Jamaica Blue franchisees speak amid calls for franchise reform

But within a few short years, it would end up destroying them financially and seriously impacting their mental and physical health.

The Toowoomba husband and wife bought an existing Jamaica Blue franchise within a shopping centre in 2011.

They took out a business loan with ANZ – the bank recommended by Jamaica Blue parent company Foodco – to cover the $520,000 needed to buy the store, plus $155,000 that was needed to refurbish the outlet just four months later.

They claim they were promised two weeks of “full support” but got just two days.

Within six months they were “struggling” and were “pushed into” buying a second outlet in October 2012 to try to increase profits.

That store was fully funded by a business loan with ANZ and had to be secured with the family home the couple already owned outright.

Ms Forsyth told news.com.au a Foodco representative incorrectly – and without the couple’s permission – told the ANZ their second store was turning over $26,000 a week.

She said that sum was what the state’s top store was making, but theirs “never even came close” to that even during a “massive week”.

“This loan on the second store would never have been approved without these false and completely untrue sales figures, and we would not be where we are now,” she said.

Within months of opening the second store, it too was floundering.

Robert Whittet and Emma Forsyth claim they lost a fortune through their involvement with Jamaica Blue. Picture: SuppliedSource:Supplied

For 18 months the couple struggled to make ends meet, and Ms Forsyth said during some weeks, they received 50 per cent less in sales than they had been quoted by Foodco.

Ms Forsyth was working night shifts at Woolworths until 2am, surviving on four hours of sleep before returning to work at Jamaica Blue to try to cut costs on wages.

One of her daughters also worked in the family business for “pretty much no wages” to help out.

Eventually, in 2013, they sold their unprofitable first store for just $110,000, which is what they claim Foodco said it was worth – despite paying more than $500,000 for it originally.

But Ms Forsyth said ANZ and Foodco had a dispute, and after that, the couple’s loan repayments increased from $4000 to $16,000 per month.

In April 2018, the second store was liquidated.

“It got to the point where we realised we couldn’t go on any further, we needed to clear the debts and feed the family,” Ms Forsyth said.

They were forced to sell the family home for $700,000, which they fully owned and was valued at $780,000, and cash in term deposits worth $750,000.

It still wasn’t enough to cover their debts, which they are still paying off in small instalments with around $250,000 still owed.

Ms Forsyth said they had business losses of $410,000 on the first store and $430,000 on the second and had no wages or superannuation during the seven years they owned the stores.

All up, the couple claim they are out of pocket by more than $2.5 million.

Mr Whittet is now working, but Ms Forsyth is not due to the toll the situation has taken on her mental and physical health.

“We’ve lost everything,” she said.

“The turnover they promised never arrived. We’ve gone from having two incomes (before Jamaica Blue) to having one income and a lot more debt.

“We struggle just to function these days.”

There are more than 100 Jamaica Blue cafes in Australia. Picture: Facebook

There are more than 100 Jamaica Blue cafes in Australia. Picture: FacebookSource:Facebook

Ms Forsyth said she was diagnosed with a heart condition around her 40th birthday she claimed was caused by stress.

She said her husband also suffered a “breakdown” due to stress and worry and that she feared for his life after finding an email on his computer that hinted at self-harm.

“The amount of money we’ve lost and the pain and suffering it has caused is horrendous,” she said.

“This nearly did kill us. It causes so much damage to families, which is partly why I want to stop it from continuing to happen to other people in the same situation. It’s just awful.”

A Foodco spokesman told news.com.au the company worked “collaboratively with our franchise partners to serve our customers and are proud of the contribution they make to their local communities” through its Australian network of more than 100 Jamaica Blue cafes.

“We can confirm that Mr Whittet and Ms Forsyth operated two Jamaica Blue franchises and an independent cafe prior to 2017,” the spokesman said.

“We will not comment on confidential matters between us and Mr Whittet and Ms Forsyth.

“We are pleased that both the Jamaica Blues cafes continue to operate in Toowoomba today along with a third franchised Jamaica Blue cafe which we have opened since that date.”

But Ms Forsyth’s situation is one fellow Queenslander Brent Harrison says he is all too familiar with.

The 37-year-old shelled out around $600,000 to open a Jamaica Blue cafe in December 2016 in Harbour Town on the Gold Coast that experienced cashflow problems within three months.

He told news.com.au Foodco advised him to keep costs down, including labour, but the biggest issues were “turnover and foot traffic” that did not match figures he was originally given.

He said turnover had been “grossly over-projected” and was “way off the mark”.

In 12 months, Mr Harrison’s store made less than $700,000, while the represented sales figures he had been given were around $1.8 million.

Brent Harrison opened a Jamaica Blue cafe in Harbour Town on the Gold Coast. Picture: Facebook

Brent Harrison opened a Jamaica Blue cafe in Harbour Town on the Gold Coast. Picture: FacebookSource:Facebook

He even produced a commercial at his own expense as “the marketing support was not there”, but it had little effect.

He said the franchisor provided “some royalty relief”, which also failed to help.

“It is basic commerce – reducing the royalties by a per cent here or there does not make up for the magnitude of difference in sales turnover when you are talking the amounts mentioned here,” he said.

“Prospective franchisees are relying on franchisors to be giving truthful, accurate and correct representations, in particular regarding financial information with which they make decisions on.”

Foodco ended up terminating the franchise agreement when mediation failed and Mr Harrison could no longer meet rent and franchise fees.

He said he had experienced “every emotion under the sun” in the 16 months he ran the business.

“There’s a constant dark cloud hanging over you and, you can quite easily see how people go to a very dark place with no light or hope of ever getting out. You’re in a constant state of free fall – it’s totally debilitating,” he said.

Mr Harrison is now is now taking Foodco to court. Picture: Supplied

Mr Harrison is now is now taking Foodco to court. Picture: SuppliedSource:Supplied

Mr Harrison is now taking Foodco to court, claiming a seven-figure sum for alleged misrepresentation and arguing he took out a business loan based on an incorrect, site-specific sales turnover representation given by and endorsed by the franchisor.

In legal documents seen by news.com.au, it is alleged Mr Harrison was told he “should be able to achieve more than $21,000 of sales per week (or $1.092 million annually) without a problem” and would achieve “higher than average sales” as a flagship Queensland store.

A Foodco spokesman told news.com.au the company “strongly refutes allegations of any inappropriate conduct”.

“With regards to Mr Harrison, the matter is currently before the court and it is therefore not appropriate for us to comment,” the spokesman said.


Late last month, Labor Senator Deborah O’Neill organised a roundtable meeting at federal parliament with several franchise victims, including Mr Harrison, to highlight the need for a radical shake-up of the industry.

She told news.com.au a joint parliamentary committee inquiry into the sector published its report in March – but besides the formation of a taskforce, little had been done to fix the system.

Labor Senator Deborah O’Neill organised a roundtable meeting at federal parliament with several franchise victims, including Mr Harrison (right). Picture: Supplied

Labor Senator Deborah O’Neill organised a roundtable meeting at federal parliament with several franchise victims, including Mr Harrison (right). Picture: SuppliedSource:Supplied

“The main message we want to get out to people thinking of buying a franchise is don’t – there are too many dangerous operators in the field, and the Government is sitting on its hands,” she said.

She slammed the Government’s lack of transparency and called on authorities to enforce the recommendations of the inquiry immediately.

According to Franchise Council of Australia (FCA) CEO Mary Aldred, the organisation and its franchisee advisory committee had provided input to the taskforce, “consistent with the recommendation by the bipartisan parliamentary inquiry into franchising”.

“The FCA supports the methodical, considered and consultative approach that the taskforce has been taking to prepare advice on the complex business and regulatory issues raised through the inquiry,” she told news.com.au.

“The FCA has an expert, independent hotline for member franchisees and franchisors to phone for employment relations advice.

“The FCA is already in the process of working with our members on new standards to address compliance and behaviour issues raised through the 2018 inquiry.”


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