FORMER Dragons Den star Theo Paphitis is mounting a rescue for some of the Post Offices’ biggest branches.
The Post Office is this morning announcing a major change to its remaining 108 owned branches in an effort to save them from closure.
The company will switch the big city branches, sometimes called “Crown Post Offices” to a franchise model and hopes to strike a deal with new owners by the end of September.
In November fears were sparked that the Post Office couldo close its loss-making branches in a move that would cut hundreds of jobs.
The 108 branches are currently losing the Post Office £40million a year, despite only accounting for 1% of the business, the firm said yesterday.
However, the Post Office said that the franchise plan will mean towns will “that currently have a Directly Managed Branch in their area will continue to be able to access Post Office services either at, or near to, the same location.”
Franchising is a business model where a company (the franchisor) grants permission to an individual or group (the franchisee) to operate a business using its brand, products, and processes in exchange for a fee.
The Post Office was not guaranteeing that all branches will stay open as they are currently but it is understood that there has been strong interest.
It is understood that there have been 4,000 applications to take over the 108 branches from 500 different groups of bidders, including existing Post Office franchise owners.
Teso is in the running to take over some of the larger branches, but not all of them.
Stationery retailer Ryman, owned by entrepreneur Theo Paphitis, is also understood to be interested in acquiring some of the Post Office branches.
Ryman already offices Post Office services in six of its 237 branches. Mr Paphitis did not respond to a request for comment.
Nigel Railton, Post Office chairman, said that the £40 million of savings will be funnelled into increasing postmasters’ pay by 10 per cent as promised last November.
The Post Office is still negotiating with the government on funding for this year and is understood to have secured the majority of its funding.
Mr Railton said: “Moving to a fully franchised network is one part of enabling the Post Office to deliver a ‘New Deal for Postmasters’, helping to create a long-term, sustainable future for the Post Office.”
Post Office will work with franchise partners with a clear track record of successfully running Post Office services or similar customer-focused retail to ensure communities in these 108 locations will continue to receive a high quality of service once their Directly Managed branch is franchised.
Further details on proposals will be shared with local communities and stakeholders for individual branches in the coming weeks.
