Uchumi Supermarkets has begun implementing the franchise as a viable means to growth given its strong brand value.
The struggling retailer on Tuesday announced a five years deal with local traders to operate its Nairobi West branch.
CEO Mohamed Mohamed said franchising is among its strategic moves towards recovery.
“Franchising of this branch marks an important milestone for Uchumi Supermarkets. We plan to franchise other stores in addition to cost leadership initiatives,” said Mohamed in a statement.
Last year, Mohamed said they can unlock their super brand value using franchising to the benefit of all our stakeholders and franchisee.
“We shall enter into a “Franchising Agreement” that shall lay out various technical and financial obligations that the Franchisee shall meet in order to successfully operate the Franchise,” said Mr Mohamed.
“By achieving these pre-agreed key performance indicators on an annual basis for successive number of years, we will be able to receive multimillion shilling Franchisee Royalties. Most of the obligations of the agreement shall be agreed upon during the final stages of negotiations with the selected franchisee,” he said.