UK Rentokil Initial’s parcels business plans to cease franchising
Rentokil Initial has today announced that its parcels delivery business Initial
City Link will, over a period of time, cease to operate on a franchised basis.
This is another important step forward in Rentokil Initial’s development. The
change will return full control of Initial City Link to the Company and should
deliver better returns for our shareholders while maintaining or improving
service to Initial City Link’s customers. Franchisees, who collectively have an
estimated annual profit of GBP5 million, will be offered a fair price for their
businesses and will be given plenty of time to plan the transition. The franchise model used by Initial City Link has been in place since the early
1990’s largely unchanged and the franchisees have played an important part in
its growth. However, thanks to recent investment in franchisor sales and
marketing and a renewed focus on personnel, better growth is being experienced
in Initial City Link’s controlled and operated branches than in those of the
franchisees.
