Hi dougie, I think essentially you are right but that is...

Hi dougie, I think essentially you are right but that is supposed to be the benefit of buying a franchise. The franchisor is supposed to help with training, systems and the experience that you lack. If the franchisor exploits you, along with the landlord you are going to be in a world of pain.

My wife and I owned and operated a coffee shop (not a franchise) and a related retail business in the late 80's early 90's and went through Paul Keatings 'recession we have to have' which nearly sent us broke. The food was the most profitable part of the whole business by the time we sold it and was the reason we survived. The reason RFG is in trouble is that it has taken that profit for themselves with no consideration for the inexperienced franchisees that looked to them for assistance. Then the landlords in the major centres squeezed the rest from them. This is an unsustainable model and why RFG was trying to diversify internationally and into vertical integration of coffee and food.

I am not someone who got burnt by RFG as I had been selling into strength from $6 - $7 but saw most of those gains wiped out with the big fall last year selling the last of my holding around $2.60. The current problems though are real and will take some time to play yet.

Jack