eBay, Subway…or “the highway”?
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Subway founder Fred DeLuca recently introduced a new franchise agreement to redirect the franchisee advertising dollars from the Subway Franchisee Advertising Fund Trust (SFAFT), to the franchiser (DAI) fund. More than 14,500 Subway restaurant operators, out of a total of 26,183 Subway restaurants in 85 countries, i.e. more than 50 % sued the parent company with the anger embroiling over the control of the advertising budget at the expenses of the profitability of the franchisees. The doctors, who are the co-founders obviously want the bigger share of the pie, however would it be worth it to disgruntle the very people who bake it?
A franchisee always need to UNDERSTAND THAT THE FRANCHISEE WILL NOT BE COMPLETELY INDEPENDENT. A franchisee is obligated to conform to the policies formulated by the franchiser, which may outweigh his own needs. A franchise works on mutual trust, however just like in any other business, such changes portend more challenges of survival gradually for the smaller business owner. And its usually difficult to fight the bigger fish, unless all 100% of the smaller fishes unite against the big one.
Similarly, eBay raises fees for individual sellers all the time, sometimes once in a year, sometimes twice. Although the hike in fees is gradual, the profits for sellers do not necessarily increase quarterly or annually at that rate. Why eBay does not lose inspite of sellers not being able to cope up with the increasing fee structure? Because eBay has opened its doors globally, essentially to countries where the population is the highest, China and India. As and when Chinese and Indians pick up the eBay trend, eBay will benefit multifold, the American and European sellers will eventually suffer most because the demands of the buyers will be met by cheaper goods sold from India and China.
The question is how long will Americans retain their purchasing power?? I would like to continue on this in my next blog.
Tags: China, Conspiracy, India, US, corporation, Economics, Business, International, Subway, Ebay, Franchise, Small Business
1. Breckenridge Real Estate | December 18, 2007 #
Americans have less purchasing power now more than ever, our beloved USD is at an all time low and every industry is currently being monopolized by some big corporation. ebay being the big online retailer feels that they can raise your price and that is okay, Our board of realtors of which they answer to the National Association of Reators, decided to double the fees for each agent and rase office fees 3 fold about a year or so ago.
Not to complain a lot here, but have you tried listing your products with google? I know it’s not as popular but I know few friends who do online retailing with google and they are very happy with the results.