Daphne'S Transformation Of Direct Franchisee Refused To Renew The Contract

Recently, the part from the national tertiary market Daphne Franchisees came to Shanghai to "defend their rights" with Daphne.

According to the franchisees, after the change of senior leaders of Yongen Investment (Group) Co., Ltd. (the owner of Daphne brand), they began to implement new business strategies and gradually marginalized the franchisees.

Huang Yingzhe, director of Daphne's public relations department, said in an interview with reporters that many franchisees did not renew their contracts when it was time to renew their contracts, "I don't know very well and will not accept new franchise applications at this stage."

Yan Yiming, a well-known rights protection lawyer, told the reporter that according to the previous signing of the two parties, franchisees can protect their rights through legal means.

Refuse to renew the contract with the franchisee

A franchisee from Hubei Wuxue told the reporter that she joined in 2009, with a three-year contract cycle. "Last year, the company wouldn't let me renew my contract." Two franchisees in Huanggang and Zhongxiang, Hubei, revealed that at the beginning of joining, the company charged them 20000 yuan of franchise fee and 5000 yuan of deposit, and charged 15000 to 30000 yuan of deposit for ordering according to the area, plus decoration fees, etc, "The initial investment is at least 500000 yuan, and the store has not yet made a profit for three years, and the cost has not been recovered."

On the materials provided by the franchisee, the reporter saw that franchisee customers in all regions were told that they would not renew the contract when the contract expired. Hunan is said to bear the brunt. At present, some franchisees have started the "franchisee rights protection" action.

Huang Yingzhe said in an interview that Daphne currently focuses on developing direct stores, and "I don't know very well" about many franchisees' failure to renew their contracts when they reach the renewal time, "At this stage, new franchise applications will not be accepted. For the renewal of existing franchisees, the company will make a decision based on the comprehensive consideration of the operation and management capabilities of individual franchisees, local market demand and other conditions."

In fact, Daphne has played down its franchise business. Daphne said in the interim performance report released this month that a stable store expansion plan is very important for sustainable development, so it adopted a strategic store opening plan focusing on the development of direct stores. The company believes that this will not only strengthen the long-term development of the brand, but also help the group quickly respond to market changes. In the first half of the year, Daphne added 411 direct stores and reduced 45 franchise stores.

　 Change of overall operation mode?

Daphne said in the email in reply to the reporter that the self operated channel is the main direction of the company's future expansion.

Previously, Daphne's online business effect was not obvious, and the desperate development of offline business became Daphne's goal. However, the development speed of the first and second tier cities of the company is difficult to sustain, and the third and fourth tier cities where the franchisee has opened the market have become the key to the follow-up development of the company.

"Daphne's practice (joining to direct marketing) is not exceptional, and there are similar situations in the industry," Ma Gang, an independent clothing observer, told reporters. Others in the industry believe that, at present, joining the direct marketing is a development direction of the footwear and clothing industry. This can eliminate the intermediate links and improve the turnover speed and operation efficiency. Compared with franchise stores, the contribution of direct stores to sales cannot be underestimated.

"With the gradual seizure of market share, the competition between the first tier and second tier cities has become more intense. This is also an important reason for Daphne's direct marketing channel to 'sink'," said an analyst in the footwear industry.

Ma Gang told reporters that the third, fourth and lower tier cities are far away from the company, and the market is small. It is difficult to manage, and the profit is relatively low, so the direct marketing risk is relatively high. However, after the franchisee opened the market, the company has gained brand awareness, which makes it easier for direct stores to enter the company. Daphne's divestiture and alliance will make it more competitive by increasing direct sales, which is a change in the overall operation mode.

Franchisee: Daphne is forcing us to quit

Due to the "sinking" of the company's direct stores, how to deal with the aftermath of franchisees is a thorny problem. According to the situation reflected by the franchisee, the company has taken some actions to force the franchisee to withdraw.

In August this year, the week before the "Tanabata Festival", Daphne launched a full promotion of 99 yuan. This has caused widespread dissatisfaction among franchisees.

Huang Yingzhe said that when carrying out promotional activities, franchisees can adjust the price by themselves, "not necessarily according to the regulations." But according to franchisees, if they raise the price, they will be affected. {page_break}

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On August 22, the franchisee of Hubei "Daphne" asked the company to immediately stop (the above promotion) activities or compensate customers for the sales price difference. However, the company refused to accept it and replied that, according to the relevant contents in the Franchise Futures Purchase and Sales Contract and Franchise Policies and Key Points signed by both parties, the company's promotion price implementation plan is within the scope of the contract signed by both parties.

Yesterday (August 28), the reporter saw a "Complaint Letter" signed as "National 'Daphne' brand franchisee". The Complaint Letter requires Shanghai Administration for Industry and Commerce to file and investigate the illegal acts of Yongen Investment (Group) Co., Ltd. according to its functions, so as to maintain fair competition in the market. Franchisees believe that the "full 99 yuan" sales activity of the company headquarters violates the provisions of relevant national laws and regulations.

lawyer: Franchisee Rights can be protected by law

Mr. Ma, the franchisee, revealed that Daphne had a franchise commitment on its website to ensure that the franchisee could obtain sustainable development opportunities and prospects, and Daphne was also looking for a lifelong business partner. No one expected this to be the case.

Yan Yiming told reporters: "Although the contract terms were not included, the two parties signed the contract on the premise of long-term cooperation, which can not be simply ended unilaterally. If the company's franchise website has hinted at such long-term cooperation, the franchisee can seek legal channels."

In addition, when reviewing the Franchise Futures Trading Contract of "Daphne" brand, the reporter found that there was no provision on the pricing right during the promotion in the contract. However, it is found in Article 11 of Daphne's Franchise Policies and Key Points "Purpose of the Rules for the Maintenance of Market Sales Price" provided by the franchisee that "the uniform market sales price shall be uniformly announced by the distribution department under the management of the franchisee or the franchise business department of the company, and any franchisee shall strictly comply with it" and "For the unified market sales price announced according to the regulations, the franchisee shall not adopt the public or private price increase or discount sales behavior at any time". Does this clause give the company the pricing right on products?

Yan Yiming believes that the regulation of commodity sales price is itself a practice of restricting competition, which violates《 Antitrust Law 》It is suspected that the company has obvious advantages over franchisees. According to this series of provisions, the company has abused its advantageous trading position, "violating the principle of fair contract, and the practice is also illegal."

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