Hungry Jacks Boss Pushes For Franchisee Clause

The Australian:

One of Australia’s largest franchise operators is pressing the Rudd Government to introduce a good faith clause as he fights to stop the forced closure of 3 fast-food outlets outlets.

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 3 in coming months.

In each case, he said, Yum was not prepared to recognise goodwill established over 30 years. More.