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RadioShack franchisees band together amid bankruptcy

With company in bankruptcy court, independents worry about name, supply

Andy Emond (left) manages an independent RadioShack. The franchisees have hired a Boston lawyer to represent them.
Andy Emond (left) manages an independent RadioShack. The franchisees have hired a Boston lawyer to represent them.Matthew Cavanaugh for The Boston Globe

As the once-mighty RadioShack corporation comes apart in bankruptcy court, hundreds of independently owned RadioShack shops are banding together to ensure they survive the turmoil.

The Texas company is shedding roughly 2,000 corporate-owned stores, and its iconic name is being offered up to the highest bidder.

But the independent shops — there are roughly 800 to 900 in the United States — are worried about being forgotten in the great shakeout.

Ira Brezinsky, who owns RadioShack franchises in Greenfield and Brattleboro, Vt., organized an effort among the dealers to hire Boston attorney Richard Mikels, a bankruptcy specialist at Mintz Levin, to represent their interests in the company’s Chapter 11 bankruptcy proceeding in Delaware.

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Regardless of what happens to the RadioShack corporation, Brezinsky said the independent dealers have a better chance of keeping their businesses going during and after the bankruptcy if they speak with one voice.

“I hope that the end result is that something happens that allows the network of stores to continue on and, whatever it’s called, that the whole organization stays together,” Brezinsky said.

Brezinsky will also be among a group of independent dealers meeting in Kansas City, Mo., this weekend to discuss forming a buying consortium to ensure they continue getting supplies of consumer electronics. In late February, RadioShack told the independent dealers it will no longer supply inventory on credit.

Richard Mikels
Richard MikelsPhoto courtesy of Mintz Levin

Mikels said the independent dealers are most concerned with being able to continue to operate under the RadioShack name and also still get consumer products from the company. And because dealers are small businesses without the time or resources to follow the bankruptcy closely, Mikels said it made sense for them to act through a single representative.

“We would far rather cooperate and get what we’re looking for rather than have to fight,” he said.

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It’s not clear what RadioShack will look like post-bankruptcy. But it will most assuredly be smaller. RadioShack shareholder Standard General has engineered a bid for the leases of nearly half of RadioShack’s 4,000 company-owned locations, with plans to convert most of the ones it wants to acquire into co-branded stores with Sprint.

After filing for bankruptcy protection in early February, RadioShack started closing hundreds of its corporate stores. It has already shuttered about 400 in the past year.

The terms of the independents’ contracts with RadioShack vary.

In general, the franchisees’ shops are in small towns, and some are tucked into other stores like hardware shops.

The independent RadioShacks in Massachusetts are in Greenfield, Athol, Provincetown, Vineyard Haven, and Nantucket.

For those independents, the bankruptcy raises a wide range of questions. Will they still be able to use the iconic RadioShack name? How will they get inventory? Will the company’s franchising department survive the bankruptcy?

The details of Standard General’s plan are still unclear to the franchisees — and another bidder, including a liquidator, could trump Standard General’s offer. Standard General has also submitted a bid for the RadioShack brand name, which is being auctioned separately.

Meanwhile, a RadioShack franchisee in Manhattan, Kan., is spearheading a group of independents to discuss forming a purchasing consortium.

They plan to meet for the first time in Kansas City, Mo., this weekend.

The goal, said the Kansas franchisee, Frank Beer, is to ensure these mom-and-pops stay viable through the bankruptcy and beyond. He said many of them are thriving because they didn’t ditch their focus on electronics to emphasize smartphone sales, as RadioShack executives did.

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But the corporate bankruptcy, he said, has been a big setback for these independents.

“We obviously don’t know what’s going to happen with RadioShack’s bankruptcy,” Beer said. “We, as independent businessowners, can’t just wait for the final shoe to drop and then scramble like crazy to figure out what to do next.”

The Greenfield store is one of five independently owned RadioShacks in Massachusetts.
The Greenfield store is one of five independently owned RadioShacks in Massachusetts.Matthew Cavanaugh for The Boston Globe

Related:

RadioShack files for bankruptcy

RadioShack to sell name; bids start at $20 million

BetaBoston: Radioshack founded in Boston in 1921


Jon Chesto can be reached at jon.chesto@globe.com.