CANDYMAN SMOKING OUT TSG FRANCHISEES
Written on the 17 December 2015 by Nick Nichols
TOBACCO retailer FREECHOICE has lit a match under plans by its largest rival to sell its business assets, with plans to tempt some operators of TSG's most profitable stores to switch brands.
FREECHOICE, headed by millionaire playboy Travers Beynon (aka The Candyman), launched its aggressive expansion plan after TSG, formerly Tobacco Station Group, announced plans this week to sell its business.
The TSG network comprises 340 stores across Australia, mostly franchised outlets, from which the group is reported to have generated revenue of more than $4.7 million in FY15.
The Melbourne-based TSG has placed all its business assets, including trademarks and intellectual property, for sale.
According to an advertisement announcing the sale, more than 65 per cent of current franchisees are secured through agreements with between two and five years to run. That has prompted FREECHOICE to target those operators looking to change teams.
The Gold Coast-based FREECHOICE was established in 1991 and has 255 stores across Australia.
FREECHOICE's colourful managing director Travers Beynon became an internet sensation this year after a series of provocative social media posts from his waterfront Gold Coast mansion that put on show his millionaire playboy lifestyle.
Beynon has ruled out considering an outright purchase of TSG, revealing that a number of TSG franchisees have already approached him looking at joining his franchise model.
"I have no intention of buying the business as advertised as it's clearly struggling and it makes no sense to purchase their problems," says Beynon.
"All I'm interested in are the profitable stores which I intend to go after individually as they get closer to the end of their current franchise agreement.
"The exodus has already started with TSG's biggest-volume store moving his business to FREECHOICE, along with numerous others in key locations, and I expect the trend to continue."
Former TSG franchisee Ming Liang, who operates in Frankston in Victoria, was TSG's biggest-volume store selling more than 30 million cigarettes a year. He says the decision to move under the FREECHOICE banner followed a difficult business relationship with TSG.
"While I was still with them, they [TSG] just stopped talking to me for about three years," Liang says.
"TSG don't have any interests in storefronts, so have little idea what it's like to run a small business.
"FREECHOICE has a number of company-owned stores so they know what it's like on the retail frontline."
Author: Nick Nichols