Sandwich chain Benjys is locked in a dispute with a number of its Benjys Delivered franchise operators, which deliver sandwiches to offices and other workplaces. Some 33 of its 116 franchisees, which operate delivery vans, joined forces to issue a 29-page letter to Benjys Group at the beginning of last month, outlining various grievances and demanding confidential business figures.
They claim that they were subject to strong-arm selling when they bought their franchises, received little support and were sold Benjys products at inflated rates. They also maintain that the Benjys’ Delivered business model was based on unrealistic profit forecasts.
But Benjy’s has written back refuting the allegations, and insisting that the majority of its van franchises are successful.Chief executive Ian Rickwood said he is keen to get the situation resolved and is confident the business model works.
“Benjys Delivered continues to see fantastic growth,” said Mr Rickwood. “We have 116 vans on the road and the majority of our franchisees are enjoying success.”
Benjys launched its Benjys Delivered “vanchise” operation, three years ago. Vanchisees receive a specially designed van to sell the chain’s sandwiches, hot snacks and coffees to workplaces on designated routes.
Benjys Delivered operates alongside its 68 retail sites, largely in the south-east and Midlands, including 28 franchise stores, Benjys recently filed results for the year to March 2005 at Companies House showing pre-tax losses have widened from £1.98m to £5.09m on turnover up 7% to £33m. Net debt at the company had increased by £5m to £25.9m.
In a separate case, Benjy’s is suing two of its vanchisees for bad debt.