Earnings Estimates for RFG, page-38

The franchise model is broken. Taking 10% of sales doesn't work anymore and is not aligned to franchisee profits. Making money from selling inflated product to franchisees is wrong. Making money from franchisees selling there shop to another franchisee is wrong. Look what's happened in the aged care sector.... Have a look at dpm result. Arguably one of the better franchise brands with better systems and advertising. Sales slowing. New store opening slowed significantly. And those that did open new stores 97% are existing franchisees, no new blood. Rfg have a terrible brand and reputation. How do you expect them to sign up new franchisees.... why do you think the average franchisee leaves after 7 years? Because that's when there lease/franchise agreement ends. Churn and burn. On leases, 99% will be linked to sales turnover. So most shopping centres will have a 8% turnover rent. Given how poorly there stores perform I assume all would be paying much higher %. How they account for leases going forward will be a huge issue. Just wait until there is a royal commission into the franchise industry. Some politicians are already pushing very hard for this. Companies and directors get sued for misleading investors in a prospectus. But franchisors can get away with misleading people in there disclosure documents. The accc who is the governing body does nothing. Why? This sector is short or an avoid at the very least.