Possible class action ahead for Retail Food Group

Posted by Andrea Hogan on 22nd January 2018

Retail Food Group may soon be facing a class action from a law firm representing disgruntled franchisees.

Australian law firm, Bannister Law, is investigating the possibility of filing a class action after a number of concerns have been raised by Retail Food Group (RFG) franchise partners.

RFG holds franchising rights to a number of quick service food providers in Australia including Gloria Jean’s Coffee, Donut King, Pizza Capers and Crust Pizza.

In late 2017, a Fairfax investigation alleged RFG was not supporting its franchise partners properly. The investigation made a number of claims including that RFG franchise partners have felt forced to sell their stores at large discounts and have been underpaying employees to help make ends meet.

Following the investigation, Bannister Law announced in late December 2017 that it would be exploring possible shareholder class action into RFG over possible contraventions of provisions of the Corporations Act regarding its stated profit guidance during the first half of its 2018 financial year.

Bannister Law is now working with Australian action group, Franchise Redress, to investigate the possibility of class action on behalf of franchisees. Co-Founder of Franchise Redress, Maddison Johnstone, said Franchise Redress has had contact from over 100 franchisees, many of whom have raised concerns around RFG’s conduct.

“Given the accounts of hardship, it is important to us that franchisees have an avenue of redress for the severe financial distress they’re living with,” Johnstone said.

“Franchise Redress strongly encourages all disaffected RFG franchisees to express interest in a potential class action with Bannister Law.”

RFG responds to possible class action

RFG has said that in the event a class action would proceed, RFG would defend itself vigorously.

“As Australia’s largest multi-brand retail food franchisor, we are proud to support numerous small businesses across Australia,” RFG said in a statement.

“We remain committed to the livelihood and profitability of each and every one of our franchise partners,” the statement concluded.


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