Retail Food Group's shares plunged as much as 24 per cent in the first 15 minutes of trading after a Fairfax Media investigation revealed hundreds of Donut King, Brumby's and Gloria Jeans stores were going to the wall as a result of a brutal franchise model. The company's shares lost more than $1 to $3.38 a share as it also faced claims that RFG spies on franchisees and charge crippling costs, including franchise fees, which is driving the stable of brands to the ground. Many franchisees have walked away from their stores unable to sell them, even for $1. Fairfax can reveal hundreds of stores are for sale, or about to go on sale, on websites including Gumtree and Seek.com.au, as well as in local Chinese-language newspapers. Fairfax estimates 17 per cent of Gloria Jeans stores are for sale; at least 25 per cent of Pizza Capers are for sale. A key concern is the health of RFG's franchised brands, some of which like Esquires Coffee and BB's Cafe have been closing in recent years as some franchisees decided to walk away or not renew their agreements.

Other brands including Michel's Patisserie, Brumby's are also for sale. In recent months RFG has become a target of hedge funds after it was forced to restate its accounts in August. According to shortman.com.au it is one of the 10 most shorted stocks on the ASX. Since the story broke at the weekend, hundreds of franchisees have come forward, describing life inside the RFG machine as a financial trap. Some suppliers have emailed with tales that RFG is slow at paying its bills. Some staff say the culture inside the RFG machine is toxic with a lot of staff turnover. A difficult retail environment has contributed to the demise of many stores but the investigation also revealed hard-nosed business practices imposed by the RFG head office including fee gouging, churn and excessive cost cutting.

Described as the richest chief executive on the Gold Coast in 2015 by BRW with a fortune of $147 million, Alford's reign at RFG between 1996 and 2017 cemented the company's reputation as fast-growing profit machine as it snapped up a series of franchise brands and expanded into 81 countries. Alford has arguably been the key player in RFG's remarkable story. With serious questions being asked about RFG, it is worth examining how he became such an influential figure within the ASX-listed company. Humble beginnings Alford moved from the sleepy town of Ulverstone on Tasmania's north coast in the 1980s to open up an accounting practice in Southport Queensland with the now deceased Paul Ebbage. It was in Southport, the Gold Coast's central business district, that he established himself as the go-to man for tax minimisation in the area, say people who knew him at the time.

Former RFG CEO Tony Alford (left). Credit:Instagram The firm was called Alford Ebbage and became Alfords after Ebbage's death in 1998. It excelled in setting up and administering family trusts and attracted the rich, including Hutchence. A former senior executive and shareholder at RFG recalls seeing Alford in the late 1990s writing on a whiteboard, "now who likes to pay tax?" But it was Alford's meteoric rise at RFG which made him legendary. He joined in 1994 as an external adviser and quickly climbed the ranks. In just over a decade Alford was ensconced as the chief executive and major shareholder. His next move was to list the company on the ASX. Shareholders in the original float include his associate Colin Diamond and future partner and RFG executive Alicia Atkinson.

There was also Karl Farmer, a long-time employee of the Alfords' accountancy practice and the current owner of the firm. Karl Farmer, owner Alfords Accounting. At the time of RFG's float on June 22, 2006 the stake owned by entities associated with Alford had ballooned to 39 per cent but through some complex structures. For example, company documents show that 8 per cent of RFG was held by Rastus Pty Ltd, a private company which lists Diamond and Alford as the shareholders. Later in 2006, Alford told the ASX he had transferred this non-beneficial interest to a third party. Within 18 months of RFG floating, Rastus had sold its shares. Documents filed with the ASX show the stake was sold at 85c per share to a Mauritius company called Gotham City. The shares were sold well below the issue price of $1 and well below the market price at the time of $1.85.

The remainder of Alford's stake has been held over the years through a complex series of no fewer than 10 family trusts. Nearly all of the entities associated with Alford do not list him as a director or shareholder but shareholder disclosures show the companies each run different Alford family trusts. It appears Alford has never included Atkinson's shares in his declarations despite them having been in a relationship for many years. Alford stepped down as managing director and CEO of Retail Food Group last year after 20 years in senior roles. He remained on the board until July 3 this year. Alicia Atkinson (centre).

Atkinson followed Alford out of the business in 2017. Instagram posts by Atkinson's adult children congratulate her on her retirement. She is 47. At RFG'S annual meeting in 2016, chairman Colin Archer paid tribute to Alford. Praising his "incredible" achievements and "enormous" contribution to the company's success". Archer observed: "Tony presided over the company's remarkable growth from an obscure and challenged franchisor to a global full service food and beverage company". At the time of the tribute, RFG's shares were trading at more than $6 a share. Under Alford's stewardship, RFG became renowned as franchise amalgamator, making at least 15 acquisitions valued at almost $500 million. "RFG has continued to flourish as a public company under his (Alford's) leadership, experiencing rapid but controlled growth as a consequence of the strategies employed during his tenure. His achievements are manifold," Archer said in February, 2016.

Retail Food Group chairman Colin Archer was glowing in his assessment of Tony Alford's tenure. Credit:Dan Peled But not every deal was announced publicly. The company's 2016 annual report briefly notes the sale of management rights to the Gloria Jeans Drive Thru business. Described by the company in a 2016 presentation to shareholders as an important growth engine, Gloria Jeans Drive Thru is responsible for the roll-out of a new format of commuter-friendly coffee stores at petrol stations and other high-traffic areas. The annual report does not say how much the rights were sold for or who bought them.

However, a search of company documents shows Atkinson, Gary Best, who is Alford's friend and a long time RFG executive, as well as Gloria Jeans founder Nabi Saleh are all shareholders of GJDT Holdings, the private company that holds the rights. The drive through business sells stores to franchisees for between $500,000 and $700,000 a store. It is not known why RFG sold the management given its deep knowledge of the local market. Alford was in charge of RFG at the time but it is not known if he and Atkinson were a couple then. As the purchase price is unknown it is also unclear if it should been declared as a material event under ASX rules. Alford and Atkinson did not respond to Fairfax Media's detailed questions that were sent via email, text message and express post. The questions were also sent to them care of Alfords' accounting business, where they are both still clients. Neither responded. Nor did RFG respond to questions about the deal. Murky waters

While Alford's involvement in the RFG itself is unclear, it appears set to remain that way. Between June 2016 and September this year Alford's brother Gary was promoted to joint CEO alongside another RFG executive, Andre Nell. Tony Alford soon stepped down to become a managing director, leaving Nell to take up the role of managing director. Gary also stepped down in September. Retail Food Group's Gary Alford stepped down in September. Credit:Remco Jansen Another mystery surrounding RFG is the exact size of Alford's shareholding. Up until June 30, 2017, Alford owned about 11.2 per cent of RFG's stock.

However, in September he issued a shareholder notice explaining how he was "decoupling" his stake from a single holding into various entities. The upshot of the "decoupling" is that it will be difficult for investors to know whether he continues to maintain his holding in the company or will continue to sell it down. In the meantime, both Atkinson and Alford are diversifying their asset base. According to several media reports, Alford was behind the purchase of a $6.4 million home in Port Douglas in 2016. During the same year an entity that counts Atkinson as the sole director and shareholder, GJDT Investments, purchased a Great Gatsby-inspired mansion in the lush Gold Coast area of Tamborine Mountain for $5.5 million. The Tamborine Mountain home Alicia Atkinson is tipped to have bought.

And at around the same time Alford's property company Kendall Street Developments is unloading 11 blocks of prime Byron Bay beachfront development land that agents estimate could deliver a $40 million windfall for the executive. Alford, his family, Atkinson and other associates may be preparing for retirement but the news is not so good for others associated with RFG. There are many franchisees who are have been driven to the wall. And then there's the shareholders, who are also now hurting. There are concerns that RFG's model is flawed and showing signs of stress including rising receivables and ballooning vendor finance. In the past year, hedge funds have started to circle the company, making it one of the 10 most shorted stocks on the ASX, according to shortman.com.au.

The company's credibility took a belting when it was forced to restate its accounts in August. A key concern is the health of RFG's franchised brands, some of which like Esquires Coffee and BB's Cafe have been closing in recent years as some franchisees decided to walk away or not renew their agreements. There are also concerns that the value of the stores are plummeting. One woman in Currimundi on the Sunshine Coast, who did not want to be named, put her Donut King for sale for $1, while others have walked away losing hundreds of thousands of dollars after failing to find a buyer. Most of the top tier broking houses don't cover the stock due to its falling market capitalisation of about $800 million. However, UBS has a sell recommendation on the stock. In August the Swiss house cut its valuation by 19 per cent to $4.34 a share. Earlier in the year, RFG had been trading at more than $6. Concerns include it not meeting a self-imposed target of lifting stores from 2500 currently to 3500 stores by 2018 without another significant acquisition. UBS has also raised concerns about RFG's exposure to leases.

"RFG did not disclose the number of outlets that are under a sub-let arrangement," it said. "Any increased disclosure could highlight that the company may be liable for lease payments should a franchisee come under financial difficulty. Michel's Patisserie/Pizza Capers closed 45 outlets over FY17." Alford's estimated wealth by comparison would be in the hundreds of millions of dollars if his RFG shares (as at his last disclosure), properties and other assets are thrown in. Tear us apart But behind that wealth, lies a string of scandals and unexplained coincidences that involve Alford and the accounting group that bears his name.

One of the most high profile relates to INXS star Michael Hutchence. Tony Alford has featured in the dispute of th estate of Michael Hutchence. Credit:FABRICE COFFRINI In 1998 Alford, Hutchence's lawyer Colin Diamond and others were accused by the Hutchence family of mismanaging the rock star's estate before and after his untimely death in 1997 Instead of the expected $25 million-plus in assets including properties around the world (including the Gold Coast), the Hutchence estate was left with less than $500,000 which was barely enough to cover court costs. A recent investigation by Four Corners and the International Consortium of Investigative Journalists on the use of tax havens by the Bermuda-based law firm Appleby – dubbed the Paradise Papers – revealed the beneficiaries of trusts thought to be tied to the Hutchence estate included Diamond, his relatives and a suite of local and offshore companies.

Documents from the Hutchence estate and the family's legal case obtained by Fairfax Media show Alford was deeply involved in the Hutchence estate both before and after his death. This includes being a director of Chardonnay Investments, a private company that is thought to have held the rock star's music rights and royalty streams, Sin-Can-Can Pty Ltd, a company that once held a lavish Gold Coast property owned by Hutchence, and Nexcess, another company that owned a bowling alley on the Gold Coast. The Paradise Papers have produced new evidence. Atkinson is listed as the settlor on two properties Hutchence's family alleges belonged to the deceased rock star. One of the documents from the Hutchence legal battle obtained by Fairfax Media shows Alford, acting as a Sin-Can-Can director, telling the lawyers for the Hutchence family that Hutchence never owned a Gold Coast mansion.

Alford writes in his letter: "To the best of the writers knowledge, the late Michael Hutchence was not involved directly or indirectly with purchase of the subject property and can confirm that no part of the purchase was funded by him." The Hutchence case grabbed the headlines in 1999 when The Courier Mail revealed Nexcess had purchased a bowling alley from alleged organised crime figures in 1994. The Hutchence family believed Michael Hutchence had owned the property. Documents from the Hutchence legal matter and from ASIC show Alford was a director of Nexcess. Nexcess purchased the property from a company called Harbrick that had links to the Calabrian mafia, including in Griffith. Company records show that in 1994 Harbrick received a $270,000 loan secured through a charge held by Nexcess over all assets of Harbrick, including the bowling alley.

The loan document is signed by Domenic Romeo, who at the time had just spent time in jail over cultivating marijuana. Other company directors included Bruno Lee Romeo, another convicted drug cultivator Several different documents filed with the Australian Securities and Investments Commission show Alford Ebbage conducted accountancy work for Harbrick and Bruno Lee Romeo at various times between 1993 and 1995. Alford defended the Hutchence family's allegations at the time and his firm has long denied any wrongdoing. The matter was discontinued in 2001 and a small settlement paid to the Hutchence family with no admission of wrong doing. But controversy wasn't unusual at Alford Ebbage. The firm's Southport offices were raided in 1998 by Customs officials investigating a fuel substitution plan potentially involving one of the firm's clients, according news reports at the time in the Courier Mail.

Alford, who was 39 at the time, was a director of a company called Stat Stuff Pty Ltd which was a shareholder in a parent fuel company to which the warrant was related. The outcome of the investigation is unknown and no accusations were made about Alford Ebbage. Then in 2003, while he was well ensconced at RFG, Alford was found to be a witness of little credit by Supreme Court judge Roslyn Atkinson in a complex legal case over the estate of Paul Ebbage, the former co-owner of Alford Ebbage. The case was launched after the death of Ebbage in 1998. Tony Alford at the time of the RFG float in 2006. Credit:Robert Rough

Justice Atkinson at the time remarked: "Mr Alford's sworn statement about the fees generated by the Southport practice is, in my view, not true. It reflects very poorly on his credit as a witness." In dismissing Alford's claim, Justice Atkinson added: "I did not… find Mr Alford to be a reliable witness on controversial matters and I am therefore unable to rely on Mr Alford's assertions." Arm's length In 2002, Alford changed the ownership structure at Alfords so that the business was now at arm's length from his role at RFG. Farmer took up the role of managing the business, taking majority ownership in 2009.

He defended the firm's conduct when contacted by Fairfax Media. "Alfords Accountants is an independent accounting and advisory firm which is majority owned and operated by Mr Karl Farmer and has operated under this ownership structure since 2009," he says. "Our staff are highly qualified and work according to professional industry standards." He adds that Alford has had no role in the accountancy firm Alfords for 15 years. Up until this year Alfords listed several RFG brands as its clients while it audits the accounts of RFG's major reporting subsidiaries according to documents filed with ASIC.

Farmer says Alfords currently provides "professional taxation compliance and corporate secretarial services" to Retail Food Group Limited. "These services are provided on a commercial basis and are provided according to professional practice standards," he says. Alfords – the accounting firm - again hit the headlines this year when Australian Olympic Gold Medallist swimmer Neil Brooks of Mean Machine fame was arrested for fraud. Brooks and his wife had been clients of Alfords. Court news reports detail allegations that Brooks "dishonestly induced" his business associate Glenn Melcheck to deliver $1.95 million to Alfords Operations Pty Ltd in February 26, 2008 as part of a joint venture agreement. Neil Brooks in 1997.

Melcheck alleges the Brooks' misled him about the value of the sportswear business they ran in which he was by a 50 per cent stake. The accountancy firm has not been accused of any wrongdoing. Brooks has said he is vigorously defending the case. After initially denying Alfords were the Brooks' accountants, Farmer says Alfords did do accounting work for the Brooks' but it was after the transaction which is the subject of the legal proceedings. He adds that at the time Alfords was engaged by the UK advisers to the deal to facilitate the transaction. "The firm has assisted the Queensland Police Service in their investigation of the matter, providing relevant documentation as requested. The QPS has thanked Alfords for that assistance. We expect to have no further involvement in the matter." end As RFG's share price tumbles, investors are questioning the business model and its sustainability as franchisees go to the wall, accounts have been restated, receivables are blowing out and there has been a revolving door of executives. But as Alford cashes out, his associates suggest he will spend more time on his other passion: cars.

Loading Over the years, Alford has picked up a number of prizes including endurance races at Bathurst in his array of fluorescent pink Donut King-sponsored vehicles including Porches, Nissans and a Lotus. Whether shareholders and franchisees have the same level of passion and endurance, time will tell. Do you know more? Contact Adele Ferguson or Sarah Danckert