In The News

Between the 2008 and 2013 Censuses, 32,184 people left Auckland for the Waikato, Wellington and Canterbury regions, while 29,301 moved to Auckland from those areas.

Economist Shamubeel Eaqub said there were two types of Aucklanders leaving for the provinces - retirees heading for cheaper areas like Tauranga and Northland, and families looking for a better lifestyle.

Since the 2013 Census, Auckland had become even less affordable, but the decision to leave the city was a challenge for some.

"The challenge for a lot of people is they're not able to get the same kinds of jobs or job security in other parts of New Zealand.

"That's [probably why] it's only a third of people saying they've actually considered it."

Download our latest issue to read more about business opportunities in the regions - http://franchise.co.nz/shunts/72

"The passing last year of Subway founder, Fred de Luca, our key contact within the organisation and the ultimate vision behind the partnership, has meant that Franchise Brands and Subway's priorities have had to change," CEO Josef Roberts said.

"It is clear that for now they have their own challenges. Given this situation we felt that it would be best to seek an end to the operating partnership, which if not in full swing, only delays us from developing in the United States."

"We are confident that we will get something off the ground in America soon and that our goal of opening in the USA will still be fulfilled," Roberts said.

"Let's not forget we have a strong business, no debt and a significant amount of knowledge about doing business in the USA which frankly has been necessary to understand."

The company requested a release from its agreement which has now been granted. Roberts said while the outcome wasn't what the company wanted, it had to be adaptable to the circumstances.

Foodstuffs' general manager for property development, Lindsay Rowles, said many growth opportunities existed for retail development in New Zealand.

"Consumers are becoming more discerning about where they shop," said Rowles. "Some want more modern facilities and a wider range of products, while others are focussed on cost savings and environmental sustainability. We are well aware of all those factors, and are investing in order to cater for these needs well into the future."

Once ubiquitous in products ranging from soda to ketchup, high-fructose corn syrup has fallen out of favor since scientists and consumer advocates identified a possible link between consumption of the compound and obesity and diabetes. Many food and beverage companies, including PepsiCo Inc. and ketchup maker Kraft Heinz Co. , already have removed the sweetener from products or introduced separate lines without it.

At a press event on Monday, McDonald’s supply chain chief, Marion Gross, said it takes time to make changes at a company with 14,000 U.S. restaurants. “It’s been a journey,” she said.

The chemical composition of high-fructose corn syrup, derived from corn, is nearly identical to that of sugar, and it is unclear whether natural sugar is indeed healthier. Medical research has reached conflicting conclusions on whether corn syrup causes weight gain and other health problems.

 The American Journal of Clinical Nutrition in 2008 published a paper concluding that there is no such link. But a 2010 Princeton University study found that rats that consumed high-fructose corn syrup gained significantly more weight than rats that consumed table sugar, even when their overall caloric intake was the same.

The Massey Rd store owes $465,014 to creditors, including $418,172 to suppliers and $18,264 in staff wages and holiday pay, according to the report by liquidator Peter Jollands, of Jollands Callander.

He said the liquidation appeared to have resulted from "unsustainable cost of sales giving insufficient gross profit".

The Mangere outlet is one of 10 Mad Butcher stores that have gone into liquidation, receivership or been closed down, according to Veritas.

Two of the stores that had been through liquidation were trading again and a third, in west Auckland, would re-open in around six months.

Since the pair acquired the four venues between 2007 and 2011, Nando's has been trying to force the franchisors into making significant investment into the businesses. It is this the dispute centres on.

Nando's says the franchisees haven't upgraded the restaurants since they bought them, in some cases as long as nine years ago.

 "As a consequence, the fit-out and branding used in all four restaurants are out of date and not in line with Nando's current standards," business development manager Scott Hamilton says in an affidavit tendered to court as part of the case.

The company wants the franchisees to spend almost A$1.2m to refurbish the Narre Warren, Wareca and Braeside businesses, the documents indicate.

The case has become a key test in head office's ability to force franchisees to invest in their business, Hamilton's affidavit says.

"A number of franchisees in the Victorian market have already raised the pending litigation... as a reason to delay their own refurbishment works".

 Franchisees have a requirement to upgrade and invest in stores when head office "reasonably requires" them to do so written into their franchise agreement, a counterclaim filed by the company says.

Jefferies analyst Andy Barish said he believes an increase in competition will keep pressuring sales growth in the restaurant industry. He wrote in a note to investors that people's options for eating out or dining in "have increased tremendously," particularly with the emergence of smaller chains and independent concepts.

 Chains are also pushing more deals to attract customers amid the intensifying competition. Wendy's has been promoting a "4 for $4" deal, while Burger King recently said it would start a promotion for $1 hot dogs.

To boost results, McDonald's has been closing underperforming stores. It ended last year with fewer stores in the U.S., its first contraction after decades of expansion. It is on track to shrink its domestic store base of more than 14,000 again this year.

Globally, McDonald's said sales rose 3.1 percent at established locations. That included a 2.6 percent increase in the division that includes established markets like the United Kingdom, Canada and Australia. The high-growth segment, which includes China and Russia, saw a 1.6 percent increase.

For the quarter, McDonald's earned $1.09 billion, or $1.25 per share, including a 20-cent negative impact from restructuring charges. Analysts expected $1.39 per share, not including one-time items.

The company launched its "Make Burger History" site this week, as part of a new promotion where customers can "build your own unique burger" and get free fries and a medium soft drink.

"Just come in to a participating 'Create Your Taste' McDonald's and order your Creation at the self ordering kiosk," McDonald's promised.

But its failure to consider what pranksters might dream up online has left the company red-faced, with the website overrun by racist, homophobic and otherwise offensive suggestions. The page now redirects to the McDonald's homepage.

"Despite many offers to help and a rent holiday being negotiated on his behalf, the [current] franchisee has been unable to turn around a consistent slide into poor performance," Cook said.

He said the franchisee was offered a "top performing proven operator free of charge" and an advertising package to help turn the business around.

"This was rejected by the franchisee," Cook said, adding that he had been surprised by the liquidator's lack of understanding of the state of the business.

"It is a lesson for all franchisee businesses that you can't simply buy a business and expect good performance to be maintained if you are not working in and on the business."

The vehicle, based on United States military hardware and input from Australian defence contractor, Marathon Robotics and other advisers, was a four-wheeled vehicle with compartments "built to keep the customer's order piping hot and drinks cold whilst travelling on the footpath at a safe speed from the store to the customer's door".

It was able to navigate from a starting point to destination, selecting the best path of travel, the marketing said. "His on-board sensors enable him to perceive obstacles along the way and avoid them if necessary."

Domino's wants to spin its robot wheels in New Zealand, where law covering the rollout of driverless technology is less rigid. Australia allows testing of semi-autonomous vehicles but not the unguided type that Domino's has in mind.

It hoped to start an DRU trial in this country in the first half of 2017, Bush said

Big Mac deliveries have taken off in Australia, with customers able to order online after setting up an account with the fast food restaurant. The online account can be set up to allow super-fast reordering with a "save your favourites" function.

There is no McDelivery option on the New Zealand McDonald's website, but the McDelivery logo has made an appearance on the Government's Intellectual Property Office's register of trademarks this month.

Subway was going through significant challenges and changes – largely due to the death last year of Subway founder, Fred de Luca, said BurgerFuel chairman Peter Brook.

Franchise Brands had not confirmed it would continue its involvement with BurgerFuel and the New Zealand company was not prepared to enter the US without that support, he said. A decision was expected in the next few weeks.

BurgerFuel posted a $1.1 million loss in the year to March 31, compared to a $817,000 profit the previous year. The loss was largely attributed to spending related to the planned US expansion.

The chain opened 12 new stores in the past year in New Zealand, Australia and the Middle East, taking the total number of BurgerFuel stores to 78.

Terrorism and instability in Kuwait resulted in lower sales than originally anticipated and in January the two BurgerFuel stores there were closed . A new store opened in May in Baghdad was performing well.

BurgerFuel pulled out of Iraq in 2014 due to an increased threat from Islamic State militants.

Industry analysts say Burger King is now trading pretty well. They are tipping the company, which could fetch between A$140 million (NZ$149 million) and A$160m, will soon release financial results that reflect an ongoing improvement in performance.

Should Blackstone give the green light to a formal sale process, likely trade buyers include 'Hungry' Jack Cowin, who owns the Hungry Jack's franchise in Australia and is a major shareholder in Domino's, as well as Stephen Copulos, a former KFC franchisee who sold 42 outlets to New Zealand outfit Restaurant Brands in March for A$82m. 

The business may also be attractive to some regional private equity funds who are building pan-Asian portfolios of fast food outlets.

"In the iced coffee example, a Starbucks customer who orders and pays for a Venti iced coffee, expecting to receive 24 fluid ounces (709mL) of iced coffee based on Starbucks' advertisement and marketing, will instead receive only about 14 fluid ounces of iced coffee."

The suit also claims Starbucks is making more money off its customers than it should.
"In essence, Starbucks is advertising the size of its cold drink cups on its menu, rather than the amount of fluid a customer will receive when they purchase a cold drink - and deceiving its customers in the process," the complaint states.

Ms Pincus is seeking $US5 million in damages. The case is a class action, representing anyone who bought a cold drink from Starbucks in the US in the last decade.

Starbucks has dismissed the lawsuit, saying staff would happily remake a drink for any unsatisfied customer.

Professor Lorelle Frazer, director of the Asia-Pacific Centre for Franchising Excellence, told SmartCompany the apparent lack of time and money spent on undertaking due diligence was the most surprising finding to come out of phase two of the research.

“Business owners are often so concerned to know how much it will cost to buy or start a business, which is a big investment, that the last thing they invest in is education leading into it,” she says.

While Frazer says there are some free resources available to prospective business owners, including from governments, it is more often the case that these individuals are missing out on specific, expert advice that applies directly to their business.

“Each business is unique,” Frazer says.

“They need to do their own personal due diligence for their particular business, to make sure they are in the right market, understand the competition and if they are paying the right price for the business.”

Frazer says one of the concerns in the franchising sector is the tendency for prospective franchise owners to seek general professional advice, as opposed to specific advise about franchised business models.