BRISBANE - [AAP] Retail Food Group (ASX: RFG) shares have plunged to a five-year low amid ongoing media reports its business model has left Gloria Jean's, Brumby's and Donut King franchisees struggling.

Fairfax Media has reported RFG is charging franchisees exorbitant fees--including high food costs--to grow the company's profits, but that the business model has allegedly forced some to underpay staff.

The group on Monday released another statement denying the accusations, but its shares tumbled another seven per cent to $2.66 at 1110 AEDT--their lowest since August 2012.

RFG says its franchisee network employs more than 10,000 people and as far as it knows, there is no widespread underpayment of staff.

"RFG has no evidence of any widespread franchisee non-compliance with employee entitlement payments," a company statement issued to the ASX on Monday said.

"Since Fairfax Media published its initial article on December 9, RFG has received just one telephone enquiry through its support hotline from an employee, which it is investigating."

It said the company takes any allegation of employee underpayment seriously and investigates the matter with a view to remediating any genuine claims.

RFG, which also owns Crust Pizza, Pizza Capers and bb's cafe brands, said it has run a number of initiatives in recent years to educate and support franchisees in complying with employee entitlements.

 

 

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