Mango Franchises Are Not Always a Secure Business

Mango grows and grows, but half of the shops we see in Spain corresponding to the string are in the hands of franchisees. I.e., that investment make it individuals who put all his enthusiasm and money into a business that is not always profitable, and not always counts with all the necessary support from the franchisor, i.e. handle. That has happened a couple of franchisees in Madrid, which have been forced to close his store wrecked y they have denounced the textile company.

This couple blames handle of breach of contract, What has led them to suffer year after year of losses since they opened their store in the community of Madrid in May 2010. Their demand is based on “an aggressive sales strategy imposed by the respondent to the franchisees which is not legitimized by the contract”, which would have led to “a progressive reduction in margins” from 2011.

Let us remember that the franchisor to the franchisee business must support, y Mango entered into a price war, increasing the sales and promotions and reducing the profit margins of the shop doing the unsustainable business. It also made estimates of very ambitious sales which were not fulfilled. For the businessmen, who invested nearly half a million euros in the project, the result was ruinous. In addition, they accuse to handle for an interior design project with major flaws, “a dereliction of duties in terms of marketing support”, to force them to hire more staff than necessary and many more bugs.

The trial against point AF SL, proprietor of the franchise operated under the trade name of Mango took place on December 2 and is awaiting judgment. They are not the only franchises that have had problems, but they are the few who have dared to denounce the textile giant. This business model allows Mango to grow without assuming all risks. Franchise promise to be safe business, especially when you have a name back as powerful as handle, but not always the result is as expected.