The sequelae of Shangpin Home Delivery franchise model: Franchisees run away and complain about quality | biggest sports bets, infini88 bonus new member 100, matahari88

"Investors News" reporters Yang Quan and Wang Jiwei

In China, due to reasons such as rising housing prices, not many people can afford large-space houses. More and more consumers choose customized furniture to improve space utilization and improve the quality of their homes. But many times, they do not enjoy the corresponding quality and convenience.

On October 26, 2018, Shangpin Home Delivery (300616.SZ) announced its third quarter report. According to the report, Shangpin Home Delivery’s operating income in the first three quarters was 4.638 billion yuan, a year-on-year increase of 29.24%, and its net profit was 293 million yuan, a year-on-year increase of 42.28%.

Guosheng Securities pointed out, "Overall, the customized furniture industry is still developing at a high speed in 2018. However, due to the decline in real estate sales growth and intensified competition, the development speed has slowed down. Since this year, the post-cyclical effect of real estate has weakened, and the impact on customization companies has gradually deepened."

How does Shangpin Home Delivery, which relies on franchisees to expand, manage its own furniture customization system so that it can continue to maintain rapid development?

Chaos

In Baidu’s Shangpin Home Delivery Post Bar, you can see many people accusing this company, which was listed on the Shenzhen GEM in March 2017 and is currently ranked among the top three whole-house customized furniture companies in China. There were many reasons for the complaint: some said that Shangpin Home Delivery’s publicity was inconsistent with the actual situation; some said that the customized furniture had various quality problems; some said that the installers were not employees of Shang Pin Home Delivery; some said that the attitude of Shang Pin Home Delivery’s staff began to change from enthusiastic to cold after the deposit was paid; most importantly, I saw many people reporting that the formaldehyde smell would not disappear after using Shangpin Home Delivery’s furniture for several years, etc.

A consumer who purchased Shangpin Home Delivery said that after installing a Shang Pin Home Delivery cabinet in his bedroom, the wall at the edge of the cabinet peeled off. I don’t know what kind of glue was applied to the edge of the cabinet when the cabinet was installed. After installation, the wall at the edge of the cabinet began to peel off.

The maintenance master of Shangpin Home Delivery said, "They have never encountered such a problem when installing furniture. It may be because of the glue that was applied. Your wall may have expanded due to heat and contraction, causing the skin to burst. It is a problem with the wall. It is not a problem with the wall paint, not a problem with the cabinets. This cannot be solved."

In addition to suspecting that the cabinets installed by Shangpinzhai caused the wall skin to fall off, the above-mentioned consumers also said that the company was in chaos, the various departments were not well connected, and the staff turnover was very high. One of the customer service staff she had contacted before resigned, and she was asked to contact another customer service staff. Within a few days, the other customer service staff also resigned.

Another consumer reported that the door panel he customized at Shangpin Home Delivery had quality problems. He had to replace it three times inside and out, but the quality of the door panel still had problems. He finally wanted a refund, and the customer service offered to replace the door panel with another one. However, when it was about to be installed, the customer service member said that this door panel could not be used as a drawer because it did not match the pattern of the drawer. The consumer felt that the cabinet he spent more than 60,000 yuan on was useless. (As shown in the picture, the picture is from Baidu and provided by the owner)

In addition, some people have complained that many Shangpin Home DeliveryFranchisees have poor quality and service, missing orders, delaying installation, and delaying refunds. Moreover, some stores take the money and run away, and consumers later find out that the franchisees have long since left.

In June of this year, a consumer left a message to the mayor of Nanning on the local leadership message board of People's Daily Online, saying that he had customized furniture for the whole house at Shangpin Home Furnishing on the second floor of Nanning Qingxiu Wanda, and the owner, Peng You, ran away with the money.

On July 16, the relevant departments in Nanning responded to this message: The relevant departments have conducted an inspection and found that the franchisee has a business license, the legal representative is Peng You, and the date of establishment is February 27, 2012. The store has stopped operating, and it is impossible to enter the store for inspection. Peng You, the legal representative of the company, is out of contact.

Currently, the Economic Investigation Brigade of Qingxiu Public Security Bureau is collecting and processing relevant materials and evidence. If it can be determined that there were illegal and criminal acts in the incident and the criteria for filing a case are met, the public security organs will file a case for investigation and handling in accordance with the law.

Some media reported that franchisees of Shangpin Home Delivery in other places such as Quanzhou, Shijiazhuang, Jingzhou and other places have closed their stores after consumers paid.

However, Shangpin Home Delivery’s 2018 semi-annual report stated that: The company’s franchisees provide consumers with services and products that are no different from those of direct-operated stores. They also provide consumers with interactive design of personalized furniture plans, arrange for designers to provide door-to-door measuring services, repeatedly communicate and modify plans, door-to-door measurement confirmation, delivery and door-to-door installation services.

In response to various complaints about the above issues, our reporter sent a letter to Shangpinzhai Recipe to inquire about the relevant situation, but as of the date of the report, Shangpinzhai Recipe had not responded.

Our reporter recently visited the Guangzhou Kecun store of Shangpin Home Delivery. The store staff told the reporter that in Guangzhou, except for the stores in Zengcheng and Nansha, which are franchisees, the others are directly operated stores.

The reporter asked to see the contract. After many communications, the staff gave the reporter a template contract. The reporter found that the format contract of Shangpin Home Delivery was only a "Product Ordering Contract" with only one page. The warranty and free design or packages promoted by the staff did not form contract terms and attachments, and Shangpin Home Delivery was not stamped with the company's official seal or contract seal, but the company's financial seal.

When the reporter asked whether the contract could be changed according to the actual situation, the staff replied that no.

Huang Haiyong, a partner lawyer at Guangdong Legal Shengbang Law Firm, said: If the agreement between the two parties cannot be formulated in terms of the contract, it will be difficult to protect the rights and interests of consumers, and when signing the contract, the company should affix a legally binding official seal or contract seal instead of a financial seal. When consumers sign a contract for purchasing large-ticket goods, they should pay attention to transactions that require large deposits and advance payments. They should try to choose well-known and honest large merchants for transactions. Otherwise, when the merchant defaults, the advance payment will often not be recovered due to difficulty in execution.

Lawyer Huang Haiyong also said: Pay attention to verify the name of the contracting party. If the contract subject and the seal are the name of the brand's head office, the degree of security is generally relatively high. If it is the name of a self-employed person in a retail store, it means that the contracting party is only a large or small franchisee authorized to distribute the brand. The degree of security is generally lower than the former. Whether it is credible or not needs to be further judged based on the scale and stable operation of the franchise store.

Management and control problems

As of the end of June 2018, there were 93 Shangpin Home Delivery directly-operated stores, most of which are located in cities such as Beijing, Shanghai and Guangzhou with developed economies, relatively mature custom-made furniture consumption concepts, and residential areas.Large cities with strong purchasing power; the total number of franchisees has reached 1,755 (including stores under renovation), mostly located in other second-, third-, fourth- and fifth-tier cities.

Shangpin Home Delivery has repeatedly emphasized that franchisees play an important role in rapidly expanding the company's marketing network, expanding brand influence, and driving sales growth.

So, how does Shangpin Home Delivery, which has such two levels of direct-operated stores and franchisees, manage its franchisees? What are the requirements for joining?

In this regard, our reporter called the customer service number of Shangpin Home Delivery headquarters as a consumer and asked if consumers could complain to Shangpin Home Delivery headquarters when there was a dispute between the consumer and the franchisee. The customer service told the reporter that she would record the relevant issues and feed them back to the franchisee’s customer service, and the franchisee would resolve them. The customer service system of Shangpin Home Delivery and that of franchisees are not the same, and Shangpin Home Delivery cannot intervene.

When the reporter called the investment hotline staff of Shangpin Home Delivery with the intention to join, the investment hotline service staff told the reporter that if there is a conflict or dispute between franchisees and customers, Shangpin Home Delivery headquarters will work with the franchisees to solve the problem.

The investment hotline service staff told reporters that in Guangzhou, if you are in the urban area, joining Shangpin Home Delivery requires a franchise fee of about 400,000 to 500,000. If it is in a suburban county, it only costs about 300,000. The fee is a one-time payment, which includes a deposit of 20,000 yuan, a franchise fee of 50,000 yuan, and the rest is the product sampling fee. That is, after the franchisee selects the address, Shangpin Home Delivery will be responsible for designing and delivering the relevant products to the franchise store. Thereafter, franchisees do not need to pay any more fees to use the name Shangpin Home Delivery.

Later, the reporter got in touch with the investment department personnel of Shangpin Home Delivery. The investment personnel told the reporter that the company will require franchisees to form their own teams for overall operations. Generally, the store area is required to be 200 square meters. In areas like Nansha District, only a deposit of 20,000 yuan is required, and the rest is about 350,000 yuan to be paid to the company. The franchise fee of 50,000 yuan has been canceled recently, and the deposit will be refunded when the franchisee no longer participates.

As for how Shangpin Home Delivery manages franchisees, the above-mentioned investment personnel said that they will send notices to franchisees for rectification based on customer complaints. If too many notices are sent and the company finds that the franchisee has ruined Shangpin Home Delivery’s reputation, Shangpin Home Delivery will ask the franchisee to withdraw. However, the company generally does not issue notices, but only feeds the problems back to the franchisees, allowing them to negotiate and resolve them.

The semi-annual report released by Shangpin Home Delivery shows that the franchise model helps the company save capital investment, use the advantages of franchisees to expand the national marketing network, reduce investment risks, and achieve rapid expansion of the company's business scale. Shangpin Home Delivery Company has signed franchise contracts with each franchisee to manage the number, location, sales performance and other aspects of franchise stores to achieve the company's development strategy. However, the franchise stores are independent of the company in terms of people, finances and materials, and are not completely consistent with the company's interests.

Regarding the above phenomenon, Huang Haiyong said that companies like Shangpin Home Delivery that rely on franchisees to expand their business should pay special attention to protecting their brand image. Instead of thinking that the interests of franchisees and the company are not completely consistent and letting it go. If things go on like this, what will ultimately be damaged is the reputation of Shangpin Home Delivery. Moreover, when brand owners carry out commercial franchising, they need to strengthen the qualification assessment of franchisees, divide the responsibilities of franchisees through franchise contracts, and strictly manage the business behavior of franchisees through specific operational guidance, such as demarcating fixed areas and assigning dedicated personnel to be responsible for fixed docking management, and collect a certain deposit to ensure the franchisees' business operations.Guarantee management is in place. Only in this way can we maintain a good brand image, gain recognition from consumers, and help the long-term development of the brand.