DEVENS, Mass.—For Sharon DiMinico, founder and CEO of Learning Express, occasionally
taking a few minutes out of her day to call or email certain franchisees to urge
them to pay their vendors is a means of protecting the brand.
DiMinico is working with the Credit Collective, interceding in the collections process
before nonpayment alerts are sent out to the vendor-member base of the group, or
worse. She became involved after some stores called her to complain that members
of the Collective had said they would no longer supply them because of nonpayment.
Learning Express had negotiated terms with most vendors on
behalf of its stores that included a net 60-day payment period. According to Credit
Collective founder Ron Solomon, some Learning Express stores were running out as
far as 120 days and not returning calls, at which point the alert process is
triggered. The stores were not in financial trouble, Solomon insisted; rather he
suspected they were paying larger vendors first.
"I was mortified," says DiMinico. "That’s terrible, because we all share the same
name. So even though we’ll have 140 stores at the end of this year, all you need
[are a few that create the problem] and that’s just bad."
So DiMinico worked out a system with Solomon that, at the option of the vendor,
creates a 48-hour buffer before an alert is issued on a past due account. Instead
a notice is sent to DiMinico, who then emails or calls the franchise owner in an
effort to shake the payment loose.
"It seems to be working,"
DiMinico cited one example of the owner of a high-volume store who was embarrassed
to hear from her. He called the vendor and sent a check out immediately.
Solomon says the issue rarely has to do with a retailer’s financial woes. "I’ve
worked with some retailers whose terms are net 30 and they’ve never paid me before
90 days for 10 years," he complains. "They’re just not as worried about the small
guys."
