One of the country’s biggest aggregators has promised to change its remuneration model after 50% of its franchisees said they are prepared for legal action.
Mortgage Choice released an announcement on the ASX yesterday (4 June) in response to an investigation by Fairfax Media and ABC’s 7.30. Franchisees are accusing the aggregator of running a harsh business model and remuneration structure, which is causing financial distress and worrying loan practices.
One hundred and seventy three franchisees have said they are ready to set up a fund to take legal action. Towards the end of last year they agreed to commit $200,000, but put this on hold after Mortgage Choice said it would review the structure.
In the statement from company secretary David Hoskins, he said the company would be working closely with franchisees about a more “competitive remuneration model”.
The statement said the purpose of this would be to “increase franchisee remuneration and reduce franchisee income volatility to allow them to grow their business and assist more customers with their home loan needs”.
Following the outcry, Mortgage Choice is offering state-based workshops to discuss new structures and will invest in new technology to “improve franchisee productivity”.
CEO of Mortgage Choice, Susan Mitchell, said, “These changes are designed to support the long term sustainable growth of Mortgage Choice, increase franchisee remuneration and attract new high-quality franchisees to our network.
“We want to continue to help Australians with their financial services needs for many years to come and having thriving, growing franchisees that have the confidence to invest in their business is critical to achieving this.”
Mortgage Choice expects to finalise a new remuneration model in this coming July and implement an opt-in basis across the network in August.
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