Provender: “We have the Profitability of Franchisees foremost in our mind”.

The supply and servicing of vending machines and so-called honesty boxes relies on Trust.  Often, equipment is placed in staff-rooms where people go to have their breaks and it is not unusual to see a range of personal items lying around the place, including wallets, cell-phones, even jewelry!  And then not even going down the track of overhearing conversations between people..!

That trust takes time to build, and there are no hard and fast rules: each customer is different.  So with this customer.  Calling on their workplace weekly, I noted they had a coffee vending machine for staff and visiting trades people that was often out of order. Finally, I got the opportunity to speak with the Managing Director about the machine, which he owned.  He was quite keen to have it replaced and gave me an opportunity to quote on a lease machine.  He accepted that to lease was a far more cost-efficient option as servicing, repair and maintenance were no longer at his expense, and he accepted an offer to have a different machine on a trial-basis.

Of course, I made contact with Provender Franchise Management Office providing a detailed brief on the company, its requirements, adding there was also a real possibility to place another coffee machine in their North Island branch and requesting a “trial-machine”. I (finally) received relevant information from the Business Development Manager on costs related to the equipment and in conjunction with him we determined a monthly lease price, based on both the cost of the machine and what was being charged for similar equipment by other Franchisees. It is important to note I would be required to purchase the machine from Provender.

However, my customer visited the Provender web-site and discovered:

• the same machine was offered by Provender New Zealand Ltd. for a monthly lease $ 40 less than my quote;

• Provender New Zealand Ltd. offered each company that signed up with them a $ 100 petrol voucher.

OUCH!!!

When I found out about this, there were a few choice words exchanged between myself and the Managing Director who claimed to have no knowledge….  weird, because the man is a control freak! NO-ONE dares do anything without him knowing and approving.  However, the next day this posting had disappeared from the Provender web-site.

I did receive some “soothing” e-mails from the Business Development Manager.  Most of these made no sense at all.

To me, Provender appeared to be in direct competition with its own Franchisees (!!!!!) and it soon became clear how Provender was going about it.

Totally and utterly out of the blue I got a call from a third party advising me that another one of the Provenders’ Business Development Managers, a daughter of its Managing Director, had made an appointment to meet with my client and was going to sort things out.  Yeah, Right!  Would it not be the correct thing, at the very least, to inform me of this meeting?  I had briefed Provender in meticulous detail on my client.  Apparently not!  Why?  Because the contract this Business Development Manager presented to my client reflected the true intentions of Provender:

•  Provender was going to supply the machine direct at the price stated on their web-site and further give the company a $ 150.00 petrol voucher;

•  Provender was further “responsible “ for the supply of ALL consumables (coffee, sugar, soup, what have you);

•  Provender stated the four weekly service cycle (cleaning etc.) would be carried out by……… it’s Franchise Owner (i.e. ME) and that I would deliver the consumabels ordered by my client………………...

MMMMMMMM. 

Interesting stuff -  -  -  -  here is a Managing Director blabbering on that the profitability of “his F/O” [F/O stands for Franchise Owner but he never bothers to write the full title] is uppermost in his mind………….   So, where is MY commercial benefit: Provender leases-out equipment, sell consumable items, yet I am expected to deliver these PLUS clean equipment for no commercial gain?

I told my client I would match the price and presented the client with my contract, detailing supply and service/maintenance.  It ended up with me being given a chance (TRUST, you see) over Provender NZ Ltd.

Finally, the so-called demo machine arrived.  It was dirty, with coffee, milk, and water still in the various containers but, most importantly, there were no instructions with it at all!  I made contact with the Business Development Manager who promised to e-mail the instruction manual to me “As we speak”.  It took three days to arrive, via e-mail!!  Then, the crucial moment arrived: the machine was connected and switched on.  It failed on all counts as it was faulty, fortunately a minor point I was able to fix on the spot.

In the end, my client went elsewhere for a coffee machine – dealing with Provender had caused too much bother, upset, controversy, and unease.  To this day I still call there once weekly to restock their honesty-box and have cemented my relationship.  Still, I have to wait for two years before the coffee contract they have comes up for review.  It's OK - I'll wait.

a provender franchise - "professional support"

Professional Technical support……..

Where to start?  Perhaps with the much-lauded CMS (Customer Management System) all Franchisees had to compulsory purchase from the Management Office – cost: $ 400.00 plus GST.

Fist, my copy was handed to me with a brief explanatory note which also stated my log-in name and password.  Small alarm-bells rung loudly when I was informed the password could not be changed.  No-one could answer why not, and soon the topic was changed to, well, the weather or something.

The programme itself.  It was build on the relational database platform (MS Access) and, in reality, showed only information relevant to a current transaction.  No history, except for the previous four weeks and then not even cumulative (quite relevant if one wants the history of a customer).

Soon, the logging in via the net became a problem.  No-one could tell me why although at one point one of the staff in the Management Office disclosed (in writing) that the IT outfit that had developed this programme had ceased to exist and no-one could figure out what the difficulty was.  In the end, it stopped working altogether, so I gave up trying.

Although, I threatened to not pay any more bills until this problem was fixed after which I received a call from the Managing Director himself, explaining these two issues (bills for stock – management support) were totally unrelated and that non-payment was a serious enough reason to call in the debt collectors…. When I confronted him saying I had paid $ 400 of my very sound money for something that was defunct, he just waived it away and said these thing happen in commerce adding there would be a solution, free of charge, just around the corner.  It appeared a "long and difficult" corner to take: nearly 2 years later it still had to eventuate.

The next one is more serious.  Provender desires to be the largest snack and beverage (vending) retailer in New Zealand.  It lures people into believing they [Provender] are “winners” with all its’ support staff highly trained and totally dedicated to supporting the Franchisees.  Reality is different.

1. Provender buys second hand vending equipment and then on-sells to its franchisees, at a massive profit.  According to law, it does not have to provide any warrantee with equipment it sells: it is deemed an internal transaction, and the equipment is second-hand.

2. The supply of spare-parts for any equipment purchased from Provender is left (by Provender) to third parties.  The claim to having a team of dedicated and “trained staff” is a myth, a hollow phrase.  The full extend of “technical expertise” is to provide contact details of where to obtain support, parts, service.

3. Also the supply of equipment is fraught with difficulty.  In many instances the shipment is incomplete and does not match what was ordered, acknowledged to be supplied, and, PAID FOR.

4. Equipment is delivered in sub-standard condition, often not even cleaned to the minimum standard as specified by the manufacturer.  In some instances, equipment was faulty and did not operate properly due to defective components.

When I purchased my first coffee machine ex-Provender (described an “ex-demo” unit) it was delivered without the stand.   The response: “You can get for around $ 45.00 a kit-set from Bunnings.”  Ludicrous, as the kit-set was not large enough to accommodate the coffee machine.

Further, this machine had some 8,000 servings in its memory (each serving is recorded for routine maintenance purposes), a faulty key-pad (several key-selections such as “soup” and “hot water” were not working, as were the two main cleaning functions – flushing out the hoses, a daily hygiene requirement).

Finally, I discovered that a large deposit of coffee grind had been left in the machine.  The cause was in a poorly adjusted coffee-grinder.  This was not rectified until some weeks later by the “highly trained, technically competent” staff member visiting Christchurch.  Even then, a routine maintenance check some months later by an approved service-agent revealed the adjustments made were inadequate and superficial.

By the way, this machine was sold to me for around the $ 150.00 below the price of a new machine, which would have carried a 24 month manufacturers warrantee………….  found out later.

More on the Professional Support in the next installment!