More than two dozen Rams Home Loans franchise owners are headed for mediation with Westpac this week before the Australian Competition and Consumer Commission, the
Sydney Morning Herald reported.
The franchisees are claiming against Westpac for false and misleading and unconscionable conduct.
The claims centre on representations made by Westpac on available products, trailing commissions, retail space, working capital requirements and the saleability of the franchises.
Franchisees were unfairly pressured into opening stores with no or little consideration as to the financial ability of the existing business, according to the claim reported by the SMH.
Westpac bought the retail network and brands from Rams in an agreement reached in October 2007, two months after the funding arm of Rams was unable to refinance short-term debt in the US.