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Bank balance tops talent: Refund franchisee

by Staff Reporter11 minute read
The Adviser

Simon Parker

Refund Home Loans franchisees were chosen based largely on their ability to pay the franchise fee rather than their ability to be a mortgage broker, one franchisee has claimed.

Speaking to The Adviser, the franchisee said they were aware that the company was never well managed and sold franchises to people that could afford it rather than those necessarily capable of doing the job.

"They would sit down at a review with people, and tell people who have got no chance of making it in the system, no chance of being a [successful] broker...but then the finance guy [would say]: they've got plenty of money. So they go OK, and they take [the franchisee]," the franchisee said.

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Another franchisee, who purchased a Refund Home Loans franchise in June this year, questioned whether the company knew they were insolvent at the time they took her $75,000 fee, and also raised concerns about the lack of communication from appointed administrator SV Partners.

"I don't know how a company could... go into administration, if they didn't know in June that they didn't have enough money."

"Obviously, I can't prove it. What I was hoping was that SV Partners would have to investigate that – and they have led us to believe that's what they do – but I don't have any faith whatsoever in SV Partners because every time you try and contact them, they don't return your calls."

The franchisee has also issued Refund Home Loans a contract termination notice.

"Obviously that cost me more money because they've breached their agreement," the franchisee said.

"SV Partners got back to me and said that they've not breached their agreement because we haven't warned them, we haven't given them the 14 days warning. But I have, there have been a thousand emails [I've sent to them]... I went back to my solicitor and he said just get on with it, don't worry about what they say."

While the franchisee was seeking compensation from Refund, she was also looking to sign up with another aggregator.

"I've actually met with a couple of aggregators, and every single person that I've met with has been more than helpful," the franchisee said.

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