Uchumi Supermarkets #ticker:UCHM is set to hand over its Nairobi West branch to a franchisee, making it the second outlet to be relinquished in the retailer’s franchise model.
The struggling firm has called on investors with financial muscle to bid for the franchise licence of the branch. Uchumi, banking on its brand, in June picked the Lang’ata Hyper Branch as the first to go under the franchise deal. The supermarket is said to be in the final stages of sealing the deal.
Uchumi first contemplated the model in 2016 during its 35th annual general meeting when shareholders were briefed on the retailer’s expansion plan. The retailer then termed it a cost-effective model that would return it to profitability.
During the meeting, Uchumi said that it targeted 200 franchise mini shops across the country as part of its turnaround strategy. The strategy as announced did not, however include giving up its own stores.
In the franchise model, big brands allow other operators to use its name in a certain market in return for royalties.