News

Australian millionaire sues Yum! Brands for blocking franchise sale

March 21, 2012

Jack Cowin, an Australian millionaire who made his money in the quick-service industry, has sued Yum! Brands for blocking his attempts to sell the franchise rights to 46 KFC outlets in the Western Australia market.

Cowin said the company's actions could force him to close those stores, according to SmartCompany.

Cowin's company, Competitive Foods, is Australia's largest restaurant franchisor. Yum Restaurants Australia, which franchises KFC and Pizza Hut in the country, said his case lacks merit.

The company's statement continued: "Indeed much of what is being alleged is so far-fetched that it bears no relation to the true position. We intend to contest the claims vigorously in the court proceedings and look forward to this long-running matter finally being resolved."

Cowin refuted with a statement that read: "Yum! refuses to renew franchise agreements with no legal basis for one of the most successful franchise groups after 42 years of building the business. Why? Because they don't think they have to, and can transfer goodwill to their own account."

Some KFCs have already closed after their franchise agreements ran out.

Specifically, Cowin is calling for an extension of the remaining franchise agreements until the case is presented. Those agreements expire next week.

There are about 600 company-owned or franchised KFC restaurants in Australia and New Zealand.

Read more about franchising issues.