Just for the skae of balance, here's a bullish view (although I am Bearish overall)
Whenever you have such a large franchise network, it is inevitable that you will have instances of failed and/or unhappy franchisees. For the master franchise to be successful -- and sustainably so -- you only need a majority of franchisees to perform sufficiently well. As such, there is the potential that these allegations from Fairfax are something of a ‘beat-up’.
When you go looking for unhappy franchisees, you will find them. And even those that are doing ok, will often claim that they need a better deal.
So, OK, RFG will end up owning a much smaller network, and likely at reduced profitability, but it is not going to zero. There's even some takeover potential if the price is low enough.
If you annualise second half FY18 guidance, this is a business generating ~$20m in underlying NPAT (but a huge statutory loss due to writedowns). If you apply a PE of 8, that's a share price of 87c.
Of course, things could well continue to deteriorate -- so buyer beware!
