Executive shake-up at RFG

Change of direction for embattled food franchisor

THE head of embattled cafe and pizza outlet owner Retail Food Group, Andre Nell, has been replaced by the man overseeing the company’s business-wide review.

RFG, the owner of Gloria Jean’s, Donut King and Crust Pizza, says Richard Hinson (pictured), who was hired by the company in January to lead a strategic review triggered by problems within its franchise network, has been promoted to group chief executive.

Managing director Mr Nell was due to leave the company yesterday.

RFG was hit with a string of accusations late last year from former and current franchisees that they had been run into the ground with exorbitant fees, including high marketing and food costs, poor quality food and a lack of support.

The company later appointed Mr Hinson, a former executive at supermarkets wholesaler Metcash and confectionary maker Wrigley Pacific, to improve the company’s support for its franchisees and ensure their profitability.

Chairman Colin Archer said the leadership change showed the board’s commitment to improving relations between head office and franchisees.

“Richard is gaining the confidence of our franchisees and has restored some momentum to the business by delivering immediate benefits and focusing on longer term strategic plans for each brand system,” Mr Archer said in a statement.

The company said it has reduced the costs of goods, renewal and new store fees, and worked with franchisees to pilot innovative new store concepts. It said the senior executive team, which includes chief financial officer Peter McGettigan and Di Bella Coffee chief executive Darren Dench, has been working closely with franchisees on new product ranges and quality, supply chain improvements and a customer loyalty program.

Mr Hinson said it would take 12 to 18 months to turn around the RFG business.

“Our core business is fundamentally sound and we are working hard to improve franchisee relationships and profitability,” Mr Hinson said.

RFG is one of a number of franchise networks, including 7-Eleven, Domino’s Pizza and recently Red Rooster and Oporto’s parent company Craveable Brands, to make headlines for either mistreating franchisees or underpayments of franchisees’ staff.

A federal parliamentary inquiry into the franchise sector is under way in response to the string of allegations to rock the industry.