Nick Xenophon calls on ASIC to investigate Wendy’s, claims the chain put profits ahead of franchisees
Thursday, February 25, 2016/
South Australian Senator Nick Xenophon has claimed the owners of ice cream and hot dog chain Wendy’s have put its profits ahead of franchisees in a scathing parliamentary speech.
Speaking before the Senate on Tuesday, Xenophon called on the Australian Securities and Investments Commission to investigate Wendy’s owner Stanley Tan.
Tan’s business, Singapore-based Global Food Retail Group, bought Wendy’s in 2014 and placed the food franchise under the control of a company called Supertreats Australia.
The ice cream chain’s previous operating company, Wendy’s Supa Sundaes, was placed into voluntary administration in July last year.
SmartCompany has previously reported more than 100 Wendy’s stores have either collapsed or been taken over by management in the past nine years.
In Tuesday’s speech, Xenophon claimed that when Tan bought Wendy’s he said there would be more support and better returns for franchisees.
“But it seems the only thing Mr Tan had in mind was better profits for his companies,” Xenophon said.
“That came at the expense of the franchisees, who trusted him to keep their businesses going. This trust would soon be betrayed by a series of cold, calculating moves that would destroy the livelihoods of so many small family businesses.”
Xenophon likened Tan’s behaviour to that of a “corporate cannibal” and claimed a “trail of creditors exceeding $30 million” have been left behind following the collapse of Wendy’s Supa Sundaes.
“This appeared to be part of a calculated strategy to avoid the implications that would have come with liquidation rather than voluntary administration,” Xenophon said.
The South Australian Senator also questioned whether Tan has paid his fair share of tax in Australia.
“I call on Mr Stanley Tan to come back to Australia, to face his creditors, to look his victims in the eye and to be accountable for his actions,” Xenophon said.
“I hope that our regulators, ASIC, the ACCC and the ATO, can ensure the full weight of the law is applied against Mr Tan and the companies he has controlled for the chaos and mayhem he has caused to so many.”
Wendy’s denies allegations
A spokesperson for Wendy’s told SmartCompany the chain denies the allegations made by Senator Xenophon.
“The statements made in Parliament are grossly inaccurate and we have invited Mr Xenophon to contact us to clarify the inaccuracies,” the spokesperson said.
“Wendy’s or Stanley Tan are not planning on making any further comment without giving Mr Xenophon an opportunity to do so.”
SmartCompany contacted ASIC, however, a spokesperson for the regulator declined to comment.