Franchise firms treat moms and pops better

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Franchise firms treat moms and pops better

Franchise headquarters are competing to offer various types of support for their franchisees, including financial help when opening up shop.

The trend is a reaction to a government campaign of improving relations between the big companies and their small business partners.

In the past, big companies have been accused of squeezing smaller business partners, contractors and suppliers, and the government has tried to intervene to stop bullying practices. In the case of franchises, some of the big chains were accused of making the mom-and-pop owners renovate their premises and pay out of their own pockets, or forcing them to make sales quotas beyond their capabilities.

One of such business that has jumped on the better-relations bandwagon is Into Franchise System, which runs franchise businesses including Wa Bar, which specializes in selling imported beers, and Italian food franchise Carbone for 13 years.

Into Franchise System is running a co-work start-up program. Under the program, a person who wishes to open up one of the company’s franchisees only has to pay for a lease. Into Franchise System pays for the other costs, including interior decorating and installing equipment.

According to the company, two Beer Barkets, another bar brand, opened in Cheonan, South Chungcheong, under its start-up program. The company said the two stores have succeeded in transforming themselves from average restaurants to highly successful beer bars.

The company said the owners only had to pay roughly 90 million won ($84,889) for their leases while the other costs were paid up by the company. Now, each store makes more than 50 million won a month.

Other than financial support when opening up a business, the company said it has been providing marketing expanses.

Onigiri & LeeGyudong, a franchise specializing in rice balls and rice bowls with toppings, is providing scholarships for children of its franchisees from profits that it made. It is the first franchise company to do so.

Onigiri & LeeGyudong has given roughly 100 million won in scholarships so far this year. Eighteen high school students received 1.6 million won each while 30 college students received 2.5 million won each.

“If companies only are focused on making profits and expanding revenue figures while ignoring franchisees, the consumers will definitely turn against them,” said Suh Min-gyo, head of Maxcess Consulting, a company that specializes in the franchise industry.

BY KIM YOUNG-MIN [ojlee82@joongang.co.kr]

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