Retail Food Group’s new executive chairman Peter George has taken over day-to-day running of the beleaguered food franchisor following the abrupt resignation of group chief executive Richard Hinson.
Mr Hinson’s departure followed a management restructure foreshadowed at the company’s annual meeting last week, when Mr George said the current financial situation was “unsustainable” and RFG needed to reduce its cost base “by a large amount”, sell assets and possibly recapitalise the business to reduce bank debt.
In a statement on Monday, Mr George said management would be decentralised and resources shifted to better support franchisees, who are struggling amid rising costs and weak discretionary spending.
However, it is understood Mr Hinson was the only senior executive to resign on Monday. He joined the company last November to run the Australian franchise business – weeks before an investigation into the plight of struggling franchisees was published – and was thrust into the top job in May after the departure of CEO Andre Nell.
Mr Hinson’s turnaround plan included slashing operating costs, reducing cost of goods for franchisees, cutting franchisee fees, building field support for franchisees, which had been decimated over the last few years, reinvigorating topline sales through better merchandising, and closing unprofitable stores when leases came up for renewal.
However, RFG’s performance has deteriorated over the last few months and the company is now operating at the mercy of its bankers. The company runs a range of franchise networks including Gloria Jean’s, Crust Pizza, Michel’s Patisserie and Brumby’s Bakery.
Mr George thanked Mr Hinson for his leadership, saying relationships with franchisees had improved and a range of actions had been taken to stabilise the business and improve performance since he took the helm.
“Richard has driven positive change at RFG, and on behalf of the board, I would like to thank him for his efforts during the early stages of the turnaround and wish him well in his future endeavours”.
Mr George, a turnaround expert who joined the board in September and was appointed executive chairman last month, will assume CEO responsibilities for the group for the time being.
Half-a-dozen current and former senior executives including former CEO Tony Alford, former chairman Colin Archer, Mr Hinson and chief financial officer Peter McGettigan have been forced to appear before Parliament’s franchising committee.