Uchumi bets on franchising to lift fortunes

Loss making retailer Uchumi is set to venture into a franchising deal as it seeks to salvage its operations.

The move is aimed at offering private and mostly small supermarkets the opportunity to trade under its brand name as it seeks to spring back to profitability.

In a notice in the dailies, Uchumi has put out an expression of interest for a partner to take up the Uchumi Langata hyper branch.

“Uchumi is now exploring the piloting of a franchisor-franchisee business mode. Successful franchisee candidates shall be required to demonstrate financial resources in the high hundreds of millions of shillings and technical capability to undertake this venture,” the retailer said.

The idea was first mooted by former chief executive officer Julius Kipng’etich but has failed to materialize even as the retailer sunk further into loss.

The franchise model in which a big brand allows smaller players to use its name in a particular market in return for royalties has been in operation in other sectors such as manufacturing, hospitality and transport.

Despite multiple government bailouts, Uchumi has failed to bounce back further compounded by the fact suppliers have stopped delivering goods owing to poor cash flow.

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