Franchise Association Statement on Green Acres

The Franchise Association of New Zealand is extremely concerned about the situation affecting people who have apparently been sold false Green Acres franchises.

The information we have received so far suggests that this relates to the activities of one person who acted as a master franchisee for Green Acres in Auckland. That person appears to have issued sub-franchises only for ironing franchises and not for other kinds. The situation is understood to be under investigation by the Police, the Serious Fraud Office, and the Commerce Department.

At this stage, it appears that the Green Acres franchise is itself a victim of the alleged actions of the master franchisee in question. It has announced a rescue package for the parties affected, which is under discussion.

Some of the people affected contacted the Association in December 2007 and alerted us to the situation. Their concerns were immediately raised with Green Acres by the Associations General Manager. The Association publishes a Code of Practise and Code of Ethics with which all members must abide (click here to see Codes ). Green Acres is a member of the Franchise Association and is committed to comply with the Codes.

The Franchise Association was founded in 1996 to promote ethical franchising in New Zealand and to help educate and protect all those involved in franchising, both franchisees and franchisors. The Association has a policy of regular contact with the Government regarding matters of mutual concern and interest.On Tuesday 8 January the Minister of Commerce, the Hon Lianne Dalziel contacted the Association Chairman, Mr Miles Agmen-Smith for substantial discussions in the light of the possible issues raised by this situation. Further discussions will follow.

"The Association would like to stress that the apparent actions of one individual in creating and selling false franchises within a system in this way are, to the best of our knowledge, without precedent," says Mr Agmen-Smith. "Franchising is a $10 billion-plus sector in this country and has helped many thousands of people into running their own successful businesses. This has been regularly demonstated at the annual Westpac New Zealand Franchise Awards."

The whole situation is being followed very closely. When more information becomes available the Association will be reviewing the position carefully regarding what further steps are to be taken.