Franchises;

 

Franchisees often complain about a lack of communication with their parent company. Now at least one franchisor -- U.S. Electronics Group Inc., of Aurora, Colo. -- has discovered a solution to the problem: electronic mail.

A franchisor of consumer-electronics stores, USEG opened 23 of its U.S. Tech stores from 1977 to 1984, a growth rate that left many franchisees feeling out of touch with company headquarters. Announcements of price changes, new product additions, personnel shifts, and other important matters usually arrived in a monthly newsletter, with was followed by sporadic weekly mailings. "By the time we got the information, it was out of date," says Ben Whitfield, a Pueblo, Colo., franchisee. "We couldn't follow all the inventory changes, and we couldn't take advantage of special deals offered by manufacturers."

Responding to the problem, USEG developed a daily electronic bulletin board, dubbed "Mr. Bill," which transmits company information instantly. At USEG headquarters, a clerk inputs the relevant data into a computer that all franchisees can access via modem. The clerk also relays the franchisees' questions back to company executives, who generally answer within a couple of hours. Each franchisee is responsible for buying a computer, a modem, and a printer -- at a total cost of about $4,000 -- as well as paying the long-distance phone charges.

By eliminating printing, mailing, and labor costs, USEG saves "several thousand dollars" per month, says company treasurer William DeFazio, while enhancing communication throughout the chain. Individual franchisees not only have access to timely information from company headquarters but can "talk" among themselves about marketing, sales, and inventory problems as well. Whitfield, for example, recently bought some hard-to-find merchandise from another franchisee who wanted to clear out his inventory.

Not all of the information is so businesslike. Baby and wedding announcements often pop up on the bulletin board among the price changes and product additions. "When you're a franchisee, it's easy to feel isolated from the franchisor and other franchisees," says Whitfield. "The billboard has changed that."