Break-away franchisees ordered to cease trading
posted on 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.