A former Bakers Delight franchisee has been asked to attend a mediation session with the company, after taking to Facebook to accuse the company of “stealing” his business.
Giuseppe Celi, who used to own a Bakers Delight franchise with his wife at Stockland Wetherill Park in NSW, told StartupSmart he has been asked to attend a mediation session with his former franchisor on Monday, February 11.
The move comes after Celi created a Facebook page called “Bakers Delight stole my business”, accusing the company of unfair tactics, misleading emails and unconscionable conduct.
After operating the bakery since 2001, Celi said his franchise agreement and Bakers Delight Holdings lease expired on the same day – September 30, 2012.
Celi said Bakers Delight initially negotiated with the landlord on his behalf in a bid to secure another “reasonable rental agreement”.
“In this time BDH… stats (sic) in emails they have agreed in terms to a new lease term, or were just about to sign a lease within 48 hours, [but] never a lease signed,” Celi wrote on the page.
“We also received an email on the 21st of September 2012… [This email] mentions that BDH will not reopen the bakery unless the rental agreement is below $120 TOC. So we closed the bakery on Monday, 24th September.”
On October 2, Celi said he received a call from Bakers Delight, informing him the lease would be terminated – and the bakery vacated – as a result of failed negotiations with the landlord.
“[I was informed] there are some conditions within my franchise agreement that would stop me from going independent,” he said.
“The landlord were (sic) happy for us to trade as our own bakery but… [Bakers Delight said] they would force their right to vacate the bakery and leave me with nothing.
“[Bakers Delight has since] reopened the bakery we once owned under a new franchisee with the rental agreement of $130 TOC.”
Celi says he was last contacted by Bakers Delight in December, when the company sent him a letter saying his Facebook page was “ruining the lives of current franchisees”.
“I was told I need to stop doing it, and that they’ve paid me $40,000 for my equipment. That’s it basically,” he says.
According to Bakers Delight, Celi was not operating the bakery to its potential and in line with the company’s standards, and was losing sales as a result.
“In September 2012, his 10-year franchise agreement was up for renewal – we offered the opportunity for him to extend this and to continue operating,” the company said in a statement.
“He declined the opportunity to extend his franchise agreement and operate as the Bakers Delight Wetherill Park franchisee.”
Bakers Delight said it is disappointing Celi has now used social media to slam the company’s directors and damage the reputation of the 550 franchisees in the network.
“We have always been determined to use the appropriate legal channels to resolve any dispute – that is, mediation,” it said.
But Celi insists Bakers Delight is to blame. In addition to a public apology, he wants the company to pay back the money he and his wife put into the business – more than $450,000.
“Plus all the outstanding debts we’ve incurred since we shut down. We’re looking at about $200,000 to $300,000 on top of [the $450,000],” he says.
“[I also want compensation] just for the moral of Bakers Delight shutting me down. We’ve relocated homes, relocated schools. We’ve lost a lot of money in the process.
“[I set up the Facebook page] for public knowledge – this is what Bakers Delight has done to us. It shows this is what Bakers Delight are doing and lets current franchisees know.”
Solicitor Colin Dorrian, a former franchisee of James’ Home Services, has a special interest in franchisees. He says prospective franchisees need to get as much information as they can before they enter into an agreement.
“Get all the financials reviewed by an experienced accountant who has experience in business,” he says.
“Go see a lawyer who specialises in franchising, particularly one who acts for franchisees [as opposed to franchisors].
“More importantly, talk to as many people as possible in the franchise system. Go visit them – go visit other shopfronts.
“The most simple advice is to Google the brand. Even type in a word like ‘complaint’ or dispute’ and you’re more likely to get those sorts of pages.”