In The News

Practical workshop: Franchise Financial Essentials

18th March 2019

Education - who trains the trainers?

18th March 2019

March 2019 - If franchisors want to help franchisees build better businesses, they need to invest in themselves

Report recommends more changes for Australian franchising

18th March 2019

16 March 2019 – The final report from Australia’s Parliamentary Inquiry into the franchise sector there makes sweeping recommendations but the time-frame for any changes is uncertain. Jason Gehrke summarises the report; additional reporting from New Zealand by Simon Lord

Migrant workers allegedly exploited by Bottle-O franchisee

6th March 2019

The Migrant Workers Association has gone to RNZ with claims that a franchisee of the Australian Bottle-O chain has underpaid workers in his Auckland and South Island stores. The Labour Inspectorate is investigating, having previously issued an Enforceable Undertaking to the owner for failings in employment agreements, record keeping, and provision of holiday and leave entitlements.

Franchisors take such failings very seriously, as they are a breach of franchise agreements which require franchisees to comply with New Zealand employment law obligations. In many cases, the franchisor terminates the franchise agreement, leaving the franchisee with no business as in this case.

The Franchise Association has been working pro-actively with the Labour Inspectorate and specialists in the employment area to help franchisors make franchisees better aware of their obligations.

Three migrant workers claim Bottle-O franchise owner Ravinder Arora has underpaid them by tens of thousands of dollars, and even asked them to repay him money, the Migrant Workers Association says.

The association said in one case a worker at the stores based in Auckland and the South Island worked 84 hours in a week but was only paid for 32 hours, meaning their actual pay was only $7 an hour, half the legal minimum wage of the time.

In another case Mr Arora paid the workers correctly and according to their pay slips, but would then demand the employees refund him thousands of dollars in cash, again leaving their pay packet light and below the minimum wage.

The Labour Inspectorate has confirmed it is "currently progressing proactive investigations in Mr Arora's Nikhil Himalaya Companies".

RNZ has made repeated attempts to contact Ravinder Arora - he hung up on our producer after telling her to contact his lawyer, but refused to provide details for them.

Employees at two of his Auckland businesses today said he was not on site, but that they were paid fairly and above the minimum wage.

Burger King NZ up for sale

3rd March 2019

The whole of the Burger King New Zealand franchise is up for sale, following a decision by American private equity firm Blackstone to sell the company. Blackstone paid close to $108m in 2011 for the franchise, which makes an estimated $20 million per year according to the Australian Financial Review. The company does not sub-franchise, with 83 of the 85 Burger King restaurants in New Zealand being operated by the Blackstone-owned Antares Restaurant Group.

Blackstone was rumoured to be receiving offers for Burger King in 2016, but held on to the business at that time.

A spokesperson for Craigs Investment Partners confirmed it has been mandated to sell the business on behalf of Blackstone. Deutsche Craigs has been hired to run an auction for the fast food business.

The last few years have been turbulent for Burger King, which has faced scrutiny for its treatment of staff and questionable working conditions.

How couple with no experience built a world-class business

24th February 2019

February 2019 - From learner to leader: we look at how franchising can help someone with no experience in an industry develop a world-class business

Economy is 'extraordinarily ordinary', says Westpac

19th February 2019

20 February 2019 – The latest Westpac Economic Overview, published today, says that the economy is unusually average at the moment. Where will it go from here?

Business as usual after fire guts franchisees' building

1st February 2019

1 February 2019 – Sometimes, it’s the unexpected things that pay off when you buy a franchise

Franchising starts 2019 with hint of optimism

31st January 2019

1 February 2019 – Business confidence seems to be creeping back after several quarters of pessimism, and franchising is no exception. The latest Franchising Confidence Index shows improvement in sentiment over the previous quarter towards general business conditions, access to suitable franchisees, operating costs per franchisee and franchisor growth prospects. There are still challenges, but opportunities too.

Employment law changes - does your franchise comply?

28th January 2019

January 2019 - The Employment Relations Amendment Act 2018 introduced a number of employment law changes that aim to improve fairness in the workplace and deliver decent work conditions and fair wages. The first changes came into effect in December 2018; the remainder will become effective in May 2019. Is your franchise prepared?

Coffee franchise named best for service

14th January 2019

January 2019 – The Coffee Club has scooped gold in the Reader’s Digest quality service awards

Work to live - don’t live to work

2nd January 2019

As the weather improves at last, some people are already having to return to work. Would owning your own business give you more of what you desire? Here's an article from December 2012 about how to get the five F-words that most people actually want in their lives: Family, Flexibility, Fun, Freedom and Finance.

Slice of advice for teen entrepreneur from Mayor of Gisborne

21st December 2018

21 December 2018 – 16-year-old entrepreneur Oliver Lodewyk got more than he bargained for as a nominee of Hell Pizza’s Satan’s Little Helper scheme – first-hand business advice from the mayor himself

IKEA to open in New Zealand

19th December 2018

20 December 2018 - After many years of wondering and waiting, New Zealand is to get its first IKEA stores.

Taco Bell will be franchised in NZ

16th December 2018

December 2018 - Restaurant Brands New Zealand Ltd on Tuesday has reached an agreement to expand the Taco Bell brand in New Zealand and Australia. According to the company, the deal dictates the construction of more than 60 new Taco Bell restaurants in New Zealand and Australia before 30 June 2024, the company said in a statement. Restaurant Brands already owns and operates 36 Taco Bell stores spread throughout Hawaii and Guam, as well as the KFC, Pizza Hut, and Carl's Jr. brands in New Zealand. The company dropped Starbucks earlier this year.

Restaurant Brands group chief executive Russel Creedy said the company wanted to build a franchise system with the brand. This suggests a change of direction for the company, which has previously operated the majority of its outlets under management with the exception of some regional Pizza Hut stores. Taco Bell previously entered Australia under a different operator in 1997 with a stand-alone store and a few store-within-a-store concepts in KFC branches, but by 2005 they had all gone. The brand has never before been tried in New Zealand, where Mexican food has become increasingly popular in recent years with chains such as Mexicali Fresh, Mexico and Zambrero all doing well.

In October 2018, Restaurant Brands announced that it was in takeover talks with Mexico-based Finaccess Capital which had made a $578 million bid for a 75 percent controlling stake in the NZX-listed company.

Restaurant Brands group chief executive Russel Creedy said the company wanted to build a franchise system with the brand.

"Bringing the Taco Bell brand to this part of the world aligns with our strategy of focusing on global tier-one brands in markets we understand," Creedy said.

"We know from our experience in Hawaii and Guam that Taco Bell is a top-tier brand backed by excellent franchise systems."

Kiwi stars decorate charity coffee cups for KidsCan

27th November 2018

Regions on a roll - economic overview

22nd November 2018

The November 2018 economic overview from Westpac finds it's 'different strokes for different folks' as regional economies are at their most buoyant in years

Franchise Awards 2018 Results - IT’S BUSINESS TIME

10th November 2018

10 November 2018 – Business-to-business franchises proved there’s more to franchising than burgers when they took out the top titles at the Westpac New Zealand Franchise Awards. Once again, winners came from all round the country.

Hell drops fireworks for next year

7th November 2018

Hell is to stop home-delivering fireworks from 2019. The pizza franchise launched the concept five years ago with the idea of offering 'a whole night's worth of entertainment,' and was the only company offering a delivery service. Fireworks week has delivered record sales for the company for the past three years but, despite its success, Hell has decided that increasing public concern and negative feedback about fireworks in general means it's time to stop.

Hell's general manager Ben Cumming says the company will continue to explore the delivery of non-food items.

'We know it has created a lot of enjoyment but this year we have listened to a lot more negative feedback from the public with really legitimate concerns, mainly around safety of animals and anti-social behaviour, so balancing all of that in light of the feedback we feel it is the right thing to do and move on.'

People using fireworks irresponsibly and the distress they can cause for horses and other pets was the deciding factor to take them off the menu.

'There's always been that risk with fireworks and we've always had a bit of feedback about it but it does seem to be growing a lot. We've decided we can't ignore it, we have to listen to our customers and what people want from our company,' he said

Bill to give 'no undue preference' to franchising

30th October 2018

30 October 2018 - A new Cartel Bills report recommends that no allowances be made for franchise relationships, despite strong submissions

Confidence concerns continue for franchisors

26th October 2018

26 October 2018 - Franchize Consultants’ latest Franchising Confidence Index finds franchisors are continuing to be concerned about possible future challenges, although franchisors still remain more positive than respondents to general business surveys

Australian Franchise Awards – 2018 Results

18th October 2018

19 October 2018 – Hire A Hubby dominates Australian Franchise Awards

Mexican company seeks 75 percent of Restaurant Brands

17th October 2018

Restaurant Brands New Zealand Ltd says it has received a NZ$9.45 per share offer for up to three-quarters of its shares from Mexico-based investment firm Finaccess Capital, S.A. de C.V. As well as the NZ$881.5 million ($577.6 million) indicative cash offer, which represents a premium of about 24.3 percent to Restaurant Brands' last closing price, Reuters reports that the two firms are also discussing a full takeover.

The Board of Restaurant Brands recommends that shareholders do not take any action in respect of the Proposal unless and until Finaccess proceeds with a formal takeover offer and shareholders receive Restaurant Brands’ Target Company Statement in response to that takeover offer (including the independent adviser’s report required under the Takeovers Code).

The Proposal does not constitute a takeover notice pursuant to the Takeovers Code. Restaurant Brands and Finaccess are in discussions to seek to agree and finalise the terms of any takeover implementation arrangements which, if agreed, could result in Finaccess issuing a takeover notice to Restaurant Brands. There is no guarantee at this stage that agreement will be reached or that Finaccess will advance the Proposal to the point where a takeover notice is issued.

Finaccess is an international company with a focus on high quality businesses with growth potential, including in the global consumer retail sector. Finaccess (along with its associated entities) has significant experience in owning and operating international branded quick service and casual dining restaurants, including holding a controlling interest in AmRest Holdings SE which operates KFC, Pizza Hut, Burger King and Starbucks branded outlets and several owned brands across Europe and China.

If Finaccess does proceed to make a takeover, the offer would be subject to various conditions, including Overseas Investment Office consent and receiving consent from certain subsidiaries of Yum! Brands Inc., the owner of the KFC, Pizza Hut and Taco Bell brands franchised to Restaurant Brands.

NZX announcement

Reuters report on NASDAQ

Offer 'out of the blue'

Franchise Awards a chance to celebrate community involvement

15th October 2018

US quick service chicken chain seeks local partners

11th October 2018

Taranaki event - Your franchise, your future

8th October 2018

Improving franchisee performance - Auckland seminars

3rd October 2018

Four seminars being held in October/November are designed to give franchisor teams the tools they need to help franchisees get the most out of their businesses.

The sessions, run by multi-award-winning Auckland experts Franchize Consultants, are designed to respond to real-life challenges and help answer real-life questions. They are facilitated by two of the company's most experienced consultants: Michelle Bentham, who has many years of operational experience with McDonald’s and Subway; and Dr Callum Floyd, who has led franchise system development and improvement projects for local and international franchises across a range of business sectors.

They cover:

Franchise field support visit training
Improving franchisee performance
Managing a franchise system
Franchisee business planning for field managers

Find out more here.

Franchise’s topping response to Aussie needle sabotage

21st September 2018

Updated 24 September 2018 – The Cheesecake Shop franchisees are taking action to safeguard consumers while supporting strawberry farmers affected by saboteurs

Joint employment status – latest

19th September 2018

20 September 2018 - A proposed ruling from the USA on responsibility of franchisors for staff employed by franchisees could help influence international thinking on the issue

Suffrage 125 - Celebrating women in franchising

19th September 2018

19 September 2018 – As New Zealand celebrates Suffrage 125, we take a look at the success of women in franchising

Franchisors take action on cheating franchisees

18th September 2018

18 September 2018 – Two more franchisees found guilty of historic wage and visa breaches have lost their businesses

Top tips for dealing with bad press

17th September 2018

17 September - We share tips from a free webinar aimed at helping franchisors be prepared when an issue erupts in the media.

Macca's McVegan burger on the rise

10th September 2018

September 2018 - Last year, McDonald's teamed up with a Swedish food company to create a non-meat burger patty. In a country where 1 in 10 Swedes is now vegetarian or vegan - and 1 in 5 of the under-30s - it was an important step in bridging the gap between the ethical and health concerns of the vegetarian population and the reputation of fast-food itself. It was also important to have something to address a potentially declining market for the company's other products.

Here's a story from the BBC that looks at the reasons behind the McVegan Burger - and tastes it, too. Is it any good, and will it be expanding beyond the borders of Finland and Sweden any time soon? Read the article and listen to the interview.

“When you have meat as a base, the meat itself has a taste,” says Karl-Johan Freelander, product developer at Orkla. “When it comes to soy protein, the little taste it has… it’s not a very pleasant taste to be honest.”

To mitigate the blandness, Freelander pressed the soy protein together with flavourful onions, peppers and tomato powder – which gives it a uniquely red colour.

But Freelander says the secret to the McVegan’s hearty taste is something called umami. “Umami is what you often call the fifth flavour,” he says. “It’s the flavour of the savoury.” In place of real meat, Friedlander was able to mimic the umami sensation with ingredients like mushroom powder.

New FANZ Chairman knows franchising inside-out

6th September 2018

No more straws for The Coffee Club

6th September 2018

6 September 2018 - The Coffee Club is removing plastic straws from its 63 cafes across New Zealand and replacing them with paper straws

Starbucks sold after years of struggle

3rd September 2018

Publicly-listed Restaurant Brands has sold the New Zealand licence for Starbucks to a new private company after seeing the brand decline here from a peak of nearly 50 outlets to just 22. Restaurant Brands, which runs Pizza Hut, KFC and Carl's Jr. here as well as having overseas interests, blamed New Zealand's strong coffee culture and the fact that it was competing against some very strong brands for Starbucks poor performance here compared to the USA.

Starbucks has never been franchised in New Zealand.

Two of the directors of a company taking over the Starbucks licence in New Zealand were also behind the recent takeover of Kiwi footwear company Hannahs.

Experienced directors John Elliott and Roger Harper are two of the three directors of Tahua Capital, which was specially set up to take over the coffee chain's operation from current licence holder, Restaurant Brands.

Tahua is a third owned by Maestro Cafes, and the rest by passive investors. The third director is Anthony Carter.

Restaurant Brands' licence to run the cafes expires in October. Tahua will pay for up to $4.4 million for the fitout and stock, and will seek to take over the leases with hopes of expanding the chain.

Holidays Act review paper published

30th August 2018

30 August 2018 - The Holidays Act Taskforce has released an Issues Paper (download here) which sets out the Taskforce's understanding regarding the key issues faced by employers, employees and payroll providers in trying to implement the Act. Submissions are invited on the questions raised in the Issues Paper by 12 October.

Problems with how the Holidays Act is understood and interpreted have led to several companies, including franchisees of some well-known brands, having been found to have under-paid staff. The Government has responded to calls to make complying with the Act easier for all concerned by setting up the Taskforce.

The Holidays Act 2003 sets out the minimum entitlements to holidays and leave, and payment for them, that employers are obliged to provide to their employees.

It is an Act that touches the lives of every employee in New Zealand. Its purpose is to promote balance between work and other aspects of employees’ lives by providing minimum entitlements to annual holidays, public holidays, sick leave and bereavement leave.

However, it has become evident in recent years that widespread non-compliance with the current Act is affecting employers and employees right across the New Zealand economyand is costing employers and employees significant sums of money.

To address this, in May 2018, the Minister of Workplace Relations and Safety established a Taskforce to review the Holidays Act 2003 (the Act) and recommend changes.

The tripartite Taskforce, which includes employer, employee and government representatives, offers the opportunity to work together to find a better solution.

Mobile payments made easier for franchisees

29th August 2018

August 2018 – Small to medium business owners and franchisees can now receive card payments, send invoices, quotes and receipts using Westpac NZ’s updated Get Paid app and secure card reader.

Coffee franchise embraces Chinese social media

28th August 2018

29 August 2018 – Columbus Coffee is using the Chinese WeChat app to reach new customers and offer new payment options. There’s also a WeChat group for its franchisees.

Economy 'falling into place'

20th August 2018

21 August 2018 – The economy may be slower, but it is moving on to a surer long-run footing, says Westpac

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