Andrew,
I would like to comment on my experience during my seven year involvement with Bakers Delight. God I cannot believe we put up with them for so long!
Firstly, becoming involved in this company has ruined my life. My family has been emotionally, physically and financially smashed by this ruthless company and the bullies it employes. We have nearly lost everything. Including my husbands health, as he sufferered a mental breakdown.
Never in my 40 years of life have I experienced anything like it. The lies, misrepresentations, appalling treatment and power trips transcend through the entire company, from the bottom and straight to the top. There does not seem to be any common sense within this company and there is nothing they will not do for a buck. The ramifications I have sufferered as a result of the conduct that this company engaged in when dealing with me and my company will resonate within my family for years to come.
This is a brief account of what we experienced. We purchased the Karrinyup store in Perth seven years ago and the Belridge store four years ago. It was conditional on purchase of Belridge, that we carried out extensive refurbishments. We were told that by refurbishing we could expect at least a 20% increase in sales. There was a period four years left on the Belridge franchise agreement. We discussed with the State Manager our concerns in relation to financially outlaying 140k in refurb costs with such a short term left on the agreement.He offered to let us purchase a further ten years at a cost of 55k. However, due to the large financial outlay in purchasing Belridge and doing the refurb we were not in the financial position to purchase the agreement at that particular time. The State Manager then "PROMISED" that we would be given the further ten year term on the expiration of the current agreement. On his word we proceeded with the costly refit of Belridge. Interestingly, we never did experience an increase of 20% following the refurbishments.
In early 2005, the Belridge shopping centre was subject to a major refurbishment of its key tenant COLES, this was a poorly managed and disruptive refurbishment that lasted the entire year.The customers left the centre and almost all tenants experienced severe loss of trade. It took at least 6 months for the customers to return to the centre. We lost well over 200k off our bottom line during that period. At the same time the Karrinyup store experienced a rental review which was to be managed and negotiated between the land lord and Bakers delight. Hence, we received a rental increase in the vicinity of 90%, this could not have occurred at a worse time for us. Obviously we experienced considerable financial constraint as a result. Blind Freddie could see why we were experiencing financial stress at that time and anyone with any degree of business acumen realises that it takes time to recover from such episodes. However Bakers Delight took the opportunity to relentlessly hound us and blamed us for the lost sales etc. I point out that all these circumstances were beyond our control and BDH knew it. BDHs discriminate application of the franchise agreement then resulted in breaches for all manner of indiscretions, that they knew we could not reasonably remedy in the frames given.
During the above mentioned period we received absolutely no assistance, mentoring, financial advise or support. Nor did we receive rent or royalty relief. At the same time other franchisees were receiving such help. Yet we continued to pay for it through our marketing levy. Time marched on and we were paying our bills albeit late, but we were gaining ground and reducing our debt, both the stores were growing and again were finally profitable.
We attended a meeting at the Regional Office to discuss the rewrite of the franchise agreement as PROMISED on the belridge store. At that meeting we were handed our "operator review", never in seven years had I heard of his beast. It was a new creation, that I have since learned that along with the "5star" it has aided in the termination of a number of agreements.
Can subjective criteria such as the "5 star" or "operator review" be used in this manner remains to be seen. We were marked down on a few areas, one was that we failed to attend the last baking competition. We had previously informed the State Manager that we would not be attending due to the sudden death of my father in law. The funeral was that day and required us to travel to NSW. BDH used that document and the scores on it as justification to refuse to provide the promised agreement. We spent the next 12 months engaged in expensive legal dispute trying to get the agreement as promised. Money that we could least afford. Especially as it was now a requirement to refurbish Karrinyup....Yes they let us spend the money to refurb Karrinyup! The agreement was not forthcoming and as the bank loans are aligned to the franchise agreements we were forced into breach with our bank. We needed to change banks fast and had finance approved with another institution. Due to the non provision of the franchise agreement, we could not change banks or sell the stores. In addition, due to BDHs refusal to provide the franchise agreement we could not provide a bank guarantee in accordance with the Karrinyup lease. This resulted in us being in forced into breach with the landlord. BDHs actions created this breach. We placed a cash security of 7000k in lieu of the Bank Guarantee with the landlord.
To the best of my knowledge this is commercial substance. This was not accepted by BDH or the landlord. We were advised by our lawyers that this company was too difficult to deal with, to sell our businesses back to BDH,escape this company and get on with the rest of our lives. Our lawyers were corresponding with BDH and negotiating the sale price whilst all of the above was happening. BDH could have legitimately purchased the stores from us, but chose to send our profitable company into receivership. They got the profitable Karrinyup store from the receiver for a an absolute song( not even the real cost of the equipment)....and kept the income stream associated with it for themselves.
BDH ultimately used the lack of a bank guarantee and other circumstances that they caused or contributed to, to breach us out of both businesses. BDH informed me by telephone on the27th Feb 07, that they intended to terminate my agreement. I had no idea that they meant that day! During that conversation I informed the state manager that we were still have a dispute with BDH and that documents had been sent and faxed to the Melbourne office. I even emailed the CEO of BDH to let him know the state of play. As usual he ignored my correspondence. My notice of dispute was disregarded. On the same day during a routine telephone call to one of my shops, I was informed by a 14 year old sales girl that BDH had changed the locks and had security guards on the premises. BDH staff told my staff, their parents and our customers that we went "bankrupt" which is an out right lie. BDH sacked my 20 year old son on the spot. He had worked in the business since he was 14 years old. My agreement was officially terminated only after I asked for it in writing at 740 pm, 3 hrs after BDH moved in and stole my businesses.
It is my opinion that Bakers Delights conduct induced a breach of my contract. Which enabled them to take the businesses and deprive my family of aprox 1.5 mil worth of assets, our wages and the future potential of those assets. This amounts to well over 5 mil. Not to mention, they also waited for us to pay for the refurbishment of the karrinyup store and stole that business within months of doing so. Life goes on as it must. With the support of my wonderful friends and my fantastic Barrister, I am now fighting my bank all the way to prevent them from taking my family home. It is yet to be determined by the appropriate authority my banks role in all of this. I would suggest that my bank has conducted themselves in a similar way to the one mentioned in Joanna Gashes Hansard. I sincerely hope that my comments prevent some other innocent from experiencing the same fate and devastation as my family. Narelle