Majestic reveals new 'franchise-lite' model

Majestic Wine has revealed plans to invest in a ‘franchise-lite’ model.

Rowan Gormley, the company’s ceo, said: “We are going to trust our store managers and turn them into partners.

“This is our logic. There are winners and losers in retail and we aim to win via a long-term growth strategy to drive customer loyalty and retention. As a wine business, we grow by helping our customers discover new wines and we can only achieve this by having experienced, engaged staff.

“We are going to hand over store control to our people and give them the chance to – quite literally – run their own shop, just as they would in a franchise but without the up-front payment and with them sitting at the centre of our business instead of in satellites.”

Gormley went on to explain these ‘franchise-lite’ partners will move from the traditional ‘earn a percentage of sales’ model to earning significantly larger proportions of their store’s contribution. This gives them the chance to grow their income materially in comparison to a store manager – in fact, up to £50,000 per year, compared to the average store manager salary of £30,000.

In addition, the company plans to turn the traditional retail ‘command and control’ style of management on its head, giving managers more control over their stores. This will extend from selecting their own staff and products to choosing opening times and discount levels. This means staff can be rewarded for their customer service levels and profit contribution, which the company believes will deliver more sustainable growth to its business.

Gormley said: “During the past few months we have been testing this model with 21 pioneers. We are now rolling out the whole programme and expect to move at least 50 to 60% of our branches over the next year, leaving only new managers with the career trajectory of a traditional store manager.

“Majestic was falling into a familiar trap where we were asking our people to do one thing (great service) and rewarding them for doing something else (sales). This move re-aligns us. It also has the potential to pay for itself multiple times over. 

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