The viability of Red Rooster stores is under threat, according to a submission made to a federal Senate inquiry.
The inquiry into the Franchising Code of Conduct has been told many stores face the risk of bankruptcy due to alleged breaches of good faith by Red Rooster’s parent company Craveable Brands.
The submission alleges Cravable overcharges its franchisees on many products such as plastic cutlery, bags and meal packs.
Craveable oversees Red Rooster, Oporto and Chicken Treat stores across Australia.
Shepparton boasts a Red Rooster franchise on the corner of High Street and St Georges Rd.
Craveable countered the Senate submission in a statement claiming the average franchisee earned $135,000 per annum and stores were not under threat of bankruptcy.
"Claims of stores nationwide on the verge of collapse a ridiculous assertion,” the statement read.
Yesterday, Fairfax Media reported on Red Rooster franchisee Steve Beadle who reportedly lost $500 000 when his franchise went into liquidation three months ago.
Mr Beadle said franchisees were struggling to make monkey due to “gold plating of the supply chain” by Craveable.