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Wendy’s franchisees in Australia are asking whether the franchise model was designed to fail. Their questions have reignited franchisee disgust at yet another federal government broken promise.
The move by Wendy's has been personally mortifying and financially devastating. She and her husband have been left with a $200,000 debt on their home and a $300,000 debt on her mother's home - both had been used to fund their forays into the Singleton franchise and another in nearby Cessnock. The Age
Wendy’s have claimed the model is healthy and yet;
Trevor Banks, who operates a Wendy's franchise at Mount Druitt, said he had documented 33 products supplied by Wendy's that had increased by an average of 8 per cent over six months last year.
Director of Wendy's Malaysian private equity group owner, Navis Capital, Tom Beecroft said he was unaware of increased costs.
The 2008 franchise inquiry had recommended the inclusion of an explicit obligation of ‘Good Faith’ dealing in franchising. It has been suggested that Good Faith would assist franchisees where abusive behaviour occurs. Emerson rejected that and most other recommendations.
Representing some Wendy's franchisees and Jack Cowin owner of 300 Hungry Jacks, Tim Castle, partner at Atanaskovic Hartnell said there were systemic issues in the franchising industry.
But what you see in some cases … is that after the system is established, the franchisor can use its powers and control to increase its return through increased charges or by changing the business model at the expense of the franchisee.
Emerson argued that Good Faith was too difficult to define. After the Australian Treasurer, Wayne Swan, had repeatedly relied on Good Faith to cover up another national act of stupidity, Jack Cowan had sent him a message:
Meanwhile, when you're dealing with people with their life savings on the line, you can't define it? It's a bit of a nonsense.
In a side issue; at a Small Business Group meeting in Brisbane last night one of the questions directed at Emerson saw the Minister attempt to mislead the entire gathering by suggesting that of all of the recommendations from the Franchising Inquiry, he had only dropped Good Faith. One of the better looking small business people in attendance suggested to the gathering and Emerson that Emerson was lying. Because he was.