Pearle Vision Prepares for Major Franchising Push to ECPs


By Marge Axelrad: Editorial Director

CINCINNATTI—Pearle Vision is embarking on a strategic expansion of its franchising efforts.

Starting this year and into 2011, the division of Luxottica (NYSE:LUX), which currently operates 743 stores in North America, including 364 franchises in the U.S., intends to target independent practices and optical retailers with a new initiative that reflects the Pearle brand’s “Clearly Different” philosophy backed up by a complete infrastructure of support services and resources.

“We believe there’s a large group of optometrists out there who really want more of a turnkey solution when it comes to running their own business,” said Seth McLaughlin, senior vice president and general manager, Pearle Vision, in an exclusive interview with Vision Monday. “Some are retail and business-minded and are successful, but among the 25,000 ODs out there in the U.S., there is a large number of them who we feel would be interested to bring in the expertise of Pearle and tap the resources of Luxottica Group to help them run their businesses.”

Pearle said it is leveraging its national brand strength and operational support to franchisees.
The current ratio of corporate stores and franchised Pearle locations in North America, including Puerto Rico and the Caribbean, is currently about 50/50; McLaughlin said the new initiative could potentially grow the total number of franchises by some 50 percent over the course of the next few years, reflecting the company’s optimistic outlook toward the current market opportunity.

McLaughlin added, “The demands of running a practice, from managing the staff and lab services to determining what works in the dispensary, are extreme. We can bring the power of nearly 400 corporate locations to bear with the data and experience to help determine what is selling and how to operate efficiently. And as we look at the heritage of the Pearle brand which Dr. Stanley Pearle founded nearly 50 years ago, we can do this in a way that respects and enhances the doctor’s ability to deliver premium eyecare. We want to be the eyecare retailer down the street, owned and operated by your local OD professional. This is a great evolution of the brand where the solution for the doctor is ‘Focus on patient care and let us take care of the rest.’”

McLaughlin continued, “In terms of the doctor role, too, we have learnings through our 100+ locations where we employ the doctor as well as significant input from our leasing doctors regarding best practices, technologies and equipment.”

“This is a great evolution of the brand where the solution for the doctor is ‘Focus on patient care and let us take care of the rest.’” —Seth McLaughlin
Luxottica and Pearle, said McLaughlin, see franchising as a trend in the U.S. and in other markets around the world. “We’re always looking at best path for growth for our brands. We are the franchise brand in Luxottica’s retail portfolio—there are really not too many similar opportunities in this optical category. We are looking for people who want to fully affiliate and leverage the power of a large company like Luxottica.”

Pearle initiated its franchise efforts in 1981. Today, there are 304 corporate Pearle stores in the U.S., Puerto Rico and the Caribbean. In Canada, Pearle operates 75 company locations and, McLaughlin said, “We are considering franchise expansion there in 2011.”

Much of Pearle’s current presentation to prospective franchisees, whether for existing optometric businesses or new practices, is to communicate the work that Pearle has been doing internally and with its existing franchise system in the past few years.

The goal of Pearle’s franchising efforts are to create “sustainable, profitable business,” the company said.
The underpinnings of Pearle’s “Clearly Different” tagline, now used in its $40 million integrated consumer marketing efforts, were about a year and a half in the making as the operation evolved this message from the long-term “Nobody Cares for Eyes More than Pearle” theme.

According to Bill Vaughan, Pearle’s vice president of franchise development, a 12-year veteran of the company, “‘Clearly Different’ speaks to the idea of value for the money, associate and doctor engagement with the patient, making sure that patients understand choices when it comes to eye health and wellness, lens technology—it’s a message of customer and patient advocacy. The Pearle platform is centered on trusted eyecare and how we deliver that in-store experience.”

Vaughan pointed out, “The consumer insights and research we’ve collected and tested to best understand the price/value equation and deliver those drivers of customer loyalty are things that are part of what the franchisee can rely on from us. In the U.S., managed vision care or group-directed care can be confusing; we want to help our customers understand it and this is a part of the process and training we offer associates.”

“The Pearle platform is centered on trusted eyecare and how we deliver that in-store experience.”
Vaughan also noted, “We’ve done a lot of work to be sure we can provide solid growth and support for franchisees, to help them be more profitable. The average annual volume for franchisee units is about $700,000 in dispensing volume, probably double that of the average independent, when you strip out the doctor fees. We have refined a turnkey support model based on input and analysis of turnover from thousands of locations; we have a whole new field structure team dedicated to operational excellence and integrated services.”

Vaughan added, “We want to be more diagnostic in our approach, to work with franchisee partners to understand the root challenges they face to discover how Luxottica and Pearle can solve those issues together, building a business plan, understanding capital assessments, finding the right real estate and so forth. We have a history of success with our long-term, ‘legacy’ franchisees; in fact, about 60 percent of our franchisees are with us 10 years or more.”

Vaughan cited the investment inside the Pearle operation which has happened in the years since Luxottica acquired Cole National/Pearle, including improvements in Luxottica’s optical manufacturing/lab operations and practice systems. Franchise agreements include product mix requirements but Pearle franchisees are able to choose from an approved list of outside vendors for frame choices. Pearle’s STARS program is its inventory managing system which includes turnkey product replenishment, product selection based on corporate data/trends, full-service frame and lab reps and Luxottica wholesale pricing advantages.

When it comes to the doctor side, Vaughan explained, Pearle “doesn’t interfere with professional judgments” but does offer “soft chairside advice and recommendations” for exam equipment and has a team which negotiates contracts with instrument makers for pricing and service.

Pearle’s current Franchise Advisory Council, with about 20 state and seven national advisory representatives, meets regularly to share input and provide peer-to-peer support.

Pearle’s traditional franchise convention will this year give way to a new, expanded Pearle Vision Brand Summit, involving both corporate and franchisees, vendors and resource services, to be held in New Orleans in October.