I am not surprised by this ACCC court action, but I am surprised why it has taken this long to come about.
Unfortunately, any franchise business, where the franchisor is screwing over franchisees, unfortunately won't be a sustainable business model. That's not to say the current management aren't trying to address the company's pasts sins, and to put things right moving forwards.
Selling unprofitable business's to incoming franchisees and withholding critical financial information regarding losses, is about as dodgy as you get in business. Charging marketing fees to franchisees, and then not spending on marketing, but paying operating costs of RFG is not much better. I think RFG may struggle to defend these claims based on all the media reporting on these issues by AFR and Adele Ferguson. The unknown question is if ACCC litigation succeeds, what will be the cost to RFG.
Many people have lost a lot of money having an association with RFG, but none worse than the poor franchisees. I hope that if the ACCC court case is successful, that franchisees (past and present) receive some compensation.
RFG Price at posting:
7.0¢ Sentiment: Sell Disclosure: Not Held
