Fast-food millionaire Jack Cowin is taking restaurant giant Yum! Brands to court accusing the US fast-food giant of unconscionable conduct.
But Yum! Restaurants Australia, the franchisor of the KFC and Pizza Hut brands in Australia, has rejected Cowin’s action, describing it as “farfetched” and “without merit.”
Cowin, whose wealth has been estimated at $618 million by BRW magazine, has accused Yum! of thwarting his attempts to sell the franchise rights to 46 KFC outlets in Western Australia and said Yum!’s actions could lead to the closure of his stores.
Cowin, whose Competitive Foods is Australia’s biggest franchisor of restaurants, was contacted for comment this morning, but was not available before publication.
But his statement claim has been published by the Sydney Morning Herald, and accuses Yum! of refusing to “renew franchise agreements with no legal basis for one of the most successful franchise groups after 42 years of building the business.”
“Why? Because they don’t think they have to, and can transfer goodwill to their own account.”
Cowin has already shut a number of stores in the state after that particular franchise agreement ran out.
An injunction hearing is set for next Monday in the Federal Court in Sydney, with Cowin calling for the extension of the remaining franchise agreements until his legal action against Yum! is heard. It’s understand the last of Competitive Food’s agreements will expire next Wednesday.
According to the Yum! website, there are now about 600 company-owned or franchised KFC restaurants in Australia and New Zealand. The first was opened in Sydney in 1968.
In a statement, Yum Restaurants Australia chief corporate affairs officer Sally Glover said the company entirely rejects the “allegations being made by Competitive Foods in this case – the claims being made are baseless and without merit.”
“Indeed much of what is being alleged is so far-fetched that it bears no relation to the true position.”
“We intend to contest the claims vigorously in the court proceedings and look forward to this long-running matter finally being resolved.”
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
