Private Label: Who wins?
Posted by admin on December 10, 2011
The NBN has done numerous studies on the impact of private label products that mirror branded products.
There are three parties who split the “pie”:
- Customer (account, not consumer)
- Franchisee
- Canada Bread
So, when a Private Label product is launched, who wins?
Canada Bread is the big winner. Their profit margin increases substantially, while Franchisees lose almost 50% of their revenue compared to the branded product counterparts.
When it is on feature that disparity exponentially increases and Franchisees lose significantly more money. Each week this costs Franchisees thousands of dollars.
Frank Tilban said
Did you know that an account in Ontario, the earnings for a PL 675g for a franchisee is only .008 more today fall 2012 than in 1998. If you factor in the franchise service fee and the agreement renewal fee your earning for that same loaf leaves you with .003 cents more. That is 1/3 of a cent more today than 14 years ago.