{"id":1484,"date":"2012-08-29T07:51:11","date_gmt":"2012-08-29T07:51:11","guid":{"rendered":"http:\/\/www.franchisemart.in\/franchise\/?p=1484"},"modified":"2014-03-06T07:58:14","modified_gmt":"2014-03-06T07:58:14","slug":"reeboks-franchisees-in-delhi-forced-to-shut-shops","status":"publish","type":"post","link":"https:\/\/www.franchisemart.in\/franchise\/reeboks-franchisees-in-delhi-forced-to-shut-shops\/","title":{"rendered":"Reebok’s franchisees in Delhi forced to shut shops"},"content":{"rendered":"

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\nDelhi\u2019s major sportswear Reebok India\u2019s outlets have accused the company for forcing them to adopt the new business model else the company will shut their shops by August 31.
\nThe franchisees have also alleged that the company, which had filed complaint against two former top executives for an alleged Rs 870 crore fraud, has refused to settle dues in violation of their franchise agreement.<\/p>\n

\u201cAs per our agreement with the company, whenever a franchisee wants to exit the business, three months time would be given to clear up the stock and if any products remain unsold, the company would take it back at the purchase price.
\n\u201cNow they are asking us to close the shop in just 15 days. They are saying that once the goods are transferred, it is our responsibility,\u201d Delhi Reebok Franchisee Association spokesperson said.
\nThe franchisees claimed that they received notices from Reebok India\u2019s parent Adidas Group on August 13 for shutting down their stores by August 31 if they do not agree to the new terms of the agreement. \u201cThey are purely holding us on ransom and are not ready to settle our claims at all,\u201d they alleged.
\nThe franchisees also said that they were hired by Reebok India under the minimum guarantee (MG) basis, in which they used to get fixed returns on investments irrespective of sales.
\nWhen contacted, Reebok India Company did not comment specifically to the allegations but said it will \u201cfollow good standards of respectful and professional conduct to engage with our stakeholders while restructuring the business\u201d. \u201cDespite the challenges, we are committed to the Indian market and believe in the growth potential of Reebok India. Hence, we are working closely with all our Reebok franchise partners and discussing revised business terms to drive strong profitability for both the franchise partners and Reebok India,\u201d the company said.
\nUnder the Franchisee Transformation Project for Reebok India making a brand new start from 2013, the new business model includes comprehensive performance based commercial terms.
\nThe company said although it received \u201ca very good response from our partners from across the country\u201d, however, \u201csome of our franchisee partners are a bit uneasy about making a change from an existing model\u201d.
\n\u201cBasis our discussions, we expect some 2\/3rd of the current 900 Reebok franchisee store base to transfer over to the new business model,\u201d it added.
\nIn May this year, Adidas had said it planned to shut down one-third of its 900 Reebok stores in India as a part of a restructuring strategy for the brand.
\nAdidas Group CEO Herbert Hainer had said the restructuring could lead to additional one-time charges of an estimated ^70 million in the remaining quarters of 2012.<\/p>\n