Behind the Headlines

 

Spa group acquires NZ chain

 

Day spa and wellness product company Endota has purchased New Zealand’s largest day spa group, Forme Spa, for an undisclosed amount as part of its international expansion plans, according to a media report.

 

Endota operates 120 spas and distributes products to 11 countries including Canada, Thailand, Malaysia, and China with a group turnover of approximately $170 million. The Forme acquisition adds nine locations around New Zealand to Endota’s studio chain.  Read more

 

 

 

 

Last SA Pizza Hut dine-in closes after 44 years

 

South Australia’s last Pizza Hut dine-in restaurant will close on June 28 after operating for 44 years due to long-term plans to redevelop the site, according to a media report. 

 

The dine-in store concept was the premise of the original Pizza Hut offer when it was first developed in the United States in 1958, but has long been overtaken by take-away and delivery outlets only. Of the brand’s approximately 270 outlets in Australia, only 13 remain as dine-in restaurants according to the company’s website.  Read more 1; Read more 2

 

Franchise positions itself against corporate giant

 

Hardware chain Mitre 10 has launched a new “disruptive, fun, and memorable” campaign to differentiate it from corporate-owned hardware giant rival Bunnings, according to a media report.

 

The campaign, which uses the slogan “The Other Hardware Store”, hopes to lure some DIY’ers away from Bunnings through amusing reminders of Mitre 10’s history, expertise, and connection with the community. Mitre 10 is Australia’s second-largest hardware store retailer with more than 350 outlets across the country.  Read more

 

Private equity sells food chain stake after 18 months

 

Specialist fund manager Magellan Financial Group has sold its 11.6% share in Australian-based Mexican food chain Guzman Y Gomez (GYG) to a trust fund for about $140 million, according to a media report.

 

GYG has twice deferred plans to float on the ASX, most recently after Magellan acquired its stake in the company in January 2021 for $86.6 million.  Read more

 

Auto brand faces possible $2b payout

 

Automotive manufacturer Toyota Australia has lodged an appeal in the Federal Court of Australia to challenge a potential $2 billion payout to class action participants, according to a media report.

 

The class action, which was filed in the Federal Court in 2019, alleged Toyota had been installing faulty diesel particulate filters (DFPs) in its Hilux, Fortuner, and Prado models which were sold in Australia between October 2015 and April 2020. DFPs are designed to minimise the release of harmful pollutants into the atmosphere but these emitted foul-smelling white smoke and resulted in increased fuel consumption and wear and tear and, eventually, required the vehicles to be serviced or repaired at the consumers’ expense. 

 

That ruling for the plaintiffs effectively opened the door for more than 260,000 vehicle owners to potentially claim damages totalling more than $2 billion as compensation for being sold cars which were defective and financial loss associated with the purchase of those vehicles.  Read more

 

Mixed customer feedback over cabbage swap

 

Fast food chains are receiving mixed reviews from their customers over their decision to deal with the shortage of lettuce by replacing it with cabbage in their burgers, according to a media report.

 

Customers are using social media to voice their opinions of the controversial replacement, with comments ranging from “no one likes cabbage” to “actually prefer it with cabbage it’s nice and crunchy”. Subway, KFC, Red Rooster, and Oporto are all using cabbage or cabbage/lettuce blends in response to lettuce supply chain disruptions caused by heavy flooding on the east coast of Australia earlier in the year.  Read more

 

Franchise Disclosure Register website now online

 

The Australian Government’s new Franchise Disclosure Register is now available online at www.franchisedisclosure.gov.au

 

Franchisors will be required to upload certain information to create a profile on the Register by logging-in with a MyGov ID, and publish disclosure information about their franchise no later by November 14. The Register will go live and be searchable by potential franchisees and others from November 15.

 

The Register may contain a franchisor’s disclosure document, key facts sheet and standard form agreement, although at the very least a franchisor must provide their name, trading name, ABN, office address, phone and email contacts, and ANZSIC division and subdivision codes for the industry in which the business operates. See the Register website at www.franchisedisclosure.gov.au

 

New Russian brand reopens closed McDonald’s outlets

 

Outlets previously owned by McDonald’s in Russia are reopening with a new name and logo, and neutral packaging with no word or letter that should remind customers of its former owner, according to a media report.

 

New brand Vkusno i tochka translates to “Delicious. Full Stop” and operates under a logo of two stylised orange fries next to a red dot on a green background. The first of the newly branded restaurants opened where the very first Russian McDonald’s opened in January 1990 with the new group intending to reopen up to 100 outlets a week across the country. While Vkusno i tochka’s menu still has double cheeseburgers and a variety of desserts, all “Mc” prefixes have been removed. McDonald’s, which had directly managed more than 80% of its 850 outlets in Russia, sold all of its Russian business to one of its licensees for an undisclosed amount in May after suspending operations in the country in March in response to Russia’s invasion of Ukraine.  Read more

 

International coffee chain to exit Russia

 

International coffee giant Starbucks is leaving Russia in response to the country’s invasion of Ukraine and reported human rights abuses by its military, according to a media report.

 

Starbucks discontinued sending supplies and suspended operations in Russia on March 8 but has now decided to exit the country leaving franchisees to find another brand to operate under. Russian sales across Starbucks’ 130 franchises stores represent approximately 1% of global sales. The company has committed to paying its nearly 2,000 workers for another six months to help them transition to new employment.  Read more

 

How to improve franchise recruitment

 

The Franchise Advisory Centre’s popular Effective Franchise Recruitment workshop returns in September with new and updated content relevant to the challenges and opportunities of the current recruitment environment with valuable insights for franchisors.

 

The four-part workshop will be delivered live online in four two-hour sessions in September on the 6th, 8th, 13th and 15th from 10am-12noon AEST, and include comprehensive reference materials. For more information, click here.

 

 

 

Jason Gehrke | Director | Franchise Advisory Centre Jason is the director of the Franchise Advisory Centre and has been involved in franchising for more than 30 years at franchisee, franchisor and advisor level. He advises both existing and potential franchisors and franchisees, and conducts franchise education programs throughout Australia. He has been awarded for his franchise achievements, and publishes Franchise News & Events, Australia’s only fortnightly electronic news bulletin on franchising issues. In his spare time, Jason is a passionate collector of military antiques. www.franchiseadvice.com.au