Questions grow over business dealings of Lenard’s pair

…there was an endemic problem in Australia of middle-order franchisors systematically and deliberately recycling franchises. He claimed Lenard’s was a classic example of where owners did not care if franchisees stayed in business because they could make more money by reselling and restarting the stores.

http://www.thewest.com.au
January 8, 2008

Questions grow over business dealings of Lenard’s pair
Gabrielle Knowles

The Federal consumer watchdog is believed to be investigating millionaire Perth businessman Gerardus Gerrit Heijne and his dead lover Frank Cianciosi over the way they dealt with franchisees of their chain of chicken shops.

Mr Heijne, 44, has been charged with murdering his 51-year-old partner in the riverside penthouse they shared in East Perth and is in custody waiting for a bail hearing.

Yesterday, major crime squad detectives turned their focus to the East Perth headquarters from where the couple ran the WA arm of the Lenard’s franchise chain.

Serious concerns have been raised about the operation.

Federal MP Don Randall accused them in Parliament last year of financially ruining WA franchisees. Under parliamentary privilege, Mr Randall, the Liberal member for Canning, said Mr Heijne and his partner had caused a number of his constituents to lose their homes and had verbally abused others in public. He accused the couple of sending franchisees “to the wall” in a bid to be able to resell the businesses and make more money.

At least four franchise owners claim to have walked away from their businesses because of the alleged actions of Mr Heijne and Mr Cianciosi.

Disgruntled former owners, who did not want to be named because they were fighting Lenard’s for compensation, said other problems were a lack of training and over-ordering of stock by the master franchisees.

Terence Gale said he felt like a failure when he could not make Lenard’s Belmont profitable during almost three years he owned it in the late 1990s. He claimed Mr Heijne and Mr Cianciosi misled him, telling him it was “one of the three best Lenard’s stores in WA”.

Mr Gale said the business was turning over about $13,000 a week before he bought it but the couple told him the franchisee was “doing nothing”.

“They told me ‘this store can easily do $18,000-$20,000 a week’,” he said. “But I could not get the store over $15,000 and at that figure, it was struggling to pay the bills.”

National Federation of Independent Businesses president John Farrell said there was an endemic problem in Australia of middle-order franchisors systematically and deliberately recycling franchises.

He claimed Lenard’s was a classic example of where owners did not care if franchisees stayed in business because they could make more money by reselling and restarting the stores.

Mr Farrell said the Australian Competition and Consumer Commission was investigating Lenard’s but the ACCC refused to comment.

Lenard’s did not return calls.

http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=53497


Brought to you by WikidFranchise.org

Risks: Churning (serial reselling), False earnings claims, Forced ordering, Lost homes, Murder, Only 3 ways out: resell to next loser, independence & be sued or abandon and go bankrupt, Opportunism: self-interest with deceit, Political champions, Australia, 20080108 Questions grow

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License