Franchisees voice frustration

05 March, 2010

Threshers franchisees seeking to secure their independence are growing frustrated with legal delays and rising costs.

KPMG has agreed to surrender the head-leases of stores which don’t meet its blanket £10,000 valuation, leaving franchisees to negotiate directly with landlords over new terms.

Blake Lapthorn, the law firm representing the majority of franchisees, said the result was “excellent”, but some franchisees have expressed annoyance with the speed of the process and the costs being racked up.

One angry franchisee described the legal fees as “silly money” and said landlords of properties occupied by franchisees were becoming impatient and looking for alternative tenants.

“My landlord sounds as though he has had enough and may give me notice to close down,” she said.

The franchisee said takings were down by more than a fifth on pre-administration levels, figures that were “well below break-even point”.

Franchisees have also been struggling to buy the stock they want for their shops, having to revert to cash and carries to top up with branded products.

Geoffrey Sturgess, lawyer at Blake Lapthorn, which is representing around 50 franchisees, said individual franchisees’ costs for legal advice came to around £1,500 each, so far, and would probably come to a further £250. The figures don’t include forthcoming conveyancing costs or extra advice taken on licensing.

Sturgess insisted that the deal with KPMG was good for franchisees and their landlords. He said: “Landlords should be delighted at the opportunity of having a solvent tenant again.”

He said he had “great sympathy” for franchisees faced with a “long, slow and terribly frustrating process”.

In a bid to ease the stock situation, independent wine merchant Paul Dawkins, of Heaton’s Wines in Romsey, Hampshire, is acting as an informal unpaid co-ordinator of dealings with suppliers on behalf of the franchisee group.

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