A recent article in PMQ about how we took on an Australia chain and won (David vs Goliath) has had a sad result for the owner of that establishment. Last night (Friday), mid trade (8pm), the owner closed the doors and advised staff that she had closed the store due to bankruptcy.
As mentioned in the story we did an intense guerilla marketing campaign from the day they opened right through the next 12 weeks, stifling their opening. They have never hit sales projections.
Since January this year our economy has been depressed and all retail is showing declines, even us.
Unfortunately for the franchisee they have been hit hard and now face financial ruin.
I could gloat that we forced their shutdown but I feel so much pain for their loss. I got on well with the owner and we often chatted about similar problems we encountered from time to time.
One thing that stood out is that if you make a good product and give good service you can command a high price and survive. This franchise group market and price similar to Domino’s and this particular store was a mere 100 meters from our store but we held our prices and bettered our quality and continued whilst they faltered.
Tomorrow I will look at placing notices on their windows advising customers who turn up and see them closed that they can get great pizzas with fantastic service at our establishment. Opportunistic? Yes. Ethical? I see no problem as they have now closed their business. And yes I am certain the head office will re-open the store under management until they can suck in a new owner, so I will make hay in the meantime while the sun shines.
If you are not allowed to post the notices you could park a vehicle near by that acts as a billboard for you.
I very much doubt that it is OK to place notices on property you do not lease. That is not something I would do.
On the other hand I would have no hesitation to take out newspaper ads, radio, direct mail, FB or even a billboard with the same message.
If he had a POS, offer to purchase his customer database and/or his phone no.
Yeah, maybe think twice about posting anything at all on their windows. Many people might think that you are gloating at their misfortune … and this could even backfire on you, if they think you are a bore. There is a reason that you were the winner, and the public knows that too. They will again become customers.
Good idea on the mailing list and phone number… although the franchise agreements I have seen forbid the owner from doing this, maybe in your area it does not?
and customer list would be owned by business and the soon to be former owner would not be in a position to sell them…
Maybe hire some lackey as a sign flipper/spinner, dress him up in a pizza costume, maybe a banana costume or something else just as ridiculous that’ll draw attention.
Maybe even throw in a few coupons for people that show up there, or accept the coupons from the failed franchise for a few weeks to gain their base.
Wholeheartedly agree. Double thought about posting notices after posting my comments and changed that idea.
Spot on Royce
The franchise owns the mailing lists ad all numbers goes through the collective 1300 … phone number for the franchise.
The shop is not well positioned and I would imagine the majority of their customers use online ordering. The franchise has reported in trade magazines that in excess of 60% of their orders are online. Local press advertising with a bounce back offer will probably be the best way to go
EB are dropping off like flies around us in Sydney too. It’s a hard pitch to sell pizzas at $5.50 when their main competitor is selling them at $5 and the $5.50 price is the USP of some sorts?
Yeah, look at pizza shops for sale and just about every Eagle Boys is for sale. How can you afford to sell at $5 2 nights a week and <$10 other nights and then pay 12.5% franchise fee of gross sales
Talk about snake oil salesman with these franchisors getting in unsuspecting franchisees on promises of selling xyz number of pizzas a week. They make them look like saints.
When this store opened EB advertised hard and even stated in an advertorial in the local paper that they expected to do in excess of 2,00 pizzas a week. My view was if there was that much extra pizzas around (we do around 700 pw) then surely we would be getting a cut of that, or we were a pretty hopeless business.
EB never got anywhere near that amount and did even less than us.
Another gullible bites the dust
Dave