Refund network likely to 'implode'

by Adam Smith17 Nov 2011

Refund Home Loans is likely to "implode" as a franchise, a rival refund model has claimed.

Robert Graham, chairman of Refunds Direct, has predicted that the struggling franchise network, now in voluntary administration, will collapse unless a "white knight" buyer appears. The company entered voluntary administration in October, and its real estate and financial advice arms have since followed it into insolvency. Graham, whose company offers a referral service rather than a broker-based service, pointed to reports of legal action being launched by a number of franchisees, and the lack of commission payments to the company's brokers. He said Refund's network was on the verge of collapse.

"They are at a tipping point right now where some good news is needed, such as a cashed up or high profile buyer," he said.

If the company is beset by more "bad news" or if franchisee litigation spreads, Graham declared it would be "game over" for the company's network.

"Emotions will be running high among franchisees as they are scrambling to save their investments and livelihood. There will also be franchisee factions forming. At one end, some franchisees trying to rally the troops to stick together and minimise publicity and at the other end a growing number of franchisees seeking compensation and retribution for all sorts of things," Graham said.

Graham advised the company's brokers to "get on the front foot" and leave the franchise network rather than "stay and pray".

Related stories:

Choice slams Refund administration bungle

Refund failure should serve as warning


  • by JAGMAN 18/11/2011 11:30:22 AM

    What an example of the most cynical form of self promotion! Taking the opportunity to get some free press on the back of the financial pain and worry that Refund Franchisees are experiencing. This states the bleeding obvious, ie. that Refund will coolapse unless their is a buyer! But to give advice to Refund's Franchisees is very poor form indeed. There are indications that there are real buyers and it just may be that for many Refund Franchisees, a little more patience may pay off. But don't let that get in the way of self-promotion...