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Retail Food Group (RFG) has failed 23. 1 percent, according to Australia’s Consumer Watch, claimed the company had committed misleading behavior.
The brands in question are Brumby’s Bakery, Gloria Jean’s Coffee, Michel’s Patisserie, and Donut King.
The Australian Competition and Consumers Commission (ACCC) claims RFG and five of its affiliates acted irresponsibly in the sale and licensing of 42 loss-making businesses between 2015 and 2019.
It was alleged that the company withheld important financial information and made false or misleading statements about the profitability of its business.
« We claim that the Retail Food Group withheld important profit and loss information about these corporate deals from incoming franchisees and misrepresented that these loss-making deals were profitable or profitable, » commented Rod Sims, chairman of the ACCC.
Although the Retail Food Group claims it cannot estimate the profits of a particular franchise, the ACCC claims that RFG knows the profits of each store and is aware that the stores sold are making losses.
« The prospective franchisees simply had no way of knowing the actual financial performance of the stores and we claim the Retail Food Group took advantage of this in selling or licensing the stores. «
The ACCC also alleges that RFG violated the Franchising Code by using marketing funds to pay for non-marketing expenses.
In some cases, this included costs for managers and employees who were not in marketing roles.
« The Franchising Code makes it clear that marketing funds can only be used to cover legitimate marketing and advertising costs, administrative costs, expenses that are disclosed to franchisees or that are agreed upon by the majority of franchisees, » Rod said.
« We claim that the Retail Food Group has violated the Code and, in some instances, has wrongly made undisclosed payments from the marketing funds for its own benefit to the detriment of the franchisees, » he concluded.
The Retail Food Group stopped trading earlier today, but has since resumed trading, 15. 4 percent to 7. 7 cents at 1:43 p.m. AEDT.
Retail Food Group, Australian Competition and Consumer Commission, ASX: RFG, Gloria Jean’s Coffees, Brumby’s Bakeries, ASX, Franchising, Michel’s Patisserie
World News – AU – ACCC alleges retail food misconduct of the group (ASX: RFG) – The Market Herald
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– >> ACCC alleges misconduct by the Retail Food Group (ASX: RFG)
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Ref: https://themarketherald.com.au
