Franchising report reveals former RFG boss Tony Alford's "professed, repeated ignorance" at inquiry
Written on the 15 March 2019 by Paris Faint
A scathing report has ripped into former Retail Food Group (ASX: RFG) boss Tony Alford for being "evasive, inconsistent and generally uncooperative" during the parliamentary inquiry into Australian franchisors which took place between March and September 2018.
In its Fairness in Franchising report released yesterday, the parliamentary inquiry committee revealed that former CEO Alford, along with other former executives Alicia Atkinson and Andre Nell, refused to appear at a hearing despite being ordered to do so.
As part of its inquiry, the committee summoned the appearance of Alford, Atkinson and Nell at the public hearing to investigate alleged failings in RFG's strategies and conduct during their tenure.
Alford and Atkinson attempted to dispute the committee's power to force them into appearing, but both attempts at evasion were dismissed by the High Court.
When the trio of executives eventually took the stand, the committee noted that Alford was particularly unhelpful.
"The committee did not find Alford to be a reliable or credible witness," says the report.
"Alford was evasive, inconsistent and generally uncooperative. The committee was struck by Alford's professed, repeated ignorance about a range of matters which one would ordinarily expect a chief executive officer to be acutely aware.
"The committee considers that this reflects poorly on Alford and his tenure as chief executive officer of RFG."
Additionally, Alford's hearing testimony directly conflicted with other statements given by his succeeding CEO Richard Hinson on 11 September.
Hinson stated that when he filled Alford's shoes at RFG in January 2018, the company was complex and lacked suitable systems to deal with radical expansion.
"When I arrived I found the business with a strong foundation which had delivered strong growth over a number of years," said Hinson.
"It was also a business which had expanded rapidly through acquisitions, which led to complexity the acquired businesses could have been more effectively integrated and the transition could have been better managed."
Despite this testimony from Hinson coupled with allegations that RFG was "churning and burning" its franchises, Alford refuted the position.
"Alford also disagreed with Hinson's view that RFG had grown rapidly. By contrast, Alford claimed that 'the growth was programmed, it was steady and it was as required and as the opportunities arose'," said the report.
"And yet, during an eight-year period between 2007 and 2014, RFG grew its outlet numbers by over 2000 outlets."
This included more than 600 outlet acquisitions with Brumby's and Michel's, 110 with Pizza Capers and 800 with Gloria Jeans.
2007: Over 600 outlets acquired with Brumby's and Michel's