In The News

"McDonald's uses royalty payments from franchisees and foreign subsidiaries in major markets to route profits to tax havens," the report states. "These strategies may have allowed it to avoid up to US$1.8 billion (NZ$2.4m) in tax in those markets in the years between 2009 and 2013, including €1 billion (NZ$1.5b) across Europe and A$497 million (NZ$535m) in Australia."

A spokeswoman for McDonald's said: "We have always been committed to paying our fair share of tax in Australia. In fact, over the past five years, McDonald's Australia has paid in excess of $500 million in tax."

But the report suggests the company's Australian operations show an "unusually high level of inter-company payments over the five years" had gone to the low-tax nation of Singapore.

BurgerFuel Australasia general manager Craig Notman said the city council's approach was as good as it gets.

"This is the first time we've worked with a council that has such a pro-active stimulus package," he said.

"They have a great programme in place to assist the introduction of new businesses to the area and the BurgerFuel family is very happy to be joining the community."

Council economic development manager Phil Gorman said it was exciting to see UHCC's  stimulus package working to such effect for the city.

"To secure a brand as big as BurgerFuel and to have them investing as they have will encourage and help provide confidence to others looking at Upper Hutt as a great place to set up," Gorman said.

If you have TVNZ On Demand, you can watch the programme here.: https://www.tvnz.co.nz/ondemand/fair-go/06-05-2015

Uniacke said the company planned to "look through New Zealand systems" and would then decide on what ideas it could introduce here "that have been hard to run or maintain off a 70 store franchise base".

"We see this as an opportunity to take these stores back, it's possibly a healthy reset," he said. 

"There are some synergies we can probably bring into New Zealand."

Uniacke said DVD kiosks might play a part.

So far, Video Ezy only had 40 of the movie vending machines this side of the Tasman, while it had 1400 in Australia. It was "one of the silver bullets that we have launched," he said. 

The kiosks minimised rent and staffing costs, which meant dvds could be borrowed for half the usual cost, he said. 

They could also be placed in "high foot-traffic" with high rent prices, where a store would be impossible to afford.

Savio Laban, a married hotel worker with two young children, thought Mr Green cleaning would give him a start in business. He borrowed from his social group and paid Dean Smith $15,000 in March for a customer list expected to return $1000 a week. He did not realise Mr Green Property Management Ltd had been struck off the Companies Office register in January.

The pattern was repeated. A customer list failed to materialise and Laban, originally from Mumbai, last month asked for his money back. Emails from Julian Smith to Laban said he was going to put pressure on his brother to repay the money.

"Dean always had some excuse why he couldn't give our money back. We don't know what to do. We made a wrong decision in trusting Mr Green. We came to New Zealand to work hard and make a better future for our two kids and all our hard earned saving is down the drain," Laban said.

Mr Treen said the agreement hadn't been finalised but the union was convinced "there is good will on both sides" and a spokesman for McDonald's said security of hours would be included in the collective agreement.

"We know that having security of hours is important to our people, which is why on April 13 we announced that a guarantee of hours would be formally written into our employment agreements," the spokesman said.

"Since April 13 we have been working through the technical detail with Unite, along with other elements of the agreement.

The world's biggest hamburger chain said global sales declined 2.3 per cent at established locations during the first three months of the year, with results for April expected to be negative as well. The drop included a 2.6 per cent drop in the U.S., where people are increasingly heading to places that market their food as more wholesome.

Meanwhile, McDonald's is struggling in other regions of the world as well. During the first quarter, the unit encompassing Asia, the Middle East and Africa reported an 8.3 per cent drop in sales at established locations, hurt by a supplier controversy in China last year and ongoing consumer perception issues in Japan.

Sales at established locations dipped 0.6 per cent in Europe because of softness in France and Russia.

There are some challenges when you're part of a franchise group. Sometimes the wheels of change can move slowly. Yes, it's our business, but the decisions that we make can have wider implications, and so there are processes we need to follow when we want to implement any changes.

Sometimes other challenges can be because you're part of a franchised network. If someone visits a Robert Harris cafe in another part of the country and has a bad experience then this could - and through no fault of our own - have a negative impact on your business. You're only as strong as your weakest link.

The requirements included being readable on smaller phone screens, not using software that was not compatible on mobiles and having links spaced out to make searching on mobiles easier for users.

Auckland based marketing consultant Fleur Revell from Impact PR said she had looked over websites of the NZX's top 50 companies earlier this month and found that half failed Google's online mobile readiness tool.

'Dynamic businesses that can adapt rapidly to Google's 500 algorithm changes each year will reap the rewards, while others will be relegated to virtual obscurity as their rankings slip off the coveted first page of Google,' she said.

The NZX-listed company bought the New Zealand rights to American fast-food brand Carl's Jr in 2011, opening its first store the following year.

It has since expanded to 18 stores in the North Island, netting $200,000 in earnings before interest, tax, depreciation and amortisation and a 40 per cent increase in sales to $20.1 million.

Creedy said sales at the burger chain would continue to grow as the company looked to expand the brand to an initial 60 stores in the next five or six years.

'It's [had] very rapid growth,' Creedy said. 'I think the market could easily take 60 stores, that's an initial target for me.'

'If you look at competitors, they have around 80-plus stores - KFC has close to 100 and McDonald's around 160, so 60 is a pretty realistic first target,' he said.

'We decided some time ago to re-evaluate how we present our kids meals, and as part of our ongoing commitment to the Advertising Standards Authority Children's Code for Advertising Food, the decision was made to drop toys altogether.'

The chain will stop selling toys at all 82 of its outlets nationwide.

Hunter said the move was Burger King's second major initiative to help customers make healthier choices. Last year, it became the first major burger chain in New Zealand to display the energy content of menu items on menu boards.

Unite director Mike Treen led his delegates out of a five-hour mediation meeting on Tuesday because he said McDonald's refused to guarantee 80 per cent of actual hours and insisted on guaranteeing 80 per cent of rostered hours only.

"Rosters go up and down. We can't measure a roster," he said. "At the end of it I said, 'Are you moving from scheduled hours to worked hours in your proposal?' And they said no."

However McDonald's human relations manager Christine Hutton emailed Mr Treen at 4.30pm yesterday proposing further mediation dates between April 17 and 29. Spokeswoman Kim Bartlett said the company was willing to talk about scheduled or worked hours.

"Our initial offer was exactly the same as Restaurant Brands but it was scheduled hours, theirs was worked hours," she said. "We are willing to have a discussion with Unite about that, but to do that we have to be in the same room."

Mr Treen said he would accept more mediation if McDonald's assured him that it was willing to make "a meaningful offer".

Controversial zero-hour contracts mean workers had to be available for work but had no guaranteed hours per week. Woodhouse asked officials to review the legislation late last year, amid concerns employment laws were not being used as intended. 

Prime Minister John Key said if zero-hour contracts were being used in a way to discriminate against employees then that had to stop.

'But general flexibility in the labour force is also important, because there are some people who want to have that flexibility.'

Casual contracts were a common practice, which did not require employees to always be available or prevent them from picking up hours elsewhere. 

Woodhouse told One News it was worth banning zero-hour contracts, even if their implementation was relatively low.

'We can expect to get some good advice about that to make some changes in that bill to effectively rule out those kind of punitive provisions. "Even if it is a relatively low incidence in our employment, it's probably worth ruling them out, for the sake of certainty for those vulnerable workers.'

McDonalds NZ announced Monday all employees would receive 80 per cent security of hours up to a 40 hour cap, based on the average of the previous 12 weeks. 

The company had presented its updated position on security of hours at its most recent collective bargaining meeting. 

That had 'previously been common practice' when it came to scheduling in McDonald's restaurants, but would now be formally written into employment agreements, communications manager Kim Bartlett said.

Hoewver, Unite Union has criticised the proposal, calling it 'meaningless' and 'misleading'.

Unite's national director Mike Treen said it was a giant step forward for the industry.

'Restaurant Brands is a public company, and I think that they recognised New Zealand society has moved on; that it's no longer acceptable in 21st century New Zealand for this type of contract to exist, so they're looking for a way to move with the times.'

The Unite Union is now setting its sights on other major fast food chains. It will mount a campaign to try to convince McDonald's, Burger King and Wendy's to end zero hour contracts.

'It is time for New Zealanders to tell these profitable multi-national chains that they need to stop taking advantage of their often young and vulnerable workers and put an end to a labour practice that the people of New Zealand have made clear they find unacceptable,' said Mr Treen.

The National Business Review, citing industry sources, has reported that more Mad Butcher stores are in financial difficulty, which chief executive Michael Morton last week called "grossly inaccurate".

In February, Veritas reported a 16 per cent decline in first-half profit to $1.7 million as acquisition costs mounted during a buying spree, and warned annual earnings may be at the low end of guidance depending on how its new businesses perform.

Revenue jumped 89 per cent to $27.4 million. Of that, the Mad Butcher business lifted revenue 14 percent to $16.6 million.

Fast food fans are salivating over the prospect of Taco Bell opening in New Zealand, but the rumours could yet prove to be a tantalising hoax.

A Taco Bell-branded sign has popped up in the Auckland inner-city suburb of Ponsonby, reading "because Ponsonby Road needs another Mexican restaurant".

The fast food franchise, known for its sardonic humour, is apparently referencing the fact that the popular dining strip is already home to Mexicali Fresh, Mexico, and Mad Mex.

Taco Bell could not be reached for comment, and it is not yet clear whether any other company has franchise rights in New Zealand.

Dean Smith is in trouble again in Wellington with a franchisee wanting his investment returned. Dennis Krishan bought a Mr Green franchise from Smith's company in November for $21,000. Krishan claims he is now owed $3000 for cleaning work and had spent $2000 on legal fees.

The company, Mr Green Property Management Ltd, which was struck off the companies register on January 28, supplied equipment and a list of customers who paid Krishan directly.

Julian Smith said his brother was embroiled in a "couple" of disputes in Wellington but overall franchisees were happy. His brother retained his confidence and had just "bitten off more than he can chew".

MRH general manager Nathan Bonney said the company's "tried and tested" franchise support and management team could be rolled out to other brands.

There is a real opportunity here to drive and support growth for both brands.'

The locally owned and operated Burger Wisconsin pioneered gourmet burgers in New Zealand, with combinations such as avocado and bacon and camembert and cranberry.

It now has 22 stores throughout the country, all of which are run by local franchisees.

Mexicali Fresh was founded by John and Cindy Buell, who moved to New Zealand in 2005 after running Mexican restaurants in the United States. It has 11 stores in the Auckland region (soon to be 12).

New York Attorney General Eric Schneiderman in December sued Emstar Pizza Inc., which operates seven Papa John’s franchise locations in Brooklyn and Queens, alleging that Emstar underreported hours worked by employees over the past six years, rounded employee hours down to the nearest hour, and did not pay overtime.

Attorney General Schneiderman is also considering legal action against the franchisor, Papa John’s International Inc., on the theory that it is a joint employer and thus liable for the actions of its franchisees, according to reporting from the New York Post.

The National Labor Relations Board in July ruled McDonald’s a joint employer and thus liable for labor or wage violations at its franchise locations in a first-of-its-kind decision that represents a significant victory for workers’ rights advocates. Corporations like Papa John’s and McDonald’s employ about two-thirds of the low-wage workers in this country, but have so far mostly avoided liability for the illegal actions of their franchise owners under the theory that, despite sharing a common corporate brand, each franchise is independently owned and operated.

Robert Passikoff is the founder and president of New York-based Brand Keys Inc., a consultancy that seeks to predict consumer behavior trends and brand engagement. He questioned McDonald’s brand research in a recent article.

"If Google’s slogan is ‘Do no evil,’ McDonald’s unofficial corporate slogan seems to have been ‘We can do that, too,’” he said.

As part of its Loyalty Leaders list, Brand Keys asked 1,000 consumers in each of three generations, boomers, Gen X and millennials, about fast-food and fast-casual restaurants. Conducted in late 2014, the survey found recent declines reported by McDonald’s, Burger King and Taco Bell mirrored the downward loyalty shifts seen in the survey’s results.

Brand Keys’ research contained a few other McNuggets: a 20 percent year-over-year decrease in fast-food visitation among millennials (down 18 percent among baby boomers), 42 percent of surveyed millennials increased visits to fast-casual restaurants and 53 percent called McDonald’s offerings “dollar food”—not a compliment.

“They’re not necessarily suggesting that it’s good because it’s cheap,” he said. “Millennials are looking for value. Even if they don’t have a lot of money, they’re still looking for value.”

Ms Read carried on trading in the oven cleaning business in her former territory following termination, again a fact she did not deny. Ms Read (who appeared in person at the hearing) admitted to the judge that she wanted to carry on trading in her former territory as it had taken 18 months to build up the business within that area and she would have to start again if she was prohibited from working in that territory. 

As the judge pointed out, Ms Read was openly admitting that she used her franchise business as a springboard to set up her own, competing business which is precisely what restrictive covenants are designed to prevent and it is the goodwill in the franchisee's territory that a franchisor is entitled to protect.