Independent Online:
The Woolworths Franchise Association (WFA) has told the Competition Commission that Woolworths’
proposed acquisition of its franchise stores will have significant adverse effects on jobs and local communities and has called on the commission to instruct Woolworths to seek its approval for each acquisition.
In terms of the Competition Act approval must only be sought when the acquired firm has turnover of more than R80 million.
A number of franchisees have also raised concerns about the low buyout price. “Woolworths is trading at a 17 price:earnings rating (p:e), but they are only offering us a 5 p:e and our stores are growing faster,†one franchisee noted.
In a presentation to the commission last month, Dennis Hamer, the secretary of the WFA, alleged that Woolworths would close down a number of the acquired franchise stores to the detriment of local communities and poorer consumers.