Abetz screams at ice-cream award
RIVERVALE resident Rupinder Singh ran an Armadale Wendys outlet for four years before Wendys terminated his contract in 2012.
Mr Singh said an agent had painted him a “rosy picture”, but his situation soon soured.
In March 2011, he began reminding management staff to renegotiate his lease, due to expire that December, with the shopping centre landlord.
He said they first reassured him they would, but then stopped responding to reminders and took no action until the following January.
By this stage, the landlord had stipulated a “ridiculous” rent Mr Singh could not afford, but he said Wendys staff pressured him to sign a five-year lease at the new rent, as well as pay $120,000 for a store re-fit.
He asked them to negotiate for a better deal, but they refused and also forbade him to use his own negotiation skills with the landlord.
He said after a period of Wendys staff pushing him to sign the unviable deal, they sent him a letter saying he had to vacate the premis- es or he would be trespassing.
Mr Singh said Wendys repossessed all of his stock, fittings and equipment without paying “a single penny” for it, which he said was “devastating”.
“I had a wife and kids to support and I was under financial strain,” he said.
Mr Singh said he had previously joined a coalition of Wendys franchisees who tried to challenge the system and he believed this was why his store was taken off him.
“Anyone who raised their voices, they would go after them.” FAST food giant Wendys’ recent national franchising award win was a slap in the face to exfranchisees who had lost “everything”, Southern River MLA Peter Abetz said.
Mr Abetz said it was “most concerning” that Wendys won Australian Established Franchisor of the Year at the Excellence in Franchising Awards, run by the Franchise Council of Australia (FCA).
“Wendys have lost 116 stores in the past eight years, meaning the owners walked out because they were insolvent, or Wendys kicked them out because they could not pay their bills, then put a manager in for a short time and then tried to resell the store to another person,” he said.
“Many franchisees have lost their homes or declared bankruptcy.”
The FCA refused to respond to questions from Community about this issue, a fact Mr Abetz claimed was an “indictment” on a “less-than-transparent” organisation.
The FCA also refused to clarify what the award criteria were, or how Wendys had met the criteria.
Mr Abetz was instrumental in campaigning for legislation passed this year, enabling the Australian Competition and Consumer Commission (ACCC) to protect franchisees from unfair policies.
He said one example was Wendys forcing franchisees to buy expensive ingredients man- ufactured in-house, despite cheaper ones being available.
He said many franchisees had sought his help after becoming unable to cope with the resulting financial burdens.
A Wendys spokeswoman said Global Food Retail Group, which bought the Wendys company in September, was reviewing all internal business operations in an aim to strengthen the business and offer better support to franchisees.
“The new owners… invested in the business because they see potential in the Wendys brand and the network,” she said.
“They are continuing to review all internal business operations, with the key deliverable being to ensure Wendys customers, franchisees and staff in Australia are well supported into the future, while driving growth into the Asian marketplace.”
She said stores, and supplier relationships, would continue as usual while the review was conducted.
In October in Adelaide, new owner Stanley Tan gave a speech to all franchisees indicating he was aware that if there was no change in the Wendys system, they would not survive. Addressing the ingredients policy was among the issues identified.
Navis Capital, the previous owner of Wendys, declined to comment.
Southern River MLA Peter Abetz with a list of Wendys franchises closed down.