Franchise plan for Thomson

THOMSON plans to franchise its brand to independent travel agents to slash shop overheads while maintaining its distribution network.

The move will allow agents to adopt Thomson’s name or take over existing Thomson shop leases.

TUI head of third-party sales Jeanne Lally said: “We will identify gaps in our distribution and where we want to work with independents and offer them a Thomson franchise. It is a different way of working with selective agents.”

Lally admitted the proposals were linked to cutting Thomson’s shop network as leases come up for renewal. She said it was also tied into increasing regional departure points for Thomsonfly and to commission cuts, but not a reaction to agents threatening to drop the operator.

Thomson has already approached some independents but will not reveal how many franchises it is seeking.

“We’ve had favourable responses on the basis of loose conversations,” said Lally. “Agents who may be interested will be those whose trade includes a lot of mass-market quality packages, and who want to work more closely in terms of access to stock and different deals, and have the benefits of Thomson’s name.”

The news comes less than a month after Thomson cut base commission to 7% and a year after the company first considered franchising.
The move follows the launch of a franchise operation by TUI’s Budget Travel in Ireland. But unlike Budget, Thomson franchises will sell other operators’ products. Sources claim Thomson will demand 40% of stock sold to be in-house.

Thomas Cook has denied rumours it plans a similar franchise operation.

Advantage managing director John McEwan – a former Lunn Poly boss – dismissed any threat to independents. He said: “Thomson is seen as a tour operator first and foremost, so I’m not sure how big the appeal would be [for agents to become franchisees]. Shops would effectively become a multiple forced to push Thomson’s product.” McEwan added Thomson risks losing control of its brand. “I suspect Thomson would be selective about the agents it signs up.”