Troubled Nando's franchisees disputing marketing spend and rebates
posted on 29th November 2013
The failure of a Nando's store in Ponsonby owned by a high-profile franchisee is highlighting disagreements within the chain in New Zealand. A group of disgruntled current and former franchisees are questioning marketing spend, ingredient supply costs, loan repayments and incentive payments or rebates paid to the franchisor by chicken suppliers Tegel. Master franchisee Shailen Ramjee, himself a former Nando's franchisee, has strongly defended the company, pointing out that when he took over in 2006 the business was in a state of disarray, and that despite the GFC only two outlets of the 31-store chain had permanently closed.
Ramjee says a large majority of franchisees are happy with the franchisor and the business in general.
One of them is Kuldeep Arora, owner of the Nando's stores in Auckland's Epsom and Hamilton's The Base shopping centre.
He's so happy, in fact, that he plans to open his third Nando's store in a location he didn't want to disclose.
Arora says some people think they can buy a franchise and it will "run itself", but it actually takes a lot of hard work to make a business a commercial success.
"Nando's is a great system."
Arora says he has an excellent relationship with Ramjee, adding that it's "human nature" for people to blame others for their business failings.
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