Wendy’s seeks injunction against NZ franchisees
Supa Sundaes stores claim they’re being forced by owner to buy Aussie icecream
Owners of Wendy’s Supa Sundaes stores say they are fighting for their livelihoods after being allegedly forced to buy Australian icecream rather than a Kiwi product by the brand’s overseas owner.
Kiwi franchisees have rebranded to Shake Shed & Co in an attempt to break away from Singapore-based parent company Global Food Retail Group, which purchased the master franchisor rights for A$10 million ($11.2m) in 2014.
There are 32 Shake Shed & Co outlets in New Zealand, formerly trading as Wendy’s Supa Sundaes, and two original stores.
Former New Zealand Wendy’s master franchisee Chang Xi said the franchisee businesses operating in shopping malls had united and collectively abandoned their agreements following restrictive measures from the icecream brand’s owner, which had harmed local operations.
The parent company is seeking an injunction in the High Court at Tauranga.
Xi said local owners fear their businesses will go under and jobs lost if they are forced to return to operate as Wendy’s.
“We rebranded as a group as we feel that we need to be separated from this international franchisor to be able to survive,” Xi said.
“We have encountered a very terrible situation. All New Zealand franchisees are extremely upset.”
Xi said Supatreats NZ Limited, ultimately owned by Global Food Retail Group, had introduced restrictive measures for franchisees, including a set list of approved suppliers operators must buy product from.
Shortly after Global Food Retail Group took over, it had made Kiwi franchisees buy icecream from an Australian supplier which costs 50 per cent more than the price of the local product it had been supplied by Emerald Foods for 30 years, and was “not as good quality”, he said.
“We had no input into that icecream; to trial it, to test it — nothing,” said Wendy’s New Zealand training manager Elizabeth Myburgh.
“We have fine dairy in New Zealand. For a customer now to suddenly have to accept an Australian icecream when we’ve got what we’ve got in New Zealand, I think will negatively impact the business, as it is anyway.”
Scoop icecream was the first product to have its supplier changed, with proposals for new soft serve and hot dog suppliers following after, Xi said.
There were other issues with the franchisor, including changes to its marketing, he alleged.
Xi said he went through a process of mediation with Supatreats Australia prior to the franchisees’ decision to collectively rebrand.
“We didn’t want to rebrand, we’re forced to do it so that we can survive.”
Emerald Foods, which had been supplying Wendy’s Supa Sundaes with icecream for 30 years, legally
We get a lot of questions about why we are not Wendy’s anymore, and we can’t answer.
Elizabeth Myburgh
lost its contract to supply Wendy’s franchisees with icecream but is supplying businesses now trading as Shake Shed & Co, Xi said.
Emerald Foods general manager David Foreman said the Aucklandbased icecream manufacturer was unable to comment on the matter.
The situation had been trying for franchisee owners and their families, who faced an uncertain future, Myburgh said.
“We get a lot of questions about why we are not Wendy’s anymore, and we can’t answer,” she said.
“It’s awful because this effects 34 people’s livelihoods and their staff.”
Global Food Retail Group, owned by parent company Global Yellow Pages, acquired the Australian Retail Franchise Group, the former master frachisor of Wendy’s Supa Sundaes, in September 2014.
A spokesman for the owning company said both Supatreats Asia and Supatreats NZ had filed legal proceedings against Shake Shed & Co.
The spokesman said proceedings allege breaches of franchise agreements both by the master franchisee of Wendy’s in New Zealand, sub-franchisees and breaches of confidence by Xi and a director of Shake Shed & Co.