Hungry Jack’s owner Jack Cowin says a loophole in the law means 62,000 franchises across Australia can be deprived of the value of goodwill they build in their business.
Mr Cowin and other operators say franchisers should be obliged to negotiate and act “in good faith” and that existing laws do not reflect the market practice that agreements are usually renewed.
Mr Cowin’s Competitive Foods is locked in a fierce battle with Yum Restaurants International, which owns the Kentucky Fried Chicken and Pizza Hut brands.
In addition to being a franchiser for Hungry Jack’s, Cowin operates the KFC franchises in Western Australia and the Northern Territory.
Last year, he closed a KFC outlet in Rockingham after Yum refused to renew the franchise. He said yesterday Yum was poised to force the closure of another three in coming months.
In each case, he said, Yum was not prepared to recognise goodwill established over 30 years.
Small Business Minister Craig Emerson will attend the Small Business Ministerial Council and the Ministerial Council on Consumer Affairs in Christchurch on Friday, where recent inquiries in South Australia and Western Australia will be a leading item on the agenda. A spokesman for Mr Emerson yesterday said the minister was considering the reports and looked forward to discussing franchisee issues with his counterparts from the US and New Zealand.
Logo from Hungry Jack’s.
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