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Harvey Norman sees rise in franchise revenue

Sarah Stowe

Harvey Norman has achieved net profit of $268.1m, thanks in part to a change in franchise operations.

Franchise sales revenue rose by 3.7 percent, up to $4.95bn; as a result franchisees paid increased fees to the franchisor, and at the same time the retail chain lessened the level of support it provided at the franchise front line.

According to Inside Retail, Gerry Harvey, chairman of Harvey Norman, said “Strong growth in franchisee sales has enabled us to further reduce tactical support to franchisees. While maintaining our investment in the Harvey Norman brand, tactical support has decreased by approximately 20 percent in each of the last two years.”

Revenue from the franchise operations rose by $56.78m(seven percent) up to $870.80m.

There are now 194 franchised complexes in Australia, and 678 franchisees.

Medium term performance at franchisee level will be helped by the strength of the housing market.