Kiwibank faces franchise revolt

Now the group says it does not want to be a part of the deal. The chain of 34 NZ Post franchises stretches from Whangarei to Timaru, making up 10% of Kiwibank's proposed outlets…Act MP Rodney Hide says the bank was "a dog from day one."

ONE News
January 10, 2002

Kiwibank faces franchise revolt
The controversial Kiwibank is facing a revolt among New Zealand Post franchises.

An internal memo leaked to ONE News from key franchise group Books and More says it does not believe Kiwibank stacks up economically.

Now the group says it does not want to be a part of the deal.

The chain of 34 NZ Post franchises stretches from Whangarei to Timaru, making up 10% of Kiwibank's proposed outlets.

The franchise's advisory panel says Kiwibank's proposed payment of 53 cents for handling transactions is far too low to justify their involvement.

A memo sent to other branches says there are too many unresolved issues and "a lack of quality information."

It says the bank's financial model is not robust enough and there are too many unknowns, "which can only have a negative financial outcome".

Act MP Rodney Hide says the bank was "a dog from day one."

"They are saying this bank can't pay its way and we're expected to subsidise it… they're not prepared to, and therefore the bank can't get off the ground," Hide says.

Ironically, Books and More is 50% owned by NZ Post in a joint venture with WH Smith.

Kiwibank has been negotiating with individual outlets over fees and costs, and the opposition has taken the new bank by surprise, says Kiwibank chief executive Sam Knowles.

"We're still in negotiations with Books and More, and we expect them to be successful," he says.

Despite its criticism, Books and More says NZ Post needs to be applauded for looking at initiatives to replace revenues lost.

But Kiwibank has also struck opposition from a handful of other South Island franchisees with similar concerns.

However, Knowles says Kiwibank remains confident of its support.

"We are totally confident, we've got enormous support from the majority of the franchises, we've got enormous support from customers throughout New Zealand," Knowles says.

Kiwibank still expects to have 300 branches in operation by June.


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