Hot Topics: Behind the Headlines

Jason Gehrke, Franchise Advisory Centre

RFG delivers surprise F20 result

Listed multi-brand franchisor, Retail Food Group (RFG), has achieved its target EBITDA and asset write downs, according to a media report.

RFG claims its improved financial performance is due to a number of turnaround initiatives designed to stabilise the business and establish a strong foundation for growth which were implemented in the nine months prior to the pandemic.

Opposition proposes $10m fines for code breaches

The federal opposition has proposed further amendments to the Franchising Code of Conduct, including an increase in financial bill tabled in Parliament on September 2.

Labor senator Deborah O’Neill, who was a member of the joint parliamentary committee which conducted the 2018 inquiry into the Franchising Code of Conduct, introduced a private bill in the Senate to make up for perceived deficiencies in the Federal Government’s official response to the Inquiry recommendations, which Senator O’Neill described as underwhelming.

The proposed Franchising Laws Amendment (Fairness in Franchising) Bill 2020 includes turnover of a franchisor, or three times the benefit received by the franchisors, whichever is higher.

The Bill also seeks to increase the role of the Small Business and Family Enterprise Ombudsman in enforcing the Code, which includes providing optional binding arbitration.

McDonald’s sues rival over Big Jack burger

Burger chain McDonald’s has taken Federal Court action against fast food rival Hungry Jack’s over a “Big Jack” burger and trademark that McDonald’s claims is deceptively similar to its iconic Big Mac, according to a media report.

The Big Jack burger, which is described in terms very similar to that of the Big Mac, is an act of “bad faith” according to McDonald’s who are seeking to have the Big Jack trademark rescinded, plus damages, and the destruction of all signage and materials featuring the Big Jack trademark.

Judge calls out migrant exploitation in wage fraud case

A trend among employers from “culturally and linguistically diverse backgrounds” to deliberately exploit workers from their own ethnic communities has been highlighted by a Federal Court judge presiding over a wage fraud case, according to a Fair Work Ombudsman (FWO) statement.

The comments were made at an FWO-initiated hearing related to the underpayment of 27 employees of two Hello Juice outlets in Victoria, where the migrant business owner attempted to plead ignorance of workplace laws in an attempt to avoid being penalised. The employees, including 10 juniors, were underpaid a total of $38,458 in 2017. The operators of the stores have been fined a total of more than $240,000 and the manager has been penalised an additional $34,616.

Government issues long-awaited response to Franchise Inquiry

The Australian Government has released its response to the 2018 Franchise Inquiry, nearly 18 months after the Inquiry tabled its final report, Fairness in Franchising, and nine months after consultation ended on a draft regulation impact statement.

The 20-page government response to the Inquiry report does not specifically address the Inquiry’s 71 recommendations—27 of which were referred to a Franchising Taskforce comprised of government agencies to assess in more detail—but does address themes from the Inquiry to cover pre-entry, operational and exit issues in franchise relationships.

The response includes the following highlight items: