User 2 seeks refurb franchisees

But they don't come cheap

The failure of franchising in PC retail is being challenged by User 2 Computers, which has launched an ambitious programme to sign up around a dozen franchisees. The retailer based in the North East of England, claims that - for the £110,000 cost of a franchise - it can provide franchisees with a fully fitted shop and stock to trade. Allan Mitchell, franchise development manager at User 2 Computers - a retailer with a turnover of around £ 1million - said that it offered technical training to franchisee staff, and group purchasing which meant low cost PCs. User 2 Computers builds its own PC and also sells re-conditioned units. Franchisee owners have to build PCs from approved component suppliers in order to ensure consistency said Mitchell. "The terms of the franchise mean that certain standards of build must be met," he said. User 2 Computers is combining the franchise scheme with its own expansion programme - funded by 3i - to build its name and open a dozen new stores, from its base in the North East. Mitchell said that the value of the franchisee would be increased as the User 2 Computers chain expanded. The history of franchises in the PC retail industry is not a happy one, however. Few have attempted franchising and even fewer succeeded. The reason according to Brian Burke at Dun & Bradstreet's computer market intelligence unit is that the valuable brands in the PC industry belong to the PC manufacturers not the resellers. "There is little value in the retailer's name," said Burke. "Customers will not have heard of most of them. What they will have heard of are vendors names - like Compaq and IBM - which will be of little help to the franchisee." ®

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