Learning Express CEO Speaks About Franchises

TDmonthly: I realize that you provide new franchise operators with a Suggested Store Inventory Mix when setting them up, but after that point, do you have any say in what your stores stock?

DiMinico: Our stores can carry any products they want as long as they are safe and fit within our concept — which gives them a wide range of options. In the 18 years we have been in business, there has only been one instance when I have asked an owner to remove a product from their shelves. It was a box of poker chips in a spinner that they purchased for counting and sorting activity for preschoolers. As you can imagine the packaging was better suited for a luggage shop or an adult game store. It looked odd, out of place. The manufacturer took back the product and we substituted it with a product from Learning Resources.

Our owners need to make buying decisions based on their local market. What sells in N.C., Ga. and Texas isn’t the same as what sells in New England. Even on a state level, there are items that sell well in our Newton, Mass. store that won’t sell as well in our Needham, Mass. store — only four miles away and visa versa! Our owners have to tweak their merchandising mix based on their demographics and the varying taste of their customers. We start them off on the right foot with the initial mix for what sells in their part of the country, but they make all the buying decisions going forward.

TDmonthly: Do you help them to understand what will sell best in their area?

DiMinico: What is very beneficial to our storeowners is having the ability to see best sellers by region. All of our stores share best-selling information and trends via our Intranet. A trend will typically start in the L.A., Atlanta or New York market and stores in those markets are very good about sharing that information so stores across the country are well positioned to be first to market and ahead of the curve in their area.

TDmonthly: How do you organize buying groups? Do you have enough pull as a group to demand certain packaging and delivery terms?

DiMinico: Stores in close proximity to each other will often order together if, for example, 1000 pieces can get them an additional discount or free freight or extra dating. Those stores handle it independently of our office, however.

We have done some private packaging but only when we have put an item in our holiday catalog. Otherwise, we wouldn’t be able to support the minimum the manufacturer requires as our stores order independently. We are in the same position as everyone else when it comes to delivery of product. We are all at the mercy the manufacturer’s planner! And, although we will end our year with 115 stores — “demand” is generally not a word we use in our conversations with vendors.

Check back next month to read part III of this IV-part series.