Ironing scam victims suffer second setback

…many franchisees did not want to accept the rescue package as it could not guarantee pre-arranged minimum weekly incomes, and prevented any franchisees suing the company for lost earnings.

The New Zealand Herald
January 19, 2008

Ironing scam victims suffer second setback
Lincoln Tan and David Eames

Defrauded franchisees of former Green Acres master franchisee Keith Lapham were dealt a further blow yesterday.

Just when some of them thought they could get their businesses up and running again after two former Lapham employees offered to continue collecting and delivering the ironing, Green Acres issued a legal warning asking the two to stop what they were doing.

Mr Lapham disappeared around December 20 after being questioned by Green Acres chiefs over some 200 bogus franchises, allegedly sold over the past 18 months.

Green Acres has distanced itself from Mr Lapham, but last week told franchisees - predominantly Indian and Chinese immigrants - it would honour the franchises, but with conditions.

These included franchisees paying for new vehicles and new uniforms, agreeing to work at least 35 hours a week, and submitting to security checks.

Driver Ken McCulloch, who worked for Mr Lapham since April last year, had been servicing 11 operators on the North Shore.

He claimed not only was a legal warning issued to him and a colleague, but lettering on his van advertising the services he offered were physically removed by Green Acres boss Logan Sears when it was parked at a carpark in Glenfield yesterday. An email with photos documenting this was emailed to the Herald.

"I wanted to help the operators who have lost everything to get on their own two feet by providing them with a service that could help them earn an income again," Mr McCulloch said. "I don't see it as stealing from Green Acres because the company said they were not aware about the existence of these customers in the first place."

Mr Lapham had allegedly sold 200 franchises over 18 months mainly to Chinese and Indian immigrants, which Green Acres said they were not aware of. However the company issued a rescue package saying it would honour the franchisees, with certain conditions, one of which was that the franchisees had to do their own pick up and delivery.

Mr McCulloch said: "Driving around was out of the question and if you look at the rescue package, it was something Green Acres was not prepared to offer - so I offered them the service. What's wrong with that?"

One of the franchisees, Ellen Jin, said she was shocked by the development.

"I see Ken as our saviour to help us get something back from the business we thought we had legitimately invested in," said Ellen Jin, whose ironing equipment had been lying idle until Mr McCulloch came along. "I can't believe we have been persecuted a second time."

Rachel Joel, spokesperson for Green Acres, said the company did not want to comment on the matter. But in the letter, Green Acres' lawyer, GJ Barclay, said it was "particularly concerning" that they had "taken customer lists, customer details and other elements of the Green Acres system and now claim to be entitled to use them yourselves".

The letter also warned them against "utilising any of the Green Acres system or competing with Green Acres in any way" and said it would be looking to them for losses suffered as a result of their actions.

Meanwhile, barely a week after Green Acres bosses offered a "rescue package" to those left high and dry by Mr Lapham, virtually no one has taken up the deal.

Of the 194 members of action group Franchise Watch, none had yet signed up for the package, group spokesman Ketan Trevidi said.

Mr Trevidi told the Weekend Herald many franchisees did not want to accept the rescue package as it could not guarantee pre-arranged minimum weekly incomes, and prevented any franchisees suing the company for lost earnings.

Many franchisees did not believe Green Acres had enough customers to keep ironing franchisees in work in the longer term, and only about three people had signed on, he said.

Green Acres chief executive Andrew Chisholm rejected Mr Trevidi's claims.

A "significant number" of franchisees had taken up the Green Acres package, and the company had allowed them extra time to get "back on their feet" before enforcing any rule that they buy vehicles.

He said the company had been in contact with the SFO, but he would not comment on the progress of the investigation.

Green Acres had had no contact with Mr Lapham, Mr Chisholm said.


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