EXCLUSIVE:Harvey Norman Franchisee Moves Leading To Divorce & Broken Marriages
Every year Harvey Norman has announced to suppliers the rotation of franchisee managers, last year it did not happen due to COVID, now it’s back on and partners and wives of franchisee are up in arms, claiming “it’s breaking up families”.
Last week the rotation program was bought back much to the angst of several franchisees who are under pressure from their partners and wives, many who have children in local schools and want to stay at their current stores.
Several franchisees have contacted ChannelNews claiming the process of “shifting franchisees around” does not take into account “family lives.”
The wife of one franchisee said, “The divorce rate among Harvey Norman franchisees is already high and the latest move of franchisees to new stores is a major problem especially for the the ones that are married with children”.
“We spend time building local relationships, putting our children into schools where they have friends, only for Katie Page and her management team to shift people around as if they are a piece of furniture.”
Another franchisee said, “In the past there has been drug problems with franchisees who are stressed out trying to deliver for Harvey Norman while also managing family issues. The process does not work, other retailers don’t do it, so why should Harvey Norman franchisees like us have to wear the pain of shifting to a new location just because management say so”.
The Harvey Norman franchisee operation is critical to the success of Harvey Norman in the last half up to December 2021, the profitability of the Harvey Norman franchising operations segment was negatively impacted by COVID.
Sales from franchised operations fell by 13.5% to $595M compared to $689M in 1H21.
Harvey Normans franchisee operation has been under pressure for some time and brands that have contacted ChannelNews after being allowed to return to doing store visits at franchised stores claim “moral is low”.
A senior executive from one major brand said “They are struggling to find staff, they don’t have stock and the ones that are being moved say that don’t want to move from their current location”.
Revenue from franchised stores fell by $93.35m. Harvey Norman also had to wear a reduction in rent and outgoings received from franchisees as full or partial rent waivers were given to external tenants and franchisees during COVID lockdowns.
One Harvey Norman franchisee contacted by ChannelNews said “The Retail Association claims that in February retail sales were up by over 3% this is not the case for CE and appliances. Business is down and we are struggling with staff problems and limited stock”.
The rent waivers provided to external tenants and franchisees amounted to $27.07m in total, of which $14.79m related to properties owned by Harvey Norman.
According to JB Hi Fi management they often make store changes for management “but only with their consent and support of a move” said a senior executive.