You own a franchise (one location) of a national chain of quick luncheon meals. The corporate office (the franchisor) is conducting a nation-wide marketing campaign introducing a $5.00 value meal option. This $5.00 value meal option severely cuts into you operating margins. Numerous complaints to the corporate office have resulted in the corporate office taking the position that "the franchisees need to be competitive and this $5.00 meal is competitive." You disagree noting that even with an increase in store traffic, the reduction in revenue and margin produced by this value menu, will result in a net loss for your firm. What cause of channel conflict is at play here?

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The Answer of You own a franchise (one location) of a national chain of quick luncheon meals. The corporate office (the franchisor) is conducting a nation-wide marketing campaign introducing a $5.00 value meal option. This $5.00 value meal option severely cuts into you operating margins. Numerous complaints to the corporate office have resulted in the corporate office taking the position that "the franchisees need to be competitive and this $5.00 meal is competitive." You disagree noting that even with an increase in store traffic, the reduction in revenue and margin produced by this value menu, will result in a net loss for your firm. What cause of channel conflict is at play here?

You Own a Franchise (One Location) of a National Chain