Chapter 576 Franchisee Rating
The three-level franchise strategy that Hu Wei mentioned was somewhat similar to Wang Yuanchao's inner thoughts, so he continued to ask with great interest: "General Manager Hu Wei, please continue. How do you break down the three-level franchise strategy?"
Seeing that Wang Yuanchao was interested in her, Hu Wei was greatly encouraged and continued:
"Boss, my idea is for the company to build a flagship store in every European and American country.
As the image display store of the company's clothing brand, we sell the company's clothing while looking for local franchisees.
There are three levels of franchisees. The first level is the national franchisee, who can develop other franchisees locally. The second level is the city franchisee, who can develop franchisees in the city where he is located.
The next level is the third-level franchise, which is mainly to develop franchisees in small towns in the local country."
After listening to this, Wang Yuanchao said, "How can the three-level franchisees be linked together and how can they be managed internally?"
Hu Wei thought for a moment and said, "Boss, my idea is that the management of all franchisees in European and American countries should be managed by our market developers who are responsible for flagship store management. This kind of management will not trigger internal competition among local clothing brands and will be more efficient."
After listening to Hu Wei's thoughts, Wang Yuanchao shook his head and said:
"When we go to Europe and the United States to develop markets, we are basically unfamiliar with the place. They are like fierce dragons crossing the river, but they cannot suppress the local snakes. We are not even fierce dragons. General Manager Hu Wei, your idea is good, but the market development of our clothing brand still depends more on the strength of local people in the market to gain a foothold and develop the market.
So, I agree that franchisees in each country should be divided into three levels. However, it is not feasible for local franchisees to be managed by market developers sent by the company.
I think, since the first level is the national general franchisee, we can develop franchisees locally, so our company only needs to manage the franchisees' purchases and payment collection.
For other aspects, the company will let go and hand it over to the first-level franchisees to manage. "
When Hu Wei heard that Wang Yuanchao rejected the idea she had been working on, she was shocked.
Seeing this, Ouyang Yuanfang immediately said, "Boss, what you mean is that our company's market developers have developed first-level franchisees in the local market.
Only responsible for the franchisee's purchase of goods and the company's payment,
As for how franchisees operate, our company doesn’t care, right?”
Wang Yuanchao took two puffs of his cigarette and said, "It's not that we don't care at all, but we just want to divert the conflict away.
When we enter the European and American markets, the market development personnel of our flagship store should hire a local law firm to protect the company's design patents and comply with the laws and regulations of the local market. So our company should still hire a law firm.
During the opening of our company's flagship store in the local area, we should invest money in advertising.
But regarding local market management, we don’t need to manage it.
We only need to promote and develop franchisees in the local area ourselves or supervise the first-level franchisees, and then ensure the company's capital recovery and profits through factory shipments.
Our arms are not that long, so we should give up the management rights of the alliance merchants. In this way, the conflicts caused by interests in the local market will be transferred to the franchisees and have nothing to do with our clothing company. Do you understand?"
Ouyang Yuanfang rolled her eyes and understood what Wang Yuanchao was thinking, so she nodded and said:
"Boss, do we only develop one first-level franchisee in each country? And are all the local franchisees managed by this franchisee?"
Wang Yuanchao shook his head and said:
"The company cannot develop only one first-level franchisee in each country.
It is necessary to develop two or three master franchisees and let them compete with each other.
Only in this way can we ensure that the company's marketing strategy will not be hijacked by the first-level franchisee. In addition to developing and managing the second and third-level franchisees, the first-level franchisee can also
We can give them the most favorable purchase price.
They can earn the difference in purchase price by developing second- and third-level franchisees, which can motivate these first-level franchisees.”
Hu Wei came back to her senses at this time and asked, "Boss, how do you set the purchase price for franchisees?"
Wang Yuanchao thought for a moment and said, "The global market price of our Victoria's Secret women's underwear sets is 100 US dollars per set. The purchase price for third-level franchisees is 70 US dollars per set, the purchase price for second-level franchisees is 60 US dollars per set, and the purchase price for first-level franchisees is 50 US dollars per set. The supply of second- and third-level franchisees can be purchased by the first-level franchisee and then shipped to the second- and third-level franchisees.
What do you think about allowing the first-level franchisees to have enough profits and motivation to vigorously develop second- and third-level franchisees and promote our company's clothing brand? "
Hu Wei continued to ask:
"Boss, what about the franchisees that our flagship store develops and grows? How should we manage them?"
Wang Yuanchao waved his hand and said:
"After all local cities have developed second- and third-tier franchisees, and the company has opened enough brand stores, we can then draw lots fairly and divide the stores equally among several first-tier franchisees, and let them manage them."
Wang Yuanchao doesn't care about these details. As long as the interests of his company are adequately protected, the management authority of overseas markets is not important.
After listening to Wang Yuanchao's instructions, Ouyang Yuanfang said, "Boss, if this is the case, what are the criteria for a first-level general franchisee?"
"First, the first-level franchisee must purchase 100,000 sets of women's underwear sets and 1 million pairs of Victoria's Secret stockings each year locally.
Second, any Victoria's Secret brand franchisee can only sell the company's clothing brands and cannot sell other brands of clothing in the franchise store. If they breach the contract, the company has the right to terminate the contract with them.
Third, franchisees cannot disrupt the global sales price set by the company and cannot increase the price privately.
Fourth, all franchise stores must follow the same global unified decoration standards as our flagship stores and the company’s requirements, and cannot change the store’s decoration style without permission.”
Ouyang Yuanfang nodded and immediately wrote it down in her notebook, saying, "Boss, how will the salary of overseas market developers be determined?"
"I believe that there will always be courageous men under great rewards. Overseas market developers need to leave home and go abroad to work alone, so the salary will naturally be higher.
Moreover, what is earned abroad is US dollars and British pounds, and what is spent is also US dollars and British pounds.
I personally think that the annual salary of overseas market developers should be set at US$20,000, and they should receive a 5% commission on the profits from market development. What do you think? "
(End of this chapter)
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