Cut the leeks of the franchisee? Tuhu car maintenance was exposed to fool franchisees into choosing a location and causing losses

Recently, Mr. Chen, a franchisee of Tuhu in Changzhou, Jiangsu, broke the news to The Paper that he was fooled by Tuhu to choose a location and caused losses. Mr. Chen said that he joined Tuhu in October 2021, and the investment manager provided false data to create the illusion of a strong location, so he "had to bite the bullet and open the business", resulting in a dismal operation in the later stage.

According to Mr. Chen, Tuhu claimed in the early stage of investment promotion that the store's business district was particularly good, the surrounding population base was large, and the franchisees in Changzhou could achieve an average of 1670,000 yuan per store, and promised to do online diversion for Mr. Chen.

Under the advocate of Tuhu's investment manager, Mr. Chen joined hard. However, the actual situation after the opening is far from what Tuhu advertised, and the actual revenue of Mr. Chen's store is only about 30,000 yuan per month, and it is also about 50,000 yuan per month.

In response, Tuhu responded that the location was a very good service and retail location, and the location was appropriate, and denied providing false data, indicating that no coercion or deception occurred. It is reported that Mr. Chen has proposed to terminate the cooperation with Tuhu Car Maintenance.

In fact, Mr. Chen's experience is not unique. In June 2022, another franchisee of Tuhu Cars complained that it was "tricked" by a investment promotion manager of Tuhu in the process of joining, and was artificially intervened in the location selection issue, and the other party was suspected of fraud, resulting in the loss of its 1.7 million investment.

On August 16, 2022, another franchisee complained on the black cat complaint that it was also defrauded by an investment manager of 100,000 yuan on the grounds of paying a deposit to bind the business circle for one month in the process of joining.

According to public information, Tuhu has three different types of stores, namely self-operated Tuhu factory stores, franchised Tuhu factory stores and third-party cooperative stores.

The entire operation of the self-operated workshop store is completely controlled by Tuhu Cars, which is costly. Therefore, in recent years, Tuhu has continuously reduced its own stores, and at the same time continuously expanded its stores through franchised stores and cooperative stores, thereby passing on the cost of opening stores and operating risks, and earning its own franchise fee of "drought and flood protection".

According to data released by Tuhu, as of June 30, 2022, the number of Tuhu Auto's self-operated stores was 179, a decrease of 16 from 195 at the end of 2021. The number of franchised stores continued to grow from 3,658 at the end of 2021 to 4,114, while the number of cooperative stores decreased from 31,623 at the end of 2021 to 25,321, a decrease of 6,302, a decrease of nearly 20%.

From the perspective of revenue structure, of Tuhu's revenue of RMB5.468 billion in the first half of 2022, franchise, self-operation, cooperation and direct sales brought RMB4.055 billion, RMB255 million, RMB376 million and RMB358 million respectively. Obviously, Tuhu's revenue is very dependent on franchised stores.

However, to join Tuhu Car Maintenance, the threshold for capital investment is not low. According to the data, Tuhu's investment promotion policy has two levels of franchise standards, which are aimed at different types of franchised stores:

First, more than 800 square meters, as well as guest rest areas, work stations more than a certain number of stores. The brand usage fee of this type of store is 400,000 yuan/3 years; Second, for stores below 800 square meters, the brand usage fee is 200,000 / 3 years.

The above two types of stores need to pay a deposit of 100,000 yuan and pay a management fee of 8,000 yuan per month, while the monthly profit distribution amount is calculated at 10%.

In addition to paying brand usage fees, security deposits, management fees and profit sharing, franchisees also need to bear the rent, decoration, equipment, employee salaries, water and electricity and other expenses of opening the store, and the initial investment cost is not less than one million yuan.

In this way, Tuhu successfully passed on the store opening costs and operational risks to franchisees, and it made money from franchise fees and profit sharing.

Tuhu also has a third-party cooperative store, which only needs to pay a deposit of 5,000 yuan to Tuhu, which has neither a unified store design nor a brand logo, and is only responsible for the installation service of Tuhu's online products, and Tuhu pays related fees.

In other words, Tuhu only gives online traffic support, not brand authorization, but car maintenance is only an offline business within the "3 km" range after all, and has little to do with online diversion. After many car maintenance stores became Tuhu car maintenance cooperative stores, they found that the so-called online diversion did not have obvious benefits, and wasted 5,000 yuan of deposit, which also led to the instability of Tuhu car maintenance cooperative stores, with 6,302 stores withdrawing from cooperation in the first half of 2022 alone.

In fact, even the profitability of its own stores, let alone franchised stores, which are controlled by Tuhu itself, is relatively dismal. The data shows that in 2019, 2020 and 2021 and the first half of 2022, Tuhu had 127, 165, 195 and 179 self-operated Tuhu factory stores, of which the number of profitable stores was only 61, 92, 102 and 102, accounting for 52.1%, 77.3%, 57.3% and 57.3% respectively, which means that nearly half of Tuhu's self-operated stores are in a loss-making state.

In recent years, Tuhu has been in a state of increasing revenue without increasing profits. From 2019 to the first half of 2022, the revenue was 7.040 billion yuan, 8.753 billion yuan, 11.724 billion yuan and 5.468 billion yuan, the losses in the same period were 3.428 billion yuan, 3.928 billion yuan, 5.845 billion yuan and 952 million yuan, and the adjusted operating losses were 1.135 billion yuan, 913 million yuan, 1.314 billion yuan and 518 million yuan, respectively.

Based on the number of Tuhu factory stores (total self-operated and franchised) and the loss of 5.845 billion yuan in 2021, the average loss per store of Tuhu Car Maintenance is about 1.2737 million yuan, even if it is calculated at 1.314 billion yuan after adjustment, the average loss per store still reaches 306,000 yuan.

Obviously, Tuhu has achieved scale expansion by constantly pulling investors to open new stores, but it is also difficult to escape the suspicion of cutting franchisee "leeks".