by Media Release

last updated 18/02/2013

Club Physical dispute continues

by Media Release

last updated 18/02/2013

18 February 2013 - The following media release has been received from the franchisors of Club Physical. We do not usually publish details of ongoing disputes as we feel it is not helpful to the parties seeking resolution. In this instance, however, there has been so much publicity regarding Club Physical that we are making an exception. We have not yet received any information from the other party, but would publish that on the same basis.

The media release is published unedited as follows. It is headed: 'Colvin group create havoc in New Zealand'

"The owners of South Africa’s largest labour hire company are busy causing havoc in New Zealand’s largest city – a city they had said they wanted to call their new ‘home’.

Three years ago, Colvin owner Stuart Holder travelled to New Zealand wanting official residency, a goal that took more than two years to achieve. As part of his plan he decided to take on an existing gym location franchise; the 1300sm Club Physical in Botany, a suburban location.

About ten months after buying the first franchise location he asked the franchisor if he could buy another existing location, closer to the city. Stuart went ahead and purchased the Three Kings franchise location.

Once more Stuart wanted to buy one of the existing franchise clubs for sale on the opposite side of town. The franchisor was reluctant to do this by this time having had experience with Stuart’s business manner. But Stuart persisted and after a gentleman’s agreement as to his conduct, the franchisor was persuaded to grant the third franchise.

The franchisor helped Stuart and his wife Karen to achieve their residency.

Each of the three franchise locations is subject to a professional lawful franchise agreement.

Once his residency came through Stuart (approx Oct 2012) asked the franchisor if he would sell the entire Club Physical group to him, but he was turned down as they had no wish to leave the business.

Stuart then (December 2012) brought his father, Mike Holder of the Colvin Group, to New Zealand ‘to help him with his business’.

On Friday 8th February at 4pm the franchisor received an unexpected email from Stuart’s lawyers stating in the subject box: ‘Three franchises cancelled’.

At the same time Stuart, Mike and Karen had coordinated scaffold and signs pulled down and replaced with a new brand of their own. As group exercise instructor’s (including the founder’s wife) arrived at each club to take classes, each was abruptly told ‘you are no longer required’. Nineteen lost the jobs without notice. These actions are well beyond the bounds of their agreement and unprecedented in New Zealand.

But local New Zealanders have been quick to show their disgust at these actions and an application was made to the High Court for an injunction, last night.

New Zealand’s leading current affairs television show, Campbell Live, also reported last night on the National station, TV3.

Some businessmen arriving in New Zealand from South Africa have said that they were desperate to get their funds out of the country due to political unrest leading to a fear of losing their larger companies.

It is not known whether this was Holder’s motive."

Editor's note: The use of the term 'franchise owner' rather than 'franchisee' for Mr Holder is somewhat misleading. The owners of the Club Physical franchise are Paul and Tina Richards. See here for clarification of these terms.

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