RFG settles big cake Case

Image courtesy of rfg.com.au

Gold Coast-headquartered food franchisor Retail Food Group is set to settle the last of a long-running series of court battles against regulators and franchisees.

The listed company was at one time besieged with franchisee complaints about its practices and the Australian Competition and Consumer Commission accused the company of breaching Australian Consumer Law, provisions of the Franchising Code of Conduct and the Competition and Consumer Act.

However, under new leadership, the company, which is Australia’s largest multi-brand retail food and beverage franchise owner, has slowly battled it way back from the crisis.

In the last case facing the company, RFG has agreed to settle a class action brought by Chambers Westgarth on behalf of some 130 former and current Michel's Patisserie franchisees over alleged losses incurred between 2015 and 2016.

Corrs, which was originally seeking millions of dollars in damages, had alleged that RFG displayed unconscionable conduct, misused marketing funds and pressured franchisees to invest more into struggling stores.

The settlement, which is yet to be approved by the courts, will see RFG waive the franchisees’ debts but will also see RFG walk away with making any admissions or payments.

"The settlement, which remains subject to court approval, involves a dismissal of the proceeding by the applicant without RFG making any admission or any payment to the applicant, to any class member, or towards the applicant’s or the litigation funder’s costs of the proceeding," the company said in a statement to the ASX.

"The settlement includes releases by the applicant and class members in favour of RFG and its related respondent entities.

"RFG has agreed to release applicable class members from historical debts alleged in the proceeding."

Retail Food Group said the settlement would have no financial impact on its annual results.

As well as Michel's Patisserie, RFG is the owner of Gloria Jean’s, Donut King, Brumby’s Bakery, Crust Gourmet Pizza and Beefy’s Pies. The Company roasts coffee under the Di Bella Coffee brand.