Bank of Queensland - BoQ - franchise model criticised

"(But) still not achieving anywhere near the figures I expected." He said his budget forecasts were partly based on supplied figures and support from BoQ, with its distinctive blue on gold Queensland logo, in advertising and local activities. This branding support did not meet his expectations.

http://www.news.com.au
December 9, 2008

Bank of Queensland - BoQ - franchise model criticised
Liam Walsh

ANGUISH about Bank of Queensland's interstate franchise push has extended to an owner-manager quitting his branch near Newcastle, NSW.

BoQ, facing an annual shareholder meeting tomorrow, has recently stood by its franchise model with almost 200 such branches Australia-wide.

It said the model offered superior growth rates and a sustainable competitive advantage. BoQ declined to comment yesterday on specific questions.

Disgruntled owner-manager Jeff Jones said the model needed reforming while claiming problems had spread to Western Australia.

"The bank's buried its head in the sand," he said.

He faces a possible legal dispute, like some other former NSW franchise owners, over debts of about $1 million.

His Toronto branch lost almost $20,000 monthly in the past 12 months, Mr Jones said.

Turnover partly fell in the last six months as he became stressed over the business, was since referred to medical help and unable to put in sufficient time, he said.

Former branch owners say up to 20 franchises have turned over of 54 in NSW.

However BoQ chief executive officer David Liddy recently estimated it was 10.

He blamed NSW's economy and "bad decisions" in people selection.

Some other franchise owners have also praised the system.

Mr Jones's branch opened in 2006.

"It was building up," he said.

"(But) still not achieving anywhere near the figures I expected."

He said his budget forecasts were partly based on supplied figures and support from BoQ, with its distinctive blue on gold Queensland logo, in advertising and local activities.

This branding support did not meet his expectations.

The sluggish economy also hurt.

But he said getting credit managers to approve home loans was a big problem.

Mr Jones said loans fitted with BoQ policy but were rebuffed.

"Other banks wrote them within 24 hours of the customer walking in," he said.

Mr Jones said BoQ offered assistance to struggling branches in June this year, but he rejected verbal offers as inadequate.

He said a small number of WA owners had contacted him. BoQ was offering "attractive relocation salary packages for people to … go over there to work - managers and tellers", he said.

Mr Jones said the model put too much pressure as owners carried many costs (such as computer systems) from "day one".


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