Roberto and Melissa  Ferraro: Franchisees 11 years

My Name is Robert Ferraro and my story of the way Bakers Delight Holdings has conducted them selves with me I hope will save some people of heartache and sorrow.

My wife and I became Bakers Delight franchisees in 1995 leasing Bakers Delight Hawthorn for 18 months for a lease fee of $10,000 p/m, (nothing to sneeze at hey) but made ends meet and turned a poor run store into a success once again.

After this time Roger Gillespie met with us with an opportunity to purchase our own store starting with leasing first and option to buy, the place was Goulburn NSW, we accepted the challenge and moved to Goulburn in November 1997.

After four and a half years of hard work and commitment to the franchise system and more on our behalf with community involvement and marketing we had a successful store and were the apples in Rogers eyes with a NSW Prime Ministers award for small business community partnership and several records in MAT% increase on the business in Australia.

In early 2000 we decided to sell Goulburn and get out of the franchise and start something else.

In November 2000 we still had not sold the Goulburn store and were in Melbourne for the BDH Xmas Ball when Roger asked for us to meet with him (boy do we regret going) Roger somehow built our ego to move to south Australia to purchase 2 stores from the COBS group mind you according to Roger and his merry men the potential of these stores was always there for the takings.

Roger was prepared to move mountains to get us to purchase these 2 stores Gawler and Munno Para to the point where BDH had set up for 2 new franchisees to lease the bakery off us till the purchaser was ready to take over after finishing his training,

(Yes BDH wasted no time in finding a purchaser for Goulburn yet no one was sent our way beforehand) Roger can move mountains when it suits his back pocket.

January 2001 we came to SA for a holiday and to see what stores were available in SA, well we met with Jarrod Smith and Mark Mcpherson whom showed us 2 stores in which BDH had up for sale, one store we were not even allowed to go inside of because BDH did not want leasing Franchisees to know Munno Para was about to be sold there were issues with them we were told, spent all of 1 hr at shopping centre then moved on to Gawler.

When we looked at Gawler the shopping centre had full tenancy and we were told by Jarrod and Mark that tenancy was sound and strong and that after Steve and Karen Fairfield would hand the store over to BDH it would be looked after by Jarrod Smith himself until we came across to take over Gawler we were there for about an hour during this time we had a short conversation with Steve Fairfield (care taking Franchisee) before being driven to Barossa Valley and stopping for lunch at Heidelberg Café Tunanda where we continued negotiations on the 2 stores.

At that meeting we were promised that upon purchase of the 2 stores the leases would be both brought up to a 5+5 yrs lease terms and would have the support of BDH in growing the store portfolio to possibly 5 stores in the northern region as Jarrod Smith Called it the FERRARO strip (Main North Road).

First 12 months here in SA we poured many thousands of Dollars into the businesses and achieved great growth in both stores BDH even awarded us an award for the highest MAT % increase in Australasia Rob and Melissa Ferraro were placed high on a Pedder stool for all Franchisees to follow our example.

After 12 months We have raised many concerns and issues with BDH and Landlords of Gawler on issues in which have and would affect our trading and profits in future only to be told by Steven Payn (CBRE property manager) to pull My head in and mind my own business, well the performance, condition and tenancy is my business because it all affects our bottom line during this conversation I told Steven Payn that if he was in front of me I would nock his head off I guess since then Steven Payn has not gone out of his way to help us in any way nor has the Landlord.

We were sold 2 stores under false information Sucked in by a better term We did not get legal advice because we needed to save money as we were short on funds to purchase the store and have always been told by BDH property department that don’t bother to try to change anything on the contracts as they are non negotiable.

BDH were very keen to see us here that they even loaned our company $50,000 just to make sure that we would take the 2 stores off their hands on the proviso the loan was paid back within 6 months I suppose that once we were in there (2 stores) they were no longer their problem (BDH).

At the end of 12 months of being in SA we placed our stores on the market because our confidence in BDH management had expired all the promises of support and expansion had not transpired.

In December 02 I was diagnosed with Major depression it was kept quiet for a while until Mel spoke to Jude Thorpe business consultant #3 in18 months about the problems we were having and reiterate the point that we needed to get out of this industry.

The SA management did not do enough to help us get out of the system to avoid any further losses both financially and physically.

November 2002 Jarrod Smith (4th largest BDH stakeholder at the time) stood in front of all SA Franchisees at the SA conference in the Barossa and said quote” If anyone wanted to get off the bus BDH will help us implement an exit strategy just ring the bell and we will stop the bus” Jarrod Smith.

We are still waiting for this bus to stop and let us off, in mid 2003 Melissa contacted Ron and Sue Lawns whom were earlier interested in buying one of our stores but could not get finance and let them know that Munno Para was on the market, Ron and Sue initiated proceedings and negotiation with us and BDH to purchase Munno Para store this all happened because of Melissa Ferraro not BDH not nobody yet BDH still takes the credit for making the sale happen at Munno Para.

BDH staff in SA advised the Lawns on several occasions on matters that as a result cost us in excess of $25,000 in loss of sale price and wages for making staff redundant upon sale.

On the 9th June 04 I served BDH with a notice of dispute on several issues (please read attached notice) in which has cost our company many thousands of dollars, since then we have not been able to get a straight answer from any BDH staff or management or the landlord at Gawler, our livelihood was hanging in the balance because of the incompetency of the SA management and BDH property department I have been labelled as a troublemaker by the Landlord according to Jarrod Smith and this is the reason that why the landlord has not executed the extension of lease so that we are able to refinance with the bank.

BDH has known of our financial position with ANZ since march 04 when we first requested an extension of lease and was granted one but has not been executed yet by landlord because they will only execute for new franchisee, we have a lease until 31st December 06 as it stands BDH only gave us a 4 yr lease from time of purchase but did not notify us of this until January 7th 2004.

All BDH and Landlord are doing is screwing us to the wall with our cash flow due to $7000 per month repayments to ANZ the reason that both BDH and Landlords are doing so to make sure that we the Ferraro’s have no money left to fight them in court which they know that if a judge has to decide it will not go in their favour the easiest way is to ruin peoples lives and take all we have in time bit by bit.

Well it is now February 2007 and Bakers Delight achieved their goal my marriage has ended and we had to sell absolutely everything including our home to pay our business debts after being blackmailed by BDH into selling our Gawler store back to them for half the price we paid for it not to mention solicitors bills for the amount of $30,000 and mounting debts with accountant and living off credit cards, the conflicts of interest and unfair trading by BDH and their staff were of the highest levels ever encountered but as I said to Mr Gillespie and his merry men and woman “WHAT GOES ROUND COMES ROUND AND THEIR DAY WILL COME” I hope that one day the accc will investigate their business dealings and promises to expose the true Bakers Delight Business and its Greedy people whom have lined their pockets at the expense of innocent people like us, all up our losses for the 5 yrs in South Australia were in excess of $800,000 thank you Roger Gillespie for ruining our lives