Franchisees who own Red Rooster and Oporto stores are believed to be on the verge of bankruptcy.

The claim is among hundreds of submissions made to a parliamentary inquiry into the franchising sector.

Under some agreements, business owners are forced to buy supplies from a company that charges more than retail.

Nationals Senator John Williams tells Alan Jones, franchisees are being driven to the edge.

“We hear this all the time. They’re paying $2.40 for two litres of milk, you can buy it at Coles and Woolworths for $2 for two litres of milk Alan.

“In some cases, like Brumbies, they take a slice of their gross turnover, regardless of their profit.

“Many are making losses yet they’re taking a slice of their turnover.”

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