Michael Sherlock, an expert in franchising, is unhappy at the turn the sector has taken

SOME of the nation’s biggest retail brands have been embroiled in controversy over poor treatment of franchisees and staff. Now a man considered one of the founders of franchising in Australia has spoken out.

Illustration of Michael Sherlock by Brett Lethbridge.

MICHAEL “The Professor” Sherlock is considered one of the founders of franchising in Australia, transforming Brumby’s into a nationwide chain of bakeries.

But now Sherlock is disgusted about the direction in which the franchising sector is heading, with some of the nation’s biggest names including Retail Food Group (RFG), Domino’s and 7-Eleven embroiled in controversy over poor treatment of franchisees and staff.

“It has got to the stage now that some of the big US franchisors are not interested in Australia,” Sherlock tells your diarist. That’s bad news for a sector that includes 79,000 separate small businesses that between them employ 472,000 people. Sherlock, who is now a top executive at Sentinel Property Group, has taken aim at the sector’s peak body, the Franchise Council of Australia (FCA).

He says the FCA no longer represents the average small franchisee, with a board stacked with lawyers and advisers. Franchising just does not seem to be delivering on its promise these days.

Sherlock says one former franchisee of Brumby’s has set out on his own and is doing very nicely because he doesn’t have to pay expensive marketing and other fees to head office.

Amazingly, he can now buy flour at a cheaper rate than that provided by Brumby’s, which is now owned by RFG.

FRANCHISE DEFENCE

THE Franchise Council of Australia has responded to Sherlock’s criticism, claiming it is currently working on a package of reforms. FCA executive chairman Bruce Billson says the changes will address franchisee, franchisor and supplier engagement, board and governance arrangements, advisory structures, information services and member standards.

“The FCA membership is overwhelmingly small business but also includes numerous bigger and long-established franchise brands,” Billson says. We will wait to see if the planned reforms satisfy “The Professor’’.

SCAMMERS GET WISE

INTERNET scammers are getting more cunning. Your diarist received a call yesterday from Hervey Bay trucking firm owner Peter Schuback who said scammers based in Uganda had hacked into his computer system and stolen his customer list. These customers were then contacted by the scammers and told to pay their invoices from Schuback’s firm into bank accounts linked to the cybercriminals. “Our customers have ended up losing a lot of money in the process,” Schuback says. He says the Australian Federal Police have been informed of the crime and he has told his customers not to accept any payment changes unless told directly by a director of the company on official company letterhead. Earlier this year, Brisbane-based Totally Workwear was hit by a similar scam when hackers, believed to be based in China, diverted payments totalling $76,096.56 to their own accounts. A cyber security report released by Telstra last year found that more than half of Australian businesses have at least one cyber security incident each month. The message is be vigilant.

MOSCOW CALLING

GIVEN Russian agents appear to be running around poisoning people willy-nilly in the UK, your diarist was a bit alarmed when he spotted a white van in Racecourse Rd with the words “”You are tailing the KGB” on its back. As it happens there was no need to worry about the Ruskies invading Ascot. The van belongs to a local security firm that likes to delve back to the glorious past of the Soviet Union, including using the hammer and sickle symbol.

POPULAR ROLE

HOUSING and Public Works Minister Mick De Brenni’s decision to ramp up the powers of the state’s building watchdog appears to have attracted some interest. We hear a job vacancy for a compliance investigation officer at the Queensland Building and Construction Commission attracted 90 applications. The QBCC has new powers that will ensure builders face jail time or hefty fines for financial malfeasance, including not paying money earmarked for subbies into special trust accounts.