At the end of an email to retailers, Tatts made this announcement:
Retail Image News!
Keeping pace with an ever changing, competitive landscape, we are pleased to announce an update to our Retail Image program.The majority of outlets will now have the choice to install one or more digital screens in their new Generation One DigiPOS retail image.
Larger outlets will still be required to install a minimum of two internal screens.
Any retailers with shopfits currently in the pipeline or those with a retail image due will receive communication shortly.
The company has made no announcement about the retailers forced to put in two screens where one would have been sufficient and where the second screen has lumbered the business with a capex outside what would be reasonable for the business.
Oh, and still no evidence from Tatts supporting a business case for their cap[ex demands on their franchisees.
Competition and Consumer (Industry Codes—Franchising) Regulation 2014
30 Capital expenditure
(1) A franchisor must not require a franchisee to undertake significant capital expenditure in relation to a franchised business during the term of the franchise agreement.
(2) For the purpose of subclause (1), significant capital expenditure excludes the following:
(a) expenditure that is disclosed to the franchisee in the disclosure document that is given to the franchisee before:
(i) entering into or renewing the agreement; or
(ii) extending the term or scope of the agreement;
(b) if expenditure is to be incurred by all or a majority of franchisees—expenditure approved by a majority of those franchisees;
(c) expenditure incurred by the franchisee to comply with legislative obligations;
(d) expenditure agreed by the franchisee;
(e) expenditure that the franchisor considers is necessary as capital investment in the franchised business, justified by a written statement given to each affected franchisee of the following:
(i) the rationale for making the investment;
(ii) the amount of capital expenditure required;
(iii) the anticipated outcomes and benefits;
(iv) the expected risks associated with making the investment.
Considering the DigiPos expenditure was not approved by a majority of franchisees, nor have Tatts supplied information relation to point (e) justifying the expenditure with anticipated outcomes and benefits….it appears quite clearly that Tatts have forced franchisees to undertake significant capital expenditure.
Amanda I have agitated on those exact lines previously. No one is prepared to take the action necessary to challenge Tatts. More fool them. Tatts acts as a law until itself.
Apart from the fact that any one of us could wander into a Harvey Norman store and buy a suitable television for a small fraction of what Tatts are charging these out at….