Franchised Food Company warns landlords against “gouging” tenants

Stan Gordon, head of brand management business Franchised Food Company, has accused landlords of holding back franchise expansion in Australia.

Gordon says although he tries to be fair, landlords can’t expect exorbitant rents from franchises.

“I like to believe that everyone needs to make a dollar, but landlords can’t gouge tenants,” he told the Herald Sun.

Gordon is one of many business owners that has flagged a tough approach to landlords, with Premier Retail and Myer declaring a willingness to close unprofitable stores.

The Australian Retailers Association has also complained that retail rents are not in line with the country’s fragile economic conditions.

Experts have suggested that retail rents are unlikely to tumble this year, given only about 20% of rents come up for negotiation each year, but say discounts are already taking place in the vulnerable categories of clothing, footwear, gaming, books, magazines and recreation products.

The Franchise Council of Australia says it will unveil a retail tenancy code of conduct this year, designed to stem conflicts between landlords and tenants, and following complaints from tenants about unfair rent increases and contract conditions.

FFCo, the owner of Mr Whippy, Pretzwel World, Cold Rock Ice Creamery and Nutshack, has about 150 outlets across Australia.

It says it’s Australia’s biggest non-listed franchisor in the “fun treats market”.