The actions of a Bank of Queensland (BOQ) franchise in Adelaide that approved a loan to a fast food chain franchisee have been examined at the Banking Royal Commission, according to a media report.
The business loan was made by a BOQ “owner/operator” bank manager to a franchisee of ice cream chain Wendy’s. Issues associated with the loan include the bank contacting the franchisor without its customer’s consent; doubling the repayments due between the conditional offer and the final loan offer; and miscalculating the interest to be paid. In a further breach of policy the original loan offer was made on a term longer than the franchise lease term. The Wendy’s franchisee immediately defaulted on the loan, never making a repayment in full.
The Commission has scrutinized BOQ’s own franchise model in which owner/managers receive income based on commission. The owner/manager of the branch concerned was terminated in 2013 after misappropriating $160,000 in customer funds from two accounts. . Read more
Source: Franchise News 2 June