Becoming a RFG Franchisee
The vast majority of our franchisees are hard-working and successful. However, it is important that all potential RFG franchisees understand the franchising landscape, conduct their own thorough due diligence, and obtain appropriate independent advice before applying for a franchise. The livelihood and profitability of franchisees is of the utmost importance to RFG, however, the retail market can be challenging and there are no guarantees as to success. It is therefore important that prospective franchisees consider all the available information before making a binding decision.
Franchising Code of Conduct
The Franchising Code of Conduct (Code) is a mandatory industry code that regulates the conduct of all participants in the franchise relationship. Under the Code, the franchisor must provide prospective franchisees with a disclosure document that equips them with relevant information concerning the franchise opportunity they are interested in. The disclosure document will include a copy of the Code.
The Franchise Sector in Australia
Franchises equate to about 4% of small businesses in Australia and the industry contributes over $150 billion to the Australian economy, with almost 80,000 units employing more than 470,000 people. According to researchers, the sector’s trajectory will continue to climb, with predictions that industry sales will continue to increase to $160 billion in 2020. Source – Franchise Council of Australia
The RFG Franchise Model
RFG operates a traditional business format franchising model. Franchisees contribute franchise and marketing levies in exchange for an established brand, systems and ongoing technical, operational, marketing, business support and intellectual property. Information concerning the fees and costs associated with our franchises are disclosed early during the application process, with detailed information provided in the franchisor’s disclosure document, and ultimately, the formal franchise agreement. Essentially franchisees run their outlet as their own small business, including management of store operations, hiring a team and making key business decisions. They are supported by dedicated sales, performance, compliance, operations, training and Brand System management teams.
Lease Renewal and Refurbishment Obligations
Most lease terms are between 5-7 years. Refurbishments are generally required on renewal of a franchise, pursuant to the terms of the franchise agreement and landlord’s lease of a site. The timeframe may vary dependent upon the terms of these documents.
We work alongside our franchisees to ensure refurbishments reflect up-to-date trends and are appropriate for their particular outlet and the requirements of the lease for the site. We also aim to leverage our scale to negotiate competitive pricing for materials and shopfitters.
Further information concerning refurbishment matters is provided in the franchisor’s disclosure document and, where an application is successful, relevant approval communications. We also touch base with our existing franchisees before lease or franchise renewal to discuss potential refurbishment and other renewal matters, usually 12 months from renewal.
There are many factors that might influence the scope of a refurbishment, including the age and quality of an existing fitout, plant and equipment, landlord requirements, and operational changes relevant to the brand, etc. We work with our franchisees to ensure that refurbishments are appropriate for their particular store and budget.
Franchisees are responsible for ensuring their compliance with relevant workplace laws, including proper payment of their employees’ entitlements. Recent changes to the law mean that a franchisor could potentially be liable for a franchisee’s non-compliance where it has not taken reasonable steps to prevent the contravention.
RFG acknowledges and appreciates growing community concerns in connection with this matter, and has a strong commitment to ensuring wage entitlement compliance within its franchise network. The Company has taken a number of steps to demonstrate this commitment over a number of years.
In the first case, RFG is a strong believer in training and education, not only regarding wage entitlement compliance, but across broader operational platforms. A key aspect of RFG’s initial and ongoing training regime is to ensure franchisees have the necessary knowledge, skills, resources and support to ensure their compliance with wage compliance laws. A central feature of RFG’s support programs includes the Company’s collaboration with the National Retail Association (NRA) to create the RFG Foundations Program to facilitate the outcomes noted above. Under this program, franchisees are provided training, materials and workshops facilitated by the NRA, together with a national toll free workplace advice line and online resource platform that ensures they have access to independent specialist support to better enable them to comply with their obligations.
These initiatives are supported by extensive dialogue with our franchisee community in connection with wage entitlement compliance, efforts to engage with franchisee team members regarding their rights and avenues for raising concerns, and otherwise a compliance audit regime focused on ensuring wage entitlement compliance with our network.
Ultimately RFG maintains a strong commitment to wage entitlement compliance within its franchise network and continues to refine its activities to better assure compliance within its network.