Australia’s major fast food chains are getting hit with new regulations, as the country’s largest fast food franchisee prepares for the first legal challenge to its lucrative franchises in over two decades.
The Federal Court of Australia heard on Wednesday that fast food outlets operating in Australia are required to pay a minimum of $1.7 million per day to the Government and an additional $2.4 million to the State.
The franchisees are also being asked to pay the Government more than $3.3 million to cover operating costs and costs incurred in the wake of the financial crisis.
They have been fighting a landmark case that has drawn global attention and legal fees, but the ruling is not expected to be made public until later this year.
The franchisors said they were committed to paying the franchisees their fair share of taxes and that they would continue to provide free meals to franchisees.
The Franchisee Owners Council of Australia said it was a win for franchisees and the Australian community.
The ruling comes amid a broader debate about whether franchisor tax breaks should be extended, which has been fuelled by concerns about the financial impact of the crisis on the economy.
“The fast food sector has experienced the greatest economic crisis since the Great Depression, with unemployment rising to 10 per cent, the cost of living on average is up to 16 per cent higher than a decade ago and Australia’s budget deficit is at its highest level since the 1970s,” the FOCA said in a statement.
“Fast food is not a low-paid, low-skilled, low paying service.
It is the most popular restaurant service in Australia, and the most profitable.”
As a result, it is the industry’s top earner.
The FOCAs aim is to reduce the impact of this crisis by working with the franchisers and the community to create a more sustainable future.
“The FOCs decision to file the case in the Federal Court comes a day after the Federal Government announced a package of measures to reduce Australia’s debt.
The package included changes to the corporate tax system, the capital gains tax, changes to income tax rates, a change to the tax treaty, and a plan to help the industry create thousands of new jobs.
The government is now reviewing the franchised restaurants operating in the country and expects to make a decision in the next two to three weeks.