Pramod Arora

They say disputes over money is the most common reason for marriages breaking up. The problem with business partnerships is that they are basically all about money, so chances of a financial disagreement are much greater than in a marriage. In spite of this reality, most people enter into a business partnership with far less thought and preparation than they would a marriage.

When we set out with a franchising model to expand and develop our business in 1989, we made sure that it was suitable for Indian conditions. There were many respondents when we advertised the business opportunity for prospective franchisees. But not many understood what to expect from setting up a greeting card store. There was this young man whose father had an export business in Mumbai but he was adamant on taking an Archies franchise. We were not too sure if the boy was really serious. It turned out that his outlet was so strategically located that it was a big grosser for him as well as for us.

When he started, he was fresh out of college and trained with us to get the basics of running the franchise. However, within a few months he was suggesting practical store management possibilities, shelf space utilisation and even spotting trends. Many other franchisee partners have also shared ideas that have benefited the franchisee as well as us. There are numerous instances of Archies spreading its operations because one of our franchisees had explored a location. Then there are friends and family who visit an Archies store and then want to replicate it in their cities. About 30-35% of our franchisees have more than one store run by other family members.

When we were extending our range from cards to gifts, we took franchisees along with it. We offered them soft credit cycles and encouraged them to change their shop interiors to suit the changing needs. Considering that it’s tough to pool money into a business that is running fine, franchisees have retained their trust and faith in us to agree to changes. I am proud to say that we never had any litigation or disputes with any of our franchisees.

Our biannual meetings with franchisee partners are of great learning. Ideas are exchanged, new models are suggested and plans are discussed. There is a sense of belonging that we as promoters and franchisees as partners have experienced over the years. The year we went public (1996), there were many franchisees whom we explained the benefits of listing and many bought into the IPO. All those who got allotments benefited from it.

With changing times, some franchisees have faced extraneous reasons to shut shop—legal issues or the premise was leased which was coming to an end and so on. We have encouraged some of them to opt for outlets where we have no presence and yet feel the potential. Some outlets were too small to change with times. We had to change the franchising model to suit their needs. I would say, our business decisions have not always been governed by profits. It may cost a few bucks in the short term, but it helps ensure we remain friends in the long term. That makes the expenditure well worth it.

 

Pramod Arora is Joint MD, Archies.