HWT scraps trading zones

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25/07/2005

HWT scraps trading zones
Byline goes here

Harvey World Travel today announced plans to scrap its traditional franchise trading zones - a move the retail group is hoping will allow it to add another 80 travel agencies to its Australian network over the next 24 months.

Since HWT's franchise model was launched in the 1970s, members have operated within exclusive geographic trading zones.

But managing director Barry Mayo said the practice was now holding back the group's expansion and putting it at a disadvantage to competitors such as Flight Centre, Travelscene American Express and Jetset Travelworld.

He said trading zone restrictions had prevented HWT from adding new members following the collapse of the Traveland chain in 2002. More recently, the group was unable to accommodate American Express members he claimed were dissatisfied with chain's merger with Travelscene.

Mayo said some of the franchise zones, which have remained largely unchanged since they were carved out 30 years ago, could accommodate multiple franchise outlets given population growth over that period.

He forecast the move would help boost the group's sales by up to $250 million by mid 2007.

The new model will replace all HWT franchise agreements ending after January 1, 2006.

To fast track the transition, the group is offering franchisees who opt-in over the next three months rights to 5,000 shares.

In addition, franchisees who opt in will receive rights to a further 22,500 shares for each HWT branded travel shop that opens/converts in what was their trading zone in 2006; 17,500 shares for each shop that opens/converts in 2007; and 10,000 for each that opens/converts in 2008.

25 July 2005

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