THEY are explosive documents that have lifted the lid on the true extent of how much Yogurtland Australia gouged its franchisees by inflating costs for their stores.
A detailed examination by the Newcastle Herald of emails, invoices and bank loan documents reveals just how much some of the unsuspecting franchisees paid.
It starts with an email, sent by Yogurtland Australia owner and prominent Newcastle accountant Paul Siderovski, on February 10, 2015, to Trevor and Karinne McDougall, of the Central Coast, who bought a store in Baldivis, Western Australia, for $370,000, excluding GST.
Labelled "turn key store costs", the email details the estimated price of a company franchisee store.
They were experienced small business owners but the McDougalls lasted less than three years as Yogurtland franchisees, walking away shattered after closing their store more than $500,000 out of pocket.
Yogurtland Franchising is now pursuing the couple in Newcastle Local Court for $52,000 in allegedly unpaid yoghurt bills, however the McDougalls plan to fight the case, arguing they have lost enough.
The email discloses the budgeted cost of items for a typical Yogurtland store, including everything from yoghurt machines, to store displays and the kitchen sink.
"Hey Trev, please find total breakdown of everything in store fitout," Mr Siderovski writes. "These numbers are budgeted costs."
It's almost midnight on a Tuesday when Mr Siderovski pushes send on the email to Mr McDougall that includes an Excel spreadsheet detailing a breakdown of the predicted costs, but the file still has working sheets attached.
At the time, Mr McDougall only opened the final spreadsheet that detailed the predicted cost for a store and did not notice the other tabs on the file.
The working sheets, that have columns headed "cost", "mark up", "sell" and an unnamed column detailing profit, flies in the face of Mr Siderovski's statement to the Herald last week that Yogurtland "never made a profit in any way from the shop fitouts".
Mr Siderovski told the Herald on Friday that any profit margins detailed in the document for fitout would be made by an "external contractor" doing the work, not Yogurtland.
"This is a document that Yogurtland did not prepare and was prepared by an external estimator for what the budget of a typical store was," he said.
"Any calculations in the document are workings of what an external contractor would cost up to deliver the works and their margins not profit made by Yogurtland."
But according to Yogurtland Australia's former general manager, Theo Koutrodimos, who examined the file on Friday, he put the original document together in 2014 at the request of Mr Siderovski.
Mr Koutrodimos, who said he was "sad" for the franchisees, designed the spreadsheet to give an indication of the price for future franchisee stores and said "of course" there was profit built into the fitout for Yogurtland.
According to Mr Koutrodimos, who is in manufacturing, while he was general manager of Yogurtland his company fitted out more than 20 corporate Yogurtland stores.
He used this exprience to design the spreadsheet because Yogurtland was looking at franchising stores.
"Yes there is profit built into the fitout for Yogurtland," he said. "This is something Paul asked me to look at ... Looking at this particular model there is profit to be made in the fitout … There is profit in just about everything ... I don't know any company that would build anything not to make a profit."
The suggested mark up for products and services in the working sheets range from 10 per cent to 2000 per cent for everything from the cool room, to sinks, to stainless steel trims and store displays.
Mr Koutrodimos said several of the products were marked up so high because he was working off the premise that some would have been manufactured by his business and some labour costs had to be added.
Mr McDougall, who has been a franchisee for 20 years, said much of the equipment used in his Baldivis store was secondhand from Yogurtland's failed Melbourne store.
The WA-based fitout company that did the work confirmed "a lot of the items" were used.
According to the spreadsheet sent to Mr McDougall the "grand total" for the cost of a typical store was listed on the final budgeted cost spreadsheet - that doesn't disclose any mark ups - as $391,156.
The McDougalls actually paid $370,000 for their Baldivis store, excluding GST, with a lot of secondhand equipment used.
Documents obtained by the Herald detailing the cost of yoghurt machines, confirm allegations of gouging made by three of the franchisees in dispute notifications lodged against Yogurtland Franchising's sole director Mr Siderovski in February 2017.
The documents stand at odds with Mr Siderovski's public claim that Yogurtland "acted in the best interests of all parties".
Yogurtland has experienced a mutiny from its franchisees after stores failed to perform as expected. The McDougalls are one of four couples from the Hunter and Central Coast who signed on as franchisees and opted out of their struggling stores amid disputes over disappointing turnover and profits.
As the managing director of Newcastle's SiDCOR Chartered Accountants - the franchisees' accountant - it's alleged Mr Siderovski had a conflict of interest in selling them the stores. He held a position of trust and had intimate knowledge of their finances.
Mr Siderovski's response was that none of the franchisees were inexperienced or lacked "business acumen". It's understood three franchisees suffered large financial losses, a claim that Mr Siderovski, denies.
Mr McDougall said part of the deal for his store was he agreed to accept six used yoghurt machines from the failed corporate store in Melbourne. Photographs of the machines from when they arrived at the Baldivis store reveal two were cracked and dented and needed repairing.
According to an invoice supplied to the McDougalls, Yogurtland charged $13,333 each, excluding GST, for the used soft-serve machines. Mr Koutrodimos told the Herald on Friday that Yogurtland bought the machines new for about $13,000.
The 791 water-cooled machines are manufactured by Taylor Company in the United States and are used by numerous companies that sell soft-serve ice cream and yoghurt.
According to Taylor Company's website it only has one distributor for its products in Australia, JL Lennard Food Equipment, that has its head office in Sydney.
A December 2016 email from JL Lennard Food Equipment to the Erina store franchisee Tony Temelkovski said the "Yogurtland price" for a new Taylor 791 machine in the United States was $US13,470 and the price to have one delivered to a store in Australia was $AU16,980.
Mr Koutrodimos said Yogurtland Australia was able to get the machines cheaper because it bought in bulk. He confirmed the machines were purchased through JL Lennard Food Equipment.
Mr McDougall said he was told by Mr Siderovski that the machines were worth $30,000 new because they were specially designed for Yogurtland's product.
"I certainly didn't know new machines were only worth around the same as what I paid for old bashed up machines," he said. "I would never have agreed to secondhand ones [at that price]."
Mr Siderovski said he was unable to discuss the price of the machines because the information was "confidential".
To add insult to injury, the Herald found the six machines from Mr McDougall's failed Western Australia store listed for sale on Gumtree this week for $3000 each.
In an email Mr Temelkovski recounts a disturbingly similar story about the cost of the soft-serve machines.
"During our discussions, Paul mentioned that YL [Yogurtland] had a special design machine that provided better quality yoghurt," Mr Temelkovski writes. "He also said that they were worth over $30,000 each."
According to Commonwealth Bank documents detailing the Temelkovskis' equipment financing loan, that the couple said in emails was organised by Mr Siderovski, they borrowed $198,000 for eight new Taylor 791 soft-serve machines for their Erina store that was fitted out by Yogurtland.
But as the relationship between head office and the franchisees soured, a suspicious Mr Temelkovski contacted the bank in November 2016 to ask for a copy of the invoice supplied by Yogurtland for the loan.
"In regards to the loan above I do not have a copy of the invoice(s) from Yogurtland Australia for the equipment that underpins this loan," he writes.
"During the set up of the loan Chris Johnson from the CBA and Paul Siderovski from Yogurtland Australia/SiDCOR were liaising directly on this matter."
A bank employee emails back with an attachment labelled "Amended Tax Invoice 1". It was a watershed moment for Mr Temelkovski who had known Mr Siderovski since they were boys.
The amount charged on the invoice matched the amount borrowed on the loan documents, $198,000, but the equipment listed as being financed was completely different.
Instead of eight new soft-serve machines as listed on the loan documents, the invoice was for six used machines, a used upright freezer, used cold condiment display and a used underbench fridge.
To make matters worse, the invoice revealed that the Temelkovskis were charged $25,000 each by Yogurtland for used soft-serve machines.
It meant they paid Yogurtland almost double what brand new machines were worth.
A line on the bottom of the invoice reads: "Bank details for electronic funds transfer: Yogurtland Administration Pty Ltd".
To add to the pain, the Temelkovskis were paying interest on the $198,000 loan.
Suspicion of price hikes was first raised when all four franchisees gathered at a New Lambton cafe in June 2016 to discuss growing concerns about Yogurtland and their floundering stores.
Together for the first time, they swapped notes and started investigating.
When the franchisees obtained a copy of the invoice for equipment used in Christie Riboldi's Cessnock franchisee store it raised further serious questions about Yogurtland's pricing.
"There were huge differences in prices and everyone's heads were just spinning," Mr McDougall said.
Mrs Riboldi was charged $220,000, including GST, for six new Taylor machines and 12 other new items, including an upright freezer, underbench fridge and condiment displays.
The Temelkovskis had been charged $198,000, only $22,000 less, for six machines and the same upright freezer, underbench fridge and condiment displays.
But all of their equipment was used.
Other items listed on Mrs Riboldi's invoice as being supplied new included a coolroom, storage shelves, stainless steel trolleys, stainless steel bench, surveillance camera system, refrigeration unit, point of sale system and front counter.
According to the email sent by Mr Siderovski to Mr McDougall in February 2015 that detailed the "turn key store costs", a cool room was worth $16,000, point of sale system $12,500 and dry and cold displays $18,000.
In a December 2016 email, Mr Temelkovski detailed his disgust. "The value of the USED equipment on the invoice is more than the equipment is worth NEW by nearly double for the yogurt machines and freezer and five times for the underbench fridge," he writes.
"Effectively we have paid nearly twice the real value of the store."
According to the dispute notice issued by the Marketown franchisee Samantha Worth, she also paid for secondhand equipment.
Know more? firstname.lastname@example.org