Monday, June 23, 2008

After Botched Attempt Distribution Company Turns Again to Franchising to Grow Company in Today's Economy

According to this article, "K & N Electric – through its trade name K & N Mobile Franchises – is aiming to expand by implementing an updated franchise system, more than 20 years after a botched attempt in the 1980s. We’d like to grow the company and it’s very expensive for us to put trucks out, fully stock them, pay the salesmen for a year or so until they’re actually selling enough to pay their way,” Nelson said. “So the best way for us to grow rapidly is through franchising, which is why we started the franchise company.” After years of research the company is rehauling it's basic business model to capture as many new customers as possible. "Changes include reducing the franchise royalty rate from 13 percent to 9 percent, lowering the franchise fee from $23,500 to $10,000 and updating computer systems to expedite sales and service." Nelson remains optimistic despite the state of the economy saying "“If the economy is going well, everyone is manufacturing, buying new stuff, which uses our parts.”

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