FCA fights back against franchising criticism

By Sarah Stowe | 29 Oct 2015 View comments

Franchising is not the weak link in the business world according to the Franchise Council of AustraliaÕs executive director Steve Wright. Wright has fought back against media and public criticism of franchising, highlighted by the collapse of Kleenmaid, by pinpointing the current trading successes of some key franchise brands.

Delegates at recent state conferences have heard how Clark Rubber, Eagle Boys Pizza and PoolWerx have all reported strong sales growth.

Kleenmaid organisation, caused essentially by manufacturing costs and reduced demand in the wake of the global economic crisis, had been seized upon by some to try to claim weakness in the franchising model in times of economic downturn. The results that many systems are currently reporting show this to be a weak and superficial analysis,” he said.

“Some franchisees are out of pocket for commissions owed to them by Kleenmaid, for sale of Kleenmaid products and for servicing work done under warranty contract. There has been no suggestion of any fundamental disagreement, conflict or dispute between Kleenmaid and its franchisees other than its unpaid commission and servicing payments issues, which has the effect of including some franchisees in the list of Kleenmaid unsecured creditors.”