By George, franchisor is at it again

RFG makes another change to board

BARELY two weeks since flailing Gold Coast food franchisor Retail Food Group made its last change to its board structure, the Southport-based company is back at it again.

The latest announcement is that new chairman Peter George, who was the second appointed to the post in one month, has taken on the role of executive chairman of the Donut King owner on a 12month contract.

Shares surged 16 per cent, or 6 , after the announcement to close at 42.5 .

RFG owns a number of brands including Pizza Capers, Crust Gourmet Pizza, Gloria Jean’s Coffees and Brumby’s Bakeries.

The new post means Mr George will take a role in the day-to-day running of the company.

Mr George took over from Stephen Lonie on October 26, just over one month after Mr Lonie was appointed chair on September 25. Mr George’s salary will be $500,000 a year including superannuation.

RFG last month said Mr George was recruited to the board as a turnaround specialist for the beleaguered franchisor, which has seen its share price and profit smashed in the wake of allegations of mistreatment of franchisees.

The company’s annual report revealed it did not open a single new outlet in the second

half of the past financial year.

It said a possible market recapitalisation and asset sales remain on the table for the company, which remains at the mercy of its lenders. RFG unveiled a $306.7 million fullyear loss for FY18, much worse than it previously flagged.

PETER GEORGE

RFG CEO Richard Hinson, in a statement to the ASX yesterday, said Mr George is the “executive chairman RFG needs right now”.

Mr George previously led the restructuring of commercial printer PMP Limited when he was managing director between 2012 and 2017 and was non-executive director of Optus Communications from 1994 to 1998.

“As he is a turnaround expert with considerable experience in capital markets, I look forward to working with him closely and seeing the positive impact that his experience will have on RFG’s business and its franchisee customers,” he said.

Mr George said his role would be to support the board and CEO to steer the company back to a position of improved performance and financial stability.

“RFG still has a way to go in restoring its financial position and shareholder value, but I see a great deal of opportunity ahead for the company and look forward to sharing my turnaround experience to help get RFG to where it needs to be – quickly,” he said.

“RFG’s turnaround strategy, and options to address RFG’s balance-sheet challenges, are the board’s utmost priority, and my assumption of an executive role is further evidence of that focus.”

There are a number of caveats included in his employment agreement. One is that during the first nine months either RFG or Mr George may terminate the agreement on three months’ notice.

After nine months the period reverts to just one month.

Also, if Mr George decides he cannot implement his strategy because of changes to the future plans of the board, he can terminate his employment on one month’s notice.

I LOOK FORWARD TO SHARING MY TURNAROUND EXPERIENCE TO HELP GET RFG TO WHERE IT NEEDS TO BE – QUICKLY