Green Acres ordeal gets worse for franchisee

…real issue wasn't with the law, but the "culture of non-enforcement. There seems to be a reluctance on the part of authorities to act when cases are brought before them, as we have seen in the Green Acres saga."

The New Zealand Herald
March 10, 2008

Green Acres ordeal gets worse for franchisee
Lincoln Tan

The nightmare has turned from bad to worse for Green Acres franchisee Phoebe Yang, as a finance company starts demanding repayments from her for a loan to buy equipment she never received.

About 30 franchisees who bought bogus ironing franchises from Green Acres franchise master Keith Lapham for $20,000 also borrowed $5000 each from Finance Now Limited to pay Lapham for commercial ironing equipment. But at least 11, including Ms Yang, said they never got the equipment.

She told the Herald she has been having sleepless nights since she couldn't meet a deadline last Monday set by the finance company and was told that her case would be passed to a debt collection agency, which could affect her credit rating.

"I really don't have the money and don't know what to do," Ms Yang, who has a 3-year-old daughter, said. "I work night shifts as a cashier in Foodtown and there is not even enough money to make ends meet, so how do I afford to pay a loan for equipment I never got."

Finance Now CEO Phil Ellison described Ms Yang's situation as unfortunate, but said that while the company felt sorry for the franchisees, the loans had been issued to them in good faith. So unless there was a dispute, the company expected franchisees to start making repayments to the loans.

"We have some who said the signatures on the loan agreements were not theirs and those ones we would investigate," Mr Ellison said. "But for the others who do not have a police report or an affidavit to support their claims, we will put them through our usual collection process."

Meanwhile, the Franchise Association of New Zealand is preparing to make its final submission today to the review of the Financial Services Provider (Registration and Dispute Resolution) Bill, calling for stronger legislation and more protection for franchise business owners in the $20 billion industry.

But Franchise Watch spokesperson Ketan Trevidi said it would take more than just tougher laws to prevent a repeat of the Green Acres debacle, where its former area manager Lapham allegedly sold about 200 non-existent franchises to Chinese and Indian immigrants for between $21,000 and $25,000 each. The police are also investigating another company, commercial cleaners Green Power, for also allegedly selling bogus franchise businesses to Chinese immigrants.

"It is good to have tough laws, but educating immigrants is a better way of prevention," Mr Trevidi said.

National MP Pansy Wong said the real issue wasn't with the law, but the "culture of non-enforcement. There seems to be a reluctance on the part of authorities to act when cases are brought before them, as we have seen in the Green Acres saga."


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