In The News

Franchise confidence bounces back for 2016 26th November 2015

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"McDonald’s of the Future" <br> opens in Auckland 24th November 2015

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Home business scheme led to $34,000 loss 22nd November 2015

If it sounds too good to be true, it probably is. A New Zealand man found this out the hard way recently when he bought into an online cruise booking scheme from a company called 'Coastal Vacations' which suggested he could earn $8,000 a month by doing virtually nothing. As Fraud Awareness Week ends, it's a reminder to anyone looking at buying a business to do proper due diligence on the opportunity before signing up or parting with any money. Find franchise-experienced lawyers here and accountants here.

Taylor said the elderly man had been cold-called by a man claiming to be from a company called "Coastal Vacations" asking him if he wanted to make money from home.

In return for paying "membership fees" he was told he would be assigned a website in his name through which people could book cruises around the Middle East and Mediterranean, said Taylor.

The caller said the company could not operate the websites in its own name due to some "legal requirements" in the US and that it was looking for investors to lend their names for a share of profits from any bookings made through their website.

The man could log into the "back office" section of the website that had been set up for him, Taylor said.

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It appeared to show the activity of visitors to his website and purchases made through it.

Taylor said the man felt this gave some transparency to what he was doing and earning.

The man was told he didn't need to do anything to earn the $8000 as the company would do all the selling.

He paid his "membership fees" using his credit card in January, but by February nothing had appeared in his 'back office' and no commissions had been earned. 

He was told that payments were pending or that [there] were technical issues.

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Pizza becomes the gateway drug to reading addiction 21st November 2015

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Franchise Awards 2015 - Results KEEPING IT IN THE FAMILY 15th November 2015

14 November 2015 – The Hall family of Columbus Coffee are New Zealand’s top franchisees, and Paramount Services is Supreme Franchise System of the Year for 2015/16

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Franchise pioneers honoured at Awards night 14th November 2015

14 November 2015 - Some of the people who have made huge contributions to the growth of franchising in New Zealand were honoured at the Westpac New Zealand Franchise Awards

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Strong opposition to Wendy's liquor plans for Hornby 12th November 2015

Over 300 people have objected to Wendy's bid to serve alcohol at its Hornby restaurant. Christchurch City Council received 326 submissions on Wendy's application to gain a licence to sell liquor between 8am and 11pm, seven days a week. It is reportedly the first fast-food restaurant in New Zealand to make such an application.

Riccarton-Wigram community board member Debbie Mora said she had not seen such opposition to a liquor licence application in her two years on the board.

She was worried that, if approved, it could set a precedent for other fast-food outlets across New Zealand.

Wendy's chief executive Danielle Lendich said she had not seen the submissions and would not comment until she had a chance to review them.

She previously said the company wanted guests to enjoy a beer with a burger if they chose to. Non-alcoholic beverages would still be available, and no alcohol would be served at the drive-through or for takeaway guests.

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21 years of the franchise awards 10th November 2015

We look back at some of the winners and how the Awards have helped New Zealand become the most franchised country in the world

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School kids design The Coffee Club's Christmas cup for KidsCan 7th November 2015

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KFC swaps Pepsi for Coke 6th November 2015

KFC in New Zealand is to start selling Coca-Cola rather than Pepsi. The change, which will affect all 91 KFC stores in New Zealand, marks a significant victory for the Coke brand and will give it significant extra volume, although presumably at low margins given the buying power of KFC's master licensee here, Restaurant Brands. Internationally, KFC used to be owned by PepsiCo until 1997, when it spun off Taco Bell, Pizza Hut and KFC into the company that was to become Yum! Brands.

Restaurant chain KFC will soon no longer be selling Pepsi soft drinks, with Coca-Cola taking over as its official drinks supplier.

Restaurant Brands New Zealand, the country's largest fast food operator, confirmed the exclusive deal with Coca-Cola will begin in mid-January next year.

The change in beverage supplier is part of KFC's transformation programme that started last year, and includes changes in marketing and longer opening hours. Coca-Cola will soon also be taking over at Restaurant Brands' Pizza Hut stores.

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Franchise confidence bounces back for 2016 3rd November 2015

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Low-cost franchise group launches in New Zealand 31st October 2015

Express Business Group has brought its low-cost franchise model to New Zealand, with services franchises starting from under $6,000.

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Mad Butcher sites remain unsold 30th October 2015

The Mad Butcher has advised that it has not yet been able to re-sell some of the outlets it took over after franchisees went into liquidation. The company has been the subject of media speculation after former franchisees complained about increasing fees and increased competition. In its latest update to the NZX, Mad Butcher owner Veritas Investments says the chain faces a challenging environment.

Veritas Investments says it has had no success selling Mad Butcher outlets currently for sale and that the cut-price meat chain continues to face a "challenging" environment.

However, it remains on track to meet profit guidance issued in June, in which it said annual profitability was expected to rise 28 per cent in the 2016 financial year - equivalent to its earlier expectation of results for the 2015 financial year. The company said then that it expected net profit of between $5.3 million and $5.5 million in the year ending June 30, 2016, up from the $4.3 million anticipated in 2015.

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KFC, Carl's Jr. boost Restaurant Brands' profit 29th October 2015

Restaurant Brands' policies of re-investing in KFC and Carl's Jr. outlets seems to be paying off, and even Starbucks has contributed to increased profits for the multi-brand master licensee.

Restaurant Brands New Zealand boosted first-half profit 17 percent on increased sales of fried chicken at KFC and more Carl's Jr stores.

Profit rose to $13.4 million in the 28 weeks ended September 14, up from $11.5 million in the same period a year earlier, the company says.

Total store sales rose 13 percent to $210 million, while on a same-store basis sales increased 6.7 percent to $192 million. It had a total of 180 stores across its KFC, Carl's Jr, Starbucks Coffee and Pizza Hut brands, six more than a year earlier.

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Wendy's plan to sell alcohol provokes outcry 29th October 2015

An application for a liquor licence by a Wendy's outlet in Hornby. Christchurch, has been opposed by local community leaders. While Wendy's is believed to be the first fast food outlet in New Zealand to make the move, it is common in some countries. Wendy's chief executive, Danielle Lendich, has suggested it is a way for the company to 'up its game' and pointed out that other family and quick service restaurant franchises such as Denny's, Lone Star, Mexicali Fresh and Columbus commonly have liquor licences.


Wendy's is operated in New Zealand by the Lendich family, which holds the master licence and owns all the stores itself. It is not sub-franchised. At its 25th anniversary celebrations, Danielle Lendich described the company as a family-owned business with old-fashioned values.


Wendy's Hornby opened in November 2013 and achieved world record sales for the chain in its first seven days, serving more than 10,000 customers in its first week..

People would only be able to buy alcohol with food and managers would go through training programmes, Lendich said.

'It is Wendy's view that responsible consumption of alcohol in a family restaurant setting is a positive outcome and we have every confidence that we will sell alcohol safely and responsibly,' Lendich said.

'Our principal business will remain the provision of meals to the public and we have no intention of becoming a bar or hangout where people sit all night and drink beer.'

Christchurch West Information Hub co-ordinator Kirstin Dingwall-Okoye hoped to muster 'as many objections as possible.'

'This concerns me because Wendy's is a traditional burger restaurant, usually aimed at being family friendly,' she said.

'It is often packed with school-age children after school and in the holidays. It is also often staffed by kids as an after school/holiday job. It also concerns me that this may set a precedent for family 'burger' style restaurants, not just in Hornby, but in other centres around Christchurch and New Zealand. I believe it is imperative that a strong community lead (sic) objection is raised against this.'

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How can franchisors grow their business next year? 27th October 2015

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Fastway franchisees expand to Otago 16th October 2015

The Fastway Couriers regional franchisees for Canterbury have expressed their enthusiasm for the brand by taking on the neighbouring Otago area.

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Keeping franchise data safe and secure 15th October 2015

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Kiwi franchise named Australia's best import 14th October 2015

14 October 2015 – New Zealand’s own Fastway Couriers was named International Franchisor of the Year at the Australian Franchise Awards last night

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How to make more money 9th October 2015

How do you increase the profitability of your franchise? Philip Morrison of Franchise Accountants suggests some simple steps.

Increasing profits isn’t just about making more sales or cutting costs – in fact, doing just one of those things and ignoring the others can actually reduce profits. Instead, by focusing on finding small improvements in each area individually, a franchisee can make a big difference to their ultimate profitability. Here are some tips on what to look for.

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Liquorland to expand after Foodstuffs buys 21 stores 8th October 2015

Foodstuffs, the franchisor for Pak'n'Save, New World, Four Square and Liquorland, has bought 21 liquor stores from The Mill Retail Holdings. The stores will be rebranded and franchised as Liquorland outlets.

Steve Anderson, managing director of Foodstuffs which owns Liquorland, New World, Pak'nSave and other businesses, said a sale and purchase agreement had been signed for stores throughout the country, which would become franchised Liquorland outlets.

"There are a number of conditions still to be met as part of the due diligence process before the sale can be finalised, and once these conditions have been satisfied we will be in a position to provide more information," Anderson said.

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Australia's 7-Eleven scandal <br> has wider implications 17th September 2015

Australia's 7-Eleven employment scandal is starting to raise wider questions about the roles and responsibilities of franchisors and master franchisees

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Subway founder Fred DeLuca dies 16th September 2015

Fred DeLuca, the founder of Subway, died on 14th September 2015 after being diagnosed with leukaemia two years ago. He was 67.

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Charity award goes to courier franchise for collecting old cash 15th September 2015

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7-Eleven boss resigned role as Chairman of Franchise Council of Australia 14th September 2015

Warren Wilmot, the CEO of 7-Eleven Australia, resigned as chairman of the Franchise Council of Australia shortly before the media investigation into under-payment of workers at 7-Eleven franchised outlets broke. He was elected as chairman in February 2015. Former chairman Michael Paul, the founder of Pack & Send, has returned to the role.

7-Eleven boss, Warren Wilmot, rang his fellow board members at the Franchise Council of Australia (FCA) and asked to step down from the chairman's role to focus on his day job, according to an FCA spokesman.

The decision was understandable.

The FCA holds its AGM in early October, in the lead up to its national convention. It will coincide with a meeting of both the Asia/Pacific and global franchise councils

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7-Eleven franchisees' workers alleged to be caught in 'cash-back' scam 8th September 2015

The Australian 7-Eleven franchise is already under fire for having failed to stamp out dodgy employment practices by some of its franchisees. Now, new allegations are emerging of a 'cash-back' scam, whereby employees of some franchisees have the correct award rate paid into their bank account for the hours they have worked, and are then expected to pay part of it back to the franchisee in cash.

The scam is sweeping the country, with numerous workers discussing variations on the "cash scam" theme.

For instance, a permanent resident might pay back a smaller amount than a worker on a student visa who is only allowed to work 20 hours a week under the visa conditions.

As one store manager says: "Imagine working for $12 an hour and being taxed for $20 an hour or more. I didn't think they could get more odious but I was wrong."

Pranay Alawala, a former 7-Eleven worker in Brisbane who recently confronted his boss to pay back more than $40,000 to himself and a few other workers, said he had been contacted by many workers who have got caught up in the "cash scam".

Text messages between a franchisee and a 7-Eleven employee from a Brisbane store leave no doubt that this new fraud is widespread.

The new scam will be difficult to prove and could be an additional challenge for the independent panel that has been set up by 7-Eleven to investigate underpayment of wages.

The panel, headed by former ACCC chairman Allan Fels, a fierce critic of the 7-Eleven franchise model, will kick off this week.

Mr Fels hit the headlines a week ago when he said "the only way a franchisee can make a go of it in most cases is by underpaying wages, by illegal behaviour."

Workers are invited to come forward if they have been underpaid and the panel will assess their claims, but the success or otherwise of the panel will depend on whether they are given amnesty by the Abbott government and whether the onus is on the worker to prove their case, or the franchisee and 7-Eleven head office.

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McDonald's Australia breaches fast food labelling laws 8th September 2015

McDonald's is being forced to change its signage across Australia after the fast food chain's new display boards were found to breach labelling laws in NSW. Recently-introduced electronic menu displays make customers wait for up to a minute to view health information for each product, only show the information for about seven seconds and do not show how many kilojoules are in each item, says the Sydney Morning Herald.




The menus appeared to breach NSW food labelling laws that demand fast food outlets show the kilojoules in each product next to the price and in the same size writing.

Health groups called for McDonald's to be brought into line with the rules and the chain now says it will change its menus across the country by the end of September.

"In consultation with the NSW Food Authority we have proactively made some edits to our new digital menu boards to enable additional comparison between products," McDonald's spokesman Chris Grant said on Monday.

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Restraints position not all tied-up 6th September 2015

Two recent cases before the High Court upheld the restraints of trade in franchise agreements. Can franchisors relax? Not necessarily, says barrister Deirdre Watson

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Why move to the regions to buy a business? 6th September 2015

When franchises advertise ‘opportunities nationwide’, they mean it. Simon Lord finds good reasons why business buyers should look outside the cities

If you're looking through the property pages this weekend and feeling depressed about city prices, here's an idea for you: move to the regions and buy your own business. We've been talking to some experts who say there are good reasons for doing it, and some franchisees who have taken the plunge.

Mike and Lisa Keffler sold their house in Auckland and moved to Rotorua, where they and their young family couldn’t be happier. Parin Desai has established himself as part of the local community in Whakatane. John Alipate is a Dunedin man through and through and wanted to stay in the city he loved, while Ashneer and Durgeshni Datt –­ also refugees from the hectic pace of Auckland – were welcomed by the mayor and the local MP when they arrived in Invercargill. All of them found business opportunities through franchising in the places they wanted to live.

According to the headlines, business these days is all about the growing population of Auckland and the reconstruction of Christchurch. Yet the people above, and others you can read about on this website, prove that there is life outside the big cities and that it can be very rewarding indeed.

‘In fact,’ says Daniel Cloete, National Franchise Manager for Westpac, ‘I have found that in many franchise systems, some of the most profitable outlets in New Zealand are located in the regions rather than the major centres.’

The key word here is.... Read the rest of this article.

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CrestClean’s first 500 4th September 2015

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Young franchisors aim to change the world 4th September 2015

Earlier this year, 21 year old Jess Linnell of Mt Maunganui was just one of 50 people worldwide to be named as a winner in the Young Entrepreneurs in Franchising competition sponsored by the US-based International Franchise Association Education Foundation. You can read about Jess here, and Franchise Times magazine has just published an article on six of the other winners. Their concepts include using franchising to provide clean drinkling water in Africa, cleaning child seats, parking lot maintenance, rolled-up ice cream, reviving exopiored bread and creating healthy fries.


Registration for this year’s NextGen contest opens this month and runs through the end of October. The age range has been increased to 21-35 and the list of winners will be reduced from 50 to 20, with a more robust prize package including a full year of mentoring for all winners. Visit nextgenfranchising.org to apply.  

His company provides seed financing for its franchisees to create their own drinking water company designed for the under-served (read: not wealthy) people in any variety of African communities.

With sub-par water treatment, crumbling pipes, weak building codes and widespread industrial contamination, providing clean water in many African villages is a persistent, Herculean task.

Jibu places drinking water franchises approximately one mile apart, drawing water from any neighborhood source and filtering it on the spot using advanced water filtration equipment. The company acts as a fair-lending bank that offers affordable financing to its franchisees. No middleman. No dependency on donations that could dry up. Low prices. New jobs.

With seven franchises, some making more than USD$85,000 per year, Jibu’s network has distributed more than 1 million gallons of water and reached more than 10,000 people with safe, clean water.

The company is on track to launch two franchises per month throughout 2015, and has raised more than $2.4 million through private equity and grants to support its future growth—a promising record for a socially aware and ambitious entrepreneur, as well as his franchisees and their customers.

Read more at http://www.franchisetimes.c...


7-Eleven under fire in Australia for worker exploitation 31st August 2015

A review of 225 franchised 7-Eleven stores in Australia has found 69 percent of them had payroll compliance issues, including falsification of records and rosters, wage fraud and pay rates of half the award rate. There are also allegations of blackmail, withholding passports and driver licences from immigrant workers.


The internal review by the Australian master franchisee has been publicised in a joint investigation by the Four Corners TV programme and Fairfax Media. Extracts published show that the franchisor had been aware of issues for at least the last 12 months, and that it had been taking steps to make franchisees aware of their obligations and change their practices. It is not clear how the media got hold of the report, which is certain to cause considerable damage to the brand and franchisee's businesses.

Meanwhile, a franchisee told the 7-Eleven field investigator that some staff members hadn't been paid for six weeks because they "don't care if they haven't been paid correctly as money isn't important to them".

The Melbourne-based franchisee was caught paying A$12 ($13.30) an hour to staff – well below the award rate of A$24 an hour – and was withholding the passport and driver's licence of a staff member.

The offences were handled internally.

"They constitute a breach of the 7-Eleven Agreement" and "the expectation is that you will remedy the breach by doing the following: 1. Return the passport and driver's licence. 2. Pay monies owed to your employees through the 7-Eleven payroll system so we can verify that the breach has been completely remedied."

They are just a handful of the more than 2000 extracts of on-the-record interviews conducted by field inspectors and placed on a central database at head office, obtained by Four Corners and Fairfax Media's Business Day.

Part 1   Part 2

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Youthful Enthusiasm 28th August 2015

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End of the pizza price wars entices The Coffee Club to return 28th August 2015

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Judge upholds restraint order in Mike Pero case 27th August 2015

The case of the Mike Pero Mortgages franchisees who claim that the restraint of trade clauses in the franchise agreements cannot be enforced has moved on today, with a former Mike Pero Mortgages broker being barred from competing with his former franchisor until the wider dispute is resolved.


Justice Simon Moore ruled that the broker, Christchurch's James Heath, should not be involved in a mortgage broking business in Canterbury for two years or elsewhere in New Zealand for six months or until further order of the court. He declined to grant an order against Mr Heath's de facto partner, who had registered a new company called James Heath Mortgages, saying that the injunction already granted prevents Mr Heath from assisting her or being involved in any way whatsoever.

"While I do not minimise the adverse effects of Mr Heath and his family and the threat that it will be necessary to sell the family home after four to five months if an injunction is granted, sight should not be lost of the fact that Mr Heath was aware of the restraint provisions and made the decision to terminate his relationship with Mike Pero without apparently putting in place any plan for protecting his income without breaching his agreement...in this sense I am satisfied that Mr Heath has brought these consequences upon himself through his own actions," Justice Moore said.

The judge was satisfied that an injunction against Heath should be granted while the franchisees work out the dispute with Mike Pero Mortgages.

He ruled that Heath should not be involved in a mortgage broking business in Canterbury for two years or elsewhere in New Zealand for six months or until further order of the court.

Read more at http://www.nzherald.co.nz/b...


NZ ad agency proposes to fuse Big Mac and Whopper to mark Peace Day 27th August 2015

27 August 2015 - Ad agency Y&R NZ is behind a viral marketing stunt which proposes setting up a joint 'McWhopper' restaurant in America to mark Peace Day on 21 September. The campaign, kicked off with two full page letters in The New York Times and the Chicago Tribune, drew what has been called a 'lacklustre' response from McDonald's and considerable criticism via social media.. The McWhopper campaign is being launched around the world, with the New Zealand version breaking today and tomorrow.

Y&R NZ chief executive and chief creative Josh Moore says the campaign is the result of “perseverance, late nights and an 18-month collaboration” with the global Burger King marketing team.

“When we first tabled this idea with Burger King we knew it was a long shot – asking a global icon to take their hero product and blend it with that of their biggest competitor.

“But we’ve been totally overwhelmed by the enthusiasm and appetite for big thinking and bold ideas at all levels of Burger King. I only hope McDonald’s jump on board and make this a monumental event in the name of Peace Day. Let’s end the beef, with beef.”

A dedicated website has also been set up for the ‘McWhopper.’

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Deeks brothers sell out of Esquires <br> as owners re-finance 14th August 2015

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Domino’s launches pizza driver GPS tracker 12th August 2015

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Another restraint of trade issue in court as former Mike Pero franchisees seek decision 6th August 2015

In another restraint of trade case, seven Mike Pero Mortgages franchisees are taking High Court action over obligations in their franchise agreements that prevent them from competing with the franchisor for two years after their franchise agreements expired. They are claiming that the terms which they signed up to can't be enforced. One franchisee, who chose not to renew his franchise agreement earlier this year, instead wants to set up as an independent broker. Mike Pero (New Zealand) has got interim orders against all seven franchisees preventing them competing with the firm as mortgage brokers.


This is the second restraint of trade case to hit the news this week after a former multiple franchisee of Video Ezy was forced to re-brand back to the franchise by the High Court.


Strangely, the New Zealand Herald has chosen to headline its article about the mortgage broking case with a photo of Mike Pero, despite admitting in the article that Mike Pero no longer has any part in the business.

Heath was a Mike Pero franchisee in Christchurch for 15 years and in 2009 won a New Zealand Mortgage Brokers' Association award. But he advised the franchisor earlier this year he would not be renewing his franchise agreement and was in the group that in April filed proceedings.

Mike Pero (New Zealand) is owned by Australia's Liberty Financial, and has 36 franchisees around this country. While it bears the name of its founder, Mike Pero, he no longer has any part in the business.

Queen's Counsel for the franchisor firm, Bruce Stewart, argued the company would be harmed if the interim orders weren't continued and said that eight of its other franchisees in Canterbury deserved protection.

Read more at http://www.nzherald.co.nz/b...


Online directory scamming small businesses 5th August 2015

4 August 2015 - A German company is targetting New Zealand companies in an invoicing scam that leads small business owners to think they are providing details for the Companies Office

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