On December 17th, we found out that EzyDVD went into receivership. Stuart has already written about EzyDVD Pty Ltd being placed in receivership, so I won’t rehash the discussion here… what I will share however, is the email I received this afternoon about the fallout that is just starting to occur.
It appears that EzyDVD franchises are not accepting EzyDVD Gift Cards. However, the stores are accepting full payment for new releases… Needless to say that this is upsetting a number of consumers…
Just thought I’d send out a warning about Ezy DVD shops in Australia.
See ABC news: http://www.abc.net.au/news/stories/2008/12/17/2448871.htm
Today they went into receivership but are still trading from their
Neil’s Mum had bought us Ezy DVD vouchers for Christmas and he went
into Tuggeranong Ezy DVD to try to spend the vouchers and was advised
that they couldn’t accept them on the instructions of Head Office.
At the time, a man next to him was paying for a “future release”.
Pre-paying for a movie that is coming out shortly. They were about to
take his money when he heard the discussion Neil was having with the
sales clerk (Neil is not quiet – particularly when angry). The man
took his money back, ripped up his order sheet and said “you f*&ers
weren’t even going to tell me, were you?”!
Needless to say, DON’T pre-order from them or buy vouchers (I don’t
know if they are actually selling vouchers, but they were certainly
accepting furture release payments)!!
Neil’s Mum is a pensioner and certainly couldn’t afford to lose $120
on Christmas gifts!
Please pass this on to everyone you know!
Best regards and happy holidays (hopefully).
The franchisor is in receivership and they own the money that is taken at the Franchise level for Gift Vouchers, so the Franchisees are left ‘holding the can’ with this one – I feel for them. I know how many Gift Cards we sold in the lead up to Christmas in each of our stores…
I can’t comment about asking for full payment for orders… It was certainly one of our policies with customer orders – to ask for full payment up front. Additionally, we wouldn’t accept a customer order without a deposit.
However, would we – in the current climate that exists for the Franchise – be taking full payment? It’s not a position I would want to be in. Let’s look at the situation, as I understand it from my own experience:
- Here we are, at the end of the Christmas boom, where we make the majority of income for the year
- In little over a week, maybe a little longer, we are faced with the inevitable downturn in sales. Store revenues crash to the lowest they ever are in the year.
- Supplier accounts are 30 days, the stock purchased to cover the December sales isn’t paid for till January. December accounts are generally quite large…
- Revenue for the Gift Cards has been lost… The sales that would normally come from people redeeming Gift Cards just aren’t going to happen…
- And… you still have to have stock on the shelves and fulfill customer orders…
It’s a bleak picture, made bleaker by the current ecomonic climate. I’m certainly glad that we made the decision to exit when we did – regardless of our current financial situation… it would be a whole lot worse now…
What do you think? What should the Franchisee’s be doing?