Road to nowhere


NZ Business - - FRANCHISE FILE -

Catch­ing the cheats will not only make life bet­ter for peo­ple who de­serve our pro­tec­tion; it will help pro­mote bet­ter busi­nesses.”

WHEN BRI­TAIN LOST its Amer­i­can colonies, it re­alised that it needed a new pe­nal des­ti­na­tion and de­cided upon Aus­tralia. The early set­tlers – the ma­jor­ity of them en­forced – strug­gled in this strange land, and a lack of the most ba­sic com­modi­ties and skills made life harder still.

“I am with­out one botanist, or even an in­tel­li­gent gar­dener,” lamented Cap­tain Phillip of the First Fleet.

Un­der the cir­cum­stances, it’s no sur­prise that the ar­rivals would take what­ever short­cuts they could to an eas­ier life. “When they couldn’t fool their masters the pris­on­ers could of­ten fool their fel­lows,” Bill Bryson writes in his book Down Un­der. “For years there ex­isted an il­licit com­merce in which newly-ar­rived con­victs were sold maps show­ing them how to walk to China. Up to 60 at a time fled their cap­tiv­ity in the be­lief that mag­i­cally ac­com­mo­dat­ing land lay just the other side of a vaguely dis­tant river.”

The fate of those who man­aged to evade cap­ture on the road to nowhere can be imag­ined.

I’ve been re­minded of this re­cently by a se­ries of in­ves­ti­ga­tions in Aus­tralia into var­i­ous types of em­ploy­ment fraud be­ing prac­tised upon im­mi­grant em­ploy­ees. The frauds in­clude un­der­pay­ment, ex­ces­sive hours, un­jus­ti­fi­able ‘ fees’ or ‘de­duc­tions’, and scams whereby em­ploy­ees are be­ing asked to pay large sums of money to be given jobs which would qual­ify them for visas, or threat­ened with be­ing re­ported for breach­ing their visa con­di­tions if they com­plain about their con­di­tions.

Of course, such prob­lems aren’t lim­ited to just Aus­tralia. We’ve had our share of such scan­dals here, too, most no­tably in­volv­ing the (non-fran­chised) Masala restau­rant chain, whose own­ers have just for­feited a mas­sive $8 mil­lion in as­sets and are fac­ing de­por­ta­tion hav­ing been found guilty of tax eva­sion and im­mi­gra­tion-re­lated of­fend­ing.

But the Aus­tralian cases have been wor­ry­ing be­cause they have in­volved fran­chisees of some of the big­gest names in fran­chis­ing there.

The me­dia have made much of the fact that these fran­chisees are preying upon im­mi­grants, who are of­ten ig­no­rant of their rights, scared and vul­ner­a­ble to all sorts of shoddy tac­tics. But al­though the names of the al­leged mis­cre­ants are of­ten quoted, it is never overtly stated that they are im­mi­grants or from im­mi­grant fam­i­lies them­selves, and usu­ally come from the same part of the world as their vic­tims. These are peo­ple who don’t know or, more likely, choose to ig­nore the em­ploy­ment laws of their new land. In­stead, they bring at­ti­tudes and prac­tices to the rights of em­ploy­ees that most Aussies and Ki­wis find re­pug­nant. Like those early Aus­tralian set­tlers, they ex­ploit oth­ers who have ar­rived even more re­cently than them­selves.

In these cases, it’s easy to blame the fran­chisors for in­ad­e­quate train­ing or in­suf­fi­cient over­sight of their fran­chisees’ em­ploy­ment prac­tices, or to sug­gest that the busi­ness model it­self re­quires cor­ners to be cut on wages. How­ever, most fran­chisees in these sys­tems don’t do this – it’s just that, in the pub­lic’s eyes, trad­ing un­der a com­mon brand makes them guilty by as­so­ci­a­tion.

The tragedy is that, as many award-win­ning fran­chisees have shown, fran­chis­ing is a fan­tas­tic way for im­mi­grants to es­tab­lish them­selves in their new coun­try. It of­fers them a route into busi­ness with all the knowl­edge and sup­port they need to turn their hard work into self-suf­fi­ciency. But if they abuse that op­por­tu­nity, they de­serve to be ex­posed and ex­pelled.


Here in New Zealand, the Labour In­spec­torate has warned that they are now look­ing at small busi­nesses and specif­i­cally fran­chises. They are aware that catch­ing one rogue fran­chisee will dam­age the whole brand, but have a ‘name and shame’ pol­icy to en­sure the me­dia gives max­i­mum pub­lic­ity.

This is a con­cern, of course, but as a speaker from the In­spec­torate pointed out at a re­cent Fran­chise As­so­ci­a­tion event, fran­chises should be sup­port­ive of their in­ves­ti­ga­tions into all busi­nesses be­cause em­ploy­ers who un­der­pay staff are not com­pet­ing on a level play­ing field with those com­ply­ing with the law.

Catch­ing the cheats will not only make life bet­ter for peo­ple who de­serve our pro­tec­tion; it will help pro­mote bet­ter busi­nesses. And that’s where fran­chis­ing should score highly with im­mi­grant en­trepreneurs and em­ploy­ees alike.

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