Wizard franchisees to sue Aussie Home Loans and GE money

"There is no way that we would have signed, if we had known we would have ended up working for Aussie— and our commissions will be smaller, not bigger," one said. "We thought that Wizard would be sold as a going concern to NAB or another big bank, which would have been fine. But, being sold to our biggest competitor? I would never have agreed to that."

The Sunday Telegraph
March 29, 2009

Wizard franchisees to sue Aussie Home Loans and GE money

ANGRY Wizard franchisees are gearing up for legal action against their new owner, Aussie Home Loans, and GE Money, the finance giant that sold them to Aussie last year.

At least 35 Wizard branches are consulting top law firm Maurice Blackburn for advice on suing GE and/or Aussie for compensation and to overturn what they regard as unfair terms forced on them during the sale.

Wizard franchisees signed new three-year and five-year agreements as recently as December last year, but last month they were told that they had until April 28 to sign up with Aussie, otherwise their agreements would be terminated.

They were also told that unless they signed with Aussie, they would be subject to a "non-compete" clause that would stop them from doing any business for 12 months.

"We have not had enough time to make other arrangements," said one franchisee.

"I could have tried to get another franchise up and running with, say, Mortgage Choice or another large broker. But now I'm being told I can't do any business for 12 months, anyway."

"How are we supposed to earn a living if we don't want to sign with Aussie?" said another ex-Wizard worker.

"We're not being given any choice and neither GE nor Aussie seems to want to negotiate."

In addition, many franchisees signed leases on their offices for the same term as their franchise agreements. But if they are unable to write any business they will be stuck with the costs of maintaining the lease until somebody else takes it over.

Franchisees are being offered money, if they want to sell out, but they argue the amounts on offer are too small and GE is refusing to negotiate.

Distressed workers who have contacted The Sunday Telegraph also complain of being forcibly relocated hundreds of miles because Aussie is shutting their branch down.

But Aussie boss John Symond said the majority of Wizard franchisees had signed across quite happily.

"Those that don't want to sign are welcome to stay with GE," he said. "We have offered them better terms and conditions, better commissions, better products and a strong brand. My understanding is that they have certain grievances with GE. It is up to them how they deal with that."

GE Money Home Lending managing director Lisa Davis said the company had been upfront: "We made our decision to sell very public, so that people could consider their options."

Ms Davis said she did not consider that GE's behaviour had been unfair.

But the Wizard franchisees are still furious.

"There is no way that we would have signed, if we had known we would have ended up working for Aussie— and our commissions will be smaller, not bigger," one said.

"We thought that Wizard would be sold as a going concern to NAB or another big bank, which would have been fine. But, being sold to our biggest competitor? I would never have agreed to that."

http://www.news.com.au/business/story/0,27753,25254915-462,00.html


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