The ACCC has commenced proceedings against listed company Retail Food Group Ltd - Brumby's Bakery, Gloria Jeans Coffees & Donut King - alleging it engaged in unconscionable conduct by withholding information and making false claims in order to convince vulnerable prospective franchisees to purchase 'in house stores' that were anything but profitable.
In a press release, Rod Simms explained:
"We allege that Retail Food Group withheld critical profit and loss information about these corporate stores from incoming franchisees, and falsely represented that these loss making stores were viable or profitable."
In an even worse look for RFG, it is further alleged that the master franchisor diverted funds from the marketing fund to unauthorised costs for its own benefit, which is in clear breach of its obligations under the Franchising Code.
See the full press release here: https://www.accc.gov.au/media-release/accc-alleges-rfg-engaged-in-unconscionable-and-misleading-conduct