Inaugural World Franchise Day held on June 11
The inaugural World Franchise Day to celebrate the impact of franchising on communities around the world was be held on Wednesday, June 11.
The day was an initiative of the World Franchise Council, the global body for national franchise associations, including the Franchise Council of Australia (FCA) and the Franchise Association of New Zealand (FANZ). Each participating nation promoted awareness of the benefits of franchising and highlight franchisees as small business owners who contribute to their local economies.
Franchising empowers local entrepreneurs to thrive while benefiting from the support of an established system, and leveraging their own spirit of entrepreneurship, innovation, dedication, and hard work to succeed. The franchise sector in Australia generates revenues of $174 billion across 1,200 brands and more than 94,000 small businesses employing more than 565,000 Australians, according to the FCA. Franchise brands were also encouraged to engage in World Franchise Day by showcasing their franchisees, and in turn, encourage their franchisees to highlight to their customers that they are a locally owned and operated business.
On World Franchise Day, the Franchise Advisory Centre co-hosted a free webinar with Constant Contact on Franchise Growth in 2025 which featured recruitment tips about the use of artificial intelligence to engage with franchise candidates, and understanding key recruitment performance metrics such as average acquisition timeframe. The webinar was presented by Franchise Advisory Centre director Jason Gehrke and Constant Contant Asia-Pacific vice president Renee Chaplin. To view a recording of the webinar video, click here.
ASIC prosecutes mortgage broking chain
The Australian Securities and Investments Commission (ASIC) has launched legal action against franchised mortgage broking brand RAMS alleging breaches of the Credit Act and systemic misconduct within the lender, according to a media report.
According to ASIC allegations, franchisees of RAMS, a home lending business acquired by major Australian bank Westpac in 2008 for $140 million, submitted fake payslips from non-existent employers to approve mortgage applications for borrowers. The failure of RAMS to properly supervise representatives of the company breaches the Credit Act. RAMS has further admitted to conducting business with unlicensed persons and failing to implement proper policies and procedures.
ASIC’s investigation into RAMS was initiated following a review by Westpac into the franchise network in 2022, the results of which were self-reported to ASIC by Westpac in 2023. That internal review uncovered multiple issues including cases where loans were submitted with borrowers’ expenses altered in order to pass credit tests, resulting in Westpac paying $7.6 million in compensation on 48 customer loans.
Westpac closed RAMS to new customers in August 2024 after failing to secure a buyer for the business, and shortly thereafter disgruntled franchisees launched a class action lawsuit related to the termination of some franchise agreements.
According to one financial analyst, the issues related to RAMS were well-known within the market and similar conduct problems occur across all banks. Read more
Regulator to focus on unfair contract terms
The Australian Competition and Consumer Commission (ACCC) has announced that it will prioritise unfair contract terms in consumer and small business contracts in the F26 financial year, according to media statement.
The ACCC will particularly focus on harmful cancellation terms, including those associated with automatic renewals, early termination fee clauses, and non-cancellation clauses. From 9 November 2023, changes to the Australian Consumer Law prohibited businesses from proposing, using, or relying on unfair contract terms in standard form contracts with consumers and small businesses. For more information, click here.
Food chain penalised for button battery breach
Burger chain Hungry Jack’s has been penalised $150,240 and issued with eight infringement notices by the Australian Competition & Consumer Commission (ACCC) after failing to comply with mandatory button battery information standards, according to an ACCC statement.
Between 20 May 2024 and 30 May 2024, Hungry Jack’s sold 27,850 children’s meals which included a Garfield toy containing a button battery which could have posed a risk of choking or serious injury to young children if separated from the item in which it was installed. The toy did comply with the button battery safety standard, but Australian Consumer Law (ACL) also prescribes mandatory information standards for products containing such batteries. Information standards require notification to consumers that a product contains a button battery, warnings about the potentially fatal hazards of button batteries, and advice about what to do if a button battery is ingested.
In addition to the financial penalty and infringement notices, Hungry Jack’s has signed a court-enforceable undertaking with the ACCC to establish and implement a compliance program designed to minimise the risk of future AL breaches. Read more
Ex-bank franchisees seek up to $200m more
A group of up to 70 former Bank of Queensland (BOQ) franchisees are seeking additional compensation of up to $200 million above the prices already paid for their outlets when they were compulsorily acquired by the bank last month, according to a media report.
Last year the bank announced it would exit franchising as a method of reducing its costs, and allocated up to $125 million to buy back the network’s 114 franchised outlets by March 31 this year.
The branches now operate as company-owned outlets, with around 570 employees of the franchisees now joining the BOQ payroll.
The bank says it continues to engage with former franchisees who dispute the bank’s right to terminate their franchise agreements on the terms set out in the agreements, and says it has discretion to make further payments within the previously announced $125 million limit. The bank has reduced other operating costs by reducing branch numbers, cutting staff, reducing its range of offers, decreased the use of contractors and shrunk its head office footprint, claiming that the changes are necessary to compete with larger banks at a time when it claims banking margins are tighter than ever. Read more 1; Read more 2
Franchise pay agreement struck down
National burger chain Grill’d’s most recent proposed enterprise agreement has been struck down by the Fair Work Commission (FWC) after it was challenged by hospitality and retail unions, according to a media report.
The FWC’s ruling found that Grill’d failed to explain to its employees that the proposed agreement would freeze and potentially erode their penalty rates. The agreement, which would have impacted 4,300 employees working in 149 Grill’d outlets, set penalty rates at a dollar amount rather than a percentage of the base rate. Over time, this strategy effectively results in below award rates of pay as the rate is outpaced by higher minimum award increases. It was predicted that, if approved, by 2028 Grill’d employees working on Sundays would earn 20% less than the award.
Unions which challenged the agreement, claimed the agreement was designed to appear to pass the better off overall test (BOOT) at the time, but actually would be detrimental for workers when there was an annual wage increase. The Fair Work Act specifies that an agreement need only leave workers better off than the award at the time of approval, however the FWC’s ruling was based on Grill’d’s failure to clearly explain to workers the financial implications of the agreement, particularly in regard to Saturday and Sunday penalty rates as a percentage loading, not fixed dollar amounts. Read more
International chain closes all outlets for experimental concept
McDonald’s in the United States has announced it will close all the outlets of its spinoff brand CosMc, according to a media report.
The concept of CosMc is based on an extra-terrestrial mascot McDonald’s featured in adverts in the late 1980s and early 1990s. Specifically, CosMc is a yellow, six-armed, part alien and part robot character who relocated to Earth from his home in outer-space after discovering McDonald’s burgers and fries, however the new concept stores did not have a single burger on their menus.
The retro themed restaurants were designed to capture consumers looking for a 3pm hit of something lighter or sweeter than a burger or fries. Menu items include lemonades, sandwiches, and donuts, with the option to customise drinks with tapioca pearls, syrups, and vitamin C shots.
Only five out of a proposed 10-store trial were opened in the United States in Chicago and Texas from December 2023. At the time, McDonald’s indicated that if the concept was successful, CosMc could go global, including to Australia. However the closure of the concept stores means that international expansion of the brand will be limited only to certain menu items that may be rolled-out across McDonald’s existing network.
In a statement, McDonald’s says that the outlets will be closed in June as part of the concept’s next testing phase, and that CosMc allowed the company to test new flavours, technologies and processes without impacting the existing McDonald’s experience for customers. Read more 1; Read more 2
How to manage franchise underperformance
Underperforming franchisees are often unaware of the degree to which their business is underperforming, and may even be satisfied with their business according to Franchise Advisory Centre director Jason Gehrke.
“Underperforming franchisees may be comfortable with their level of sales or profitability, even though sales in particular may be below the required minimum in their franchise agreement,” says Gehrke.
“Conversely, franchisees with high revenues may actually underperform in regards to profit (or even worse, be losing money), and need guidance on how to improve their businesses before they cause lasting damage to themselves and possibly even the brand.”
Managing Franchisee Underperformance will be held as a live and interactive online course from 1-3pm AEST on August 12 and 14, and will provide strategies and tactics for franchisors to address franchisee performance and profitability. For more details, click here.
Jason Gehrke is the Director of the Franchise Advisory Centre and has been involved in franchising for more than 30 years at franchisee, franchisor and advisor level. He advises both existing and potential franchisors and franchisees, and conducts regular education courses for franchisors in Australia and overseas. He has been awarded for his franchise achievements, and publishes Franchise News, Australia’s only fortnightly electronic news bulletin on franchising issues.
www.franchiseadvice.com.au
