Cell C Franchisee problems?
Cell C’s new 21 Mbps HSPA+ rollout and new branding campaigns are stealing the limelight in the local telecommunications market, but some of the company’s franchisees are less than enamored with ‘new’ Cell C.
According to information from a reliable source some of Cell C’s franchise owners are struggling to cope with demands which Cell C enforces on franchise owners, and many franchisees are sitting without any Franchisee Agreement because Cell C says its ‘legal department is busy’.
According to the source there are numerous issues of concern to Cell C franchisees, including:
- They currently to not have a Franchisee Agreement
- Cell C is using bully tactics when dealing with franchisees, including bantering threats that they could lose their current franchisee status easily.
- Cell C is trying to force store owners to employ at least 8 staff members per 60 square meter store and 18 persons for the 250m2 flagship stores, making it difficult to survive financially.
- It is speculated that Cell C is considering a fully company owned store model creating uncertainty for the franchisee owners.
- Insiders cite concerns in relation to the implementation of the Consumer Protection Act and having a Franchise Agreement weighted in favour of the Franchisor, being problematic and it would be simpler to have a company run channel.
It is understood that the Cell C franchisees have requested a further meeting with Cell C to clarify their position.
Not the first time
This unhappiness from Cell C franchisees is however nothing new. In March 2010 Fin24 reported that Cell C franchisees were angered by the fact that the cellular operator was not transparent in its decision to restructure its national stores network.
“No real reason has been given to us agents. I am one of the best agents in Gauteng and I have been instructed that the store will be closed and handed over to one person who will be responsible for the whole region,” Fin24 reported.
At the time Fin24 reported that Cell C told franchisees they were “forbidden to speak to the media, other agents, or employees within the company about internal matters such as store operation”, and this time around MyBroadband was also told that franchisees were instructed not to speak to anyone about the issues mentioned.
In March Cell C CEO Lars Reichelt confirmed that the company has embarked on a process to improve its current sales and distribution channels. “As a result, the contracts of all current franchises will be reviewed and where necessary restructured or discontinued,” said Cell C.
“This process is a product of our commitment to improve Cell C’s offering to our existing and new customers,” Reichelt said. “Our efforts have necessitated a restructure of our franchise model.”
Cell C appears to have locked down all communication channels and ignored requests for comment. It is unclear why Cell C is unwilling to comment on this issue and clear up the uncertainty which may be of concern to franchisees.
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