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Brokerage groups have been warned to lay off Wizard franchisees as completion of the Aussie acquisition of the group draws closer.
The warning has been issued amid increasing approaches to Wizard franchisees to persuade them to move groups.
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Gary Williams, CEO of South Australian-based brokerage Assured Home Loans, told Mortgage Business he had been cautioned against speaking to Wizard franchisees after he sent letters to a number of Wizard franchisees approaching them to join his organisation.
A communication sent to Mr Williams from Aussie stated that should Wizard franchisees choose not to remain with the business they would be “restrained from competing with the business”.
Mr Williams said his legal advisers were addressing the implications of the Aussie warning, which he described as “bully tactics”.
Earlier this month Aussie announced that the Wizard brand would be scrapped and current Wizard franchisees would have to trade under the Aussie banner.
For many years Aussie and Wizard have been fierce competitors.
Aussie confirmed that it would fight attempts from third-parties to poach its franchisees.
A spokesperson told Mortgage Busniess that should groups solicit Wizard franchises it would pursue legal action.
“... if a Wizard franchisee does not remain with the business [then it] is restrained from competing with it,” the spokesperson said.
“Such a restraint is pretty common in acquisitions like this; otherwise there is little value in making acquisitions.”
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