Warning to possible RadioShack Franchisees!
I am writing this to warn others in case they are thinking about opening a RadioShack Franchise. Apporach with extreme caution!!!
Because my RadioShack franchise store has failed in less than 1 year!
I had an existing cell phone business and RadioShack approached me and asked if Id like to merge with RadioShack. The idea sounded great because RadioShack also sold cell phones. When I did the business plan prior to getting the franchise, I figured the commissions from the cell phone sales to help offset my purchasing costs. That is also what helped in securing the bank financing for the RadioShack franchise.
I was told by the RadioShack District Manager/Franchise Developer, that I would have my cell phone dealer codes up and running with cell phones by my Grand Opening day, August 23. They were NOT set up on the Grand Opening date as promised and I continually had to tell customers next week... Next week, because that is what I was told from the District Manager. Actually I did not get codes until November. That is 3 months past the original promise date. AT&T still wasnt completely operational until January! So I had to turn away customers who wanted the AT&T phones and Sprint phones! I am sure that the message got around that I did not have phones! By the time I received the codes, there were hardly any customers for the cell phones. I never even met the AT&T rep until January! Prior to adding RadioShack to our existing cell phone business, I ceased doing any cell phone ordering with the previous vendors I had in place because if I didnt, that would have been a breach of contract. I was earning thousands in commissions per month prior to the merge with RadioShack.By the time the cell phones were setup with RadioShack; my lost revenues were from $12,000 to $18,000. If not more! And the other damages for not having the cell phones set up as promised ruined future sales. Also, because I couldnt meet AT&Ts minimum monthly sales from the damages caused by RadioShacks delays, my AT&T codes were shutdown and could no longer sell AT&T. When I signed the franchise contract with RadioShack, I also signed for the AT&T cell phone setup. The District Manager kept telling me that AT&T had my paperwork and that AT&T was setting everything up, but that turned out to be a BIG lie because I was asked many months later to resubmit the AT&T paperwork because AT&T never received it.
RadioShack also originally set us up with a $10,000 line of credit, but pushed that up to $20,000 so Id have enough for the holiday purchases. The District Manager made sure I used the whole amount too!
Since I did not order phones for stock, because I didnt have the codes in place in time, I ordered a lot of toys for the holidays per the Distraict Manager's guidelines, and according to the District Manager, I did not have enough toys and that I would run out of toys before the holidays were finished. As of today, I am still sitting on thousands of dollars worth of toys, and that is at my cost. I have toys that I did not sell even one item of. Half of the toys I have marked down to almost what I paid for them and they really are not moving. Ive sold some toys with big discounts and RadioShack will not even absorb half the loss. When I asked the District Manager if they would take back the toys, move them to a corporate store and credit my account, he just laughed and said it didnt work that way. So RadioShack received the profit and we received the loss!
Also in the beginning, the District Manager said he would spend a week showing me how things worked, including ordering, but he did not. Since I did not know how the auto-replenishing worked I had ordered several items as duplicates. Which I did not need! I spent over $30,000.00 on orders in the months before the holidays. I am sure the District Manager was happy because I know he makes money on what I buy.
Right now I still owe RadioShack a balance on those purchases. I do believe if I had the cell phones up and running by the Grand Opening, as promised, I would not owe anything and probably would have a credit balance for future purchases. Also my reputation would not have suffered as it has!
All of this has created a downward spiral heading for closing my doors permanently! I will be seeking legal counsel and with my attorney to see what we are able to do about this mess. I depended on the District Manager from RadioShack and Corporate RadioShack to guide me in the right direction and all they saw was an opportunity to make money off of me quickly.
When I attended the RadioShack expo in September in Fort Worth Texas, I originally had only spent around $2,000 figuring I would spend more as needed. The District Manager called me after the expo and by the time he was finished, my order was up to over $9,000.00 my cost. Also my Sales Support Specialist had called my fianc and talked him into even more items to order!
The so-called HOTSELLERS that didnt sell!
I have put our life savings into this along with my Father cosigning the bank note. With everything we have invested to get this franchise, we are about to lose it all! This is neither right nor fair!
I have also reported this to the Better Business Bureau and the news media!
It will be a warning NOT to believe what they verbally say and get everything in writing! Also forget about any help from corporate!
There is very little, if any franchise support to help the franchisee succeed!
So far all we have seen is how RadioShack sets you up with store fixtures, fails to keep promises compiled with lies, overstocking your store with holiday product and then demand money. Nothing else!
I've asked RadioShack twice if they would like to buy the business, since they have the right of first refusal, but never received any response!
This isnt anywhere near what Id call Franchise Development if RadioShacks Franchise Developers can successfully ruin your franchise by having you follow their so-called proven guidelines for success and end up shutting it down in less than one year and forcing you into bankruptcy!
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