Franchising

Cold burns: Another franchisee comes forward claiming mistreatment by Wendys

Andrew Sadauskas /

Another former franchisee of ice cream and hot dog chain Wendys Supa Sundaes has come forward, claiming mistreatment at the hands of the fast food chain.

It comes a week after Ian O’Neill, a former Tasmanian state trainer for the company, shared the heartbreaking tale of how the dream of owning a fast food business led to losing his job, and later divorce and suicide.

As SmartCompany recently reported, 116 Wendys stores have either collapsed or been taken over by management over the past eight years. By late last year, Victorian stores were being advertised with an asking price as low as $59,000.

Along with O’Neill, former NSW franchisee Trevor Banks previously received a letter stating his contract with the chain would not be renewed, while another former franchisee, Peter Coventry, had the locks on his two Alice Springs stores changed during a dispute with the company.

Rupinder Singh, who became the Wendys franchisee in the south east Perth suburb of Armadale from 2008 to 2012, is the latest former franchisee to come forward.

As with other former franchisees, Singh claims his experiences with Wendys were initially positive, but quickly soured.

SmartCompany understands by March 2011, Singh was becoming concerned that his lease at the Armadale Shopping City shopping complex, which he sublet through Wendys, was set to expire that December.

The fast food chain eventually stopped responding to Singh’s calls on the matter and allegedly took no action on the matter until January 2012.

At that point, Singh says he was asked to agree to a five-year lease at significantly higher rent, along with a $120,000 fitout of the store. He claims he was placed under a significant amount of pressure to sign the deal and was blocked from directly renegotiating his lease with the shopping centre owners.

When he refused to sign, Singh claims Wendys repossessed all his stock, fittings and equipment without paying him any compensation.

Singh told SmartCompany the experience left a bad taste in his mouth.

“I wouldn’t recommend anyone get involved in the business,” Singh says.

Wendys is currently advertising the 25 square metre Armadale store as being up for sale on its website, with an official asking price of $120,000. It was one of 116 appearing on a list of stores that either failed or were repossessed by the company.

A spokesperson for Wendys told SmartCompany the accusations predate the company’s sale to Global Food Retail Group in September 2014.

“The matters raised are historical allegations which pre-date the current owners of the business. Wendys does not comment on the conduct of former board members or employees of the company,” the spokesperson says.

“Should there be any allegation or implication that the current Wendys management has acted in an improper manner towards Wendys franchisees, by reference to allegations levelled at the previous management of the company or at all, such allegations or implications would be untrue and would cause financial loss to Wendys and the franchisees.

“For legal reasons, Wendys is unable to make further comment on these matters.”

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Andrew Sadauskas

Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.

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