Almost 400 Australian franchisees, which operate under Refund Home Loans or Tyrecorp, face an uncertain future after both companies collapsed within a day of each other.
On October 17, it was revealed mortgage broking group Refund Home Loans had been placed in administration after enduring “a difficult 12 to 18 months”.
The company, which has about 350 franchisees, was started in 2003 by Wayne Ormond, who also operates Refund Real Estate and Refund Financial Planning, neither of which are affected.
It’s believed Refund Home Loans has attracted the interest of several potential buyers.
Meanwhile, Choice Aggregation Services, which provides aggregation services for the company’s brokers, says it will stand by the company despite the collapse.
Chief executive Stephen Moore says he has written to Refund franchisees to ensure them Choice will continue to provide its services.
“We are disappointed to hear that the step has had to be taken to appoint an administrator to Refund, and we understand the anxiety that may cause its franchisees,” Moore says.
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“But we are a people business and the relationships we have with individual brokers are enduring relationships.”
Moore says Choice will also continue to pay commissions to Refund, but says the payment of commissions to individual franchisees falls to the company itself.
“The relationship on paying commissions to Refund franchisees is Refund’s responsibility, so we have no say over that. We’ve certainly encouraged the administrators to continue to support the franchisees,” Moore says.
Moore confirmed the group’s trail books are owned by Refund rather than Choice, and hence are at the mercy of administrators. He says Choice has advocated for Refund brokers with the administrator.
“We’ve been in contact with the administrator and made our thoughts known that our primary concern is with the individual Refund brokers,” he says.
“The company has a significant number of brokers, and in this distressing period a number of them are quite concerned.”
Administrators SV Partners could not be reached for comment.
Meanwhile, tyre retailer and distributor Tyrecorp, which has 33 franchisees, is up for sale after being placed in receivership.
“The expression of interest is now open, and closes on Friday, October 28. It’s business as usual. At this stage, we are undertaking a review of the business,” a spokesperson says.