KFC licence expires for Rockingham outlet

THE state government’s inquiry into the operation of franchise businesses in Western Australia has come too late for Jack Cowin’s Competitive Foods, which was been forced to close its Rockingham KFC store this week after franchise licence negotiations with KFC’s US-based parent company collapsed. Yum Restaurants International, which owns the KFC brand, has decided not to renew Competitive Foods’ KFC franchise licenses, the first of which, the Rockingham store, expired on November 19. WA Business News understands Competitive Foods asked Yum to extend the franchise agreement to cover the Rockingham store while negotiations continued, or would be forced to close the store once the licence expired. Competitive Foods says the 40 employees of the Rockingham store will be re-located to other KFC stores in the area. The company owns 46 KFC franchises in WA and four in the Northern Territory. It is understood two more franchise licenses are due to expire in 2008. A fortnight ago, the state government launched an inquiry into franchising to review the adequacy of existing state and federal legislation and the fairness in franchise arrangements. The inquiry, dubbed the ‘Yum Inquiry’, will seek to review emerging trends in the franchising industry and ascertain whether “unconscionable conduct” is covered under existing laws, with specific reference to the renewal of franchise licenses. The inquiry will be chaired by franchisee Chris Bothams, manager of the South East Metro Small Business Centre, and is expected to report by March 31 2008. Janelle Macri

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