A LEADING franchisor has a drama on its hands with 15 of his franchisees shutting shop and pleading with the Australian Competition and Consumer Commission to come to their rescue.
The mercy call went out in October from a group of Quizno’s Sub sandwich bar franchisees to the competition watchdog, but to date there has been no response.
There are about 28 Quizno’s Sub franchise outlets in Australia and the company’s website describes them as “the fastest growing sub franchise in the nation”. However, there are reports that 15 franchisees have joined together to petition the ACCC for help.
The ACCC’s history with helping franchisees is at best patchy, and there are many penniless franchisees around the country who would use the word “hopeless” to describe its performance.
The reality is that the laws governing franchises, such as insolvency laws, are no friend to franchisees. To be even-handed, there are many franchise disputes in which the personal weaknesses of the franchisees, poorly performing shopping centres, new competition or plain bad luck can explain why the franchisees fail.
Some franchisors have given up being hamburger sellers or retailers, and just flog franchises. One Quizno’s franchisee, who asked not to be named, said he bought in after doing the homework on the two biggest costs - food and labour. “A friend of mine from McDonalds looked at the costs projected by Quizno’s Sub and said that if they were right, the model would work,” he said.
“But they weren’t right. I think they were based on the US costs where labour is much cheaper.”
No comments yet.