Wednesday, August 31, 2011

India Introduces Urban Franchises

The India Post Office has introduced franchised urban post offices in fast growing areas  The details of the franchise agreement provide a lot more details to franchisees than public information on Village Post Offices due.  The details illustrate that franchisees will have a broader range of Products than what a Village Post Office can sell.

 Here are some details:

Only counter services are to be franchised, while delivery and transmission will be continued through the Department. Linking arrangements for the franchised outlets will be provided by the franchisee.
The franchisee will provide service across the counter for a minimum defined time schedule with flexibility to work round the clock.

Products and services offered
  • Sale of stamps and stationery
  • Booking registered articles, speed post articles, money orders (on EDBO model), e-post, etc. (no bulk booking to be taken up in franchised outlets
  • Functioning as an agent for PLI and provide related after sales service, including collection of premia. (subject to fulfillment of criteria for PLI agents)
  • Marketing products for which the Department has a corporate agency or tie-up and provide related follow up services. (subject to agreement with the other organizations involved)
  • Providing retail and bill/tax/fine collection/payment services of the Department. (subject to agreement with the other organizations involved)
  • Facilitating the provision of e—governance and citizen centric services (subject to agreement with the other organizations involved)
  • Any other service introduced by the Department in future through its outlets which is considered amenable to the franchise model. (subject to agreement with the other organizations involved)
The model has adequate flexibility built in to allow a range of services to be extended through the outlets according to the need / demand, and to increase the range when found necessary. Thus, the range of counter services that can be offered through different outlets can vary, keeping in view the location and its capacity to generate revenues.

Implementation Strategy:
In the initial phase and for the present, the urban franchise model will be implemented only in fast developing areas of urban growth like metros and their satellite towns, as also such urban areas where there is a justification for post offices on the distance and population norms but there is difficulty in providing the same through redeployment. The further extension of the scheme can be taken up after the results available from experience of the initial phase – say after six months of initial launch.
The viability of each franchise only requires to be assessed by the concerned field unit so as to ensure adequate returns to the franchisee. The expected minimum revenue, would depend on the range of services, particular location, potential revenue, the investments that the franchisee is willing to make, the cost likely to be incurred by the Department in providing support facilities, etc.

Commissioner per transaction
1.   Booking of Registered Articles
2.   Booking of Speed Post Articles
3.   Booking of Money Orders
4.      Sale of postage stamps and postal stationery and money order forms
5% of sale amount
5.   Retail Services
40%          of commission     earned      by                 Department of Post
(rounded off in rupees to be 40% or less)

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