Question

This is the case study question from sales management - shaping future sales leader textbook.

"The Idli Bowl is a fast-food restaurant based on southern Indian food. The basis of the food is the idli, a soft rice cake, on which the customer can add toppings like sambar (a spicy Indian sauce), tikka masala, and other Indian foods. In two years’ time, the company opened two locations in Austin, Texas, but expansion was limited due to the owner’s lack of capital. Ram Natarajan,the founder of the company, then hired Cathy Swift to sell franchises.
Cathy, after a successful career selling Subway franchises, sold 12 franchises in the company’s third year.
Ram thought that was a good first year, but his goal was to have 200 franchises in the next two year. Ram hired five more salespeople and asked Cathy to manage them. Ram would then do the franchisee training, franchisee support, and corporate marketing. Quickly a number of problems arose: Salespeople were calling on the same prospects, which led to confusion.
By contrast, other prospects were not getting called upon even after requesting information from The Idli Bowl. After six months, the sales staff had a total of twenty-two franchises. Worse, two of the sales people quit, and ten franchisees wanted out of their contracts, saying they had been misled as to what the company offered.
At this point, it was pretty clear that there were problems."

1. What might those be?
2. What should Ram do to save his business?

Answer 1

Solution -

1. There are multiple problems in this case -

• The sales team has not gone about with their work in an organized manner

• Indulgence in hard progressive selling

• Competition within the team

• Individual objectives have taken precedence over organizational objectives

• Multiple layers of control has been missing as Cathy has been given the whole responsibility without monitoring

• There could be faults in the hiring of the salespersons

2. Ram needs to take the following steps to save his business and brand now -

• Hold meetings with the existing franchise owners and clarify his position. those that wish to move out of the franchise should be allowed to do so after consideration of the terms and conditions which call for loss sharing or penalty if any. If the Ram does not address this then his brand is at stake. The meeting should set the expectations straight.

• Have a meeting with Cathy and team and set the expectations of the organization on ethical objectives and not really sales targets

• If there is a difference in understanding between the sales team and Ram then and he must take appropriate steps for finding replacements within the sales team

• Cathy should be asked to take control of the operations of the sales team and should provide regular updates to Ram on the progress. This will establish control.

• Ram should regularly visit the franchisees and assist the franchise partners in operational difficulties and maintenance of standards. This will help him to maintain his franchise model without erosion of his brand in a more sustainable manner.