A parliamentary committee is calling on rarely used powers to compel executives of Gloria Jean’s parent company

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  • A parliamentary committee is calling on a rarely used power to compel three former executives of a franchising company to appear before it.
  • The Parliamentary Joint Committee on Corporations and Financial Services says the former Retail Food Group executives have rejected four formal requests to attend.
  • The company has been under pressure since a Fairfax Media investigation revealed hundreds of stores were going to the wall as “a result of a brutal business model”.

Three former executives of Retail Food Group (RFG), who repeatedly refused to appear before a parliamentary inquiry into franchising, have now been formally summonsed to appear.

The rare use of coercive powers by a parliamentary committee, the Parliamentary Joint Committee on Corporations and Financial Services, was confirmed today by committee Chair Michael Sukkar, a Liberal MP.

The summons have been issued to former RFG executives Tony Alford, Andre Nell and Alicia Atkinson to appear before the committee at a public hearing in Canberra on Monday, November 26.

Failing to appear, once a summons has been issued, could be ruled contempt of parliament. The penalties include imprisonment and substantial fines.

Sukkar told parliament last week: “The rejection of four formal requests to attend is not only highly discourteous and unusual, but impedes important aspects of the committee’s inquiry.”

Alford is a former CEO of RFG, the operator of Brumby’s, Donut King, Crust Gourmet Pizzas, Michel’s Patisserie and Gloria Jean’s, and a major shareholder.

The company has been under pressure since a Fairfax Media investigation revealed hundreds of stores were going to the wall as “a result of a brutal business model”. The company says it has no evidence of franchisees underpaying staff.

Shares in Retail Food Group have been in freefall. They last traded at 43 cents, down from a 12-month high of $4.71.

Retail Food Group has decided to close between 160 and 200 Australian outlets by the end of the 2019 financial year due to high rents and declining shopping centre performance.

Last month the current CEO, Richard Hinson, who was appointed in May this year, told the parliamentary committee: “… there are things in the past we could have done better with the benefit of hindsight.”

The company in August posted a loss of $306.69 million after non-cash impairments and write-downs of $402.9 million.

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