‘I might have to sell everything’: Single mum’s $800,000 Nando’s nightmare

A Melbourne mother of four says she could be forced to sell her house after a two-and-a-half-year bullying “ordeal” by Nando’s.

A single Melbourne mother of four says she could be forced to sell her house after a two-and-a-half-year bullying “ordeal” by Nando’s – as new figures reveal half of the chicken chain’s franchises in Australia have closed since 2019.

Sarah Hassan, who runs the Melton store in Melbourne’s western suburbs, spent close to $800,000 to start the franchise with her former husband in 2012.

The 41-year-old took over running the store in 2019 after her marriage broke down, and the restaurant is her only financial lifeline.

But Ms Hassan says the fast-food company is now attempting to push her out, first demanding she fork over an additional $500,000 for “renovations” and later issuing “notices of improvement” through what some franchisees have described as intimidation tactics disguised as training audits.

She says after two-and-a-half years of Nando’s “issuing useless notices and threatening me” she is now at the end of her rope, as attempts to resolve the issue have been a “complete waste of time”.

“I want to warn new franchisees, because they are always looking for new scapegoats,” Ms Hassan said.

“We started with $600-700,000 as the initial cost for the set-up, plus stock and everything close to $800,000. Right after five years they expect us to spend another half a million – it’s not reasonable.”

Former franchisees have previously accused the South African chain of “muscling out” mum-and-dad owners by demanding they fork out for exorbitant renovations in order to renew their agreements, and taking the stores back when they cannot pay up.

They claimed it was part of a push to move to the UK model of fully company-owned restaurants.

Since that time, half of Nando’s franchised stores in Australia have closed, news.com.au can reveal.

In 2019 there were 198 locations – 76 franchised and 122 company-owned.

Today that number is 152, with only 38 franchised stores remaining. Thirty-eight franchises have shut up shop over the past three years, compared with just eight company-owned stores.

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Nando’s has been accused of ‘bullying’ franchisees.

Nando’s Australian footprint has nearly halved since 2014, when there were more than 270 locations.

“In some cases our restaurant closures have been accelerated by Covid-19 as our customers dining preferences changed due to government restrictions, while others have closed as we reach end of term or end of lease,” a Nando’s spokeswoman said.

“During this time we’ve shown our commitment to our blended ownership model, offering numerous franchise agreement extensions and new terms. Despite having less restaurant numbers than we did pre-Covid-19 our total network sales are trending higher than 2019. Nando’s is in great shape and our ticket sales show we’ve recruited more customers over the past couple of years.”

Ms Hassan said the requested renovation in 2017 was purely for cosmetic items such as tables, chairs, flooring and lighting, rather than kitchen equipment that “actually gets worn out and needs to be replaced” – and could be “done for under $50,000”.

“They’re eating up that money – you’re not paying that much for renovations,” she said.

“A sensible, sane cost would be about $100-200,000 max, and that’s if you change everything in the store.”

Nando’s has in the past defended the refurbishment program as essential to keeping stores uniform, maintaining its “brand relevance” and attracting new customers.

Nando’s called off Ms Hassan’s renovation after she retained a lawyer, but she claims the company then began a campaign of “bullying and harassment” via so-called REX Reviews – short for “restaurant excellence”.

Zoki Stepanoski, franchisee at Nando’s Highpoint in Maribyrnong, said earlier this month that the regular visits by head office representatives were presented as a coaching tool but were “basically a harassment and bullying auditing tool”.

A failed REX audit results in a “notice of improvement” being issued, which can lead to a breach notice and ultimately the franchise agreement being terminated.

Half of Nando’s franchised stores have closed since 2019. Picture: David Crosling/NCA NewsWire

Ms Hassan has been issued four notices of improvement, which she claims were either for trivial issues or unfairly given – such as temperature checking the last two chicken pieces at the end of a shift when the drawer had been “opened hundreds of times”.

“We have council (food safety inspector) visits and the council is not as stringent,” she said.

“We’re not doing anything wrong. If you go in a company store, it’ll be much worse than our stores. These procedures are specifically applied to franchisees.”

She alleges the heavy handed tactics by Nando’s audit process had “traumatised” one staff member so badly that she received a phone call from the girl’s parents.

At the next review, “this time a new guy shows up on Friday 5pm when the store is full of customers and staff”.

“You don’t do REX at this time – clearly it means you’re there to harass and bully,” she said.

If she or other franchisees tried to film the process, Ms Hassan said REX Coaches “just walk out”, record the visit as a fail and issue a notice of improvement.

Ms Hassan said Nando’s behaviour showed the company was simply trying to get rid of her.

“I don’t have confidence I’ll have my house,” she said.

“People need to know the franchise game. Now they have increased their franchise price to $1 million-plus. Young families like us will get sucked into it and lose everything they have. It’s a bulls**t gamble you’ll never win. I’ve lost my health, my time, my peace of mind, I am on the verge of losing my house as well. I might have to sell everything because of the debt that I’m under.”

She said Nando’s had “ruined families” but many never spoke out.

“I don’t sleep at times – there are so many things that you can’t even put into words, it can’t be quantified,” she said. “I don’t want anybody to go through that.”

Nando’s did not respond to Ms Hassan’s specific allegations.

Originally published as ‘I might have to sell everything’: Single mum’s $800,000 Nando’s nightmare