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National aggregator Mortgage Choice has refuted recent allegations that its current franchise model encourages poor behaviour or practices.
The company has been under fire over the last few days after an investigation by Fairfax Media and ABC's 7.30. It spoke to franchise owners who claimed Mortgage Choice ran a harsh business model and remuneration structure.
The group announced on the ASX on Monday that it has been consulting with its franchisees with a view to updating its remuneration model. It says this program has been its key priority for 2018 and hopes it will help the growth of the company as well as attract new businesses to the network.
Mortgage Choice has said its franchise system was introduced over 25 years ago, designed to allow mortgage brokers to own and grow their own small businesses with the support of a strong market brand and full-service model which included business planning, marketing, IT, training and compliance.
It says this extra support was designed to be reflected in the remuneration structure.
In a response to the allegations, Mortgage Choice said it works closely with its franchisees to assist them in growing successful businesses. The company has policies in place to support any franchisee that requires additional support, including personalised assistance to franchisees who have experienced financial difficulty or suffered health issues.
In refuting the claims that its model caused franchise owners to cut corners, it said it has robust compliance processes and credit policy controls in place that franchisees are required to adhere to.
Susan Mitchell, CEO of Mortgage Choice said: “Our franchisees are very diligent and want to do the right thing for their customers. We take any allegation of fraudulent behaviour extremely seriously and we have a very thorough and structured compliance regime in place.
“The wellbeing of our franchisees is our number one concern. We provide any business owner experiencing hardship with personalised support, including from our field-based teams. We are well progressed in consulting with franchisees on a new remuneration model that will help them to succeed and invest in growing their businesses.”
While Mortgage Choice believes brokers in the network still highly value the services the company provides, it acknowledges that the balance between services offered and remuneration provided needs adjusting.
The company has started a confidential and collaborative process to update the model, which has included numerous workshops across Australia with franchisees to consult on a new model.
It is aiming to have a new remuneration model in place by August 2018.
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