Cheated franchisee loses faith in New Zealand

"All my life in China I never got conned because over there I have been taught to be cautious,"" Ms Zhang said. ""Coming to New Zealand, I tend to let my guard down because New Zealanders have a reputation of being very trustworthy."

The New Zealand Herald
January 10, 2008

Cheated franchisee loses faith in New Zealand
Lincoln Tan

A Chinese immigrant who became a victim of a franchise scam says the experience has left her disillusioned with New Zealand.

Jennifer Zhang, 52, was one of about 200 people who bought non-existent ironing franchises from Keith Lapham, a former representative of the Green Acres home maintenance company.

He is reported to be in hiding.

Green Acres yesterday offered a rescue package to the victims but Ms Zhang described it as "rubbish."

Six out of eight people who spoke to the Herald at the company's Parnell headquarters said they would reject the offer.

The other two were undecided.

Speaking in Mandarin, Jennifer Zhang said: "It's not about owning the business, but why we bought the business in the first place."

Among the conditions in Green Acres' offer to legitimise the bogus franchises were for the business owner to buy a vehicle and carry out his or her own pick-up and delivery.

Not having to speak English and drive were the two main reasons why Ms Zhang bought the ironing franchise.

"The new requirement imposed by the company changes everything," she said. "I can't speak much English and don't know my way around in Auckland, how can they expect me to run the business?"

Mr Lapham used ethnic newspapers such as the Mandarin Pages and Chinese Times to advertise the sale of his ironing franchises, claiming buyers could decide on their own guaranteed income and that they need not have to do any collection or delivery of clothes.

Most of the defrauded franchise holders were Chinese and Indian immigrants, who had paid him $21,000 to $25,000 to buy businesses with guaranteed incomes of $800 to $1100 a week.

Ms Zhang said: "I bought this business because I was specifically told that the clothes I ironed will be delivered to me, and I don't have to personally deal with the clients."

Ms Zhang, who has permanent residence here, said her Green Acres experience had left her disillusioned with New Zealand.

"All my life in China I never got conned because over there I have been taught to be cautious," Ms Zhang said. "Coming to New Zealand, I tend to let my guard down because New Zealanders have a reputation of being very trustworthy."

She had borrowed money to buy the business from family members and said she did not know how to face them.

On top of that, she was also worried how she would pay the mortgage on her $400,000 New Lynn house - a loan she got only because of the guaranteed income the business was supposed to bring her.

"I cannot be a franchisee because I no longer trust Green Acres," she said. "This is a nightmare. All I want is my money back."

THE NEW DEAL
Franchisees must:

  • Provide proof of immigration status.
  • Buy uniforms.
  • Be GST registered.
  • Maintain a suitable vehicle.
  • Be available for minimum 35 hours a week.

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