This YouTube video (by Mike Andes) examines how a franchise suffered severe business disruption after a competitor undercut their product pricing and solicited their franchisees/dealers. The excerpt reports 16 layoffs, a reduced warehouse team now at three people, and that competitors directly contacted franchisees with lower-priced products—some franchisees continued using the brand/logo but purchased from the competitor.
We laid off 16 people.
Right.
So we have three warehouse guys now, which hasn't been that way for a decade, probably. Yeah.
What happened this year is someone came along and basically did the products for way cheaper than him and just texted all of his franchisees and dealers and said, hey, buy my products. Yeah, it's just challenging because right now, someone technically could be using your logo, getting leads, and then buying someone else's.
It happened.
They're in a weird spot because they got dealers, they got franchisees. They sell direct to consumer on Amazon. The fence. Now they're doing the franchising thing. He. He's spending like 30 to 40% of the revenue they make on Amazon on just Amazon ads. He turned it off. Their revenue dropped by 80% on selling on Amazon. All the leverage is who has the lead. And that's why if you sell the job, we have way more leverage. Because right now, if I'm getting a lead for 40 bucks and I'm gonna go and sell a $3,000 friends, I will never become franchisee. It's too good to do this. We're gonna create a third channel. We've been selling to franchisees, We've been selling to dealers. I want to go one level lower and really go after the installer market. We're gonna treat them like dealers. They're gonna be less tied to the brand, but it's gon get leverage to get rid of the dealers in the long term. The bottom line is he needs more franchisees because they make more money than the dealers. They uphold the brand standards much higher, and every single time they sell offense, he makes more money on the product as well.
