Retail Food Group is dragging a young Gold Coast family to court over $90k in debt, a case which comes after the former franchisee joined a class action lawsuit against the franchising giant.
Former Michel’s Patisserie franchisee Young Yoh Rho was served papers in the Brisbane Magistrates Court seeking $88,549.62 plus interest in April this year, and news.com.au revealed RFG has launched at least three such cases in the past three months, despite vowing to put allegations of franchisee mistreatment “in the past”.
The 40-year-old, who was forced to shut down his Westfield Gold Coast store in 2021 after COVID-19 lockdowns proved the final nail in the coffin for the business, told news.com.au, “We feel it’s unfair that we had come to the point where we couldn’t continue operating our store due to financial issues.
“RFG always say they support their franchisees but they offered no support at all in the nine years I operated this store and are continuing to get every penny that they can out of me.”
A class action brought about by a group of 130 current and former franchisees, alleges RFG displayed unconscionable conduct, misused marketing funds and pressured struggling franchisees to invest more in failing stores.
In their allegations, they claim the company, which also owns Donut King, Gloria Jean’s, Brumby’s Bakeries and Crust Pizza, stopped delivering fresh food daily and forced businesses to sell lower-quality defrosted cakes and pastries instead, leading to the demise of their businesses.
News.com.au reported that in a statement, RFG defended what is said were “reasonable actions” to recover the debt and denied the action was retaliatory.
“Consistent with any other business, and if it is to continue its successful initiatives and support measures … RFG must seek recovery of amounts legitimately owing to it by franchisees (whether they be existing or former franchisees),” the spokesman said.
“RFG acts fairly and appropriately towards franchise partners in relation to financial matters, including the recovery of payments which may be owed by them.”
The ACCC’s proceedings against RFG are ongoing, with a case management hearing scheduled for July 7.