need to ensure our stores deliver a fantastic experience.’