In The News

New FANZ Chairman knows franchising inside-out 6th September 2018

6 September 2018 – The Franchise Association’s new chairman has 20 years’ experience of all sorts of different franchise systems

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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

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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.

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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.

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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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Hell Pizza and RainbowYOUTH stand up for LGBTIQA+ rights 20th August 2018

21 August 2018 – LGBTIQA+ charity RainbowYOUTH has partnered with Hell to encourage diversity and equality in Aotearoa.

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Swapping handbags for facials 12th August 2018

August 2018 - Second year of success for Caci's charity handbag drive

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New GM for Domino’s New Zealand 6th August 2018

6 August 2018 – After overseeing five years of growth, the head of Domino’s NZ is taking up a new challenge in the UK

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The Coffee Club baking up a storm for SPCA Cupcake Day 1st August 2018

30 August 2018 – The Coffee Club's cupcake sales help raise lots of dough for the SPCA

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Franchise lawyers’ new appointments 1st August 2018


Buyer interest growing 30th July 2018

27 July 2018 – Figures show increasing interest in franchising from potential buyers

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Wage cheat franchisees lose businesses 28th July 2018

July 2018 – A franchisor has taken swift action against a franchisee found to have breached employment law

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Break-away franchisees ordered to cease trading 11th July 2018

Two of the 32 New Zealand  Wendy's Supa Sundaes franchisees involved in a break-away which saw them rebranding their stores have been ordered to cease trading by a High Court judge. Justice Edwin Wylie said two of the former franchisees - one in Hastings and another in Mt Manganui - had rebranded ‘with their eyes open ... The situation they have placed themselves in now appears to be of their own making.'

The franchisees now have the choice to go back to trading as Wendy's or cease business, pending further court orders.

Wylie said (former Wendy's master franchisee) Chang Xi and franchisees had ignored written notices from Supatreats.

'Evidence to date suggests that Mr Chang was throughout working in the background to engineer the situation that has arisen, and then to present the revolt by franchisees as a fait accompli.'

Wylie said there was a risk significant damage had been caused to Supatreats' franchise business model and its ability to re-establish a presence in the New Zealand marketplace.


Shortage of franchisees, staff, limiting growth 4th July 2018

5 July 2018 – The availability of suitable franchisees and staff continues to pose problems for franchisors despite positive signs

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Auckland Bootcamp for Franchise Field Managers 3rd July 2018


Shake-up as Wendy's Supa Sundaes franchisees split 1st July 2018

The former master franchisee for Wendy's Supa Sundaes in New Zealand has led a breakaway group rebranding the 32 stores here as Shake Shed & Co. The move follows a change of approved suppliers imposed by franchisor Supatreats NZ Ltd, which is owned by Singapore-based parent company Global Food Retail Group. The change sees Wendy's Sundae Stores reportedly required to sell ice cream from an Australian supplier at a higher price than the New Zealand product previously used. The franchisor is currently seeking an injunction against the master franchisee and sub-franchisees.

Former New Zealand Wendy's master franchisee Chang Xi said the franchisee businesses operating in shopping malls had united and collectively abandoned their agreements following restrictive measures from the ice-cream brand's owner, which had harmed local operations.

Xi said local owners fear their businesses will go under and jobs lost if they are forced to return to operate as Wendy's.

'We rebranded as a group as we feel that we need to be separated from this international franchisor to be able to survive,' Xi said.

'We have encountered a very terrible situation. All New Zealand franchisees are extremely upset.'


Primary school student's artwork wins The Coffee Club prize 21st June 2018

21 June 2018 – A new design cup being launched at The Coffee Club this month draws more attention to KidsCan

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Restaurant Brands strengthens Pizza Hut deal 13th June 2018

Restaurant Brands has signed a new 10-year master franchise agreement with owner Yum! Brands for the continuation of its Pizza Hut deal.

Restaurant Brands will continue to run marketing and operations for the brand in New Zealand and will step into the position of franchisor to existing independent franchisees, and provide development support to new franchisees.

In recent years it has been selling its regional and lower volume Pizza Hut stores to independent franchisees and at the end of the company's first quarter it owned 33 Pizza Hut stores in New Zealand, with 65 operated by independent franchisees, bringing the total network to 98 stores.


Bakers Delight smashes fundraising target for KidsCan 6th June 2018


2018 Franchise Awards - one more week to register 4th June 2018

The Franchise Association has extended the registration date for the 2018 Westpac New Zealand Franchise Awards to 13 June. Entries are welcome from franchisors, franchisees and service providers.

This is the 24th year of the Westpac New Zealand Franchise Awards, which have been measuring and recognising top performers since 1995. Winning an Award not only represents the pinnacle of achievement, but provides considerable publicity that helps build business and attract top staff or franchisees. Read our report on last year’s winners here.

Entry is open to all members of the Franchise Association. Note – the timeline has been moved forward from previous years to allow more time for judging.


Bravery award for McDonald's manager 4th June 2018

Congratulations to Mike Riley, the McDonald's manager who has received a New Zealand Bravery Decoration in the Queen's Birthday Honours for his cool actions when a gunman walked into his Upper Hutt store. He kept many people from harm. 

Mike Riley went to work to sell burgers and left a hero. A police officer, only known as Officer S, has also received a bravery award for the same incident when an agitated Pera Smiler, 25, walked into Upper Hutt McDonald's on September 8, 2015 with a .303 rifle.

Riley, a McDonald's manager, then aged 34, was out the back when a staff member screamed that a man with a gun had came in and Riley's first steps, of many, to heroism were taken.

"I could see my staff on the floor crying, I could see my close friend on the phone to her partner ... I decided I would try to talk to [Smiler]," Riley told Stuff.

What transpired next saw Riley getting staff and customers out of the building, stopping a father and daughter coming back in from the playground, checking the toilets to see if anyone else was left inside, then, remarkably, offering to cook the gunman a burger.

As he walked from place to place, checking it was clear, he had Smiler - alternating between high-agitation and calm - yelling behind him, often with a gun on him, sometimes aimed at his head, and hinting that things could end badly.

"I just said, 'I have a son and I want to go home and see him'. I think that resonated with him." These days Riley who now works in recruitment, just has sympathy for Smiler and his family.


Tipping point on plastic - how are franchises coping? 30th May 2018

30 May 2018 - Consumers and councils are turning on the humble plastic straw. Franchises are keen to respond, but their sheer size can mean supply issues slow them down.

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At last - Holidays Act to be reviewed 30th May 2018

The Government has announced that it will review the Holidays Act 2003 and make recommendations for change within the next 12 months. This will be welcome news for franchises who are battling with compliance issues under the scrutiny of a Labour Inspectorate which announced last year it would be specifically targeting the franchise sector. The current massively-complicated Act makes it hard to do the right thing no matter how hard employers try, as we pointed out last year.

It is important for employers to bear in mind that their legal obligations to ensure compliance with the Act will remain until new legislation is passed which the Government has indicated is likely to be a minimum of two years away.

Workplace Relations Minister Iain Lees-Galloway said the taskforce would look at ways to simplify the Holidays Act.

'There's been enormous change in our labour market over the past fifteen years and it's clear we need to look at the Holidays Act with a fresh pair of eyes and ensure it is fit for modern workplaces and new working arrangements,' Mr Lees-Galloway said.

The current law was proving 'difficult and costly' for employers to follow and workers were missing out on what they were owed, he said.

'The legislation needs to be straightforward and simple to implement, and deliver fair rest and entitlements for workers,' Mr Lees-Galloway said.

Download the Cabinet paper on the review here.


McDonald's embraces Te Reo 25th May 2018

23 May 2018 – A McDonald's in Hawkes Bay has become the first in New Zealand to offer customers a menu in both English and Te Reo. Will more follow?

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Maturing economy – positives among the questions 23rd May 2018

24 May 2018 – The latest Quarterly Economic Overview from Westpac suggests New Zealand is on track for moderate growth over the next few years but there are uncertainties

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GDP estimates show widespread regional economic growth 10th May 2018


2018 Franchise Awards - enter now 23rd April 2018


Fair play and franchising 22nd April 2018


What's ahead? Good, bad and goodness knows 20th April 2018


KFC results reflect healthy eating disconnect, says researcher 17th April 2018

Strong results from Restaurant Brands announced yesterday reflect increased performance from its KFC business. This might seem surprising at a time when the focus for many restaurant chains is on healthy eating, but a researcher is suggesting that while New Zealanders are becoming more concerned about their food choices, this isn't always reflected in the choices they make at point of sale. While millennial consumers expect certain standards of brands in terms of ethical practices and animal rights, their shopping decisions don't always match up.

'When we looked at shopping logs, haul videos and weekly transactional spend, we saw a very different story play out,' wrote TRA research consultant Jeremy McDonnell in an article based on the study.

'What we saw was that millennials will often put aside their allegedly strongly held attitudes in order to save a dollar, as opposed to voting with it.'

McDonnell argued there's a significant disconnect between the public narrative and what consumers actually do in stores.

'These everyday purchases involve a surprisingly low level of consciousness, which contradicts the current cultural narrative depicting millennials as conscientious, informed buyers. They may talk the talk, but fail to walk the walk,' he wrote.

The intoxicating aroma of KFC will likely continue to pull consumers out of their strong opinions and into the greasy embrace of fried chicken for some time, but consumer behaviour does have a tendency to change over time. And with governments across the world already dabbling in ways to fight the obesity epidemic with regulation, that change could potentially be forced in the future.


Franchisees are not employees, confirms US Court 13th April 2018

A court in California has dismissed a class action by four franchisees of 7-Eleven which claimed that, because of the control the franchise exercises, they had been misclassified as independent contractors and were entitled to damages under both the Fair Labor Standards Act (FLSA) and the California Labor Code. including overtime compensation and expenses incurred in operating their stores such as payroll costs, maintenance, cleaning and uniforms. The lawsuit purported to have been brought on behalf of all of the over 1,500 7-Eleven franchise locations operating in California. The Court found that that 7-Eleven's alleged controls did 'not exceed what is necessary to protect 7-Eleven's trademark, trade name, and good will.'

The case will be of considerable interest given recent law changes in Australia which make franchisors responsible for franchisees' employment breaches, thereby blurring the long-established line between franchisor and franchisee.

Quoting extensively from Patterson v. Domino's Pizza, LLC, 60 Cal. 4th 474 (2014), the court observed that franchisees acquire a business plan that the franchisor "has created for all of its stores," and that the plan "requires the franchisee to follow a system of standards and procedures." Haitayan, 2018 WL 1626248, at *2 (quoting Patterson, 60 Cal. 4th at 489). The court also noted that the goal in franchising, "which benefits both parties to the contract, is to build and keep customer trust by ensuring consistency and uniformity in the quality of goods and services, the dress of franchise employees, and the design of the store themselves." Id. (quoting Patterson, 60 Cal. 4th at 490).


Portermark quality recognised 12th April 2018


BP operator penalised for breaching employment law 12th April 2018


Esquires franchisees open in Pakistan and Jordan 27th March 2018


New inquiry for Australian franchise sector 26th March 2018


Criminalising cartels – how will it affect franchising? 27th February 2018

23 February ­– New legislation amending anti-cartels legislation would mean franchises need to be more careful than ever to ensure proper compliance

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Employment clampdown - penalties grow 26th February 2018

26 February - Franchisors advised to ensure franchisees compliant as Labour Inspectorate investigations continue

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Seminars improving performance for franchises and franchisees 25th February 2018


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