The Australian Competition and Consumer Commission (ACCC) has blocked a Bakers Delight plan to install a new product price tiering system for a range of promotional products in its new point-of-sale system.
The ACCC rejected the application by the franchisor to change how some discounts are applied because of concerns about franchisees’ inability to set prices based on local market conditions and costs.
Bakers Delight’s new PoS system will not allow for product or price modification of discount promotions.
With the new PoS, the franchisor would select a number of price tiers for each promotional product. Franchisees would have to choose one of the pre-configured price tiers for these products.
Currently Bakers Delight franchisees are able to individually determine the price of promotional
discounts.
In its submission to the ACCC the franchisor indicated it is armed with the knowledge and data to determine successful and unsuccessful product offerings.
ACCC considers pros and cons of roposed pricing system
In weighing up the benefits and disadvantages of the proposed pricing system, the ACCC considered higher prices charged to consumers across the Bakers Delight network as a result of increased technology fees to franchisees; and the cost controls limiting a franchisee’s ability to make independent decisions affecting their financial viability.
The ACCC gave its final determination on 14 March 2024. It concluded it is not satisfied the proposed price tiering system is more likely to benefit than disadvantage the
public.
Bakers Delight issued a statement in response.
“The ACCC has an important role to play in ensuring pricing structure changes like this are thoroughly tested and we have worked closely with them throughout this process. It’s important to note that our franchisees do have the ability to set prices on all of their products and this proposed price tiering system was for promotional discounts only.
“We still believe the structure we proposed will deliver savings for both our franchisees and customers, however we respect the ACCC’s decision and will now consider our
options,” the statement read.
This story was originally published on Franchise Executives.
