Thomson’s new franchising store plans will be subject to stricter rules than franchises in other sectors because of ABTA’s bonding and financial rules.
To meet ABTA criteria, holiday payments will continue to be made to Thomson centrally with the franchisee then paid commission. In other sectors, the franchisee controls its turnover.
A franchisee will also continue to count towards the company’s ABTA bond because the association counts franchised shops as “branch offices”.
Every time a new franchised store opens and extends Thomson’s retail network, the size of its bond will then increase, as a bond is based on turnover predictions for the whole company.
As far as ABTA is concerned, Thomson will remain in full control of the franchised stores.
An ABTA spokesman said: “It’s the group’s responsibility to pay off the debt of a failed franchisee. We would not get involved.”
TUI head of third-party sales Jeanne Lally said the company is still working on how to keep its large high-street presence but strip out the high costs of running a shop network.
“We’ve not discussed which model suits us best. In the past it has been retailers setting up franchises, not an operator. We need to assess shops separately depending on gaps in distribution.”