RFG to front parliamentary inquiry

September sees the final three public hearings of the Parliamentary Inquiry into the operation and effectiveness of the Franchising Code of Conduct, with contentious franchisor Retail Food Group (RFG) to front the committee.

The first hearing will be a special evening session held on Tuesday, September 11 at 8pm in Canberra and sees RFG’s chairman, CEO and two senior executives face examination.

RFG, which operate 11 franchise brands including Donut King, Michel’s Patisserie, Gloria Jeans Coffee and Crust Gourmet Pizza Bar have faced a string of allegations since media coverage of distressed franchisees emerged late last year.

Despite the ongoing media coverage and reports of unscrupulous behaviour serving as the catalyst for the inquiry’s initial formation, this will be the first time that RFG has fronted the inquiry since public hearings began in June.

At the June 29 hearing in Sydney, the inquiry heard from RFG franchise Devi Trimuryani, who suggested that changes to the business model and lack of franchisor support were key contributors to her impending bankruptcy.

RFG CEO, Richard Hinson, who took over from former boss, Andre Nell in May will be on hand to discuss the company’s latest initiatives aimed at improving franchisee support outlined in its submission to the inquiry.

In the submission, RFG wrote, “RFG is investing circa $1.5m in the implementation of a revised field service structure that will result in the creation of additional business tools, together with approximately 25 new ‘in field’ roles tasked with working alongside franchisees to support outlet performance and mentor business owners”.

The public hearing comes at a trying time for RFG, with Inside Franchise Business reporting earlier this month the brand had posted a $306.7 million net loss, far exceeding initial loss projections.

The Inquiry is being conducted by the Parliamentary Joint Committee on Corporations and Financial Services and is expected to hand down its final report by December 6, 2018.