£2.7million franchise group shut down

The investigation found that franchisees were misled by false and misleading statements about the level of training, support and potential earnings. Also that support under the Government's Small Firms Loan Guarantee Scheme of £150,000 to finance the development of a national 24 hour call centre was applied instead to a significant extent for the directors' own benefit.

Insolvency Service (National)
November 23, 2007

£2.7million franchise group shut down

A group of companies based in Exeter called Key Edge that sold locksmith and plumbing franchises countrywide has been wound up in the High Court in the public interest following an investigation by Companies Investigation Branch (CIB). Some 250 people invested franchise fees totaling £2.7 million.

The investigation found that franchisees were misled by false and misleading statements about the level of training, support and potential earnings. Also that support under the Government's Small Firms Loan Guarantee Scheme of £150,000 to finance the development of a national 24 hour call centre was applied instead to a significant extent for the directors' own benefit.

In ordering the companies into compulsory liquidation Registrar Christine Derrett said:

"I am satisfied that it is appropriate in each of the three cases to make the usual compulsory order".


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Risks: Misrepresentations, False earnings claims, No support, Insolvency, Government guaranteed loan misapplied, Government guaranteed loan program very attractive to fraud, United Kingdom, 20071123 2.7 million

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