Fury at head office of major building chain after franchisee collapses into liquidation

Customers of a collapsed building firm have been left fuming after airing out their concerns to the master franchisor months ago but being turned away.

EXCLUSIVE

Customers of a collapsed building firm have been left fuming after airing out their concerns to the master franchisor months ago but being turned away.

Last Friday, news.com.au reported that Western Australia-based RPH Australia Pty Ltd with the trading name GJ Gardner Perth West had gone into liquidation.

The exact amount of its liabilities remains unknown but 18 homeowners have been impacted from the company’s demise.

GJ Gardner Perth West was part of the GJ Gardner network, a major building franchisor which has nearly 100 independent building companies and offices dotted around Australia.

In the wake of the collapse, a spokesperson from the head office told news.com.au that: “As the master franchisee of GJ Gardner Homes WA, we are here to support the customers, trades and suppliers directly involved by assisting with the insurance process and providing support where we can”.

But two customers say this isn’t the case at all and are less than impressed with the support they have received over the debacle spanning back years.

Kate*, whose home is about halfway built despite signing on with the Perth West branch two years ago, told news.com.au: “The GJ Gardner head office never called us, they’ve not helped at all. It’s just been two general emails. Never personally received a phone call.”

Justin*, another customer, alerted the master franchisor that his build had been stalled for over 300 days and claims “they reiterated the fact we signed up with a franchise, not a head office”.

GJ Gardner head office sent an email denying there were any issues with the company, then admitted they had been aware of financial strain for the past 18 months.

The master franchisor claimed they “contacted all customers” as soon as the company appointed liquidators.

They said they had responded to all inquiries, given a briefing on “next steps” and are planning to release customers from any copyright obligations for their home designs.

The Perth West branch collapsed because it couldn’t endure trade and supply issues in the construction sector, according to the franchise spokesperson.

Justin, who has made $160,000 in progress payments to the Perth West business to date, said he could tell his building company was on the brink of collapse after a year of his construction site sitting untouched.

He raised his concerns with the head office but was told there was nothing to worry about.

“They assured us it was in the best financial position it could be, and five months later, (it) crashed,” he lamented.

What he also found infuriating was an admission from the GJ head office that they were aware of their Perth West franchisee’s struggles for 18 months, even though they denied this to him when he tried to find out more information.

In July, the head office sent Justin an email acknowledging that times were tough in the building sector more broadly but promised things were going well at the Perth West branch.

“We are comfortable that (the building firm) has the resources required for a business (its) size,” the email read.

But then at the end of last month, the major building chain changed their tune, notifying customers that the construction firm was in strife and that they had been aware of this for the last year and a half.

Have a similar story? Get in touch | [e-mail]

18 customers have been left in limbo from the firm’s demise.

“We understand your frustrations and concerns regarding your homes and the performance of our Perth West office,” the email, sent to all 18 customers on October 26, read.

“As some of you may be aware we have been working closely with (the company), particularly over the past 18 months on matters relating to (the) cashflow and job flow management … (due to) a series of challenging circumstances.

“Whilst we were aware of the schedule delays on homes, in some circumstances we were not aware of the specifics nor the extent of these delays. During this period we have also provided significant financial support.”

Just a week and a day later, the Perth West GJ Gardner franchise went bust.

“It’s honestly been an absolute nightmare,” Justin said. He added that he “relied” on the GJ Gardner name to have his dream home built but this ended up counting for nothing.

Kate, in her 30s, has also criticised the head office’s handling of the debacle as her $394,000 dream home hangs in the balance.

“We were promised the build would be done by Christmas,” the mum-of-two said.

They were living with a family friend while they waited for their home’s completion but “outstayed” their welcome amid the long delays.

They now live in a “shoebox” and their rent has increased by $100 a week with no end in sight.

“If they (the GJ head office) have been aware of this for 18 months, it’s quite disappointing,” she said.

“We signed up, (were) sold the dream. (It) ended up being lies and broken promises.”

Not the first time

It comes as last month, news.com.au reported that another GJ Gardner franchise based in Queensland had also gone bust, prompting more criticism of the head office.

Harris Constructions was trading under the name GJ Gardner Homes Springfield/Ripley and its eponymous director, Iain Harris, filed for bankruptcy in August.

Mr Harris owes $1.8 million to 46 creditors, including the tax office, tradies and financial institutions, according to a document the trustee sent to creditors. Between 25 to 30 homeowners were impacted from the venture going bust.

The company is not in liquidation as Mr Harris said to news.com.au he couldn’t afford to do so. As a result, staff never received a formal termination notice and have limited ways of recovering their wages and superannuation.

At the time, the GJ Gardner chain copped criticism from staff and trade suppliers who claimed they received assurances to keep doing business with the flailing Queensland franchise because the head office would back them and honour debts.

This ended up not eventuating.

The company denied ever making these promises.

[e-mail]