Blockbuster Stores Closing: The End of a Franchise Era for Some

After more than half of the remaining stores closed back in 2011 due to bankruptcy, Blockbuster, a Dish Network child company, has announced the soon to be closing of the remaining 300 stores operated by franchisees throughout the United States. Dish, the parent company of Blockbuster, stated that the video-rental chain would officially close the remaining franchise location doors in January 2014.

The closures mark the end of a franchise era for many Blockbuster store owners but not for all. Dish reports that an estimated 50 stores will remain open in various areas of the U.S. and overseas. The stores that do remain open will be in high profile areas that are likely to result in continued renting of movies and games from the “brick and mortar” business.

Blockbuster History

Blockbuster began in the 1980s and quickly developed into a major chain with thousands of franchised locations worldwide. Unfortunately, the rise of DVDs and the ability for these smaller, video devices to be rented through mail order and on-site kiosks such as Redbox quickly pushed the video mogul out of the picture.  While Blockbuster attempted in various ways to continue to attract customers through online streaming or video-on-demand services, mail order rentals and even kiosks of its own, their efforts proved to be too little, too late in an industry that was already booming with potential and had competition such as Netflix and Redbox which had already diversified themselves from the industry creating brand awareness that was hard to beat.

By 2010, Blockbuster was in court seeking bankruptcy protection.  The business would soon be purchased up by Dish Network with the hopes of improving digital business enterprise for existing Blockbuster locations. Unfortunately, Dish quickly realized that the strategies and changes being made to Blockbuster stores were still shortchanged from what was really necessary to turn this franchised business around. As a result, Dish quickly began closing Blockbuster stores that were underperforming in an attempt to recuperate losses and prevent further damage to the brand.

While this isn’t the end of the Blockbuster brand all together, as movie channels and various streaming services will continue to be branded with the Blockbuster name, for the majority of franchisees who own Blockbuster stores worldwide, this is the end of an era, a close in a franchise chapter that is not often seen in the franchise world.

Article by Jason Duncan, CEO/Founder of ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.