Crain’s Manchester Business:

Jason McGuire invested £200,000 in a Coffee Republic franchise hoping to strike a blow for a British brand in a market dominated by Starbucks.

But six months later on July 7, the froth on the cappuccino went flat when the 187-store chain, most of which are run by franchisees, went into administration. McGuire owns the leasehold to his property and all equipment inside and has continued to trade his loss-making business despite the collapse.

But he’s unhappy with the return on the £35,000 which he paid for training, use of the trade name and recipes. He also paid for the refurbishment of the shop, a former newsagents, and has to hand about 9 per cent of gross profit to head office.

McGuire, who also runs a Mace supermarket across the road, said the chain grew too quickly and was not able to support new franchises. He added: “I asked for some help to drive sales. Their solution was to give free stuff away but they were not prepared to pay for it. It would have been helpful if they had reduced their take for a few months or offered to pay for a few flyers.

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Originally posted by Cris Zimermann on July 21, 2009 in Franchise Site.


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