Peter Buckingham reported on Billy Baxter case
Published in the Business Franchisor Oct 2012
A recent decision in the Supreme Court of Victoria should be sending some franchisors into shock, and give some current or ex franchisees a sniff that justice may be in the air, in certain circumstances.
In a unanimous decision, a previous decision was reversed into the franchisee’s favour, with $1.22M damages awarded.
The case revolved around the Glenelg Billy Baxter’s restaurant, which was opened in 2004. The franchisee claimed he was told sales should be around $1.3M, and this definitely did not eventuate.
For many years we have campaigned that some franchisors apply little logic to the most important number in a new site evaluation – The Sales Revenue Forecast. Whilst we deal in an ‘inexact’ science, history has shown that some data based evaluation will always be better than the ‘wet finger in the air’ estimate, and if challenged, there should be some statistical base from which the Sales Forecast was derived.
Peter Buckingham is the Managing Director of Spectrum Analysis Australia. He is a certified Management Consultant, and a Fellow of the FCA and IMC.