Daphne'S "Go To Alliance": Unfeeling Or Tactics

Daphne brand of more than a dozen three or four line cities

Recently gathered in Shanghai, to make a claim to Daphne: the franchisee has opened up the market for Daphne, and now unilaterally decided to give up the franchise business, which makes the profits just not even recover their costs.

Huang Yingzhe, director of group public relations, denied the idea of "going to join".

He told the first Financial Daily reporters that the existing chamber of commerce is properly handled, and there is absolutely no such thing as "one size fits all".

"If the franchisee meets the requirements and has a good business model, there will still be opportunities for further cooperation."

"From adjustment

From the point of view, Daphne can take this kind of treatment into consideration.

Zhang Guoyuan, an associate professor of the school of international law, East China University of politics and law, told reporters, "but all parties have agreements, and the relationship established is not unilaterally relieved."

"Children were recovered when they were raised."

"If I had known the situation, where would I go to join it?" Mr. Chen of Jujube, Hubei, was somewhat angry. He was one of the franchisees who went to Shanghai to talk about this.

Three years ago, Mr. Chen and Daphne signed a three year contract with a total investment of $20 thousand and a total of 110 thousand yuan to become a franchisee of Daphne.

"In the past 3 years, we have invested 5. 6 million, but we have only recovered about 300000. Such a situation has not been returned for five to eight years."

Mr. Chen told our reporter, "we are all heavily indebted."

Joining Daphne, Mr. Chen is running as a business.

In the initial stage, Daphne did not bring profits to him.

Due to the fact that the local market has not yet been opened, plus the cost of advertising and store rentals, Mr. Chen's shop started at a loss.

It wasn't until a year later that business began.

However, Mr. Chen, who began to make profits, suddenly learned that Daphne would not renew his contract with him.

"We just raised the child, and it will be taken back."

Mr. Chen said.

According to Mr. Chen, Daphne's annual order index has four grades, reaching different indicators will enjoy different degrees of preferential treatment.

His franchisee has basically risen to level third, and every year he can complete the required performance indicators.

"I don't know how it refused to renew my contract."

Even more unfair to franchisees, they think Daphne is using all kinds of means to force franchisees to stop the contract.

Mr. Chen told reporters that last year, the price of a pair of shoes for Daphne was 99 yuan, but the price tag was only 79 yuan, plus the cost of staff salaries, and a pair of shoes had to lose fifty or sixty yuan.

"This incident is not a problem of large franchisees. There may be a small number of franchisees. They are faced with some ambiguities in terms of contract terms which are not renewed. We have arranged specialized units to deal with this matter in accordance with the circumstances of everyone."

Huang Yingzhe repeatedly stressed to reporters that "properly handled".

Huang Yingzhe has repeatedly clarified: "we do not want to cause misunderstanding to the outside world. We may not expand the franchise business, but the existing franchisees will follow the direction of the company's future development."

"Both sides should fulfil the contract according to the original contract spirit. We can guarantee that Daphne is complying with it, but some of the franchisees' request is not necessarily consistent with the spirit and rules of the past contract."

Huang Yingzhe said.

Daphne has said that there are only a dozen or so problems reflecting the presence of so many franchisees.

"Most franchisees have no problem and are still working together."

Pain of pformation

Outside the Daphne store in Shanghai, a large square poster is seen far from the window. The red letter on the Yellow bottom reads "99 yuan".

A shop in Shiquan Road also put up a loudspeaker at the door and shouted "sandals 49 yuan".

In the women's shoes industry, Daphne, which has the entire industrial chain from manufacturing, designing to selling, relies on its parity strategy to maintain its leading sales volume in the domestic market.

Even in the first half of the slowing economic growth and low demand, Daphne's core brand business in the Chinese market continued to grow by 33.4%.

But behind the growth of performance, worries have emerged.

The gross profit margin of its "Daphne" core brand showed a slight decrease of 0.5%, while the average stock turnover days increased from 149 days to 202 days.

In fact, the change of Daphne's sales channel is very obvious.

Half year report shows that as of June 30th this year, Daphne had 4598 Direct stores and 1010 franchised stores, and 411 new outlets in the first half of this year, reducing 45 stores.

The proportion of Direct stores increased from 81% at the end of 2011 to 83%.

Daphne has made it clear: "the company believes that the stable shop expansion plan is very important for sustainable development, so it has adopted a strategic opening up plan focusing on developing its own channels.

Self employment channel is the main direction of future expansion, and no new application will be accepted at this stage.

This industry analysts believe that the control of channels in their hands is indeed a trend in the footwear industry, which is conducive to compressing the channel cost of the company.

But for Daphne's strategic adjustment, Zhang Guoyuan believes that franchisees from all aspects of the management system, distribution, and operation are required according to the company's requirements. Legally speaking, there is a "expected interest". Franchisees take a look at the brand effect and the value of the chain store before investing. Easy withdrawal will affect investment interests, and the losses will be manifold.

As early as last year, Hunan franchisees contracted with Daphne because of contract problems.

The large layoffs of the electric business sector since late August also reflect Daphne's control over the channel during the pition.

Mr. Chen told reporters that each store in Shanghai has three thousand or four thousand pairs of stock piled up, and his shop is still operating, but there is no contract.

"We hope to renew the contract, and then we will ask Daphne to stabilize the supply price and ensure the full and adequate supply of the goods."

Otherwise, they will further resort to the law.