The Challenge:

In the middle to late 90’s expansion stalled. The NSW market became increasingly difficult to enter. The Victorian franchisees had been entrenched for a long period of time, and were wilting under the pressure of the Bakers Delight expansion. However, other markets such as Western Australia, Northern Queensland, Northern Territory and New Zealand were entered via Master franchises.

The challenge for Brumby’s was that organisation issues and corporate governance were hampering profitability and growth. The combination of these issues meant Brumby’s operated more like a cooperative, rather than a dynamic business. This created an environment of short-term decision-making and indecisiveness.

A change in corporate governance can be a large and potentially de-stabilising experience for organisations. Brumby’s was in the situation where action needed to be taken, or the firm would have been marginalised within the hot bread industry, as it would not been able to move with market forces.