JAG has defended its franchise scheme after some store managers claimed its structure has saddled them with debt and made their stores unprofitable.
Franchise partners last week claimed poor business written by previous licensees has undermined their efforts, with footfall down and clawbacks from Orange up because of previous trading. Franchisees have struggled as a result to meet JAG targets.
Franchisees that do not hit targets for new connections, upgrades and prepay sales are fined £45 for each sale they miss. Also, they are fined five per cent of monthly bonuses if they fail to attach JAG’s Phone Care insurance to 75 per cent of device sales. Some also claim interest on loan repayments from JAG are high.
JAG managing director John George (pictured) said: “The targets partners are set are fair and on an individual basis, so should be achievable. I’m not sure what they’re complaining about in terms of interest on repayments. Six per cent per annum is fair.
“There have been cases where previous owners have written some poor business and made a mess of stores. But store success has nothing to do with location; it is solely based on the person running them. If they’re good enough, they’ll make money.”
One former franchisee said: “Bad business was written by previous owners. We got blamed, and found it impossible to reverse things. It’s a programme based on new connections. If you’re unable to bring in customers, you’re in big trouble.”
A current franchisee said: “We’re looking to pull the plug. Previous business has undermined us. Shops have a huge job to bring in custom. Those struggling are saddled with debt.”