Recent stories in the media have revealed a general trend of disgruntled franchisees complaining that the lack of support from their franchisors have led to the demise of their businesses and, consequently, their own personal solvency.
Included among the former franchise owners who have come forward with concerns about franchising are those from Wendys, Cold Rock Ice Creamery and Step Into Life.
In the past eight years, a total of 116 Wendys stores have either collapsed or been taken over by management. For former Wendys franchisees Jenny and Graeme Bruce, their failed stores – which the couple blamed on a lack of support from the company – led to not only company insolvency but also their own personal financial difficulties. The Bruces claim that the hot dog and ice cream chain took out a caveat on their home, which subsequently led to the loss of the couple’s superannuation and life savings.
Another couple finding themselves in hundreds of thousands of dollars of debt following the failure of their Cold Rock franchise is Aaron and Kylie Gibson. The couple had to obtain a $100,000 credit card to alleviate their losses and almost lost their home due to this personal debt. Moreover, they paid out around $14,000 in a legal clash with the company.
Renowned franchises Miss Chu and Pie Face have collapsed into voluntary administration. The Australian Securities and Investments Commission’s first quarterly insolvency statistics for the 2014-15 financial year show a rise of 7.0% in companies entering external administration. Voluntary administrations were up 6.6% from the previous quarter.
With the rapidly growing number of business failures in Australia, and the tendency for business failures to be closely linked to personal debt crises, more Australians are seeking bankruptcy advice and administration than ever before. Australian Bankruptcy Services (ABS) is a bankruptcy firm dedicated to giving struggling individuals helpful advice about their bankruptcy options, as well as helping them through the process.
Founded by Anthony Warner, one of Australia’s leading private Registered Bankruptcy Trustees, ABS can provide a comprehensive financial assessment of your situation and help you to determine a course of action. To find out more information about our services, or to simply get advice, call us today on our 24-hour hotline at 1800 462 767.