Mortgage Choice today replied to reports its franchisees are being pushed into ruin and encouraged to cut corners to meet targets by the mortgage broker’s business model.
The company says it strongly refutes allegations in the media that its current model encourages poor behaviour or practices.
“Our franchisees are very diligent and want to do the right thing for their customers,” says CEO Susan Mitchell.
“We take any allegation of fraudulent behaviour extremely seriously and we have a very thorough and structured compliance regime in place.”
At the close, Mortgage Choice shares were up 9.4% to $1.62 but still down from $1.98 last week.
An investigation by Fairfax and ABC’s 7.30 reported that franchisees have been financially devastated after signing up to the high profile brand.
Confidential documents show as many as 173 franchisees, almost half the franchisees in the system, are considering setting up a fighting fund to take legal action if the company doesn’t make the relationship fairer.
Today Mortgage Choice says it has been consulting with its franchisees to update its model to increase franchisee remuneration and reduce franchisee income volatility.
“Mortgage Choice is in advanced discussions with franchisees and is aiming to have a new remuneration model in place by August 2018,” the company says.
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