Carphone Warehouse Business has ditched its franchise programme less than two years since launch, amid accusations from franchise partners that the programme was 'too draconian'.
In an email to partners the company said it had decided to shut down the franchise initiative to ‘focus on our core dealer community to service SMEs and deliver growth for us in 2015.’
All current franchisees, estimated to be fewer than 15, will be offered the option to migrate to either the full dealership scheme or a new affiliate model set to launch this month, at the end of their contract term.
However sources say the franchise programme failed because it had proved unpopular with franchise partners who accused Carphone Warehouse Business of treating them as employees rather than business partners, allowing them little autonomy.
One source said: 'There are a lot of hacked of franchise partners. They complain they have been treated like staff, being made to report in to Carphone Warehouse offices and made to go on training courses at the drop of a hat. Carphone Warehouse Business didn't seem to understand that franchise partners are not the same as PAYE staff. Franchisees need a level of autonomy, they are entrepreneurs, not employees. The programme was too draconian.'
Some partners were also unhappy with the level of leads the Carphone Warehouse Business support team generated from stores and online, according to sources.
One said: 'It was not a very nice experience and partners were paying for leads that just didn't turn up.'
Carphone Warehouse Business launched a trial of its franchise programme in April 2013 with two franchise partners. Six months later, after declaring the trial a success, the company formally launched the scheme. Each new franchise partner was given a geographic region covering between 9,000 to 12,000 SMEs after passing a six month trial period and paying a £5,000 fee.
The franchise programme offered full back office support including accounts and administrative support, order fulfillment, marketing and sales literature, lead generation and post sales customer service.
It was set up by Carphone Warehouse Business as part of a major drive into the b2b market and was aimed at new entrants in to the mobile business market, with existing Carphone b2b dealers barred from joining.
The new affiliate scheme, which replaces the franchise scheme, launches this month. It offers entrants their own brand partnership deal with Carphone Warehouse Business and is aimed at dealers new to the mobile market as well as IT and fixed line resellers.
The company told partners: ‘It has been designed as a perfect way to enter the mobile market either for non-specialists wanting an additional revenue stream, resellers in other channels such as fixed or IT who want an easy-in to converged mobile solutions or those just starting out as a mobile dealer who want a bit of time to learn the ropes before moving onto the full dealer model.’
Affiliate partners get full customer ownership plus ongoing revenue payments with Carphone Warehouse Business structuring deals, completing connections and managing customer services.
However terms for affiliate partners differ from those applied to the company’s dealer partners. Whilst all affiliate partners signing up to the new agreement will earn the same level of commission as a dealer, they also have to pay a £50 transaction fee per connection to cover the sales and service management solutions provided under the scheme.
Carphone Warehouse Business was unavailable for comment.