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If you thought that master franchise Allied Brands was in enough trouble, with its Dunkin’/Baskin-Robbins termination dispute and with one of its franchise brands, Cookie Man, in the hands of liquidators, you might have thought, “it can’t get any worse?”
The Department of Immigration & Citizenship has accused Allied Brands of breaching immigration laws by running an elaborate immigration rort where it sponsored a group of Korean nationals to work in administrative roles under 457 visas, put them to work in Baskin Robbins stores and in some cases sold Baskin Robbins franchises to their family members.” - Smart Company
Chief Executive Sean Corbin attempts to deflect the issue, stating that the immigration visa program was established by an employee who has left the company. He remarks that Allied Brands accepts that it will not be able to bring workers in on 457 visas in a letter purportedly sent to the Immigration Department but that "It was never our intention to use that strategy for bringing in our new franchisees in the future."
The way things are going for AB they possibly won’t be doing anything in the future.
But what about the 5 Koreans and who knows how many other immigrants that Allied Brands has exploited?
It is likely that these Koreans had high hopes of a new and prosperous life in Australia, what becomes of them?
Brought in to the country as “administrative workers” the DOIC claims that one of the sponsored workers appeared to own a Baskin Robbins franchise while two of the other workers wives also owned a franchise.
One of these was the Henry Deane Plaza outlet which is reported to have been closed for two years.
Smart Company reports that the investigation by the Department of Immigration and Citizenship has been going on for 3 years, culminating in a Notice of Intention to Act regarding 3 breaches of the Migration Act on August 17th.
It is unknown at this stage what will happen to the 5 Koreans, but you can safely bet that they had no idea what they were letting themselves in for.
This news comes a day after research company Ten Thousand Feet reports:
The franchising format is proving increasingly popular for overseas residents entering Australia, particularly those from non English speaking backgrounds.” and that “Many franchisors are jumping on the back of this trend with franchisors going directly to migration services agents to make their franchise opportunities available to overseas residents.
Given that many English as first language franchisees struggle to understand the franchise contract, one can only imagine the kinds of confusion felt by those trying to perform due diligence without a solid grasp of the language used and cultural norms implied.
Mr Krawitz from Ten thousand feet is also quoted:
…..but just because the capital is there and ready to take doesn’t mean franchisors should rush in regardless,
Perhaps the word take was ill chosen or perhaps it sounds better in context, but it appears that Allied Brands has done exactly that.
The Allied Brands situation, and the prospect that more franchisors will be using the migrant visa system to expand their networks, is yet another reason that Australia needs laws like South Australia’s proposed Franchise Bill.
Readers everywhere should take note that the Allied Brands- Baskin Robbins Blog has been writing about the AB migrant scandal and predicting the company’s financial difficulties for quite some time.
It goes to show that franchisee blogs can be an important source of information for potential investors, often long before main stream media ever gets around to reporting it.