’Turnaround specialist’ takes on RFG’s hot seat
FLAILING franchisor Retail Food Group has capped off an eventful week by appointing its second chairman in a month.
The Southport-based company behind a suite of brands that include Donut King, Pizza Capers and Gloria Jean’s, said former Optus director Peter George would replace veteran board member Stephen Lonie, who was only appointed chair on September 25 – the same day Mr George joined as nonexecutive director.
In a brief statement to the ASX, RFG said the election of Mr George was part of a “broader turnaround strategy”, which included “significant board renewal”.
RFG 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 remained on the table for the company, which remains at the mercy of its lenders.
While the RFG annual report back-catalogue is a sonata of acquisitions and growth, FY2018’s held a different tune.
The report revealed 305 RFG outlets, which include Donut King, Gloria Jean’s, Michel’s, Brumby’s and Pizza Capers, had closed in 2017-18, including 217 traditional outlets and 15 mobile vans in Australia, as well as 83 international outlets.
The company announced in March it would close 160-200 stores it had deemed unviable.
Yesterday’s report said “250 existing outlets” would be closed by the end of this financial year.
The revelations followed news the Senate had taken the extraordinary step of issuing subpoenas to three former executives, who had refused four times to appear voluntarily at a joint parliamentary inquiry into the franchise sector.
Former CEO Tony Alford, former executive Alicia Atkinson and former managing director Andre Nell have been formally summoned to Canberra for the inquiry that was convened in the wake of allegations of damaging franchise models of companies including RFG, which some franchisees claim has ruined their livelihoods.
This week it was revealed RFG had become the tenant of its former CEO Tony Alford and Ms Atkinson, who bought its property at 18 Commercial Dr, Ashmore.
Property records revealed the pair, through their company WC92 Pty Ltd, paid $2.075 million for the 3510sq m property in November.
The agent behind the deal, struck at public auction, said RFG agreed to a 12-month leaseback of the site, with two six-month options once that expires.
Mr Alford also bid for RFG’s two other high-value properties, including its headquarters at 1-3 Olympic Circuit in Southport, where he was outbid by a Sydney buyer, the agent said.
Attempts by the Gold Coast Bulletin to contact Mr Alford and Ms Atkinson this week were unsuccessful.
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.
“My focus is on effectively executing the already developed turnaround strategies to return RFG to stability and profitable growth and add further impetus to the group’s efforts to restore value for shareholders,” he said.
In his final director’s interest notice, Mr Lonie, who has also stepped down from the board as a director in addition to chairman, declared he held 54,195 shares worth $21,948 based on the current share price of 40.5¢.
He first joined the board in 2013.