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Major fast food franchisees on the verge of bankruptcy

Franchisees who own Red Rooster and Oporto stores are believed to be on the verge of bankruptcy.

The claim is among hundreds of submissions made to a parliamentary inquiry into the franchising sector.

Under some agreements, business owners are forced to buy supplies from a company that charges more than retail.

Nationals Senator John Williams tells Alan Jones, franchisees are being driven to the edge.

“We hear this all the time. They’re paying $2.40 for two litres of milk, you can buy it at Coles and Woolworths for $2 for two litres of milk Alan.

“In some cases, like Brumbies, they take a slice of their gross turnover, regardless of their profit.

“Many are making losses yet they’re taking a slice of their turnover.”

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