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Ray J Borradale's picture

"For example, former Pie Face

"For example, former Pie Face franchisee Marion Messih shared the story of taking our a $360,000 business loan with her brother and sister-in-law through Westpac to buy a Pie Face franchise. The trio found it impossible to make money through the store and ended up abandoning the business.

Messih said she sold an investment property worth $750,000 to repay her part of the loan. She said Westpac agreed to this, but after the sale of the property, the bank said it was taking cash from the sale to settle the entire amount of the business loan, even though Messih was only actually liable for one portion of this, with her brother and sister-in-law liable for their portions.

She said the change of heart by the bank “clearly shattered” her, as she was unable to service her debt and to pay off her mortgages, as she had planned when selling the property." Read MORE

Ray J Borradale's picture

Time for an Australian Franchise Court?

"Marianne Marchesi, franchising law expert and principal at Legalite, says her own submission to the Senate’s inquiry will echo calls for a new “avenue” of dispute resolution.

“I wholeheartedly agree with the idea — there needs to be an avenue that is affordable for people that can result in binding decisions,” she tells SmartCompany."

Ray J Borradale's picture

Bloomberg on Royal Commission

"Taking bribes. Falsifying documents. Lying to regulators. Extracting fees from dead customers. A public inquiry into Australia’s financial services industry has uncovered a laundry list of wrongdoing that’s shocked the public, cost senior executives their jobs and wiped billions off the market value of the nation’s biggest banks. That may be just the beginning. The so-called Royal Commission, established by Prime Minister Malcolm Turnbull’s government amid public anger, still has months to run."

Ray J Borradale's picture

There are hundreds of thousands of victims

Heads have already rolled, senior executives and board members escaping what one federal Minister suggested could end in jail time.

"The Bank of Melbourne tried to deal with a mistake by one of its bankers by locking up $100,000 of a customer's money in a term deposit that could not be withdrawn, the royal commission has heard.

The bank's decision, made without any consideration of whether it was legally entitled to do so, was an "abuse of the bank's power", senior counsel assisting Rowena Orr said on Friday."

"After the valuer said the property was commercial, the banker went against internal policies to value the property by using the contract of sale. It was classified as a residential loan."

Ray J Borradale's picture

Franchising in Australia limits marketing

Following coverage of the Parliamentary Inquiry and now the Royal Commission, most franchisors have chosen to limit their marketing investment. Confidence in franchising is currently in the dolldrums.

"For example, ANZ acknowledged that in 2017, two ANZ business banking managers were found to have been colluding with external third parties to make 47 fraudulent loans.

It also admitted to instances where frontline staff engaged in inappropriate sales practices in an effort to increase incentive payments, including selling or referring customers to unsuitable products, some of which involved SME lending."