Walgreens Company is known to be the second-largest American pharmaceutical company after CVS Health. It primarily focuses on the production of health and wellness products, supply of prescription, retail as well as wholesale services. Walgreens was founded in 1901 and has its headquarters in Deerfield, Illinois, Chicago. Walgreens is no more just Walgreens. In December 31st 2014, they established a merger with Alliance Boots, a Swiss company and now holds a new name of Walgreens Boots Alliance Inc. Is Walgreens a franchise?
To answer the question, no, Walgreens is not a franchise. It is a corporate-owned business where shareholders own a certain percentage of the company. To further break this down, in this article, we will look at the history of the company, how it came into making, what a franchise is and how the company functions as a privately-owned company.
History of Walgreens
People often wonder how a mere drugstore founded in 1901 became America’s premier pharmacy, one that others look at as competition and one of the nation’s most respected corporations. It is almost impossible to tell the story of Walgreens without mentioning Charles R. Walgreens, the man behind this masterpiece. He was born in Galesburg, Illinois where his father started their very first business. His father saw Galesburg as a potential future for commercial businesses and decided to start one himself.
Walgreens decided to help out his father and had his first commercial experience at the drugstore. Soon he became a registered pharmacist who used to mix and package his own drugs, with high quality and affordability. During summer, he would additionally sell his own drinks and ice creams and in winters, teaming up with his wife, they’d sell soups and sandwiches. By 1925, the store had almost sixty-five outlets, with an expansion to Milwaukee, St Louis as well as Minneapolis.
When the store had almost five hundred outlets, Walgreens took it public. The company even battled the Great Depression and sold bootleg whiskey to keep up their sales. After passing the business to his son, it only grew more and more. By 1975, the company had crossed one billion sales and the thousandth store opened up 10 years later. Walgreens has currently $72bn sales overall and continues to grow extensively. Due to the growth of the company, a lot of new career paths opened up for the public. This is another reason why this company is loved by the public. The store currently has almost 7000 outlets and 425 new openings.
What is a franchise?
To further break down the question, let’s look at what a franchise means. In simple terms, a franchise is a business that is seen in several cities. What makes them recognisable to the public is a trademark sign or color pattern. Franchises are owned by an individual, a company or a brand which is overseen from time to time. They are part of the company but run individually under certain orders. Famous companies like Subway, McDonald’s and Taj Hotels are some examples of franchises.
A lot of these franchises are publicly owned, which means that people can buy shares and hold a certain percentage of it. This also means that they own the trademarks of the brand. A common reason why companies choose to franchise is because it is a great way to increase sales and distribution. Companies sell their products to another entity who produces the sales for it under the name of the larger company.
This makes the job easier for them. Franchising also allows companies to dilute and reduce risks. The franchisor also invests some of his/her money so the risk is shared between him and the company.
Structure of Walgreens
Since Walgreens isn’t a franchise, let’s see how they structure the workings of their company. The main structure of Walgreens is divided into ten divisions, each offering several career options for the public. Of the ten divisions, the most intense departments are marketing, It/E-commerce and the distribution departments.
The marketing team handles product marketing, the E-commerce/IT team handles all the software work along with enhancement of Walgreens’ technology and the distributions team distributes the products to over 7500 locations. Apart from this, the other teams include the main management team, legal, finance, human resources, merchandise, sales, etc.
Through this article, we have looked at what Walgreens is, what kind of a company it is, the market it caters to, what a franchise is, how a franchise operates and of course, the answer to the primary question posed.
Frequently Asked Questions
1) How does Walgreens generate income?
The two main streams of revenue for Walgreens are sales due to prescriptions as well as over the counter ones. The most widely bought drugs in the US are vitamins and cold or allergy-related tablets. Some drug stores also sell cosmetics, personal care products and essentials.
2) Are there branches of Walgreens outside of America?
The pharmacy and retail departments have their segments in five different countries which includes the retail brand Boots in the UK, Thailand, the Republic of Ireland, Boots Opticians, Ahumada in Chile, Benavides in Mexico and a wholesale pharmaceutical segment in Germany. Boots also operates from the Middle East and Indonesia.