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Bloomberg
Donut King owner Retail Food Group Ltd. slumped by the most on record on Monday amid reports the company squeezed franchisees with high fees and offered limited management support. Shares in the company fell as much as 27 percent in Sydney trading, the steepest drop since listing in 2006, and wiping as much as $163 million off its market value. The stock was 24 percent lower at A$3.36 at 3:24 pm.
In a three-part investigation, Fairfax newspapers said franchisees paid crippling fees that ate into profits yet received reduced support from head office as Retail Food Group attempted to cut costs. The company’s business model saw some franchisees struggle, underpay workers to stay afloat, or go out of business, according to the report.