F’real is to withdraw its milkshake machines from retailers who do not meet a target of selling at least 10 milkshakes a day.
In a letter sent to stores in January, and seen by betterRetailing, the brand’s parent company Rich’s gave retailers two months of notice to return blenders and freezers. It said: “As you may be aware, the ‘free on loan’ model of F’real operates on the basis that each store sells a minimum of 10 F’real milkshakes per day.
“Unfortunately, the stores that fall significantly short of the target do not make the ‘free on loan’ model a sustainable scheme.
“With this in mind, we have taken the difficult decision to serve notice on the F’real proposition in your store. We will give you the opportunity to sell through the stock you have purchased but will need to recover the blender and freezer within two months of this notice.”
The firm added it would not be issuing credits or compensation for any remaining stock left after the notice period. It has given affected retailers an opportunity to buy the equipment outright.
Rich’s sales, marketing and research and development director John Want said: “F’real invests a significant sum in each retailer store, providing a blender and freezer free on loan on the condition that the retailer supports the offer and achieves a regular cup rate of sale, as stated in the agreement they sign prior to installation.
As part of our regular review” of trading performance we do serve notice on stores who are not achieving the required cup rate of sale. Stores are provided with two months’ notice to sell through any stock they have before we retrieve the blender, which is then refurbished and placed in another store.
“We do work with retailers who are just below our required rate of sale to help them promote the offer and improve their performance, which also drives their own profitability. A purchase option is also available for those who have a F’real blender in place but don’t meet the 10 cups per day criteria.
“F’real continues to grow at pace and we encourage any retailer, whether they are part of a symbol group, or independent, to apply for a blender if they feel their store would make a great addition to the F’real portfolio.”