It has been an institution across Australia since long before the First World War.  Now it is the largest franchise in Australia with more than 3,000 franchisees and licensed post offices regulated under a deficient federal Franchising Code of Conduct.

In early 2009 I began receiving contact from angry, fearful and frustrated Australia Post franchisees.

The fears relate to dwindling profits and the franchisor’s remodelling which is claimed to include a major downsize of the network sending at least many of these mum and dad operators to the gutter. eCommerce has made Parcel Delivery the future.

The Australian federal government is the sole franchisor of Australia Post where licensees provide their own premises, set-up and staff, and are paid commissions, fees and receive discounts for work performed.

Many Australia Post operators have been servicing their communities for decades and many Post Offices have been handed down through the generations. For most AP operators the business was their retirement fund. A fund now feared to be under threat of a substantial hit if not a total wipe-out.

Since early 2010 the AP franchisor has been in competition with franchisees with its massive online services and product capability. Online is a commercial reality but it seems franchisees were the last to realize the potential size of the challenge to their viability and AP seems not interested in that impact. Disgruntled franchisees claim the power abuse gradually began almost a decade earlier.

There are now reports claiming the franchisor has delayed payments, reduces others and altogether denies some payments. Franchisees say AP has threatened outspoken franchisees with criminal penalty and potentially jail time if a selected franchisee is found to have made any typographical errors pertaining to offshore services. 

‘Many Licensees have been subjected to security raids by AP, for breaches of the agreement. AP has clearly breached the agreement, yet feels justified in home invasions, and office raids, completely in breach of the stated terms of our agreement.  Anonymous AP franchisee’’

Amongst the many claims are the repeated allegations that AP withholds stock to drive business to corporate centres while poaching key account customers.  

Franchises assert a long list of contract breaches including that Australia Post has introduced new services for which franchisees receive no payment. They also suggest that franchisee support has either been reduced or removed. Franchisees have not been made privy to the long term plans behind the remodelling of Australia Post.  

The Australia Post franchisor appears to have somehow claimed special federal protection from any franchisee challenge and its abuse seems out of reach of any media criticism. Official complaints through normal channels have produced no response and the media shies away from any damage to AP’s advertising dollars.

There are numerous reports that the Australian Broadcasting Commission television spent many weeks interviewing franchisees and preparing for a LateLine exposé. As one franchisee reports; ‘all of a sudden overnight they dropped us like hot coals’.  Franchisees suspect the national broadcaster was subject to political influence.

Australia Post comes under Senator Conroy’s Broadband, Communications and the Digital Economy portfolio. When contacted with the AP franchisee allegations questioning the future for the network the Senator’s office responded that it was merely responsible for policy.

Franchisees claim the franchisor is deliberately destroying the viability of the Australia Post franchises in a cost cutting move that will send them to the wall. There is no word on what Australia Post or Senator Conroy now sees as the optimal size of the future AP network.

Note: Australia Post has Australia’s largest ‘franchisee association’, POAAL, however, given its non-existent performance regarding complaints it is suspected that either it is financially dependent on the franchisor or its administration feels similarly threatened.

Related BMM Reading:

Australia Post; Conflict of Interest and Good Faith