Digitize franchisees without cannibalization: the marketplace model
- Arnaud
- 6 min read
Digitizing a franchise network often turns into a headache. The central e-commerce site, although essential, is frequently perceived as a direct competitor by physical stores, creating a risk of cannibalization and internal tensions.
What if there was a model to transform this conflict into collaboration? Discover how the network marketplace unites headquarters and franchisees in a digital ecosystem that is finally win-win.
1. The historic conflict between central e-commerce and franchisees
For many franchise networks, the advent of online commerce has generated a dilemma: on one side, HQ pushes a national e-commerce site, essential to remain competitive. On the other, franchisees view this digital channel as a potential competitor that “steals” sales they could have made in-store.
As we illustrated in our article Network marketplace: unify e-commerce & stores, this conflict manifests as:
- Tension over revenue distribution: Every online order is perceived as a missed sale for the local shop.
- Dilution of brand image: Stores may launch divergent local initiatives, leading to customer experience inconsistency.
- Fragmented customer experience: Online stock not synced with the store, impossibility of local pickup or return, etc.
Simply put, digitization, if poorly orchestrated, can become a factor of cannibalization of the physical network rather than a lever for shared growth.
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2. Why the marketplace changes the game
Faced with this dilemma, the network marketplace model offers a real alternative: rather than opposing the central site against the stores, it groups them into a common platform.
Here is what this paradigm shift brings:
- No more “stolen” sales: The national site becomes the biggest business provider for each store (via increased visibility, aggregated stocks).
- Local empowerment: Each store becomes a “local” seller within the marketplace, valuing its territorial anchorage.
- Shared infrastructure: Catalog, payment, and logistics are pooled, reducing costs and simplifying implementation for the entire network.
- Unified offer: The customer benefits from a fluid omnichannel experience (order online, pick up in-store, ship from store, return in-store). This improves customer satisfaction, which also benefits the stores.
- Fair play rules: The network can establish clear rules to protect points of sale (e.g., zone management, floor prices, transparency) to avoid unfair internal compet
In short, the marketplace transforms what was a threatening channel for the store into a unifying channel, valuing and amplifying its local activity.
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3. How every store becomes a seller on the platform
The technical and organizational implementation of this model relies on several pillars:
| Key pillar | Technical and organizational implementation |
|---|---|
| 🛍️Store offer management | Each point of sale (franchisee) integrates its products (availability, price, local location) into the marketplace. The store acts as a seller within the platform, respecting HQ's catalog rules. |
| 🔄Stock synchronization | To avoid stockouts or cancellations, store stock must be connected. Each store updates its inventory, which becomes visible network-wide. |
| 🚚Order allocation & local logistics | When a customer orders, the OMS (order management system) chooses the most appropriate store to process the order based on proximity, availability, or performance. The store prepares, ships, or makes available for pickup. |
| 🏛️Local autonomy within a framework | The store has autonomy on certain parameters (stock to propose, shipping management) but within a framework validated by HQ (minimum prices, catchment area). This avoids destructive competition. |
| 💡Training and change management | Such a model requires supporting franchisees: explaining that the marketplace is not a competitor but a lever; presenting the benefits; training on tools. |
4. Remuneration and commission models
For this marketplace model to be acceptable to all parties, it is necessary to clarify how everyone is remunerated. Here are some axes of reflection:
- Sales commission: HQ takes a percentage on every sale made via the marketplace. This generates revenue for HQ without it selling directly.
- Margin sharing: The store sells, sets its margin, and pays a part to HQ via the commission or a subscription.
- Subscription / Service packs: HQ can offer stores paid “digital packs” (local marketing, visibility, promotion) or include them in the offer.
- Incentive bonus: The model can include bonuses for stores that reach certain indicators: sales, responsiveness, customer satisfaction.
- Logistics costs management: Determine who covers delivery, packaging, and preparation costs. If the store ships, it must be remunerated.
- Margin protection: To avoid cannibalization, it is possible to define a floor price (the store does not sell at a loss) or reserve certain sales for the local store before opening them to the wider network.
The goal: A balanced economic model where the store has a net interest in joining, HQ values its federating role, and the customer benefits from an enriched offer.
5. Benefits for HQ and points of sale
| Pour le siège | Pour les magasins / franchisés |
|---|---|
|
|
This model creates a virtuous circle: the store actively participates, HQ provides the means, and the customer enjoys a better offer.
6. Concrete example: implementation with Origami Marketplace
Let’s take the case of the Origami Marketplace solution. It embodies this network marketplace model we described.
- It connects the stocks of all points of sale (stores, franchisees, warehouses) to offer a “360° view” of availability.
- It includes an integrated OMS that automatically assigns the order to the most relevant store.
- It allows business rules management (floor price, catchment area, commission) to protect margin and avoid cannibalization.
- It enables ship-from-store, click & collect, and store returns.
- Finally, it supports change management: co-construction with pilot stores, training, and API-first integration with existing systems (POS/ERP).
Suggested implementation steps:
- Map the network: Franchisees, geographical zones, typical volumes, digital maturity.
- Define rules: Commission, remuneration, minimum price, store perimeter, dedicated stock.
- Choose technology: Select an adapted solution (like Origami) and connect existing systems.
- Run a pilot: Test with a few volunteer stores to ensure they don’t feel cannibalized.
- Scale & optimize: Extend to the full network, measure KPIs (store vs marketplace sales share), and automate dispatch rules.
The network marketplace model transforms the logic: instead of HQ “taking all sales,” it federates. Each store gains visibility, potential turnover, and a strategic role. HQ builds a high-performance, sustainable, and coherent digitized network.
With a solution like Origami Marketplace, this model becomes tangible and operational. It is the first step to transform your distribution network into a unified omnichannel power.
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