Nairobi — Uchumi's boss, John Masterten-Smith, last year termed the company's franchising effort "a viable venture that is bound to pay handsome dividends to both the franchise holder and the franchisee".

Yesterday, those words sounded rather hollow, as the company finally closed the door on its loss-making nightmare.

The 1980s was a boom period for Uchumi when the supermarket chain was synonymous with shopping. Its only competitor was the privately owned Ebrahims Supermarkets - which eventually lost out to other big chains.

Uchumi was founded by the Government in 1975 to retail essential commodities at reasonable prices and create a market for locally manufactured goods.

It continued to grow through the 1990s, with a rapid expansion plan to various towns around the country, and to Kampala in Uganda.

This growth was accompanied by an extensive brand marketing campaign executed by Scanad, the company's advertising agency at the time.

Unfortunately, the expansion did not live up to expectations, and Uchumi experienced a series of crises which culminated in its closing several branches around the country in March 2005, only to reopen them as franchises in August.

Was this limping giant fully prepared to go into franchising?

This mode of trading is often used as an expansion tool for a company that has built a successful brand and business model.

A case in point is the partnership between oil marketer Mobil and fast-food franchise Nando's, which spawned the Mobil-On-the-Run.

The concept entails a convenience store coupled with a fast-food restaurant at select Mobil petrol stations in Kenya. Service, pricing and quality are identical at all outlets and the companies deal from their respective positions of strength.

With Uchumi teetering on the brink of collapse, franchising was nothing more than the last kick of a dying horse.

Mr Richard Mukoma, the chairman of the Association of Practitioners in Advertising, points out that franchising has to be undertaken very carefully. Quoting the example of McDonalds in the United States, he says: "It has to be done with a meticulous business model which takes considerable time and planning. With Uchumi, this was not the case."

Without a good model, Uchumi's brand value has been watered down across the retail chain's outlets.

However, he says that Uchumi as a brand is very strong and retains its inherent value. "Uchumi's collapse does not have to do with its brand strength or weakness. The problem is that the brand has not been supported by good business practice."

Mr Mukoma cites poor corporate governance and management decisions which hurt the company over time.

A rush to set up a loyalty card similar to its main rival's is another case in point. The card allowed customers to earn loyalty points redeemable for a certain value at outlets partnering with the retail chain.

While it may have been a well-intentioned effort to endear itself to its customers, the launch of the U Club card last December came at a huge cost.

The expansion, which was expected to turn Uchumi into a retail powerhouse, has in the end brought the company to its knees. The death of the national brand can be best eulogised as a case on how not to manage a brand.