International Law

Taken by the Cleaners - New Zealand Style Franchise Fraud

Ironing scam victims suffer second setback in Franchise Fraud

"Defrauded franchisees of former Green Acres master franchisee Keith Lapham were dealt a further blow yesterday.

Just when some of them thought they could get their businesses up and running again after two former Lapham employees offered to continue collecting and delivering the ironing, Green Acres issued a legal warning asking the two to stop what they were doing.

Mr Lapham disappeared around December 20 after being questioned by Green Acres chiefs over some 200 bogus franchises, allegedly sold over the past 18 months."

Unfortunately, the defrauded franchisees are very unhappy with the Green Acres, the franchisor, new restrictions on their business model and may have to stop doing business altogether as a licensee of the Green Acres trademark.

"Mr Lapham had allegedly sold 200 franchises over 18 months mainly to Chinese and Indian immigrants, which Green Acres said they were not aware of. However the company issued a rescue package saying it would honour the franchisees, with certain conditions, one of which was that the franchisees had to do their own pick up and delivery.

Mr McCulloch said: "Driving around was out of the question and if you look at the rescue package, it was something Green Acres was not prepared to offer - so I offered them the service. What's wrong with that?"

One of the franchisees, Ellen Jin, said she was shocked by the development.

"I see Ken as our saviour to help us get something back from the business we thought we had legitimately invested in," said Ellen Jin, whose ironing equipment had been lying idle until Mr McCulloch came along. "I can't believe we have been persecuted a second time."

Full post as published by Misleading Advertising Law on January 21, 2008 (boomark / email).