BoQ franchisees question buyout price in bank’s buy-back plan

BoQ franchise buyback
(Source: Bigstock)

The Bank of Queensland’s plan to buy back 114 branches by March next year has caused 59 franchisees to accuse the bank of breaching good faith and enforcing unfair contract terms.

According to the AFR, the 59 franchisees are suggesting the $125m allotted for the buy back of the 114 branches is not a true reflection of their businesses’ value.

The disgruntled franchisees have turned to law firm Morris Mennilli, which sent a letter on their behalf to the BoQ board last week. The letter asks for a response within 21 days.

In a media statement, the Bank of Queensland said “BOQ remains committed to working collaboratively and in good faith with its Owner Managers through the conversion process. BOQ continues to comply with its obligations under the OMB Agency Agreement and the Franchising Code.”

Morris Mennilli declined to comment on the matter.

The buy-back announcement was made in August, just months after the bank revealed plans to nearly double the owner-manager branch footprint by 2026.

BoQ’s strategic about-turn followed the bank’s axing of 400 jobs in a bid to boost profits.

It has run a revenue-sharing model with owner-managers since 2002 and according to the AFR, payments to owner-managers and brokers cost the bank one-fifth of its lending margins in the six months to 29 February 2024.