Franchising

Disgruntled Bean Bar franchisees claim they are owed money by liquidated coffee franchisor

Engel Schmidl /

Bean Bar franchisees claim they are owed money by Basset Holdings, the former owner of the Bean Bar coffee chain which has collapsed into liquidation.

The head of Basset Holdings, former owner of the Bean Bar coffee franchise, has denied claims that franchisees are owed money from the business, which is now in liquidation.

The Bean Bar coffee chain continues to trade but SmartCompany reported last week that the former franchise owner, Basset Holdings, had become embroiled in Federal Court proceedings with the Australian Tax Office over an outstanding tax debt which resulted in the liquidation of the company.

Before Basset Holdings entered liquidation, a related company, Bean Bar International, contracted to purchase the Bean Bar business.

Current and former franchisees claim they are owed money by Basset Holdings and say there have been “numerous complaints” to the Australian Competition and Consumer Commission, Australian Securities and Investment Commission and the Australian Tax Office about the franchisor.

Joe Minuzzo, a former Bean Bar franchisee, told SmartCompany the complaints related to Ron Basset and Basset Holding’s non-compliance with some franchise requirements.

Minuzzo said there was a failure to provide franchisees with copies of the marketing plan and that rebates returned to the franchisor should have been attributed to the benefit of the franchisees as stated in the franchise agreement.

“All the franchisees have paid money into the marketing fund and there has been no evidence of marketing,” he said.

“In all of the franchise agreements there has never been a legitimate and certified copy of the marketing fund provided to the franchises.”

Minuzzo claims each Bean Bar franchisee is owed about $300 a month and estimates that he personally is owed $100,000.

Minuzzo used to own two Bean Bar franchises and most recently sold his store in Weymouth Street, Adelaide six or seven weeks ago, as he says he did not want to continue in business with Basset any longer.

“When you are in a franchise arrangement it is almost like a marriage if you don’t get on and so you either push the boundaries or get out of the agreement.”

Minuzzo’s claims that money is owed under the marketing fund have been backed by other franchisees who have spoken to SmartCompany but these franchisees wished to remain anonymous as they are not allowed to comment to the media under their franchise agreement.

Minuzzo says he will wait to see what happens with the Australian Tax Office’s investigation of Basset Holdings before considering legal action against Basset.

In May this year Basset Holdings brought proceedings against the ATO in the Federal Court but the proceedings were dismissed in June.

Basset told SmartCompany the claims made by Minuzzo and the other franchisees are incorrect.

“He is a disgruntled franchisee and that is totally false,” he says.

Basset says he expects the sale of Basset Holdings to Bean Bar International to settle as early as this Friday and says he has plans to expand the Bean Bar franchise interstate to New South Wales, Queensland and Western Australia and internationally.

In July the ATO commenced its own proceedings against Basset Holdings in the Federal Court, which culminated in the winding up of the company and appointment of Nick Cooper of BRI Ferrier as liquidator.

Bankruptcy proceedings launched by the ATO against Basset personally are currently on foot in the Federal Court.

This is the second time Basset has been pursued in the Federal Court for bankruptcy, with financial services firm Taylor Collison obtaining bankruptcy orders against him in 1998.

The ATO and Taylor Collison declined to comment, while BFI Ferrier failed to respond to SmartCompany‘s request for comment before publication.

 

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