NZ franchise survey for 2017
posted on 26th January 2017
Hell champions disabled training programme
posted on 17th January 2017Hell Pizza is continuing to leave its controversial past behind as it builds a reputation as 'champion of the underdog’.
Veritas gets extension from bank
posted on 17th January 2017
17 January 2017 - ANZ has agreed to extend the deadline for Veritas Investments to either sell or begin winding up its Nosh food supermarkets until the end of the month.
The owner of the Nosh franchise on Constellation Drive in Auckland's Mairangi Bay has dropped the Nosh brand from its store. Veritas said the franchisee has indicated that he will operate independently of the Nosh franchise and "has purported to terminate its franchise agreement. Veritas does not accept that termination, and the parties are in dispute over the matter."
Nosh franchisee removes branding
posted on 15th January 2017
One of the two Nosh franchisees has removed the branding from their store ahead of the deadline set by ANZ for the brand's owner, Veritas Investments, to sell its own stores. The six company-owned stores are being offered for sale through a business broker, but it is not clear from their advertising whether they are being sold as franchises or as independent outlets.
The store on Constellation Drive has removed its Nosh signage and appears to be attempting to remove all references to the brand.
A shopper at the Constellation Drive shop in Auckland said the store had gone as far as scribbling over Nosh logos on items such as cheese, which had Nosh pricing labels stuck on the outside of their packaging.
Owner Phillip Mead would not say what lay behind the changes, or whether his plan was to trade independently. He confirmed the store was not accepting Nosh loyalty cards or vouchers.
No news on Nosh as deadline approaches
posted on 13th January 2017
Veritas Investments is still working through the process ahead of a deadline to present a plan for its unprofitable Nosh supermarket business to ANZ. Individual stores have apparently been listed for sale through a broker.
In mid-December the company, which also owns the Mad Butcher franchise, said it had until Jan. 15 to deliver either an unconditional contract for the sale of Nosh Group, or a proposal to close and wind it down to its lender.
At the time, it said the sale or closure of the loss-making Nosh business would result in non-cash asset write-downs and one-off expenditure related to the sale or closure but provided no further details.
On Friday, chairman Tim Cook said he had no comment other than "we are working through the process."
KFC trials menu suggestions based on facial recognition software
posted on 2nd January 2017
2 January 2017 - Diners at a Chinese KFC concept store can use facial recognition technology to choose meals for them based on their mood and age. KFC collaborated with Chinese search engine Baidu to launch the system.
Baidu stated that the principle behind the system was based on setting certain set meals, food and beverage choices to a specific age range, as reported in People's Daily Online.
For instance, the AR-operated machine will recommend a lunch combo of zinger burger, boneless mini fillets and coke to a 20-year-old male customer; and a breakfast of porridge and soya milk to a 50-year-old female customer.
The food suggestion leaves some customers to question: 'What if a 50-year-old wants to have fried chicken?'
'Why is the computer not recommending healthier choices to younger people?' One Chinese web user wondered.
Caci offers incentive funding for new regional franchisees
posted on 22nd December 201622 December 2016 - Caci has launched a unique funding model to fuel growth before a public listing
Christmas already a winner for retail
posted on 19th December 2016
A total of $2,642 million was spent through the Paymark network in the first 14 days of December, up 6.1 percent on last year. The trend reinforces the positive expectations in the latest MYOB Small Business Monitor.
Annual growth rates for the first 14 days were strongest in Hawke’s Bay and West Coast. Spending growth was lowest in Gisborne and Marlborough region (that includes Kaikoura in Paymark’s coding), both due to exceptional circumstances.
The majority (52%) of spending remains through debit cards although the growth rate is faster through credit cards, which today also includes contactless cards.
As an insight into the pre-Christmas spending patterns, the spending rises through the day from 6-7am to reach a peak between noon and 1pm most days and then gradually tapers off.
7-Eleven deed sets new standards for franchise compliance
posted on 19th December 2016
Embattled Australian convenience retailer 7-Eleven has entered into a proactive compliance deed with the Fair Work Ombudsman to reform its internal systems and procedures to stamp out the wage fraud which has scandalised the brand for more than a year, according to a media report.
Jason Gehrke of the Franchise Advisory Centre advises that the proactive compliance deed – a binding legal agreement – requires 7-Eleven to undertake and implement a number of initiatives that will reduce and potentially eliminate the capacity for wage fraud to re-occur in its network.
Jason notes that that 7-Eleven is unique in the franchise sector in its application of a gross profit-share royalty model (rather than a fixed fee or percentage of turnover royalty model), which has been criticised by some observers as a contributing factor for franchisees in the underpayment of employees. The Fair Work Ombudsman does note that 7-Eleven has since changed its financial model to provide greater financial assistance to franchisees, and is now also required to provide detailed wage information to potential franchisees.
The initiatives include thumbprint scanning of workers to clock on and clock off at the start and end of their shifts, backed-up by a network-wide CCTV system monitored by 7-Eleven head office; continued rectification by 7-Eleven of unpaid staff wages; the introduction of a mandatory centralised payroll system that all franchisees will be required to use; the establishment of an employee consultation group that specifically excludes franchisees; and a raft of other measures.
Focus on franchisees as CrestClean celebrates first 20 years
posted on 16th December 201616 December 2016 - It’s happy birthday for CrestClean as the New Zealand-founded commercial cleaning franchise chalks up 20 successful years
Close Nosh or find a buyer, ANZ tells Veritas
posted on 14th December 2016
14 December 2016 - Veritas Investments, the owners of Mad Butcher and Nosh, has been told by its bankers to sell the Nosh gourmet food store business by 31 March 2017 or close it down. The company was previously hoping to franchise the six Nosh stores it owns. Two other Nosh stores (Constellation Drive on the North Shore and Mt Maunganui) are already franchised; there is no mention of how those franchisees will be affected in today's NZX announcement.
Veritas is required under the revised ANZ facility to deliver to ANZ by 15 January 2017 either an unconditional contract for the sale of Nosh, or a proposal to close and wind down Nosh. Veritas is also required to close and wind down Nosh by 31 March 2017, if it cannot be sold by that date.
Given the time available before 15 January 2017, the Board cannot be certain that a sale of Nosh can be agreed by that date. The Board therefore proposes to investigate the proposal to close and wind down Nosh by 31 March 2017, as part of its strategic plan for the group.
Retail, hospitality expect a good year ahead
posted on 14th December 201614 December 2016 - With the festive season just around the corner, a new survey reveals retail and hospitality businesses are picking it will be a cracker year.
Kiwis name NZ’s favourite takeaway
posted on 8th December 20168 December 2016 – One home-grown franchise has replaced another at the top of a major customer satisfaction survey
Creator of the Big Mac dies
posted on 1st December 2016
Jim Delligatti, the McDonald's franchisee who created the Big Mac nearly 50 years ago and saw it become perhaps the best-known burger in the world, died on Monday in Pittsburgh.
Jim Delligatti told The Associated Press in 2006 that McDonald's resisted the idea at first because its simple lineup of hamburgers, cheeseburgers, fries and shakes was selling well.
'They figured, why go to something else if (the original menu) was working so well?' Delligatti said then.
McDonald's has sold billions of Big Macs since then, in more than 100 countries. When the burger turned 40, McDonald's estimated it was selling 550 million Big Macs a year, or roughly 17 every second.
Another minimum wage breach in New Zealand
posted on 1st December 2016
More and more breaches of the Minimum Wage Act, Holidays Act and Employment Relations Act are hitting the headlines, with the latest being at a kebab shop in Rotorua. All the New Zealand cases to date have involved independent businesses; however; franchisors would be well-advised to audit their franchisees' employment practices to avoid the publicity which has affected brands such as 7-Eleven and Caltes over the Tasman.
The job description attached to his employment agreement specified Mr Corten would work 40 hours a week at $18 per hour.
But for the duration of his employment Mr Corten worked six days a week, from 8.30am until 10pm. He took no holidays while employed and was paid $720 a week, either in cash or cheque, which works out to about $8.90 an hour.
He resigned in September 2013 following disagreements with Mr Efendi.
Another wage problem for Australian franchising?
posted on 27th November 2016
The Caltex chain in Australia has been accused of systemic worker exploitation throughout its franchise network. An investigation by the team of journalists behind the 7-Eleven expose last year has, according to Fairfax Media, 'unveiled a brutal franchise structure which some operators claim leaves little option but to defraud workers.' The Australian Fair Work Ombudsman confirmed it has been contacted by a worker in relation to this group but couldn't comment further due to the 'wider compliance activity relating to Caltex franchisee outlets.'
Caltex Australia CEO Julian Segal has said, 'Depriving employees of their entitlements is illegal and immoral' and has promised the company will review the franchise model, including the franchise agreement, the financial returns as well as the ongoing governance and compliance arrangements.
When the 7-Eleven scandal broke in August 2015, one franchisee wrote an email warning: 'It is inevitable that this will get out. It is only a matter of when, not if. What damage will this cause to the Caltex brand?'
The company took action, including auditing some franchisees for suspicions of wage fraud. It then made contact with the Fair Work Ombudsman and separately investigated eight franchisees and terminated five of them, equivalent to 13 sites. It is reportedly investigating 50 more sites. However, the terminations have themselves been criticised as termination due to a breach of the franchise agreement means the value of the business returns to Caltex.
There is no connection between the Australian-owned Caltex operation and the Caltex brand in New Zealand, which is operated by Z Energy Ltd under licence from Chevron International. The largest individual shareholder in Z Energy is the New Zealand Supernnuation Fund.
An internal Caltex document presented to franchisees in August on workplace obligations outlines "common mistakes".
The list includes not paying an employee for trial/training shifts, not recording and rostering the hours worked by the franchisee and not having these records available and not checking if visa requirements are up to date.
One of the more egregious "common mistakes" was "not paying wages … on a regular basis/on time and not having required records of wage payments (especially when cash wages are paid)".
In a statement Caltex described the "common mistakes" as examples "provided by way of illustration and do not reflect Caltex's behaviour".
It says the company had always made it clear to franchisees that they are required to operate their businesses in full compliance with all laws, including the Fair Work Act.
But it will not commit to a compensation scheme where it finds exploited workers who have been systematically ripped off, similar to the scheme set up by 7-Eleven, which has so far paid A$50 million in back pay to workers.
Instead, it points the finger at franchisees, saying "franchisees are responsible for ensuring their employees are correctly paid. Caltex is providing practical support to those employees such as helping them secure ongoing employment if possible as well as assisting them to pursue a claim against their former employer".
But it isn't as simple as that. If a franchisee is terminated and loses the value of the goodwill, it is hard to chase them down to repay workers as some of them will have nothing left except a big bank loan to repay for a business loan they took and no income to repay workers.
In addition, many workers are too afraid to come forward for fear of retribution.
NZ economy – stronger for longer
posted on 22nd November 2016Stronger population growth, rising business confidence and a rebound in milk prices point to an enduring period of growth for the New Zealand economy, says the latest Westpac Quarterly Economic Overview
Mad Butcher liquidator on ridiculous crusade, claims owner
posted on 16th November 2016
A dispute between Veritas Investments, owner of the Mad Butcher franchise, and the liquidator of the original Mangere store could end up in court after liquidator Peter Jollands accused the company of having 'an unworkable business model' for franchisees and of failing to provide company records. Veritas chairman Tim Cook says the company had provided everything required and called Jolland's actions 'a ridiculous crusade.'
Veritas chairman Tim Cook, however, on Tuesday detailed what he called the facts of the Mangere liquidation and his frustration with Jollands.
He said he could not comment on Jollands' claim the Mangere store had begun losing money in the years prior to its sale, other than that Leitch had a "very successful business" there.
But he ran through a series of phone calls, meetings and other dealings with Jollands, where the franchisor wanted to find a workable solution for the store's owner rather than put it in liquidation.
Other stores, such as one in Rotorua, had become one of its big successes after a "motivated" operator took it over using exactly the same business model.
Cook said they offered "an enormous amount of free help" to turn around the Mangere store, including bringing in a proven operator and free advertising.
The franchisee had admitted in those meetings the failure was his fault, and was a minority shareholder and manager before buying the store outright, Cook said.
But the next thing Cook knew, the store had gone into liquidation
Franchise Awards 2016 RESULTS
- learning from experience
posted on 12th November 201612 November 2016 – The top titles this year have gone to franchises with decades of experience - and home-grown franchises took the majority of the honours
Franchise figures honoured at Awards
posted on 12th November 201612 November 2016 - Two people who have made huge contributions to franchising were honoured at the Westpac New Zealand Franchise Awards
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