Cell C to franchise dozens of stores amid financial distress

Jan Vermeulen is the Editor of MyBroadband, and he joins Lester Kiewit to explore Cell C's decision to franchise 44 of its 47 retail outlets.

Mobile operator Cell C is franchising the bulk of its retail stores to 'boost revenue and drive growth'.

The telecoms firm announced in a statement a review of its service model. 

Fourty-four company-owned stores will be sold to franchisees, with Cell C holding on to just three stores in the Mall of Africa, Gateway and Canal Walk.

Vermeulen says the reason for the decision is clear.

"It's in financial distress and it needs to make a plan."

- Jan Vermeulen, Editor - MyBroadband

"The company is not making a profit... in it's own words, they feel that a franchise model will help the stores run more effectively."

- Jan Vermeulen, Editor - MyBroadband

Vermuelen says it is likely a frustrating position for affected parties, given that this latest move is a flip-flop from a previous decision to do away with franchisees.

"Years ago they had taken these stores away from franchisees and brought them in-house, and now they're franchising them out again."

- Jan Vermeulen, Editor - MyBroadband

"It needs to focus on getting healthy so it can be a viable competitor to the likes of Vodacom, and MTN."

- Jan Vermeulen, Editor - MyBroadband

Cell C has assured staff they will not be affected by the plan.

Staff contracts will be transferred to the new franchisees.

Vermuelen says Cell C's main competitors, Vodacom and MTN, also operate some franchise stores and adds that the move by Cell C shouldn't have any impact on customers or the provision of Cell C services.

Scroll up to the audio player to listen to the interview.