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Customers Rally Behind Ailing Red Rooster Restaurants

Loyal customers of Red Rooster have come out in support of the restaurant chain and it's struggling owners amid claims from a small group of franchisees that their restaurants are facing bankruptcy.

The concern was recently raised in a submission to a Senate inquiry into the Franchising Code of Conduct, however the chain's owner, Craveabl, claims that everything is fine.

The authors of the recent senate submission call themselves the Franchisee Association of Craveable (FAC)

'The association is alleging that the Franchisor is not acting in good faith in regards to the Franchise Agreement which has resulted in a poor business model,' the submission reads.

However, Craveable Brands which operates 570 Red Rooster, Oporto and Chicken Treats restaurants in Australia, says it hasn't had any contact with the group, which it believes represents as little as just 2 per cent of all its franchisees.

The FAC submission states that 'recently there have been many franchisees in distress… ' 'There have been recent insolvent franchisees'

'There are many more on the verge of bankruptcy.'

But Craveable says that 80 per cent of new business set up in Australia no longer operate around after five years, only only 5 per cent of its franchises suffer the same fate.

The company claims its most recent franchisee survey, conducted last year, found an 80 per cent satisfaction rate.

Disgruntled franchisees have complained of being forced to buy products from suppliers at higher prices higher than those at a regular supermarket.

FAC states, 'The common complaint for Red Rooster chicken has been "it is the same chicken, which is available at the local supermarket for half the price"'

'[But] a simple move like adding flavours and sauces cannot be done because that competes directly with Oporto, Red Rooster's sister brand.'

Red Rooster was founded in Western Australia in 1972, four years after KFC then Kentucky Fried Chicken - opened its first Australian restaurant at Guildford in Sydney.

Daily Mail

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