Retail Food Group defends itself against allegations

Posted by Andrea Hogan on 11th December 2017

The Retail Food Group has rejected allegations that it is not supporting its franchise partners.

The Retail Food Group (RFG), which is responsible for a number of quick-service food brands and their franchises in Australia, including Donut King, Crust Pizza and Gloria Jeans Coffee, was the subject of a Fairfax investigation made public over the weekend.

The results of Fairfax’s investigation made a number of claims regarding RFG’s relationship with its franchise partners including saying “there is systemic wage fraud as franchisees do whatever it takes to make ends meet.”

In an online article, Fairfax claimed that there is a growing list of RFG franchised stores that have been forced to either close, be sold at “massive discount” to purchase price or turn into “ghost stores” which do not open to customers but still pay rent to RFG.

In a statement, RFG said that it rejected the assertion it does not support its franchise partners and said it wanted to reiterate that its success is dependent on the success of its franchise partners.

“If they thrive, so do we, and we are committed to finding ways to better support them, their staff and customers,” RFG said.

RFG further stated that the coverage failed to acknowledge properly the steps RFG has been taking over the past year under the leadership of its new Managing Director and his executive team.

The new steps RFG said it has taken were then listed as follows:

  • “We’ve comprehensively engaged with our Franchisee Partners and asked them to work with us on improving the support we provide them;
  • We’ve implemented numerous measures to improve store performance and enhance outcomes for our Franchisee Partners, whilst also bolstering the resources which support our brands;
  • We’ve implemented a new strategy focused on better assuring the long term sustainability and profitability of not just our own business, but those of our Franchise Partners and other customers; and
  • We’ve appointed Deloitte to support us in conducting a whole of business review, a key aspect of which is ensuring our franchise model remains appropriate for a retail market which remains challenging.”

In addressing the wage non-compliance allegations, RFG said for a long time it has been taking proactive steps to better inform, support and educate Franchise Partners in relation to employer obligations, whilst also providing employees avenues to raise concerns.

“These measures are supported by our monitoring and supervisory framework, which we’ve also asked Deloitte to review,” RFG said.


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