RFG CEO steps down after less than a year in top job
The CEO of struggling franchisor, Retail Food Group (RFG) has spectacularly exited the company, after less than a year in the top job.
In a statement released to the ASX on Monday, RFG’s board revealed that CEO Richard Hinson had announced his resignation as part of the major restructuring foreshadowed at the company’s AGM last week.
“The restructuring is an immediate priority for the company to reduce costs and become a more agile and customer focused organisation. Management will be decentralised to concentrate resources closer to franchisees, to support them in improving the performance and sustainability of their businesses,” the statement read.
Hinson only joined the embattled franchisor, which operates brands Donut King, Michel’s Patisserie, Gloria Jeans, Crust Gourmet Pizza Bar, Brumby’s Bakery and Pizza Capers in January, after being brought on to oversee the Australian franchise business.
However the abrupt departure of then CEO Andre Nell saw the former Metcash state manager elevated to group chief in May.
In the months that passed, Hinson introduced a turnaround strategy headlined by reduced franchisee fees and increased field support, however it was not enough to stop RFG from slumping to a $306.7m loss in August.
Upon Hinson’s resignation, newly instated RFG executive chairman, Peter George announced he would assume all CEO responsibilities for the group, before thanking the departing executive.
“Richard has driven positive change at RFG, and on behalf of the board, I would like to thank him for his efforts during the early stages of the turnaround and wish him well in his future endeavours,” George said.
“Under Richard’s leadership, relationships with franchisees have improved and a range of actions have been taken to stabilise the business and improve performance.”
At the group’s AGM on Thursday last week, George characterised the business’ performance over the last year as “unsustainable”, citing potential asset sales as recapitalisation options.
It had been confirmed that RFG was in discussion with corporate advisory firm 333 Capital in relation to recapitalisation efforts, including assistance in a small number of potential sales, however in his address to shareholders at the AGM, exiting CEO Hinson confirmed that franchisee retention was the group’s number one priority.
Hinson’s departure caps off a difficult year for the franchise group, with a number of highly-publicised submissions to the parliamentary inquiry into the effectiveness of the Franchising Code of Conduct making headlines nationally.
This latest announcement comes just days before the inquiry’s joint committee is set to hand down its findings on December 6.