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headlines Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for more than 30 years at franchisee, franchisor and advisor level. He advises both existing and potential franchisors and franchisees, and conducts franchise education programs throughout Australia. He has been awarded for his franchise achievements, and publishes Franchise News & Events, Australia’s only fortnightly electronic news bulletin on franchising issues. In his spare time, Jason is a passionate collector of military antiques. www.franchiseadvice.com.au
Court dismisses auto brand’s appeal over $125m fine The High Court of Australia has dismissed an application by auto manufacturer Volkswagen to appeal a $125 million penalty ordered by the Federal Court in 2019 for making false representations about compliance with Australian diesel emissions standards. Volkswagen admitted in 2019 that it had made false or misleading representations when importing more than 57,000 diesel vehicles into Australia between 2011 and 2015 by failing to disclose that the vehicles were fitted with software designed to falsify emissions test results. The company was prosecuted in a number of other countries for the same offence. The $125 million penalty is the highest ever imposed for breaches of the Australian Consumer Law. Read more
Listed health group to acquire physio chain Listed healthcare group Healthia will acquire both the franchisor and 64 clinics of physiotherapy chain Back in Motion in a deal worth $88.4 million, plus deferred and contingent consideration, according to a company statement. The diversified health group, which already operates a chain of 54 physiotherapy clinics, as well as more than 160 other health businesses in optometry, podiatry, orthotics, footwear, hand therapy and wholesaling, will partially fund the purchase via a $60 million capital raise. The acquisition will convert the franchised Back in Motion clinics 62 business franchise MAGAZINE
to company-owned outlets, however former franchisees will continue to be involved in operating the clinics as employees, as well as receive a special class of Healthia shares as part of their clinic sale proceeds. All franchisor personnel will be retained, including Back in Motion founder and CEO Jason Smith who will stay on for at least another 12 months as a director and consultant to the new owners. Read more 1; Read more 2
Wesfarmers to acquire pharmacy chain The parent company of hardware chain Bunnings will acquire 100% of Australian Pharmaceutical Industries (API) and its franchised subsidiary Priceline Pharmacy pending shareholder and regulatory approval, according to a media report. Wesfarmers successfully thwarted an attempt by rival pharmaceutical supplies company, Sigma Healthcare (SIG), to acquire API by increasing its ownership in API by 19% and announcing it would vote against SIG’s bid. The deal which is expected to be completed in the first quarter of 2022 is worth $1.55 per share, a 35% premium on the company’s July 9 share price. Read more
Bunnings completes acquisition of tile brand Home improvement retailer and hardware chain Bunnings has finalised its acquisition of flooring franchise Beaumont Tiles, according to a media report.
Beaumont Tiles will remain separate and distinct from Bunnings but will benefit from investment in its future growth while Bunnings will capture trade and customers who require specialised expert service related to flooring. The acquisition was not opposed by the Australian Competition & Consumer Commission which, after consulting with stakeholders and examining financials and documents, concluded that the deal was unlikely to substantially lessen competition. Read more
RFG faces Michel’s franchisee class action Multi-brand listed franchisor Retail Food Group, which featured prominently in the 2018 joint parliamentary inquiry into franchising, will face class action proceedings brought against it by former franchisees of its Michel’s Patisserie brand, according to a media report. The class action claims that a decision by RFG in 2015 and 2016 to supply franchisees with frozen, instead of fresh goods, resulted in a significant drop in the quality of food to be sold, which in turn, adversely affected the franchisees’ businesses. RFG issued a statement to acknowledge the commencement of the proceedings which
