Michael Sherlock, an expert in franchising, is unhappy at the turn the sector has taken
Posted on Friday 16th March 2018
Sour Dough
MICHAEL “The Professor” Sherlock is considered one of the founders of franchising in Australia, transforming Brumby’s into a nationwide chain of bakeries.
But now Sherlock is disgusted about the direction in which the franchising sector is heading, with some of the nation’s biggest names including Retail Food Group (RFG), Domino’s and 7-Eleven embroiled in controversy over poor treatment of franchisees and staff.
“It has got to the stage now that some of the big US franchisors are not interested in Australia,” Sherlock tells your diarist. That’s bad news for a sector that includes 79,000 separate small businesses that between them employ 472,000 people.
Sherlock, who is now a top executive at Sentinel Property Group, has taken aim at the sector’s peak body, the Franchise Council of Australia (FCA).
He says the FCA no longer represents the average small franchisee, with a board stacked with lawyers and advisers. Franchising just does not seem to be delivering on its promise these days.
Sherlock says one former franchisee of Brumby’s has set out on his own and is doing very nicely because he doesn’t have to pay expensive marketing and other fees to head office.
Amazingly, he can now buy flour at a cheaper rate than that provided by Brumby’s, which is now owned by RFG.
Franchise Defense
THE Franchise Council of Australia has responded to Sherlock’s criticism, claiming it is currently working on a package of reforms. FCA executive chairman Bruce Billson says the changes will address franchisee, franchisor and supplier engagement, board and governance arrangements, advisory structures, information services and member standards.
“The FCA membership is overwhelmingly small business but also includes numerous bigger and long-established franchise brands,” Billson says. We will wait to see if the planned reforms satisfy “The Professor’’.
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