Behind the Headlines

Jason Gehrke, Director, Franchise Advisory Centre

This article appears in the July/August 2013 issue of Business Franchise Australia & New Zealand

Code Review recommendations receive cautious support

Franchise sector participants have indicated cautious support for the 18 recommendations to improve the Franchising Code of Conduct arising from the current Code review, but have indicated that more detail is necessary to determine how practical  some of the recommendations will be.

The Franchise Council of Australia (FCA) has welcomed the report, noting that many of the review’s recommendations reflect suggestions made or supported by the FCA.

Grow-your-own marijuana franchisor jailed

A New Zealand chain of 16 hydroponic gardening stores served as a “veneer of legitimacy” to shield the supply of marijuana and products used to grow and smoke marijuana, and which generated up to 95 per cent of its turnover through illegal and  drug related activities, according to testimony at the trial of the company’s owner and general manager.

Retail chain Switched on Gardener, which features a marijuana leaf in its logo, was found by a NZ court to have played a pivotal role in 106 cannabis operations. The company’s owner, Michael Quinlan was sentenced to four years and three months jail,  with general manager Peter Bennett  sentenced to three years and nine months.

Two companies associated with Switched on Gardener were fined NZD$125,000 each, but will continue to trade for the time being while the court pursues assets held by the company’s owner in Australia and New Zealand.The Switched On Gardener previously attempted to franchise its business in anticipation of a relaxation of NZ drug laws.

QLD Government announces review of Retail Shop Leases Act

The Queensland Government has announced a statutory review of the state’s Retail Shop Leases Act, which will consider aligning more closely with similar Acts interstate, reduce red tape for tenants and landlords, and address imbalances in access to  information and negotiating power, according to the review’s options paper. Submissions to the review close on July 3.

11 chicken restaurant customers hospitalised after caustic soda salt mix-up

Eleven customers of the Chicken Treat franchise in the Western Australian town of Bunbury sought hospital treatment for burns, including two people who were airlifted, after eating food laced with caustic soda last week, according to media reports.

The customers of the Bunbury franchise are believed to have eaten the food after it was sprinkled with caustic soda instead of salt. Chicken Treat has issued a statement apologising for the incident and indicating that no other stores are affected, and  that the franchisee is working with local government health authorities and police to investigate the incident.

Telcoinabox rebrands and announces share market float

Telecommunications aggregation franchise Telcoinabox has rebranded itself Inabox and has announced an initial public offering to raise $2.9 million, which values the business at $16.2 million.

The company has also announced the appointment of advertising identity Siimon Reynolds as its new chairman. The company is offering 2.42 million shares at $1.20 a share, with an expected market debut date of June 26.

McDonalds to sell meat pies in NZ with the return of Georgie Pie

New Zealanders will be able to reconnect with the nation’s favourite pie brand when Georgie Pie goes on sale again in June for the first time in 15 years.

The brand had 32 retail outlets in New Zealand when it was bought by McDonalds in 1996, however 17 of the locations were subsequently converted to McDonald’s stores, and the 15 remaining properties closed and sold. However, New Zealand’s love affair with its favourite brand of pie has been revived in recent years with social media campaigns and petitions, culminating in an announcement by McDonald’s that one version of the pie will be trialled for sale through 10 outlets from June.