Sad end: Wendy's franchisee dies after detailing dispute

"The way they get you to do things, there's no profit, there's no nothing," a deeply distressed Mrs Evans said two days after the locks on the Singleton shop were changed on August 4. Now her husband, Danny, and others close to her are asking questions about how Wendy's had placed the mother of two teenage boys under such significant pressure. Ian Gray, Mrs Evans's solicitor, told BusinessDay yesterday: "She was under an extreme amount of distress … This was all overbearing. Over a period of time it had been a tremendous burden."

Sydney Morning Herald
August 16, 2010

Sad end: Wendy's franchisee dies after detailing dispute
Stuart Washington

WHEN Therese Evans spoke to BusinessDay last Thursday she sounded upbeat and determined to continue her fight against Wendy's, which had locked her out of her shop for a debt she put at $7000.

On Saturday morning Mrs Evans, 48, died of a suspected heart attack at her home in Singleton.

Last week BusinessDay highlighted Mrs Evans's predicament as a franchisee of Wendy's as an example of problems in the franchising industry in a story headlined ''Sundae, bloody sundae''.

"The way they get you to do things, there's no profit, there's no nothing," a deeply distressed Mrs Evans said two days after the locks on the Singleton shop were changed on August 4.

Now her husband, Danny, and others close to her are asking questions about how Wendy's had placed the mother of two teenage boys under such significant pressure.

Ian Gray, Mrs Evans's solicitor, told BusinessDay yesterday: "She was under an extreme amount of distress … This was all overbearing. Over a period of time it had been a tremendous burden."

Mr and Mrs Evans had drawn down $200,000 against their home and $300,000 against Mrs Evans's mother's home to finance their venture into Wendy's franchises in Singleton and Cessnock.

Mrs Evans said the family had moved from Sydney to Singleton to achieve a better family life with more time for their children.

Their ice-cream dreams ended less than two weeks ago, when Wendy's locked the couple out of their Singleton franchise of six years. The company said the outlet had been "temporarily closed after the franchisee failed to fulfil fundamental terms of the franchise agreement".

From the Evanses' perspective, it was a bitter reward for a business they had built to the point where they were known locally as "the pink people".

The Singleton franchise went well, but Cessnock proved a disaster when it opened four years ago. The couple walked away from it on June 19 - which Wendy's saw as a breach of the franchise agreement.

A number of concerned franchisees across the Wendy's chain of about 300 franchises are raising questions about whether Wendy's is setting them up to fail.

BusinessDay spoke to two franchisees who cited high costs for supplied goods and said they feared average turnover was not enough to break even.

Australia's largest franchisee, the BRW rich lister Jack Cowin, has argued that the failure of the federal government to explicitly include "good faith" in the franchising code of conduct, has created an environment in which franchisors can abuse their power.

Last week BusinessDay asked Mrs Evans whether she had a picture of herself and her husband in their uniforms together to run with the initial story.

There were no pictures of them together, she said. Both she and her husband were too busy working at their separate stores to ever work together.

http://www.smh.com.au/business/sad-end-wendys-franchisee-dies-after-detailing-dispute-20100815-125aw.html

Comments

29 comments so far

1. As an ex Owner manager of a bank Of Queensland franchise and spending 22 days in court against a franchisor who had unlimited legal, money and other resources at their disposal.

I can fully can understand the pressure this poor women and her family were under the legal system and the legislation is all to the advantage of the franchisor while the franchisee struggles after investing all their time and money to make the franchise a successful business while a franchisor is able to use their unfair market power on franchises and destroy the franchise financially, reputation and family of hard working ordinary people.

I heart goes out to the Evan's family on their loss.
Leicester Ramsey | Sydney - August 16, 2010, 3:46PM

2. Happening far too much. Hard working people being under so much stress just to survive and support their family.. Out there there also people whose job it is to hound and harrass people at any time of the day to recoup what they say is money owing to companies, banks etc. It is so sad to see somebody losing their life from a heart attack probably caused by stress. Her poor family will never forget what has happened.
Rainey | Brisbane - August 16, 2010, 2:50PM

3. What a sad but familiar story for those of us in these awful types of franchise agreements. I don't have a Wendys but scratch any of them and you will see the same greedy coporates underneath. Franchises amount to nothing but legalised slavery.
Muggins | Sydney - August 16, 2010, 2:02PM

4. Well that's one more fast food outlet I will never eat at again.

I know it hurts the franchise owners, but the master franchise owner needs to be taught a lesson and if enough boycott "Wendy's" and write to them to let them know we are doing this they might start treating the franchisees' fairly.
Fast Food Bunny | Hungry Mile - August 16, 2010, 3:42PM

5. This is such a sad story. Regardless of what has happenned leading up to this situation, no organisation should be allowed to (let alone wanted to) make anyone suffer like this. Condolences and my very best wishes to the Family.
RustyMcGreggs - August 16, 2010, 1:41PM

6. After several years as a franchisee in another system (without even a weekend off) I cannot write anything. This is because when I sold my outlet I had to sign an exit document that gagged me for life. This is how they suppress any negative publicity.
anon | Australia - August 16, 2010, 1:11PM

7. I'm guessing Wendy's won't be disclosing this little nugget in their prospectus. I'm always suspicious of anything that requires you to mortgage your house to "join".
Jimmy | Sydney - August 16, 2010, 1:21PM

8. A case of corporate feudalism at its best.
eyeroll | Sydney - August 16, 2010, 1:44PM

9. This is very sad. I too have a similar story to tell about another fast food franchise. What my franchisor did to me was an absolute disgrace. If I have no luck soon with them well stay tuned. This poor lady i really feel for her and her family. I know the toll it takes on your health . My thoughts are with you.
Liza | NSW - August 17, 2010, 11:57AM

10. Wendy's food prices are grossly too expensive anyway. I always go to the corner shop for my ice-creams and doughnuts. Never understood the appeal of the Wendy's brand.
Consumer | Sydney - August 16, 2010, 5:20PM

11. My sincerest sympathies to the Evans Family.

I too spent years as a franchisee and understand the kind of extreme stress that franchisees endure as a result of the legal system, an abusive franchisor and a Government hell bent on pretending there is no problem.

This is an exceptionally sad story indeed and I hope that the franchisor finds it exceptionally difficult to look at themselves in the mirror or sleep at night, knowing that their actions both recently and over a period of years has resulted in this outcome.
Boudica - August 16, 2010, 5:21PM

12. There is always two sides. These people go into business hoping to become instant millionaires. Despite all the tax advantages small business's have they still fail. People need to understand many small business owners make bad decisions and do not have the skills needed to run a business. Their business failed, they couldn't repay a debt and the locks were changed- get over it.
Peter | Wagga Wagga - August 16, 2010, 5:23PM

13. Owning a small business is completely over-rated. I had a mixed business/sub newsagency for 5 years. Worst decision I've ever made. I left a six figure salary to be my own boss. If you have a decent job, earning good money and 9% super don't buy a small business of any description - franchise or otherwsie. Let someone else have all the worry and sleep tight each night.
Over-rated | Hunter Valley NSW - August 16, 2010, 5:34PM

14. This is the story played out in franchises all over Australia. I was also kicked out of my business, the locks changed and the business stolen. It was just a different franchise. Poor Therese is not the only franchisee to lose her life to a bad franchise system. We have had our share too. Death and suicide are the price.

The pressure these franchisors put on franchisees is unconcionable. The unfortunate thing is we have a Government who is prepared to sit and let it happen. We have been telling them the problems in the sector for many years to no avail. Rest in peace Therese.
Narelle Walter | Perth - August 16, 2010, 9:20PM

15. I don't understand why people would ever buy into Franchises in the first place. Spend anything just to buy a buy a business is crazily stupid, just set up your own business and you are ahead from day one. It's free to set up your own!

A friend of mine has set up two coffee shops in under 4 years and has sold both for a $290,000 profit as well as drawing a wage while he ran them.
Confused | Adelaide - August 16, 2010, 6:34PM

16. My sympathies for the Evans Family.

I too had the misfortune of being involved in a Wendy's franchise for over eight years. For that privilege, it has cost me and my family dearly.

Although I was for some years our local State rep and Trainer when I started questioning profitability for stores, Marketing strategies, and Wendy's kickbacks, I was labelled not a 'Team Player'.

Wendy's marketing strategies were for all of its stores to buy inferior products at an inflated price, then give these products away at the franchisees cost, no refund, even though all of the franchisees were paying a 5% marketing levee.

As a franchisor , Wendy's were making profit in many ways apart from direct sales, through kickbacks, and through the franchisees having to buy more stock through Wendy's to give away in the name of 'growing the brand'.

I too had to walk away with nothing but debt.
barneyboy | tas - August 17, 2010, 3:01PM

17. I was sad to hear the story of the family going through the horrible time,we had two wendys franshise and last year we ended up in the same way as the Mr & Mrs Evans have gone through. Wendys is a not a good company and we at this stage have lost our family home and around $ 300,000,ON THE NAME OF THE WENDY
WENDY'S | Wendy's Broadway and Chullora - August 16, 2010, 9:28PM

18. The management of Wendy's is the same management that were previously employed by Bakers Delight Holdings. Their job, to churn and burn. The passing of Therese makes me soooo mad. When is the Government going to move to save franchisees from them.
anry franchisee | Perth - August 16, 2010, 9:48PM

19. This is one of the saddest stories I have ever heard. I think her family should pull together and file a wrongful death lawsuit against the Wendy's Corp. Who looks their employee's out over such a small debt? A wrongful death lawsuit should occur. Make them accountable for their ridiculous actions. I would boycott the whole franchise. SUE THEM MR. EVANS!!!! Wampus Man is for the Evans
wAMPUS mAN | Dallas, Texas - August 16, 2010, 6:20PM

20. Peter from Wagga. You have absolutely no idea what you are talking about, so dont infer that Therese and Danny were anything but good operators and good people who were pulled into a poor business model. No-one goes in hoping to become instant millionaires, there are no big tax advantages and no there is not two sides to this story, and if you knew anything about Wendys you would be ashamed of your comments.
Wendys Franchisee | Mt Druitt - August 18, 2010, 12:58AM

21. Sad to say, I personally know many distressed families from failed franchises. Taco Bills - Friend bankrupted and lost house; Cheescake Shop - Acquaintance spent an eternity in the courts and came out square but stressed; Muffin Break - Friend walked away. I'm not sure what he and his wife lost except their sanity; Pizza Parlour - Dear friends lost absolutely everything - bankrupted, health, childrens' friends (had to move to a distant suburb)… Yes, perhaps they had dreams, hopes of a richer life, control of their destiny, etc. Were they poor business people? Maybe some were but I do know the seduction of the marketing material and the whole recruitment process can create very starry eyes. Visiting professionally set out stores and seeing queues of customers creates an unrealistic expectation of what lies ahead. I think, from discussing their cases that there were elements of ruthless corporate rules and behaviour by the franchisers - not illegal perhaps, but unreasonable and unconscionable in many ways. I think people have an expectation that decent standards of human behaviour exist in our society but sadly, the white shirts at HQ don't/can't exercise reasonableness. If you are thinking of going into a franchise, don't do it because you want to buy a job. Really do your homework and once you've done that, really do your homework… Get the best legal and accounting advice you can get but get it from specialist practices, not the local lawyers and accountants. If you have current legal and accounting advisors (if you don't already, you shouldn't be even dreaming about a franchise) who aren't franchise experienced, get them to refer you to specialists. It'll cost more but you can see that the ultimate penalty for a bad relationship can be tragic.
David | Vermont - August 17, 2010, 11:11PM

22. How sad for the Evans family. I was a small business owner (no franchise) for 10 years plus in a Caffe/restaruant in rural vic.Prior to, as an environmentalist anmd chef for for my adult life. I have neve supported those junk food take away franchise stores. Never forget, hearing decades ago how much Amazon rainforest Maccas cleared per day in pursuit of making our nations obese, unhealthy and mindless consumers. I am no longer in the industry, so can say with conviction and independantly- DO NOT SUPPORT these greedy companies. Not only do they rip off the franchisees but also the environment and their customers.

Just look at the afore article re Gloria Jeans and it's ruin & debts- supposedly a christian group! No doubt affiliated with FF as well whom are now bankrupt. There are very greedy opportunistic people at the TOP with no scruples.

I say: Support Small business emphatically!

The less people whom support these mega chains the better- supporting smaller business has obvious merits, for your wellbeing and ideological decisions.

Whilst I feel for the people whom are sucked into buying these franchises, perhaps overnight wealth is a like the old adage- It just doesn't happen!

So whilst I feel for the Evans family, I say to all consumers reading this- support small business and don't be sucked in by slick advertising and rewards of instant wealth!

Life is too short , spend your hard earned $'s with egalitarian companies or businesses. We will be the winners in the end! Think at least of supporting Oz owned co's. These Multico's are only as big as they are for one reason- GREED!

And while I'm at it GO GREENS!!!!!!!!!
desert dweller | country vic - August 17, 2010, 9:04PM

23. To fast food bunny, I am a Wendy's franchisee and your comment fills me with dread. We are under extreme stress now and to lose customers because of this will send some of us over the edge. Please as a protest email Wendys in bulk. This is a powerful way to let the ones at the top know how you, the ordinary person, feel. I would really hate to open the paper and read that one of us has done the ultimate to get out of a really dreadful and hopeless situation.
wendy | griffith - August 17, 2010, 5:59PM

24. I am absolutely guttered and shattered that my sister has gone.

I had to break the news to our mother on Sunday morning in her hospital bed where she has been since March 16th. Therese travelled down from Singleton every weekend and we spoke endlessley of what was happening concerning the Singelton and Cessnock shops. Mum was inconsolable upon hearing that her eldest daughter had passed away. Sunday was the most heartbreaking day of my life.

My family and myself will continue to fight on for what Therese believed in,

So many people are just so shocked and saddened by her sudden death.

God Bless my sister !!! Love you forever xoxox
Marie Camilleri (Therese's sister) | Blacktown - August 16, 2010, 11:09PM

25. Wow it is very sad to hear about Mrs Evans passing!! But i am not too sure that we are getting the full story here??

It makes me very suspicious at what Jack Cowin (of Hungry Jacks…) is up to??? Possibly capitalising on this poor Lady's passing to bring down the Wendy's name???? I am not a franchisee but i makes me wonder… is Jack looking for a cheap purchase…??? Makes you think about the wider picture…

My thoughts and deepest sympathy go ou to the Evans family in this time of loss.

Esjay.
Esjay | New Zealand - August 18, 2010, 10:54AM

26. The laws need to change for small businesses when it comes to negotiating leases because it is getting very hard to deal with landlords. The rent gets hiked when the lease expires and it becomes unfeasible to operate.
ANDY - August 20, 2010, 7:28AM

27. I would like to extend my sincere sympathy to the Evans family. I can only imagine the pain they must be feeling now. The loss of their businesses was bad enough but now the shocking loss of their wife, mother,daughter and sister is beyond dreadful for them.

I am not a Wendys franchisee but I have seen firsthand how hard those that are work in their business. My friends have owned a Wendys franchise for a number of years. They work seven days a week, have had no holidays for those years, they cannot afford to pay staff so that means that they must be in the shop for the span of opening hours plus the opening/ cleaning/ closing hours as well.

My friends have owned and run a number of businesses in the past very successfully, they are successful people, but they are struggling with this shop. The Wendys model is so skewed towards the franchisor that even they, with all of their experience, are struggling to make a go of it. The fact that they must buy supplies from Wendys nominated suppliers at exhorbitant prices is part of the problem but the various fees extracted from the franchisees is outrageous.

The middle management of Wendys running around with their blackberries, organising meaningless meetings have no idea of what it's like to be in a Wendys shop seven days a week, What's more they don't appear to care.

The managers who were falling over themselves to sign my friends up in their business are long gone but my friends are still there working hard.
RIP Mrs Evans.

28. I wish those franchisees who are endeavouring to redress the balance all the best.
concerned | sydney - August 19, 2010, 12:08PM

29. I know Danny and Therese put everything into there business. And they worked very hard.

I'll miss seeing your smiling face Therese. Even with all your stress and pressure from Wendy's you still could manage a bright beautiful smile : ))

Marie Camilleri my heart goes out to u your Family, Danny and the kids and my heart brakes for your mum.

She really will be missed,

A tear in my eye but all i can see is her smile.
I'll remember your smile | Singleton - August 18, 2010, 11:56PM

30. Firstly my sincere condolences to Therese's family. Secondly, a REAL effort at reforming the franchise industry is long overdue and sadly the current Govt (which theoretically supports the underdog) is too gutless to institute worthwhile changes.

Of course there will be people who don't have the skills to successfully operate their own business and there is a fair argument for "buyer beware".

However, this doesn't excuse Franchisors from deliberately omitting vital information or claiming results that aren't accurate. The FCA ridiculously claim that they represent franchisors and franchisees and then continue to demonstrate their bias towards franchisors.

The real reality is that once a franchisee has committed all their time and money to a dud franchise - the law does nothing to help them.

The FCA will argue the law is more than adequate but franchisees will be first forced into mediation where they can perhaps expect a token offer. The franchisor will be wanting a rejection of this offer. Then they can sit back and laugh at an already destitute franchisee as he or she try to find a way to afford to fund a court action. I know this from personal experience and without the help of a generous legal firm or litigation funder it is fair to say that most franchisees who have a genuine issue are doomed to fail.

The system is wrong and needs fixing NOW. I suspect the reputable franchisors would also support this as the "bad apples" can taint a whole industry.
Darren S | Sydney - August 18, 2010, 11:05PM


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Risks: 1st generation of investors knowingly sacrificed, 30 different programs of kickbacks, shelf allowances and inside money, Belief in a Just World (BJW): people deserve their fate, Blame the victim (Just-world effect), Business model had never created adequate investor returns, Call for franchise law, Can't afford to sue, Cannon fodder, Churning (serial reselling), Comments on article are interesting, Death, Dispute resolution, Encroachment (too many outlets put in territory), Franchise Council of Australia, FCA, Franchisee abandons their investment, Franchisor takes back high-volume store, Fraud victims changed deeply and often not for the better, Gag order (confidentiality agreement), Gag order used to conceal criminal wrongdoing, Good faith, fair dealing, Gouging on supplies, Health consequences, Indentured servants, Must buy only through franchisor (tied buying), Only 3 ways out: resell to next loser, independence & be sued or abandon and go bankrupt, Opportunism: contract creates powers which are used to strip investor value during relationship, Opportunism: self-interest with deceit, Renewal of contract denied, Stores shuttered, Strong back and weak mind, Successful for the middleman, System designed to fail for franchisees, Unilateral changes in business model drive franchisees' profits down, Unproven business model, War of attrition, Australia, 20100816 Sad end

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