In The News

MYOB first to launch e-GST filing service 18th April 2016


How to recruit and support franchisees more effectively 18th April 2016

More than half of all Australian franchise brands and more than a quarter of all New Zealand brands have attended a Franchise Advisory Centre event. In May, five top workshops for franchisors and their leadership teams return to Auckland.


SME confidence rebounds as sectors show growth 13th April 2016


MYOB backs franchisees and franchisors through increased support 8th April 2016


Will franchise model help or hinder New World's online ordering? 8th April 2016

Foodstuffs has announced plans to launch online ordering and home delivery services following trials in its New World stores. The announcement will see the locally-owned business catch up with Australian-owned Countdown, which has offered the service for some time. But an un-named 'industry insider' told the New Zealand Herald that the franchised model used by Foodstuffs made it too difficult to work.

Foodstuffs, which owns the Pak'n'Save, New World, Four Square, Liquorland and Gilmores brands, is New Zealand's biggest supermarket chain.

Read our report on how franchises are handling e-commerce.

Chris Quin, the new Foodstuffs North Island chief executive, said this week that the move was a big step forward for the business and its customers.

Rival Countdown has offered online grocery orders for many years, he acknowledged. But Quin said he expected click-and-collect orders to be a significant market share, whereby customers would order online but collect the goods themselves.

The supermarket chain will use trucks and staff from each store to deliver the goods, rather than contracting the service out, he said.

More than 10 per cent of New Zealand retail sales were now online so he projected big growth. "New Zealand has a growing population and it's getting harder and harder to buy sites, so you can serve more customers," he said, indicating new supermarket development rates might fall as online picks up.

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The length of time it had taken Foodstuffs to go ahead with online orders was partly driven by resistance from supermarket owners, the critic claimed.

The online supermarket model was internationally challenging because big scales of business were needed to make home deliveries of food items work to cover the extremely high costs involved, he said.

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Veritas to franchise Nosh stores 6th April 2016


2016 Conference – Building Your Brand 5th April 2016


How to franchise your business – seminars around NZ 4th April 2016


New Stonewood owners terminate agreements with founder's franchises 24th March 2016

24 March 2016 - Stonewood Homes' new owners have severed ties with the building firm's founder Brent Mettrick. These include not just the Christchurch franchise which they previously bought from the receivers. but also the West Coast, New Plymouth and Blenheim franchises of which Mr Mettrick was a director, after he took the companies over from failing franchisees. In most franchise agreements, liquidation  is grounds for termination. Although the three franchises were not themselves in liquidation, in the opinion of new franchisors Inno Capital they were not 'financially sound.'

Mettrick said he had no issue with the Inno's decision to cancel the franchise agreements. 

In reference to the outstanding franchise fees, Mettrick's solicitor Mark Odlin said the entities may owe historic franchisee fee arrears to Stonewood Homes New Zealand Ltd, a debt which Inno may have purchased from the receivers.

If it was the case, the entities, not Mettrick personally, owed the money to Inno.

Before making the decision, Webber said Inno Capital was in contact with the Registered Master Builders Association. It has plans to ensure homeowners affected by the decision got "the best outcomes".

Meanwhile, work to complete the first 50 homes in Canterbury affected by Stonewood's receivership started this week.


Domino's driverless pizza delivery plans excite Minister 18th March 2016


US franchise entrepreneur looking for NZ meetings 16th March 2016


Franchise sector strengthened as leaders join forces 16th March 2016

16 March 2015 - Franchise New Zealand has joined forces with the Franchise Association to promote franchising to more people than ever

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NZ-developed franchise management app taking off 15th March 2016

March 2015 - Franchise Infinity, the tablet-based franchise management system, is catching the eye of some of NZ’s best-known franchises

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The Coffee Club targets more expansion in Christchurch 10th March 2016


Stonewood franchise sold to Chow Brothers 9th March 2016

The troubled Stonewood Homes franchise has reportedly been sold to the Chow brothers, the property magnates who have made a fortune from strip clubs, hotels and commercial property deals. The brothers were in the news in 2014 when they abandoned plans to build a 15-storey 'super-brothel' near the SkyCity casino in Auckland.

Stonewood Homes is New Zealand's third-largest home builder, but both the national franchisor and the Christchurch franchise were placed in receivership on 22 February. Receivers KordaMentha have confirmed the sale. The company has 19 franchises across the country, but no mention has been made so far of how they will be affected.

The brothers, whose assets include commercial property, hotels and strip clubs, said the deal covered both the national franchise rights and the Christchurch franchisee.

"Stonewood complements our office, retail, accommodation, and car park property portfolio," John Chow said in a statement in Christchurch on Wednesday. 

"This purchase signals our clear intention to repair recent damage to the brand and to re-establish the Stonewood brand nationally on a very firm footing."

Last Thursday, the Chow brothers and Webber met the 44 remaining employees of the company and offered them "new contracts on similar terms", they said in a statement.

"While we still have quite a process to work through with the receivers, our next step will be to engage urgently with customers with uncompleted homes.

"It's vital we provide certainty for customers who have been affected. We have a management team of eleven here in Christchurch to seal the deal but we ask for tolerance from affected parties," Webber said.

Shortly after the company was placed in receivership, 41 staff were laid off.

Grant Graham of KordaMentha said the sale to Inno Capital included the business and assets of the companies.

The "prompt sale" was the best possible outcome in the circumstances, he said.


Restaurant Brands going back into Australia 6th March 2016

NZ-listed Restaurant Brands is to return to the Australian market by purchasing multi-unit franchisee QSR in New South Wales. QSR operates 42 KFC stores in the state.

Restaurant Brands, which is the New Zealand master franchisee for KFC, Pizza Hut, Carl's Jr. and Starbucks, previously attempted to enter Australia with the purchase of 51 Pizza Hut stores in Victoria in 2002. It sold them again in 2008 following a disappointing performance. However, KFC has been a strong performer for the company in New Zealand of late where it has re-invested heavily in the brand.

Restaurant Brands [NZX: RBD] is expanding its footprint across the Tasman, acquiring  Australia's second-largest KFC franchise for $A82.4 million.

The deal sees Restaurant Brands acquire all the shares in QSR Pty – the largest KFC franchisee in New South Wales – owned by Australian property developer Stephen Copulos.

A notice to the NZX this morning states QSR is a profitable operator with 42 stores, generating sales in excess of $A100 million and earnings before interest, tax, depreciation and amortisation of more than $A15 million a year.


Can Starbucks work in Italy? 2nd March 2016

While Starbucks is a big name in the US, and used to be a staple scene in romcoms, it hasn't always flourished outside its home country. In Australia it struggled for eight years before closing over 60 unprofitable stores, while in New Zealand it has always struggled against better offerings from other brands. Part of the reason for this is that franchises such as Columbus Coffee, The Coffee Club and Robert Harris are individually-owned by franchisees, while Starbucks outlets are operated under management by Restaurant Brands.

Now Starbucks is to expand into Italy, the home of espresso and the culture that reportedly inspired Starbucks founder Howard Schultz 30 years ago. Will it fare any better in one of the world's most style-conscious and sophisticated markets? Time will tell.

The headline of its news release said the company was entering Italy "with humility and respect" for the country. Schultz said he plans to develop a coffee blend specifically for the Italian market and add a bar for customers to stand at, as is custom in Italian coffeehouses.

The company will also be going local with a partner, working with Percassi - which Srere noted is "hugely respected in Italy" - as the licensee to operate its stores.

Branding experts said the humble and local approach was the right one.

"You've got to go and kiss the ring here - you don't mess around with Italy and coffee," Ries said. Companies need "to be authentic, and to not just be the big American brand with guns blazing, coming in to take over the town."


Kiwi company takes over big coffee brands 29th February 2016

February 2016 - A New Zealand company has taken over the master franchises for some of the country’s best-known coffee brands.

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Receivers confident of finding buyer for Stonewood Homes 26th February 2016

The receivers of the Stonewood Homes businesses are confident that a buyer will be found for the building side, but there's no mention of what might happen to the franchisor and how this affects other Stonewood franchisees.

On Monday, KordaMentha's Grant Graham and Neale Jackson were appointed as receivers of Stonewood Homes New Zealand Ltd – the master franchisor of the Stonewood Group – and sister companies Stonewood Homes Ltd and Sterling Homes (Christchurch).

The company owes about $15 million to unsecured creditors and has 110 unfinished homes. Receivers are still calculating the outstanding debt to secured creditors.

They want to strike a deal to sell the business and its assets. The buyer would hopefully preserve some of the 85 jobs at stake, finish uncompleted homes and potentially take on Stonewood sub-contractors left in the cold. It is unlikely a buyer would purchase the company and its debt.

Graham said he wanted the sale to happen within weeks. The company was already well-advanced in a recapitalisation process and he hoped that interest would be converted into a sale.

Graham said more than 10 parties had expressed interest to varying degrees. He was "cautiously optimistic" of a sale.


Starbucks slammed after 'no ladies' sign goes viral 26th February 2016

A Saudi Arabian outlet of Starbucks has attracted massive online reaction after posting a notice on its door stating 'No entry for ladies only - send your driver to order.' Women are not legally permitted to drive in Saudi Arabia. The notice was posted during refurbishments to install a 'gender wall' to separate single men from women and families.

Starbucks has 78 stores in Saudi Arabia, all of which have gender walls to separate single men from potential temptresses— apart from one store, reserved for women and children.

When Starbucks finally responded to the controversy, it explained that the shop’s ban on ladies had been lifted.

“At Starbucks, we adhere to the local customs of Saudi Arabia by providing separate entrances for families as well as single people. In addition, all our stores provide equal amenities, service, menu, and seating to men, women and families,” the company said in a statement to CNN.

“We are working as quickly as possible as we refurbish our Jarir store so that we may again welcome all customers in accordance with local customs.”

This didn’t cut it with the protesters, who began to tweet memes comparing the situation with Apartheid South Africa.


Christchurch building franchisor and franchisee in trouble 23rd February 2016

Christchurch-based building franchisor Stonewood Homes has gone into receivership, along with its sister company which is the Christchurch franchisee. However, customers have been told that their homes will be completed thanks to the guarantees provided by the Registered Master Builders Association.

KordaMentha confirmed on Tuesday that Stonewood Homes New Zealand Limited was in receivership at the request of the company.

Grant Graham and Neale Jackson of KordaMentha have been appointed as receivers to the company Stonewood Homes New Zealand Limited, and sister companies Stonewood Homes Limited and Sterling Homes (Christchurch) Limited. 

Stonewood is one of Canterbury's biggest home builders.

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The Master Builders Association is in the process of contacting all of the Stonewood Homes Christchurch homeowners to inform them of the process and ensure that in the short term they do nothing to compromise their rights under the guarantee.

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Franchise expertise appeals to new owners of Fastway 23rd February 2016


Bricks & mortal retail still tops 16th February 2016

Online retailing may be the latest thing, but physical stores are still where the bulk of New Zealand retailers make their money, a new survey shows.

In a state of the industry survey by Massey University's Centre for Advanced Retail Studies, 263 retailers reported that 60 per cent to 89 per cent of their revenue still comes from bricks and mortar.

Associate professor Jonathan Elms said suggestions that the internet would 'obliterate the physical retail landscape' were wrong. 'Only a relatively small percentage of respondents were just pure-play internet retailers so there's obviously going to be some bias to say, stores are the way forward.'


NZ seminars for franchisors and franchisees 15th February 2016

A series of seminars being held around the country  in February and March will offer business owners an insight into franchising, franchise executives new ways of helping boost franchisee performance, and franchisees some practical help on improving profitability

The seminars are being run by Franchize Consultants (NZ) Ltd, the long-established Auckland-based company which has won the Service Provider of the Year Award in the New Zealand Franchise Awards for a record six times. Presenters include Dr Callum Floyd, who has worked with many local and international franchise systems, and Michelle Bentham, who has worked in a wide variety of management roles with both McDonald's and Subway, as well as being a multi-unit franchisee herself.

This year, Franchize Consultants have added two financially-focused seminars to their popular series in association with MYOB.


Moody's gives NZ big tick 12th February 2016

Moody's Investors Service is comfortable with its Aaa credit rating on New Zealand with a stable outlook, as it anticipates the impact from lower commodity prices will be offset by strength in areas of the economy such as tourism and education services.

'New Zealand has strengths that I think make it resilient to the global economy at the present time,' Hess said, citing falling government debt that is below other similarly rated countries, improving prospects for service exports such as tourism and education, and booming immigration.

'These are all these positive aspects that are offsetting any negatives that are coming from the farm sector,' he said.


Economy humming along quite nicely, says Westpac 11th February 2016

11 February 2016 – No drought and net immigration have helped New Zealand’s economy go on growing, with economists revising GDP predictions upwards

The New Zealand economy is humming along quite nicely at present, and the low-point in fixed interest rates has not yet arrived. That’s the opinion of Dominick Stephens, the Chief Economist of Westpac, in the bank’s latest Economic Overview.

Westpac’s Economic Overview summarises the outlook for the New Zealand economy, global economy, agriculture sector, interest rates and exchange rate. This quarter's special topic covers New Zealand's commitments under the Paris Protocol. Read the full report here.


Good times ahead for franchisees 10th February 2016


McDonald’s NZ invests in healthier eating and more choice 4th February 2016

4 February 2016 - McDonald’s New Zealand is to invest millions of dollars in a nutritional improvement programme that will see reductions in sugar, saturated fat and sodium across its product range.

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Falling unemployment rate a challenge for franchising? 3rd February 2016


Mad Butcher 'should have remained a franchised chain' 29th January 2016

29 January 2016 - A financial advisor has criticised the decision to list Veritas, the owner of Mad Butcher and Nosh, after the company's share price plunged from almost 50c to less than 30c last week. The drop followed a reduced profit estimate and the announcement that Veritas would not deliver a first-half dividend.

Financial adviser Chris Lee said Veritas should never have been a publicly-listed company.  He said Mad Butcher should have remained a franchised chain of butcheries. "The public should not have been asked to put up money."

Veritas said it would write down the value of its assets by $5.4 million. It is also looking for a chief executive.

Veritas was formed in 2011 through a reverse share market listing. It operates the Mad Butcher franchisor business, has a half share in Kiwi Pacific Foods, owns nosh Food Market and the Better Bar Company.

In a sharemarket update, Veritas said most Mad Butcher stores were trading profitably and the brand was a major contributor to the group's profitability.

But it was not without problems.

"Currently, there are five VIL-owned stores in the network that, in spite of extensive support from the franchisor, have consistently failed to achieve budgets for a number of reasons, including location and the inability to find appropriately qualified and experienced franchisees."


McDonald's US sales bounce back 26th January 2016

26 January 2016 - McDonald's sales in the US lifted 5.7 percent in the final three months of 2016, assisted by the launch of an all-day breakfast menu and unseasonably warm weather. It marks the second quarter of straight growth following years of declining sales for McDonald's in its domestic market.

McDonald's, which has more than 36,000 locations around the world, is working to turnaround its business under CEO Steve Easterbrook, who will mark one year on the job in March.

One of the biggest changes under Easterbrook was to make the Egg McMuffin and other select breakfast foods available past normal breakfast hours in the U.S. - an option many customers had long desired. The changes come after McDonald's executives conceded they failed to keep up with changing tastes and saw sales slide.


Road accident injures The Cheesecake Shop customers 26th January 2016

25 January 2016 - A woman and her five-year-old daughter were injured after a car smashed into The Cheesecake Shop in Whangarei and pinned them against the counter.

The woman was standing in line at the Cheesecake Shop on Tarewa Rd, waiting to buy a cake for her daughter's birthday when an elderly motorist crashed into the shop.

The shop's owner, Jenny Gu, said: 'It's terrible. It hit a lady and her kid. They were just standing beside the case waiting for service and the car crashed into them.'


Franchisees to continue as Fastway sold overseas 22nd January 2016

22 January 2015 - Fastway, one of New Zealand’s best-known home-grown franchises, has been sold to a global company based in Dubai but franchise agreements will be unaffected

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NZ franchise lawyers named in Who's Who Legal 14th December 2015


Franchisees win again in Indian Business Awards 9th December 2015


7-Eleven Australia offers $25 million in back-pay as class action looms 7th December 2015

7 December 2015 - At least 40 7-Eleven franchisees in Australia have signed up for a class action suit against the franchisor, claiming that if they had received proper disclosure at the outset they would not have entered into a franchise agreement. The lawyer preparing the class action, Stewart Levitt, has claimed: 'The wage rorts and the oppression of many working class investors under the 7-Eleven and other similar franchise models is widespread.' Meanwhile, the company has offered a new profit-sharing agreement, which includes an agreement to pay the first A$25 million of back-pay claims brought by current and former workers. This could be seen as blurring the distinction between employment responsibilities which the franchise sector has been keen to maintain (see World Franchise Council Declaration).

Franchisee sources told Fairfax Media a key concern with the new agreement was that it didn't provide all stores with enough of an income boost to offset a new clause in the contract that places all future liability for the underpayment of workers on the franchisee. Some franchisees were also concerned that the new deal doesn't address what will happen to the low-income-generating franchisees when their contracts expire. 

The 7-Eleven spokesman said this was not an admission by the company that its model had contributed to the underpayment of staff.

Mr Levitt said the $25 million offer would not be enough to cover the full amount of claims brought against a store owner or any fines issued by the Fair Work Ombudsman.


The Coffee Club celebrates 10 years in New Zealand 30th November 2015

30 November 2015 - The Coffee Club New Zealand is celebrating 10 years in business today

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World Franchise Council opposes joint employer liability 26th November 2015

November 2015 - Jason Gehrke reports on international moves to stave off growing legislative pressure to draw franchisors into employment issues

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Franchise confidence bounces back for 2016 26th November 2015


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

24 November 2015 – Thick-cut chips (not fries), gluten-free buns, Belgian waffles and affogato – whatever’s happening to McDonald’s?

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