By James Wells
BRISBANE: A short presentation was made by existing BSL member Everard Johnson to other franchisees at the PricewaterhouseCoopers office in Brisbane on Monday and broadcast via a teleconference to over 100 external franchisees.
According to Johnson, his proposition based on feedback from members and suppliers is to issue a new BSL licensing agreement with a similar fee structure, but with the removal of the controversial five per cent sale levy on purchases made with non-core suppliers.
Johnson promised a lean buying operation in terms of cost and an improvement in the member’s rebate of an extra one per cent from the group’s top 10 suppliers including Fisher & Paykel, LG, Electrolux, Centrex, Panasonic, Fujitsu and Sunbeam.
From consultations with thee suppliers, Johnson said it would be ‘business as usual’ from the first day of operation and that the new group would run approximately 10 catalogues like the previous organisation.
Under the proposal, marketing support would be provided by high profile advertising and purchasing will be managed by category buying teams.
Johnson said the current franchise model has been successful for the last 40 years and if his proposal was successful, members would once again be masters of their own destiny.
Johnson said he hoped that the group would not have to rely on borrowed money to run itself that, as a member of 20 years, he had a lot of passion and experience which would be used to support the group.
Johnson said that if his proposal was unsuccessful, his retail business, which is estimated to turnover $40 million annually, would leave the BSL group and operate independently.
When he was asked if he had sufficient funds to make the buyout, Johnson replied that the business will not require a lot of capital as it will be run as a low cost operation on an efficient basis with an income stream sourced from retailers through franchising fees and suppliers through rebates.
Johnson said that he hopes under his proposal that the business will be cash-positive from day one, but this will depend on the financial support received from members of the consortium.
Johnson has also indicated that he would like the existing management team to run the business, including current CEO Guy Houghton.
Houghton also attended Monday’s meeting at the PricewaterhouseCoopers premises in Brisbane and was backing Johnson’s proposal.
Houghton asked franchisees to cast their minds back to the more successful period from 1999 to 2004 when the business was a franchisor.
The consortium proposal expects that approximately 40 people will be required to run the business in buying, advertising and information technology services.
Even though Johnson expressed his intentions for the CEO to remain involved in the new business, backed by the consortium, Houghton said that he will not stay with the business if he is not wanted, but also said that if he believes it is right for the business, then he will stay.