Momentum is building behind a prospective class action against embattled franchisor Retail Food Group (RFG) this week as lawyers prepare for a busy month formalising franchisee grievances.
First announced in June, law firm Corrs Chambers Westgarth is preparing action against RFG-owned Michel’s Patisserie over allegations it “behaved unlawfully” towards franchisees, causing them to suffer loss or damage.
Prospective lead plaintiff Devi Trimuryani is a former Michel’s Patisserie franchisee and has said she wants to “take down” the franchisor over its behaviour, which she says plunged her life into chaos and left her unable to sleep.
Funded by dispute resolution capital provider Augusta, the prospective class action will begin building its case this month as lawyers hit the road to speak to former and current franchisees across the country, including in Brisbane, Sydney, Melbourne and the Gold Coast.
A final information session on the prospective action will be held in early-September, raising the prospect a case could be filed soon after.
The class action intends to argue that if RFG had behaved lawfully, franchisees wouldn’t have bought into the network, and further, that the actions of RFG caused loss or damage to its franchisees.
All former or current franchisees of the chain are being told they’re eligible to join, creating the prospect of an ongoing thorn in the side of RFG, which is trying to urgently resurrect its brand by reforming its own network.
RFG confirmed on Monday morning it has yet to be contacted in relation to the class action.
The ASX-listed franchisor has been in damage control since 2017, when explosive allegations about its poor behaviour towards franchisees were published by the Sydney Morning Herald and The Age.
Those allegations, alongside other scandals in the franchising sector, prompted a Senate inquiry that devoted an entire chapter to RFG specifically, recommending the tax office, ACCC and ASIC all investigate RFG executives.
It is expected any potential class action will draw on arguments made by the Senate committee, including its finding that RFG profited at the expense of its franchisees.
“Evidence to the committee revealed serious problems with the sustainability of the franchise model operated by RFG,” the committee said in March.
“It appears RFG has operated a particularly unjust business model in which shareholders and senior executives have profited at the expense of franchisees.”
Since then, it has emerged that RFG asked Michel’s Patisserie franchisees to extend the use-by dates on cakes, sparking an inquiry from the Queensland Food Authority and an admission from the franchisor itself.
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