I met last week with Rad Williams, the franchisee of Supanews Bayside (Frankston). Rad is a client of Tower Systems, my software company and has been locked out of his business by Supanews, they hold the head lease, since December 21. On hearing of the situation I offered to help – hence my meeting with Rad last week.
Because of threats of legal action by Supanews against Rad I don’t plan to go into detail about his situation here. I’ll share the basic facts. The Franchisor (Supanews) and the Franchisee (Rad and partners) have been in dispute for some time. It is while this dispute was taking its course that Rad was locked out of his business. This has stopped him earning an income at the most crucial retail time of the year. I has also denied him access to personal items and assets. Due to the time of the year, timely access to legal advice has been a challenge. As of last Friday the shop had been closed eight days.
Newsagents ought to be concerned about this for any newsagent in trouble is felt by the entire network. Rad’s situation impacts how suppliers view newsagents. It also impacts how prospective purchasers view newsagencies. Without judging the actions of Supanews, December 21 is a dark day for our channel.
One particular aspect of the lockout which is surprising is the use of the Frankston Police by Supanews. From what I understand, without any court order, they attended and advised Rad that he would be arrested if he attempted to access his business.
The ACCC website provides advice all franchisees ought to consider if they are in dispute with a franchisor. It documents mediation required (under the Trade Practices Act) to resolve disputes which cannot be resolved amicably:
If direct internal negotiations fail to achieve a satisfactory outcome within three weeks, the code enables mediation—negotiation between the parties facilitated by an impartial third party, the mediator. Under the code, if mediation is requested by either of the parties it becomes mandatory for both attend the mediation and to try to resolve the dispute. Refusal to attend the mediation and/or make a genuine attempt to resolve the dispute will constitute a breach of the code and thereby a breach of the Act.
This mediation guarantees an independent forum before the dispute gets to court.
Here are some links which readers may find helpful:
ACCC Office of the Mediation Advisor (Franchising).
ACCC small business complaints form.
Small Business Commissioner, Victoria.
Franchise council of Australia.