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Retail Food Group denies brutal business model

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Retail Food Group (RFG) has denied claims it operates a “brutal” business model that has driven several franchisees out of business.

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Retail Food Group warns franchisees against speaking out

In a recent Fairfax Media investigation, a number of franchisees across RFG’s portfolio of brands, including Brumby’s, Donut King, Crust Pizza, Michel’s Patisserie and Gloria Jean’s, called out RFG’s harsh business model, with one describing life as a franchisee as “akin to slavery”.

Retail Food Group’s portfolio of brands includes Gloria Jean’s cafes. Image credit: Alpha via Flickr.

In the report, franchisees alleged RFG spies on them and charges massive franchisee fees, which has reportedly led to bankruptcy, marriage breakdowns and wage fraud.

RFG denied the claims, stating the publication failed to acknowledge the steps the group has taken over the past year to support its franchisees.

“We reject this assertion and reiterate the fact that our success depends on the success of our Franchise Partners,” RFG said in a statement. “If they thrive, so do we, and we are committed to finding ways to better support them, their staff and customers.”

Following the allegations, RFG chief executive Andre Nell sent a memo to franchisees saying the group would look at increasing support, but also warned franchisees against speaking out publicly about their complaints.

“Whilst we remain committed to working with any franchisee to resolve any concerns, queries or challenges they may have, our policy is not to publicly comment on specific Franchise Partner circumstances,” the RFG memo read.

RFG has appointed Deloitte to conduct a business-wide review into its business model and to address whether franchisees were involved in underpayments.

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  • Published: 4 months ago on December 11, 2017
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  • Last Modified: December 11, 2017 @ 12:54 pm
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