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Outlook: Alldays' woes

Thursday 12 August 1999 23:02 BST
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THE INCREDIBLY shrinking Alldays convenience store business is a sorry tale of financial woe which looks like it is finally coming to a head. To cut a long story short, a couple of years back the Alldays management decided that 200 stores wasn't nearly enough. It wanted 1,000 and to get them it devised a franchise structure that would allow budding entrepreneurs the chance to open Alldays stores in their local area for an up front investment of pounds 100,000.

Now the grand plan has unravelled. It turns out that - surprise, surprise - opening 800 shops in five minutes is quite a tricky task for a small company's systems to cope with. Sadly for Alldays its financial controls weren't up to much either.

The company is now with its bankers, begging bowl in hand, hoping for a pounds 130m rescue fund to enable it to buy out of the franchisees.

The franchises though are less than gruntled and feel they have been royally shafted by the Alldays management. The claim, not denied by the company, is that Alldays kept the buying gains it secured from suppliers for itself and passed little or nothing on to the franchisees

The franchisees are not opposed to the idea of a buy-out although it may require an independent arbitrator to settle the precise terms.

The price for their agreement, however, is the departure of the current management. To drive home the point, the franchisees have gone direct to the Alldays non-executives.

Given that the banks are almost certain to want to put some of their own men on the board if they agree to further funding, the franchisees may well get their way.

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