'I literally have nothing': Man forced to sell home after McDonald's ends cleaning contract

Alex Batarseh's cleaning business collapsed after McDonald's axed his contracts overnight, allegedly breaching a 24-month notice clause. Photo / Supplied

Alex Batarseh claims McDonald's has taken him to the cleaners.

The young Sydney man is locked in a David-and-Goliath legal battle with the fast-food giant over the collapse of his cleaning business, which went into liquidation last year after his only client cancelled his contracts with less than 24 hours' notice.

The 29-year-old, whose mother died of cancer in December, says he has been forced to sell his Blacktown home to fund the proceedings, as liquidators prepare to haul senior McDonald's employees before the Supreme Court to answer questions about their role in his company's collapse.

"I sold everything," Batarseh said. "My house, my car, my hobbies, my personal stuff, my fishing gear. I literally have nothing. It's just completely destroyed me. I can't put it into words, to know the company I built from scratch just vanished."

Five years ago, Batarseh was doing maintenance and cleaning for McDonald's when he was approached to take on an expanded role. He started his company, A2Z Property Maintenance, with McDonald's as his sole client.

"From one store they were so happy with the service I ended up with eight," he said. His contracts covered Sydney's Castle Towers, Castle Hill, Gregory Hills, Camden, Narellan, Milperra, North Parramatta and Homebush.

"I was working for McDonald's for three years. My company became super-dependent on them and I invested all my time and effort. Two years ago, McDonald's decided to just terminate each and every contract for all external cleaners."

One evening in early July 2016, he received an email from an executive at the fast-food chain. "I am writing to confirm to you that with regret we no longer require A2Z Property Maintenance Pty Ltd cleaning services in our restaurants," he wrote.

"After considerable review, McDonald's Australia Limited has initiated the process of remodelling its current restaurant cleaning procedure. Where possible McDonald's are hoping to offer more people the opportunity to become a McDonald's employee. We thank you for your commitment and service to McDonald's over the past few years."

Despite the official explanation, Batarseh said he was told in verbal conversations that the change was a risk-management decision to remove contractors from McDonald's supply chain after the 7-Eleven scandal, in which widespread exploitation of workers - many on limited visas - was discovered in the grocery chain.

"They were afraid of the 457 [visa] scandal," he said. "Two companies got busted, they were concerned about how 7-Eleven got exposed, they didn't want McDonald's to be exposed. I was doing the right thing, but they terminated pretty much with 12 hours' notice, so a whole company had to wind down."

Batarseh's three full-time employees and 18 subcontractors lost their jobs overnight. "It's David and Goliath. You cannot go against McDonald's because they're too big and too powerful," he said.

"They hired one of the biggest law firms in the world. I was helpless. Even if it gets to court, you can't get a judgment without spending A$300,000-$400,000 ($322,000-$430,000). The system was built for the powerful.

"They knew that. I was like, 'It's the principle, you cannot do this, it's not fair'. They knew my company was super-dependent on them, that's why I had a 24-month clause. They didn't even give me a month, a week. They called and said, 'Don't send the guys tomorrow morning'."

That didn't stop him trying. In April 2017, Batarseh commenced legal proceedings against McDonald's seeking A$1.5 million in damages for breaches of contract. He claims his contract had a 24-month clause due to the company's dependence on McDonald's.

That case stalled when the money ran out, and A2Z was placed into liquidation in July.

"It was really, really hard, because at that time my mum had cancer, I had no time to even think," he said. "You have to write letters, talk to people all the time about the situation, it was emotionally, physically, full-time stress, [all while] taking my mum for appointments."

Liquidators Grant Thornton will now determine whether to take up the legal case on the company's behalf by questioning senior McDonald's employees under oath in the NSW Supreme Court this week, using powers under section 596B of the Corporations Act.

Information gathered during the public examinations will help the liquidators determine whether the case has merit, and could be used in the lawsuit should they decide to continue the fight to recover money for the company's creditors.

For Batarseh, proceeds from the sale of his A$800,000 home won't go far after the A$500,000 mortgage is paid out.

"The actual claim was A$1.5m for the termination clause, but now the debt is nearly A$700,000," he said.
Batarseh said he hoped McDonald's would choose to settle. If not, he would need to find a litigation funder. He said the goal of the public examinations was "to show how important this case is, to show the world what they did was wrong".

According to the liquidators' report filed with the corporate regulator in October, McDonald's has previously rejected the A2Z's claims and "have advised that they will vigorously defend the proceedings".

A McDonald's spokeswoman said, "We will fully co-operate with liquidators, but while this public examination is before the court it's not appropriate for us to provide further comment."