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Reebok franchisees hit the streets, may move courts

business Updated: Sep 17, 2012 23:13 IST
HT Correspondent
franchisees protests

A section of the 900 franchisees of sportswear major Reebok India, which is at loggerheads with the company over the new business model to be rolled out in 2013, took to the streets in protest on Monday.

More than 200 franchisee store owners under the banner of two associations - Delhi Reebok Franchisees' Association and Rest of North India Reebok Franchisees' Association - took out a rally and staged a demonstration at Jantar Mantar in New Delhi.

The protesters chanted slogans against Reebok and its parent group, Germany's Adidas, and burnt an effigy that sported a Reebok T-shirt and shoes.

"Our aim was to highlight our plight, as we are left in the lurch and there is absolutely no communication from the company," said Vivek Sood, president, Rest of North India Reebok Franchisees' Association.

The associations have asked the company for a clean exit route and to clear their outstanding dues.

"The company is free to take its decision, but it should honour the agreement we signed with Reebok, or else we've to take legal action," said Sood.

The aggrieved store owners said that they have incurred a huge financial loss due to the company's sudden decision to clear out products at 50% discount.

In a letter, the company said an additional sales period up to November 30 will be given to franchisees to liquidate their stock and no minimum guarantee, rent or fixed incentives will be given, unlike in the past.

"We're in a 'Catch-22' situation as each of us is carrying a huge unsold stock, apart from having spent Rs. 50 lakh to Rs. 2 crore on store refurbishing," said Sood.

"The company has stopped paying us the minimum sum of gross profit assured to us, as per the agreement signed individually with Reebok, since last eight months," a Delhi Association member added.

Meanwhile, the Reebok spokesperson rejected the protesters claims. "Their claims are completely untrue, as we've been actively engaged in discussions with the franchisees," the spokesperson said.

"Despite our setting up a reconciliation team to expedite closure process, the franchisees decided to protest."