Fran­chise dis­agree­ment


Shepparton News - - NEWS - By Bar­clay White

A Shep­par­ton fran­chisee claims he is thou­sands of dol­lars out of pocket af­ter his busi­ness was taken over.

David Dai in­vested thou­sands of dol­lars and count­less hours to grow his Shep­par­ton Go Sushi fran­chise in Maude St into a healthy busi­ness.

But his dreams came crash­ing down when Go Sushi’s franchisor sent se­cu­rity guards to kick him out of his shop.

The ex­tended dis­agree­ment be­tween Mr Dai and Go Sushi franchisor Ni­cola Mills started to go sour af­ter he took a look at how the par­ent com­pany was spend­ing its money.

As part of the fran­chise agree­ment four per cent of tak­ings had to be paid to fran­chisees to­wards mar­ket­ing for the Go Sushi brand.

Ex­cept, he claims the money was be­ing taken and fran­chisees were not see­ing the ben­e­fits of the money.

‘‘It was a lot of money each year,’’ Mr Dai said.

‘‘They were tak­ing money from the mar­ket­ing fund and spend­ing it where they shouldn’t be spend­ing.’’

He claims he sought an­swers from the franchisor, but he had not been given the in­for­ma­tion.

It was not the only com­plaint he had with the Go Sushi com­pany, which he claimed of­fered lit­tle to no sup­port in help­ing its fran­chisees, de­spite tak­ing thou­sands in fees.

He claimed that the ini­tial train­ing in how to make sushi was sub­stan­dard, lead­ing him to learn how to make sushi with­out the help of head of­fice.

Af­ter dis­cus­sions with other Go Sushi fran­chisees, he de­cided to stop pay­ing the mar­ket­ing fee un­til he re­ceived in­for­ma­tion about how the mar­ket­ing money was be­ing spent.

‘‘We want an­swers but they are not giv­ing them to us,’’ he said.

This quickly es­ca­lated the dis­agree­ment, with the head of­fice forc­ing Mr Dai out of his fran­chise at the start of Au­gust.

He claimed se­cu­rity guards put glue in the locks to keep him out and he has been un­able to take back thou­sands of dol­lars worth of equip­ment which was in the store dur­ing the force­ful takeover.

His lawyer Jules Marra spe­cialises in fran­chise law and said Mr Dai’s prob­lems were sim­i­lar to other Go Sushi fran­chisees across Aus­tralia.

Legally, he said it was dif­fi­cult for Mr Dai to fight back be­cause of the huge costs in le­gal fees and the con­tract he had signed.

‘‘She’s got the lease, she takes over the shop and she gets the ben­e­fit of the equip­ment that David has paid for,’’ Mr Marra said.

‘‘She is re­ly­ing on the ben­e­fit that most peo­ple do not want to go to court.’’

How­ever, Syd­ney-based franchisor Ni­cola Mills told a dif­fer­ent story when asked about the allegations from Mr Dai.

She claimed she was ‘‘ex­tremely pa­tient’’ with him af­ter he re­fused to pay out­go­ing fees to the land­lord of the Shep­par­ton shop for 12 months.

Af­ter on­go­ing non-pay­ment of fees and pres­sure from the land­lord, she said she had needed to ter­mi­nate the fran­chise agree­ment.

‘‘It’s not some­thing we wanted to do, but we were left with no choice,’’ she said.

She claimed rather than seek­ing to take over the Shep­par­ton shop, the takeover had cost her thou­sands of dol­lars in fees, flights and ac­com­mo­da­tion to keep the shop run­ning.

The Maude St shop is up and trad­ing again, un­der her man­age­ment, but she said this was not an ideal sit­u­a­tion.

‘‘Maybe we’ll have another lo­cal from Shep­par­ton in­ter­ested in tak­ing it over,’’ she said.

She dis­puted any claims that mar­ket­ing money was not spent prop­erly, and said that au­dited mar­ket­ing re­ports were pro­vided to Mr Dai.

When asked about claims of not pay­ing out­go­ings to the land­lord, Mr Dai did not deny the ac­cu­sa­tion, but said that there were com­pli­ca­tions from not be­ing sent in­voices as a change of man­age­ment at the cen­tre.

Mr Dai wants to re­cover $150 000 from Ms Mills on money he in­vested on shop fit outs and shop fit­tings and equip­ment, as well as money he spent into the mar­ket­ing fund.

Ms Mills is con­vinced the dis­agree­ment was a straight case of Mr Dai not pay­ing his fees.

The dis­agree­ment could con­tinue to be very costly for both sides, with me­di­a­tion set for yes­ter­day es­ti­mated to cost sev­eral thou­sand dol­lars.

Not happy: For­mer Go Sushi fran­chisee David Dai claims he is owed thou­sands.

Re­opened: The Shep­par­ton Go Sushi shop on Maude St is trad­ing again.

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