Renowned bakery and café chain Michel's Patisserie will close its doors after enduring a difficult period of declining sales.
and Victoria.
in 1980.
The organization had over 300 locations across the country at its peak.
The Gold Coast-based company intends to convert the cafes into its other brands, which comprise Donut King, Gloria Jean's, Brumby's Bakery, and Crust Gourmet Pizza.
A representative for RFG stated that the company will collaborate with its current franchisees to ensure a seamless transition.
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We maintain our ongoing support for our franchise partners as per the provisions of their current Michel's Patisserie franchise agreements.
We are working with all of Michel's franchisees in relation to the conversion opportunity, which includes an offer of financial and other forms of support.
Franchise owners will be given the option to convert their business to either the Gloria Jean's or Donut King brand.
"We think that each of the Gloria Jean's and Donut King brands offers exciting opportunities and a compelling choice for Michel's Patisserie Franchise Partners looking at their current or future business prospects," the spokesperson said.
RFG initially identified plans to convert Michel's outlets into its other brands at its 2024 Annual General Meeting after network sales had decreased by 19 percent.
"Our core brands are performing better than our legacy brands. The goal of our brand consolidation project is to transform our non-core brand outlets into more successful core brands," RFG CEO Matt Marshall stated at the meeting.
For the fiscal year that concluded in June 2024, RFG reported a net profit of $5.8 million, following a loss in the preceding corresponding period.
A lawsuit was filed by the Australian Competition and Consumer Commission (ACCC), a consumer watchdog organization, against Michel's in 2022, alleging that Reliance Franchise Group (RFG) sold franchises with the knowledge that they were operating at a financial loss.
RFG did not acknowledge the allegations as part of a court settlement, but instead repaid affected franchisees or cleared their outstanding debts.
It included $5 million repaid to franchisees of Michel's Patisserie who paid fees to Retail Food Group between July 1, 2012 and June 30, 2017.
According to the Australian Associated Press, the franchise operator incurred a loss of $10 million due to repayment and debt forgiveness costs.
RFG has been approached for comment by Daily Mail Australia.
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