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BUSINESS

Minister to confer with industry on franchise risks

Tuesday 8 January 2008, 5:18PM
By Lianne Dalziel
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Commerce Minister Lianne Dalziel met today to hear directly from victims of an alleged fraud involving the selling of bogus ironing franchises in Auckland.

The government will work with the New Zealand Franchise Association to look at whether there is a need to tighten the legal framework around franchising to minimise risks involved in franchise arrangements, Lianne Dalziel said.

"This is a very distressing issue for the victims which came to light just before Christmas. It is complex and could involve a combination of both criminal and civil investigations. It is now being investigated by the Serious Fraud Office and it would not be appropriate for me to comment further on the legal issues other than to say that the complaints are being taken seriously and are being actively investigated by the appropriate agency.

"I have undertaken to write on behalf of the group to the New Zealand Franchise Association of which I understand Green Acres is a member. The Franchise Association has rules and codes of conduct which its members are obliged to meet therefore it will be useful to have their perspective on what has occurred. I will also want to discuss with them the question that now arises as to whether the government needs to look at strengthening the legal framework around franchising.

"It would appear that most of the victims in this case are migrants, some with limited English and some who have used up all their savings to buy into the franchise. I have advised everyone involved to write down everything they can remember about their dealings with Keith Lapham and Green Acres and to gather all phone and email records as well as all receipt books and other material. If necessary, they should seek the help of others to record in English their memories of exactly what they were told so all this information can be passed on to the investigators."

Lianne Dalziel is very impressed with the people who have formed themselves into a group called Franchise Watch.

"They have certainly put together quite a detailed case which can now be submitted to the appropriate authorities."