Western Daily Press (Saturday)
Papa John’s franchisee investigated over meal discounts
PIZZA chain Papa John’s is reportedly investigating allegations that one of its franchisees misused the Chancellor’s Eat Out To Help Out (EOTHO) scheme this summer.
A Daily Mail investigation said outlets run by Raheel Choudhary took part in the scheme when they were collection and delivery only during the height of the pandemic.
Papa John’s runs a franchise system, meaning that individual franchisees such as Mr Chaudhary – and not Papa John’s – are responsible for the running and management of the restaurants.
The Mail said Mr Choudhary, 43, held the franchise of 61 outlets, and had been advised by Papa John’s not to take part in the scheme.
It said the chain warned franchise holders not to register for EOTHO because almost all outlets were takeaway only and too small to have customers sit in at a safe distance.
The head office had also distributed packs with signage to ensure just one customer was in each store at a time and advising them where they could safely sit.
EOTHO sought to entice diners to return to restaurants and pubs after the height of the pandemic with a state-backed discount.
It saw the Treasury pay a 50 per cent discount of up to £10 on meals and soft drinks between Mondays and Wednesdays in August, prompting a jump in bookings. More than 100 million cut-price meals were eaten across the UK under the programme to boost the economy by encouraging consumers to dine out after months of being told to stay indoors.
The Mail investigation revealed only a handful of Mr Choudhary’s restaurants would have been eligible for the scheme, because it required customers to eat in.
The paper said the majority of his 61 franchises were collection and delivery only during the height of the pandemic, often only allowing one customer in at a time.
A spokesman for Papa John’s told the Mail: “We are investigating these allegations thoroughly and we will be extremely concerned and disappointed if they prove to be true.
“All of Papa John’s UK stores are run by franchisees and we made it very clear to all franchisees that we felt it unlikely that they would be eligible to participate in Eat Out To Help Out. Instead of EOTHO, we created our own great-value offers for customers.
“It is important that our investigation is completed fully before drawing any conclusions, but if any franchisee participated improperly in EOTHO, they will have been in breach of their franchise agreement with us, and we will require them to make things right.”
The Mail said Mr Choudhary said 40 of his 61 franchises that had “seating capacity” took part in EOTHO. He said the EOTHO revenue had accounted for six per cent of his August turnover, adding: “All customers who benefited from the scheme ate in store and we are confident that we were fully compliant with the criteria set by the Government.”
The Mail said it had offered the evidence gathered during the course of the investigation to HMRC.
An HMRC spokesman said: “It’s our duty to protect taxpayers’ money and we will not hesitate to act against those who attempt to break the rules.
“We have built checks into the Eat Out To Help Out scheme to prevent fraud and protect public money, and will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
“Anyone concerned that an establishment is abusing the scheme can report fraud to HMRC”.
An HM Treasury spokesperson said: “We take the risk of fraud extremely seriously, consider fraud in the design of every new support package and monitor it on an ongoing basis.
“There are a range of measures employed to deny those that seek to abuse services, with a robust response against those that cheat the system.
“HMRC will continue to monitor claim data, compare against records of earnings and review reports to their fraud hotline, and will not hesitate to take action, including penalties, freezing assets and criminal prosecutions, against those found to be abusing schemes.”