Aussie Post franchise hopes left in tatters

Anthony Klan
February 13, 2013
The Australian

ONE of Australia Post’s most ambitions plans — to convert 150 branches into franchises — is in tatters with just 29 private operators created, all of which are likely to be shut down.

The rollout, attacked by unions as “privatisation by stealth”, was announced in 2006 by Australia Post, which said it would be completed within four to five years.

The national mail network boasted of receiving more than 500 formal expressions of interest within weeks from would-be franchisees across the nation — but today the scheme is in disarray.

Just 29 franchises were created. Each is expected to be shut down or re-absorbed by the Australia Post network within a few years.

The key stumbling block is understood to involve an enterprise bargaining deal between Australia Post and the Communications, Electrical and Plumbing Union of Australia.

Allegedly unbeknown to many franchise investors, Australia Post, while spruiking plans for about 150 franchises, had an agreement with the CEPU to limit that number to just 20.

The union aggressively opposed the franchise model, claiming it would lead to lower wages for employees as franchisors are not subject to the CEPU’s enterprise bargaining agreement.

Jim Metcher, of the communications division of the CEPU, confirmed Australia Post had agreed to create just 20 franchises.
Australia Post will today appear in the Federal Court in Brisbane to defend claims from one of those investors that it knowingly misrepresented the size of the planned rollout, among other allegations.

In 2007, John Christensen signed up for a franchise in the inner-southern Brisbane suburb of Coorparoo, with an initial term of 10 years.

He says that without warning, two Australia Post employees visited his franchise two days before Christmas 2010 and announced his store was to be closed.

Mr Christensen said he later discovered Australia Post’s agreement with the CEPU to create only 20 franchises.

“I had plans to buy two or three over the years and onsell them in the future,” Mr Christensen said.

“But now they’ve effectively scrapped the whole thing, no one wants to go near them. There’s no market there and the franchises are next to worthless.”

Australia Post has about 4400 outlets nationwide. Of those, about 800 are owned and operated by Australia Post while about 3000 are “licensed” outlets.

The key difference between a licensed outlet and a franchise is the former can be traded independently of Australia Post and they do not have restricted operating terms.

Australia Post spokeswoman Jane McMillan declined to comment on the action being brought by Mr Christensen, and whether the franchise network had been derailed as a result of union negotiations.

Ms McMillan said Australia Post had “paused” the rollout of the franchise network because of “significant changes taking place within the retail and environment and postal industry”.

Opposition industrial relations spokesman Eric Abetz said “at least half a dozen” Australia Post franchisees had contacted him with concerns they had been unfairly treated by the agency.

He said Australia Post had never provided a “sufficiently cogent explanation” as to why it had failed to proceed with the franchise model.