TREVOR and Karinne McDougall were doing just fine as franchisees - until they signed up for a Yogurtland Australia store.
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Despite leveraging off 20 years experience as business owners, having half-shares in two real estate agency franchises and owning a franchised pizza store on the Central Coast, the McDougalls lasted less than three years with Yogurtland.
When the Central Coast couple closed the doors for the last time on their Western Australia store last year, they walked away more than $500,000 out of pocket.
Yogurtland Franchising is now pursuing the McDougalls in court for $52,000 in allegedly unpaid yoghurt bills, but the couple plan to fight the case, arguing they have lost enough.
A special investigation by the Newcastle Herald revealed last weekend that Yogurtland has experienced a mutiny from all franchisees after stores failed to perform as expected.
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The McDougalls are one of four couples from the Hunter and Central Coast who signed on as franchisees and opted out of their struggling stores amid disputes over disappointing turnover and profits.
It's understood three suffered large financial losses, a claim that Yogurtland Australia owner, prominent Newcastle accountant and business motivational speaker, Paul Siderovski, denies.
Mr Siderovski, who is the founder of Newcastle's SiDCOR Chartered Accountants, came across the frozen yoghurt chain on holiday in Hawaii and bought the Australian rights to the franchise in 2013, sealing an agreement to roll out 50 stores.
It's been a bumpy ride so far.
Yogurtland Australia has 14 corporate stores after nine closed and it no longer has any franchisees, but Mr Siderovski said new opportunities were being explored.
Bleeding money, the McDougalls said they were left with no option but to close their store in the outer-Perth suburb of Baldivis after "extremely disappointing" sales.
Mr McDougall said the couple reached breaking point when head office cut their yoghurt supply over allegedly unpaid bills.
"There was no choice but to close, the store just wasn't viable," Mr McDougall said. "It's been extremely stressful. I've never experienced anything like this in 20 years as a franchisee."
According to Yogurtland, payment options were put forward to help resolve the yoghurt supply issue, but Mr McDougall chose to close the store.
Mr McDougall, who previously owned a half-share in a coffee van in Karratha, 1600km north of Perth in Western Australia's Pibara region, said he first saw online advertisements for Yogurtland franchise opportunities in early 2015.
At the time, Yogurtland was advertising numerous opportunities for franchisee stores in WA including at Baldivis, Ellenbrook, South Headland and Bunbury.
"I thought if there were no stores over there yet it might be a good opportunity," Mr McDougall said. "The Erina Yogurtland store near our home had only just opened and it really interested us."
Mr McDougall said he had initial discussions with Yogurtland's director of real estate, Newcastle auctioneer Gavan Reynolds, and he then met with Mr Siderovski.
"It all seemed really impressive to begin with," he said. Pushing ahead with due diligence, Mr McDougall flew with Mr Reynolds to WA in February 2015 - a trip paid for by Yogurtland - to investigate numerous potential store locations that had been selected by a Yogurtland consultant.
Three months after the trip, the McDougalls signed up to a franchise, choosing Baldivis, 46km south of Perth's CBD.
The couple sold a half-share in one of their real estate franchises to fund the purchase and borrowed money against their Central Coast home to raise the rest.
The franchise cost $370,000, excluding GST, and they ended up pouring an additional $168,000 into the store.
Mr Siderovski said the McDougalls used their own accountant and lawyer to investigate the opportunity.
Four months before signing on as a franchisee, Mr McDougall sent an email on January 29, 2015, with a series of questions to Mr Reynolds asking for more detail about the Yogurtland Australia business model.
Mr Siderovski responded via Mr Reynolds sending a breakdown of monthly sales figures for various corporate stores for 2014.
"The best store to look at is Macarthur Square as it has been training (sic) for two years," Mr Siderovski wrote.
According to the figures, Campbelltown's Macarthur Square store turned over more than $1 million in 2014.
In March 2015, Mr Siderovski also emailed monthly corporate store turnover figures to the McDougalls which detailed that the best performing store was Manly turning over $103,731, down to Coffs Harbour at $55,810.
Mr McDougall said the couple had initial discussions with Mr Siderovski about leading Yogurtland's expansion into WA and owning several stores. He even made a self-funded trip to Darwin with Mr Reynolds to look at potential store sites.
"It all sounded so great to start with," he said. "But the end outcome was that none of the franchisees could make the model work - it was the same for all four of us."
In documents seen by the Newcastle Herald, it was alleged that Yogurtland Franchising misrepresented that three franchise stores, Newcastle's Marketown, Erina on the Central Coast and Baldivis, would be highly profitable.
In February 2017, the three franchisees lodged notices of dispute with Yogurtland Franchising alleging that they were misled into buying the franchises and that the company had not complied with the Franchising Code of Conduct.
At the core of the dispute is the viability of the Yogurtland Australia franchising model and how the opportunity was sold.
It's a stalemate of vastly differing opinions.
Mr Siderovski "unequivocally" denies providing anything false or misleading.
He said there were "no issues" with the franchise system "when it is operated as recommended" and that Yogurtland acted in the "best interests of all parties".
The franchisees disagree.
In a series of text messages in July 2016 between Mr McDougall and the Cessnock franchisee, Christie Riboldi, the pair discuss the ongoing dispute.
"It sounds a bit too good to be true but then again so did YL [Yogurtland] All that's missing is the sales .. .and the profit!," Mrs Riboldi writes.
"20% profit on $1 mill self serve model ... It's self serve Trevor which means you get a minimum of 20 per cent return," Mr Dougall replies.
"I can still hear him doing this spiel," Mrs Riboldi responds.
"This is a YL [Yogurtland] recording bla, bla, bla," Mr McDougall writes.
In an email to Mr Siderovski in September 2016, the Erina store franchisee Tony Temelkovski, of Merewether, details his concerns about the franchise model.
"We accept that we have taken a risk but Paul you also need to take accountability for not acting when glaring problems were continually highlighted with the management of the franchise model," he wrote.
"Potential solutions and free offers to help evaluate and implement solutions from early 2015 onwards were continually not acted on even though you acknowledged that there were problems and that you were going to fix them."
Mr Siderovski responds: "Unfortunately this is part of any business and part of having humans working for you. We acted as we needed to with the resources the business had."
To date, the only Yogurtland outlet in WA has been the McDougalls' Baldivis store which opened in August 2015 and closed less than three years later.
Mr Siderovski said Yogurtland had no intention of opening corporate stores in WA. He said the McDougalls were advised not to go into the store if they needed to run it remotely.
It's a claim Mr McDougall denies.
"Why would I risk my money like that if they told us not to do it," he said. "It just doesn't make any sense."
Last financial year, Baldivis was named by data registry and analytics business, illion, as the bankruptcy capital of Australia.
According to illion, the suburb recorded the highest number of personal bankruptcies nationwide with 105.
Mr Siderovski said there was no indication of problems with the location when the McDougalls signed on for the store, pointing to the shopping centre's track record as being named as the best in regional Australia for moving annual turnover for 2013 and 2014.
He said several months after the opening, the centre ceased trading at 5pm which impacted "foot traffic" and other outlets around it closed.
According to Mr McDougall, it didn't take long after the store opened to figure out something was "very wrong".
"After the honeymoon opening period and the Christmas holidays were over the shop sales dropped dramatically, by more than 50 per cent," he said. "We knew then that we were in big, big trouble."
After the first six months, Mr McDougall said turnover dropped to between $4000 and $5000 a week and the couple quickly began to lose money.
It was a long way from the dizzy heights of what the Macarthur Square store was turning over.
Concerned about their struggling stores, the franchisees organised a meeting in June 2016, the first time they had all been together.
"In my other businesses we have regular franchisee workshops a couple of times a year to share information and knowledge," Mr McDougall said.
Around the same time as the meeting, Marketown franchisee Samantha Worth sent an email to Yogurtland Australia chief executive Scott Douglas, who is also the chief executive of SiDCOR, querying a lack of communication from head office.
"I can only speak for my franchise and not the other franchisees, but when we talk, we all raise the same issues time and time again," she writes.
"One thing YL was going to do, was arrange a monthly meeting with all the local franchisees to discuss business both good and bad; again nothing but it is ok as Andrew [her husband] and Tony Temelkovski are going to be organising this.
"A potential YL franchisee has called Andrew to ask him about YL, what does he say?"
In a September 2016 email to Mr Worth, Mr Siderovski questions why he was meeting with people to discuss Yogurtland.
Mr Worth had asked his father-in-law, Tony, to set up a meeting with his friend Murray McKeough, a Hunter-based McDonald's franchisee who is also a relative of Mrs Riboldi, the Cessnock Yogurtland franchisee.
"One thing mate I am still not understanding is why is there still meetings with yourself, Tony and Murray??," Mr Siderovski writes.
"Is there a belief that they will receive something you won't? I am truly lost with this as it is not positive and nothing to gain from it."
Mr Worth responds: "I wanted an independent and experienced point of view on how we as franchisees could grow our businesses and support the YL Australia business going forward considering the limited resources which are now in place Also on a humorous note, I play golf with Tony and Murray is that ok, or do I need a permission slip?"
After struggling for more than a year, the McDougalls asked Mr Siderovski in mid-2016 to buy their store.
Mr Douglas responded and offered to meet the couple to find a way forward.
But Mr McDougall again requested a meeting with Mr Siderovski, describing him as the person who "sold us on the YL dream".
A meeting was held about a month later with Mr Siderovski, Mr Douglas and Mr Reynolds.
According to the McDougalls it did not go well.
"There was no buy back offer," Mr McDougall said. "We simply couldn't afford to lose such a huge amount of money like that but we were stuck."
After mediation in mid-2017, the McDougalls closed their store and the Marketown and Erina stores were purchased by Yogurtland under confidential settlements, officially gagging the franchisees.
Mrs Riboldi's Cessnock store was bought by Yogurtland in 2016 and operated as a corporate store until it closed this year. Mr Siderovski said it closed because Yogurtland waited five years for a store at Green Hills, in East Maitland, and when an opportunity came up all equipment and staff transferred there.
He said other corporate stores had closed due to increasing rents and a declining retail climate and that the Erina and Marketown stores "continue to operate without issue and are profitable".
"Erina is in the top five performing stores," he said.
According to documents seen by the Herald, Erina was in the top five performing stores when it was being operated by the franchisees, Tony and Dianna Temelkovski, and it was barely breaking even.
Mrs Temelkovski worked in the store full-time for two years without drawing a wage.
A profit and loss statement for the nine months to April 2016 revealed the store made a net profit of $18,398.