Shop Talk

Retailers, consumers and prices

Everything is on sale, even franchises

January 28, 2009

(updates with day offer began)              

gncRetail workers need a pick me up these days after brutal holiday sales, rising unemployment and bleak expectations for 2009.  One chain is offering its own spoonful of medicine, in a way.

GNC, which sells vitamins and supplements at more than 6,200 stores (often with buy one, get one 50 percent off promotions), is offering a 25 percent discount on its initial franchise fee to retail workers who have lost their jobs.  The fee is normally $40,000 for new franchisees, so the deal brings it down to $30,000.

Even with the discount, which is available until July 31, it will cost more than $100,000 to open up a location.  The company contends it is worth it.  GNC said its industry is valued at $21 billion and is growing at 4 percent to 6 percent a year.  That definitely outpaces the overall retail market, which even the National Retail Federation expects will see a drop in 2009.  GNC said sales at franchise locations and its own stores grew in 2008.  At the same time, it forecast that 14,000 retailers will close down this year, forcing more workers out of jobs. 

Executive Vice President of Store Development Tom Dowd said GNC opened 237 stores in North America over the last three years and has plans to open another 50 in 2009.  The offer began on Monday. As of Tuesday afternoon no one had taken GNC up on the offer, though several people have asked about it.

(Photo courtesy of GNC web site)

Comments

@offering a 25 percent discount on its initial franchise fee to retail workers who have lost their jobs.

A good offer but in all honesty, it’s just another angle. Most franchisors already offer up to 50% discounts throughout the year, brokers for example can demand up to a 50% of the franchise fee and many times over when buying a franchise direct you can get the price right down as they are interested in expansion more than the fee.

 

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