Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

A cautionary tale on discounting and franchises

Mark Fletcher
July 28th, 2015 · No Comments

The 7.30 Report on ABC2 last night had a report the impact on franchises of deep discounting as introduced by Pizza Hut around a year ago.

Last year, Pizza Hit dramatically cut advertised prices to respond to price pressure from rival Dominos. Sales went up and, as some in the 7.30 Report story said, these increased sales at a deep discount considerable hurt the bottom line.

The report is a cautionary tale about franchise agreements and the amount of control you have, or do not have, over your franchised business. One former Pizza Hut franchisee mentioned they were surprised to discover how little control they had in their business.

There are several franchise systems in the newsagency channel, making this topic relevant for consideration by newsagents. It could be a good time to reach your agreement – if you have signed one.

Hop on iView and check out the 7.30 Report story.

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Category: Ethics · Newsagency management

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