Brumby’s closes at Willows

A BRUMBY’S Bakery outlet at the Willows Shopping Centre has closed, believed to be another casualty in the squeeze on franchisees from increasing costs and declining income.

Brumby’s Bakery is one of the franchises held by the troubled Retail Food Group which has seen its share price crash from $ 7.20 to 84 cents over the past 18 months.

An RFG spokesman did not respond to requests for comment before publication but Willows Shopping Centre confirmed the closure.

Willows regional property manager Andrew Stallan said Brumby’s had made a decision to cease trading.

“We have worked with Brumby’s to explore numerous options to avoid them coming to this decision,” Mr Stallan said.

“It would be inappropriate to comment further on specific lease conditions of our retail tenants.”

It is understood the franchise was approaching the period where lease and franchise deeds needed to be renewed, requiring further investment in the business.

It comes as franchisors look to ease the financial pressure on franchisees by reducing fees, including for new store and renewal fees.

Also, other costs such as training fees, plans and drawing fees and legal costs are being axed.

Small business consultant Michael Kopittke said franchisors were having to adjust to the market.

“Since the fall out in the franchise industry, it’s been noted that a number of franchisors, to try and maintain and grow their system, are reducing their franchise fees to cope with what is going on in the marketplace,” Mr Kopittke said.