Rich Lister Jack Cowin faces massive capital gains tax bill as franchise dispute nears end
Fast food entrepreneur Jack Cowin is in trouble again, with new reports indicating he may be headed to court with accounting firm Deloitte over a massive capital gains tax bill.
The rumour comes days after reports indicated Cowin was in the process of finding buyers for several of his company's KFC restaurants, as part of a deal with American group Yum! Brands.
According to The Australian Financial Review, Cowin did not lodge a form as part of a transfer of commercial properties within Competitive Foods, his company which operates the franchise networks for Hungry Jack's and KFC restaurants in both Western Australia and Northern Territory.
Both Competitive Foods and Deloitte declined to comment when contacted by SmartCompany this morning.
The report claims an application wasn't made to the Office of State Revenue in Western Australia which would have exempted the company from stamp duty. The report claim both Deloitte and Competitive Foods are in dispute as to which party should have lodged the form.
The report claims the amount could be in excess of $1 million.
The report follows a similar rumour published last week which claimed Cowin was close to a deal that could settle a dispute between Competitive Foods and Yum! Brands over the KFC chain in Australia.
The dispute came to a head last year in Federal Court. The heart of the matter was Cowin accusing Yum! of unconscionable conduct, saying it stopped him from selling 46 separate KFC outlets. Yum!, at the time, said the accusations were without merit.
Yum! made the move over concern it had regarding Cowin's investment in Domino's Pizza, which Yum! considers a rival to its own Pizza Hut brand.
The move wasn't necessarily welcome by everyone in the franchising industry, some of whom have accused Cowin of using the case to further his own interests. Cowin has been a major lobbyist for franchising reform.
A major dispute between the two parties was the amount of notice – Yum! said it informed Competitive foods eight years previously that franchise contracts wouldn't be renewed.
But the report from last week claims Cowin is close to a deal which would see him sell the KFC restaurants to a separate party.
Cowin has a fortune of over $600 million, according to BRW. Competitive Foods is one of the largest franchising groups in the country, operating hundreds of Hungry Jack's and KFC outlets.
This isn't the first time Competitive Foods has suffered legal troubles. During the 1990s the company was involved in a legal battle with the Burger King Corporation over the local franchising agreement.