Red Rooster, Oporto and Chicken Treats restaurants could be at risk of ‘bankruptcy’, a report submitted to the Australian Senate says.
Many franchisees of the restaurants, operated by Craveable Brands, are in ‘distress’, according to the Franchisee Association of Craveable.
The statements were made in a Senate Inquiry submission to the Franchising Code of Conduct.
‘Recently there have been many franchisees in distress…,’ the submission states.
A Senate Inquiry has received information about restaurants operated by Craveable Brand. The double fillet Otropo Burger available at Oporto is pictured.
‘There have been recent insolvent franchisees. There are many more on the verge of bankruptcy.’
The Red Rooster restaurants in Mt Pritchard and Parklea in Sydney have already become insolvent, according to the submission.
The submission states stores are buying drinks from suppliers that would be cheaper at supermarkets.
‘A very good example is Mount Franklin Water carton which can be bought for $11 every day price at IGA and costs $18 through Craveable suppliers,’ the submission states.
‘Recently there have been many franchisees in distress’ according to the Franchisee Association of Craveable. A Rooster restaurant is pictured.
The customer loyalty scheme, where consumers are reward with $1 for every $15 spent, is also hurting the business, the submission sates.
Craveable operates 570 Red Rooster, Oporto and Chicken Treats restaurants in Australia.
A Craveable spokesperson told Fairfax Media the submission contains several ‘inaccurate claims’.
The submission was ‘surprising’ since Craveable was never been contacted by the association and doesn’t know who its members are, according to the spokesperson.
Craveable operates 570 Red Rooster, Oporto and Chicken Treats restaurants in Australia
‘We don’t believe the submission reflects the views of the vast majority of Craveable franchisees,’ the spokesperson said. .
‘It contains several inaccurate claims that omit vital context about the operation of the broader franchise system.
‘In a business with more than 400 franchisees across three brands there will be a range of experiences, but our system is healthy and growing and we work closely with our franchisees to support their businesses.’
The Franchisee Association of Craveable state in their submission they formed a year ago to protect the interests of franchisees, and share proficiency.
Daily Mail Australia has contacted Craveable for comment.
A Craveable spokesperson told Fairfax Media the submission contains several ‘inaccurate claims’. A Red Rooster burger is pictured.