Franchise News & Events - Thursday, January 31, 2008
NZ franchise
scam descends into farce
The NZ$5 million franchise scam that has rocked the
New Zealand franchise community continues to unfold with a federal politician
describing the franchisor’s proposed rescue package as “devious”, claims that
the franchisee action group is falling apart, and attempts to help maintain the
franchisees’ businesses thwarted by legal threats.
Some 200 franchisees, mainly migrant Chinese and
Indians, are alleged to have been ripped off by Keith Lapham, a rogue master
franchisee of the Green Acres home services chain, who sold ironing franchises
for between NZ$21,000 and NZ$25,000 each without the knowledge or authorization
of his franchisor. Green Acres has offered to honour the franchise agreements
providing that the franchisees meet certain criteria, including that they
acquire and drive a suitable vehicle to pick up and deliver ironing. However
two former drivers of Lapham’s, who tried to help disadvantaged franchisees by continuing
to pick up and deliver ironing on their behalf, have been issued with a legal
notice by Green Acres to cease deliveries.
Distraught franchisees have formed Franchise Watch,
an action group to represent their case to the NZ government, but cracks have
begun to appear with some members claiming that the group is becoming too
politicized and too closely aligned with Labour politicians. The new chairman
of the group is also reported to have previously been an executive member of
the Moonie religious cult.
New
Zealand’s Serious Fraud Office is investigating the scam.
Retail employees are being disguised by their
bosses in Western Australian in a bid to thwart local trading laws that
restrict the number of employees to 13 for late night, Sunday and public
holiday trading. Employees in small supermarkets are being asked to dress in
casual clothing instead of uniforms, and not place their names on the store
roster.Read
more
Motorbike ace
plans to franchise restaurant chain
Five-time world motorcycle champion Mick Doohan has
opened a boutique nightclub restaurant in Las Vegas,
with plans to franchise the concept throughout the United States. Gold Coast-based
Doohan has opened the CatHouse, a French-themed burlesque restaurant with a
business partner, but does not plan to move to the United States himself to run the
business. Read
more
Field Support workshops - February 2008
Learn strategies and
tactics to improve your franchisees’ businesses by improving the
effectiveness of your system’s franchise field support.Click
here for details
Cab franchise a
lemon for Macquarie Bank
A Sydney-based taxi franchise specializing in
wheelchair accessible cabs has been sold at an undisclosed loss by Macquarie
Bank. Lime Taxis, failed to hit its target of 250 cabs by June 2007, and only
has 50 on the road with another 60 mothballed in a Sydney warehouse. The company was the
brainchild of former Macquarie Bank executive Bill Moss. Read
more
Not guilty plea
in murder case
A man arrested for the murder of his lover and
franchise business partner has pleaded not guilty in a courtroom videolink. Gerrit
Heijne, 44, is accused of the murder of his business and life partner, Frank
Cianciosi, 51, in Perth
on January 4. The couple were West Australian master franchisees for poultry
retailer Lenards. Heijne presented himself to police on January 4 and did not
apply for bail during his court hearing. Read
more
FoodWorks to
take on national players
Independent supermarket retailer FoodWorks will
enter the South Australian market and compete nationally against grocery giants
Coles and Woolworths as it launches or redevelops 300 new stores introduces 150
“entrepreneurial retailers” over the next few years. Read
more
Retail franchises
turn to corporate stores for growth
Retail franchise chains in Australia are
increasingly turning to corporate stores to maintain network growth according
to a recent article in Inside Retailing.
Retail franchisors are also reducing their mainstream advertising for franchisee
recruitment in favour of trade shows and the internet, but are challenged to
meet growth targets through a lack of suitable and affordable retail sites, as
well as a lack of competent franchisees. Read
more
Franchise
challenges and opportunities in 2008
Consolidation and acquisition of networks, export,
multiple-unit franchising and a contraction in consumers’ discretionary
spending will be hallmarks of franchising in 2008 according to a report in
online news service SmartCompany.Read
more
Starbucks
launches coffee war with $1 cup
Price competition among coffee franchises is likely
to boil over with Starbucks launching a US$1 cup in the United States
in a move that could trigger a price war among coffee chains
internationally.Read more
McDonalds pulls
plug on blogger; provides high school qualifications
A former New Zealand employee of McDonalds
has been ordered to remove his online blog about the chain because it was
threatening, demeaning and offensive to McDonalds and its staff. New Zealand’s
Employment Relations Authority found in favour of McDonalds, which sought an
injunction against the blog.Read
more
Meanwhile in the United Kingdom, McDonalds has been
approved by the British government to issue the equivalent of advanced high
school qualifications to its workers, giving rise to the possibility of direct
entry to a technical college or university for McDonalds staff.Read more
Ice cream
franchise achieves carbon neutral status
In what could be a first for Australian
franchising, ice cream chain Cold Rock has been certified as a carbon neutral
organisation. Carbon neutral describes a process where an organisation reduces
its carbon emissions and offsets what’s left by buying carbon credits.Read
more
Stella group
sale inevitable as MFS stuggles with debt
Sale of the Stella group, whose
brands include Harvey World Travel and the Saville hotel chain is viewed as
inevitable by analysts as parent company MFS struggles to meet $155 million in
debt due in two months. MFS has already shed its founding CEO Michael King and
sold its stakes in smaller investments to satisfy other debts, after a proposal
to raise $550 million to settle debt resulted in a 69% share price meltdown. Read
more
Franchise
inquiry hearings commence next week
Hearings for separate state-based franchise
inquiries in South Australia and Western Australia will resume from next week,
with written submissions also due by the end of January and February 15
respectively. WA hearings will be conducted in Perth on February 4, and Bunbury on February
8. Details of the inquiries are available online, including how to lodge submissions.
Click
here for details on the South Australian inquiry.
Click here
for details of the Western Australian inquiry.
Centro sale
begins
The sale of the assets of Australia’s
second-largest shopping centre owner, Centro, has commenced with expressions of
interest sought for two of its unlisted property funds. The sale process
commenced just days after the arrival of new CEO Glenn Rufrano following the resignation
of founding CEO Andrew Scott. Centro is battling to refinance $3.9 billion of
debt by mid-February.Read
more
How to better train franchisees – March workshops
Learn how to improve
training methods so franchisees can perform better and sooner in their new
business.Click
here for details
Tread lightly
with master franchising (Comment)
The
current franchise
fraud erupting in New Zealand where a rogue master franchisee of home
services franchise Green Acres is alleged to have sold 200 unauthorised ironing
franchises and pocketed the cash is a another exampleof the need to approach the use of master
franchising with extreme caution.
While
the concept of selling off regions or entire states to a master franchisee in a
domestic market appeals to many systems with ambitious growth targets and
limited capital resources, the reality is that master franchising is not always
the best way to grow a business, and can indeed give some franchisors cause for
regret. Read
more
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