Brumby’s Bakeries co-founder Michael Sherlock says he believes the Franchise Council of Australia (FCA) needs strong leadership and experienced franchise operators on its board to help steer the franchising sector from troubled waters.
He says FCA Chair Bruce Billson, a former federal Liberal MP and small-business minister, has been ineffective in tackling the problems in the scandal-ridden $170 billion franchise sector, which is facing a federal parliamentary inquiry
According to Mr Sherlock, Mr Billson had proven to be an embarrassment at the recent International Franchise Association (IFA) Convention in the US city of Phoenix, dismissing problems with franchising in Australia as “a media beat-up”.
“Mr Billson laid the blame for RFG’s [Retail Food Group] problems on landlords overcharging, and the issues with 7-Eleven on Indian immigrants,” Mr Sherlock said.
“Having spent 45 years in franchising, I’m passionate about the sector and deeply concerned at what has happened in the past few years, with the FCA absent in defending the 80 per cent of franchisors who operate their franchise systems in a fair and ethical way and put their franchisees first.
“One of the items on my bucket list was to attend the IFA in the US, and I was part of FCA delegation. There was a joint dinner with representatives from Australia and the US to be addressed by Mr Billson, and I was keen to hear what he had to say.
“But the speech he made – it was embarrassing to be in the room with him representing Australian franchising systems. This is what drove me to call for a review of the FCA and my own plan to fix the system: expose the 20 per cent doing the wrong thing, keeping the advertising money for themselves, receiving excessive rebates, charging massive hidden fees by making it compulsory to register franchise deeds and disclosure documents.”
Mr Sherlock says he wants the membership criteria of the FCA to be amended so only current established franchisors and franchisees can be appointed and serve on the board. He says franchisees should be encouraged to join through proportionate joining fees, and franchisor members should have a minimum five years’ trading experience and a minimum number of at least 30 franchisees, as well as a history of ethical trading.
“Franchising doesn’t need a distant and outdated politician’s approach,” he said. “It needs strong leadership. There are too many consultants and lawyers on the current FCA board, who should resign and let experienced franchisor operators, who control the top 20 franchise systems, steer the ship away from troubled waters.”
