0:01

The 40-year career that professionals took

0:03

for granted as they entered the

0:06

workforce has been crumbling for some

0:08

time now. Today, even a 10-year

0:10

career isn't a given. You can

0:13

blame a bad job market, AI,

0:15

economic downturns, changing dynamics, but the

0:17

bottom line is, this is much

0:20

bigger than that. The very nature

0:22

of careers is changing. So, how

0:24

do professionals across ages and industries

0:27

plan their careers in an environment

0:29

like this? Well, we are hoping

0:31

to answer just that at

0:34

the Ken's live event in

0:36

Bangalore on the 21st of

0:38

April. Two-by-two hosts Rohindhar Makumar

0:41

and Raveen Gopal Krishnan will

0:43

be in conversation with three

0:45

accomplished and distinguished guests, Harshal

0:47

Mathur, the co-founder and CEO

0:50

of Rieserpe, Vassita Agarva, chief

0:52

business officer of InMubi, and

0:54

Professor of Mukherj of IIM

0:57

Bangalore. Join them as they

0:59

discuss how we should rethink

1:01

careers for a new

1:04

era of rapid

1:06

change, innovation and

1:09

uncertainty. Details

1:11

about the event

1:14

and a link

1:16

to purchase tickets

1:18

will be in

1:20

the show notes

1:22

of this episode.

1:24

Needless to say, business has

1:26

been booming. And the company is

1:29

now inching towards its next

1:31

big step, an IPO. But in the

1:33

midst of all its success, it appears

1:35

Lenscott may have rubbed some people

1:38

the wrong way. The catch is that

1:40

these are the very people who helped

1:42

it get to this point in the

1:44

first place. I'm talking about the

1:47

franchise owners that operate hundreds

1:49

of its stores across the

1:51

country. You see for the last

1:54

few years many of them

1:56

have observed a similar pretty

1:58

disturbing pattern. set up their

2:01

stores with Lenscat's blessings, of course.

2:03

And then things started getting weird.

2:05

They found that they were being

2:07

left in the dark about their

2:10

own store's finances. And then somewhere

2:12

down the line, Lenscat would swoop

2:14

in and open a country-run outlet

2:16

very close by. This is a

2:19

fight that's been simmering for quite

2:21

a while, but now all that

2:23

frustration is turning into legal action.

2:26

Right now, a group of former

2:28

franchisee owners is preparing to ask

2:30

the Karnataka High Court to reopen

2:32

an investigation into Lenscott. These particularly

2:35

disgruntled store operators have accused the

2:37

company of full-blown fraud of playing

2:39

accounting tricks to mess with their

2:41

franchisee's commission earnings. I don't know

2:44

if you noticed, but there's a

2:46

reason I said that they want

2:48

the investigation to be reopened. This

2:51

isn't the first time this case

2:53

has entered the courtroom. Multiple FIRs

2:55

have also been filed against Lenscott

2:57

in the last few years, one

3:00

of which was handed over to

3:02

the economic offences wing, which looks

3:04

into financial crimes like fraud and

3:06

misappropriation. But Lenscott stood its ground.

3:09

In January, it got a stay

3:11

order from the Karnataka High Court,

3:13

putting the investigation on hold, for

3:16

now at least. The company told

3:18

the camp that the dispute is

3:20

rooted in contractual issues and that

3:22

the Karnataka High Court rightly recognized

3:25

this and issued this day. But

3:27

the store operators are not backing

3:29

down either. In this episode, we

3:31

dive into this particularly bitter battle.

3:36

Welcome to Daybreak, a business podcast from

3:38

the Ken. I'm your host Rahill Philipos

3:40

and I don't chase the new cycle.

3:42

Instead, every day of the week, my

3:44

colleagues Nikhah Sharma and I will come

3:47

to you with one business story that

3:49

is worth understanding and worth your time.

3:51

Today is Wednes Day, 16th of April.

4:09

I want you to imagine you

4:11

are the owner of a Lenscat

4:13

franchise store. Things are going well.

4:16

Business is looking good. And then

4:18

suddenly, a couple months down the

4:21

line, another Lenscat store pops up

4:23

right next to yours. Turns out

4:25

it's run by the company directly.

4:28

Now this is the first allegation

4:30

store operators are making against Lenscat.

4:32

Unfair competition. Cannibalization. It isn't hard

4:35

to see why this would annoy

4:37

a store operator. Unfortunately for them,

4:40

this is increasingly becoming their reality

4:42

now that Lenscott is actively moving

4:44

away from franchise partnerships. The focus

4:47

is now on running its own

4:49

stores. And the sad thing is

4:51

that most franchise owners saw it

4:54

coming. The Ken spoke to one

4:56

such operator named Shellish Jane. He

4:59

recalled how in the last three

5:01

to four years, Lenscott replaced nearly

5:03

eight area managers. These managers had

5:06

to oversee both franchise and company-owned

5:08

stores, but their focus was mainly

5:11

on Lenscatt's own stores. For nearly

5:13

a year, Lenscatt didn't even send

5:15

Shailesh, a stored manager. It was

5:18

only after countless follow-ups that they

5:20

did end up hiring someone, but

5:22

they are Shailesh to cough up

5:25

much more than the market rate.

5:27

It gets worse. Last year, his

5:30

franchise license was terminated. Another franchise

5:32

owner expressed his frustration after Lenscott

5:34

opened a company-owned store right next

5:37

to his despite promising that they

5:39

would not. Now this begs the

5:41

question, is this just standard industry

5:44

practice or is Lenscott going above

5:46

and beyond? Well, Jite Shagarwal, founder

5:49

of legal advisory firm Tree Life

5:51

Consulting, argues that it's not all

5:53

that unusual. He told us that

5:56

several Indian startups and global businesses

5:58

do it, especially in high-performing locations,

6:01

think Indranagar and Bangalore, or cannot

6:03

play in Delhi. Even Domino's has

6:05

a similar strategy. It calls it

6:08

fortressing. So it clusters stores and

6:10

tight zones to dominate local markets.

6:12

Brands like Biccanaire Walla also tend

6:15

to mix company owned and franchise

6:17

outlets. When we reached out to

6:20

Lenscott before publishing our story, it

6:22

said that this approach is completely

6:24

normal. A spokesperson explained that the

6:27

goal was to eventually set up

6:29

a store in every single neighbourhood.

6:31

In fact, they explained that proximity

6:34

in kilometers isn't even a criteria

6:36

in the company's store opening policy.

6:39

The spokesperson said that this is

6:41

even mentioned in the company's contract

6:43

with franchise companies. So essentially what

6:46

Lenscat is saying is that it

6:48

is well within its right to

6:51

set up a store wherever it

6:53

wants. Naturally this doesn't work out

6:55

too well for store operators, but

6:58

turns out that is just the

7:00

tip of the iceberg. Every couple

7:02

years, even before they are able

7:05

to recover their ROI, it seems

7:07

the company demands an additional 15

7:10

to 20 lakh rupees for mandatory

7:12

store renovations. And if they refuse,

7:14

their license is dominated. At least

7:17

three franchises told us that they

7:19

lost their licenses that way. Lenscott

7:21

has also acknowledged this in its

7:24

High Court petition. Meanwhile, the disputes

7:26

over final settlements are ongoing. Some

7:29

franchises claimed that Lenscott manipulated its

7:31

settlement after store closures. One franchisee

7:33

and Madhya Pradesh, for instance, returned

7:36

14 lakh rupees in assets to

7:38

the company after his license was

7:41

terminated. Yet his initial settlement was

7:43

only 50,000 rupees. After sending a

7:45

legal notice, the franchisee was eventually

7:48

reimbursed over 13 lakh rupees. And

7:50

this isn't a one-off. Other franchisees

7:52

have reported similar experiences of... unexplained

7:55

entries and manipulated spreadsheets. Just last

7:57

October, five franchise operators in Karnataka

8:00

teamed up and filed a police

8:02

complaint in Mysore. Between the five

8:04

of them, they had run 13

8:07

Lenscat stores at the state and

8:09

they all had the same gripe.

8:11

They were accusing Lenscat stop executives

8:14

of manipulating the company's accounting software

8:16

to mess with their stores finances.

8:19

The company also insists that Soma

8:21

Shekar, the main complainant, voluntarily ended

8:23

his license in December 2024. Lenscat

8:26

claims it sent him a full

8:28

settlement statement and that he actually

8:31

owes 12 lakh rupees. Shikar has

8:33

denied this, arguing that the reconciliation

8:35

report is riddled with unexplained entries

8:38

and lacks any certified audit. The

8:40

case in the Mysore Court remains

8:42

pending and is said to be

8:45

heard next on 9 April. The

8:47

High Court accepted lens cards petition

8:50

on 22 January and stayed the

8:52

police investigation against the company till

8:54

the next hearing. The franchise owners

8:57

meanwhile are in the process of

8:59

filing a counterpetition requesting the High

9:01

Court to let the police continue

9:04

its investigation. The last time around,

9:06

this did not play out the

9:09

way they had hoped. Back in

9:11

2016, they formed the All India

9:13

Lenscott Franchisee's Association to negotiate better

9:16

terms, but their resistance was short-lived.

9:18

A former member said most people

9:21

involved via the forced-out terminated or

9:23

got-off. Believe it or not, it

9:25

gets worse. Before we move on

9:28

to the next segment, we have

9:30

a very special announcement to make.

9:32

Hi, I'm Sita Rahmanji and I'm

9:35

a deputy editor at the Ken.

9:37

It's been tough to keep up

9:40

with the news. Shocking tariffs, a

9:42

90-day pause, a standoff with China.

9:44

It's impossible to guess Donald Trump's

9:47

next move. But everyone knows that

9:49

with him, expecting the worst is

9:51

actually business as usual. What India

9:54

does over the next few years

9:56

could alter the course of its

9:59

economic history. Many commentators have rightly

10:01

called this our second 1991 1991

10:03

1991 moment. and the Ken is

10:06

here to help you make sense

10:08

of it all with a premium

10:10

newsletter called Make India Competitive Again.

10:13

To make this more accessible. We

10:15

will also release an audio version

10:18

every Wednesday. This is a newsletter

10:20

that we think will be relevant

10:22

to everyone in India and we'd

10:25

love for you to tune it.

10:27

They claim that while they were

10:30

assured complete transparency, the company's accounting

10:32

practices were anything but clear. Lenscott

10:34

was meant to provide full access

10:37

to sales, purchase and stock data

10:39

via its point of sales system.

10:41

It was meant to regularly send

10:44

reports and purchase ledgers to the

10:46

stores. But it didn't end up

10:49

doing that. Now for a store

10:51

owner, all of this data is

10:53

crucial for calculating profits and ensuring

10:56

compliance with GSD regulations. The operators

10:58

claimed that Lenscat also controlled several

11:00

aspects of daily store operations. Things

11:03

like hiding managers to handle sales,

11:05

payments, inventories. These managers were supposed

11:08

to answer to both Lenscat and

11:10

the franchisees, maintaining quality standards. Yet,

11:12

franchisees claimed that they were often

11:15

left out of the loop. That's

11:17

despite the fact that these managers

11:20

were actually on their payroll. Lenscat's

11:22

control extended even further. A former

11:24

franchise owner we spoke to said

11:27

Lenscott controlled franchisee funds through a

11:29

digital wallet. It kept deducting money

11:31

for arbitrary things like advertising fees

11:34

and customer satisfaction surveys. And then

11:36

there is the fraud investigation. A

11:39

forensic audit commissioned by the franchisees

11:41

and referenced in an FIR filed

11:43

on 26th October 2024 alleged significant

11:46

discrepancies between transactions in the POS

11:48

system and figures recorded in financial

11:50

registers, GSTR filings and purchase logs.

11:53

reconciling Commission sales ledgers. Franchisees found

11:55

that for the fiscal years 2022

11:58

to 23 and 2023 to 24,

12:00

over 35 lakh rupees in profits

12:02

and commission revenue had never been

12:05

reported. This was an issue highlighted

12:07

in the FIR. Another recurring complaint

12:10

was about how when products were

12:12

directly shipped to customers, the invoices

12:14

would be email to them. The

12:17

franchisees would be left out of

12:19

the process. They couldn't even download

12:21

the same invoice. That ended up

12:24

becoming a serious problem when tax

12:26

authorities came knocking. In fact, nearly

12:29

a dozen franchisees reported receiving GST

12:31

notices based on lens cards reported

12:33

data, which didn't even match their

12:36

own records. And when they tried

12:38

reaching out to area managers, they

12:40

just would not be able to

12:43

get a meeting. We even took

12:45

a look at WhatsApp and email

12:48

exchanges, and we found a similar

12:50

pattern. Franchise owners would raise red

12:52

flags. and Lenscat officials would deflect.

12:55

In response to these allegations, Lenscat

12:57

insists that any discrepancies typically arise

13:00

from inconsistent use of reports at

13:02

the store level. Lenscat insisted that

13:04

they proactively work with their franchise

13:07

partners to deal with such challenges.

13:09

But even if there is truth

13:11

to that, things are about to

13:14

get even harder for store operators.

13:16

They are all going to play

13:19

a much smaller role in the

13:21

next phase of the Lenscat story.

13:23

because now the push is for

13:26

primarily company-owned stores. As the company

13:28

prepares for its IPO, a more

13:30

tightly controlled retail network makes for

13:33

a more attractive proposition to investors.

13:35

A messy, dispute-ridden franchise model on

13:38

the other hand, certainly does not.

13:40

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13:42

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just a small sample of our

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subscriber only offerings. A full subscription

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to .com and click

13:57

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subscribe button on

14:01

the top of

14:04

the the website. Today's

14:06

episode was was

14:09

by by Rahil edited

14:11

by Rajiv by Rajiv Sien.