Part King Case Analysis

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PART KING INC. Part King Inc. finds its origin in 1996 under the ownership of Hawthorne Corporation which is itself among the prominent retail stores in Canada. PK has been growing since its origin and had a 50 number of stores in Canada in 2005. PK till now has been working and growing by virtue of its franchise system. Franchise system, though had been generating profit but it PK ought to make bigger profits and get the fame in the Canada as the most authentic and renowned auto parts store Case Summary Part King, the auto parts store had been running under the franchise system with almost 50 stores since 2005. Kevin Bachand, who had a significant experience in this field, was appointed the PK as Ontario sales manager in 2003 was asked to propose a corporate model system for the three corporate owner stores as Harthrone was also to renegotiate with its merchandise store franchisees that also had their inclusion in the PK auto stores. Bachand aimed to suggest a system that would neither favor franchise system nor corporate store system. He proposed different budgeting, evaluation, and incentive systems that were delineated from the previously running franchise system. Questions for Part King, Inc., Case Question 1: Assuming Bachand’s proposed system is accepted; compare the profitability of a franchised PK store to a corporate-owned store. Answer: In my point of view the proposed system of Bachand seems to be more profitable for PK in contrast to the current franchise system. I would like to quote following reasons in favor of my conception: Incentive system: In the franchise system franchisee was to be had a definite salary of $50000 but he had full liberty to draw as large salary as he wants contingent to the growth of equity by means of profitable operations and diminishing of debt. So, PK was to pay the salary on the basis of the

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