Woolworths’ holdout franchisees, as represented by the Woolworths Franchise Association, are apparently “shattered” by a change in negotiating tactics on the part of the Dapper One. Originally, the idea was that Woolies would negotiate with the Association to agree on a fair valuation method for the stores. However, it now transpires that the Association did not receive a mandate from the franchisees to negotiate on their behalf, and Woolies is now having a word with the individual franchisees privately. Also, Ian Moir, who was originally to be conducting the negotiation on Woolies’ behalf, has been pulled off the case, which has been handed over to unknown quantity and newly-appointed head of franchise John Fraser. Interestingly, Woolies doesn’t have a buyback clause with over half of the 76 franchise stores, and will allow those stores to run the course of their contracts, should they so desire – at a substantially reduced PE.
Comment: It started ugly, it’s going to get uglier.