No joy for clients - Franchisor responds, but complainants are not satisfied with the answers they received

Multiserv did not respond to Ntsizi November, who told Consumer Line he has been waiting for the difference of his sales amount since 2008. November said he sold his franchise store because of the problems he was experiencing.
March 8, 2010

No joy for clients - Franchisor responds, but complainants are not satisfied with the answers they received
Thuli Zungu


DESPONDENT: Aggrieved franchisees Zweli Jele, Peter Masemola, Thomas Sithole and Victor Mokoena at the Sowetan office in Rosebank. Photo: Thuli Zungu

FOR the past two weeks we have been running reports about Multiserv franchisees who said they have been given a raw deal by the company.

Multiserv has responded to eleven complaints that Sowetan received since February, but we can only report on a few due to space constraints.

Ayanda Mtanase said that she has been battling to recover her R68000 that she paid for a stall at Cavendish Glen in Kempton Park in Gauteng which franchisor Henk White did not secure.

She said she therefore cancelled her contract and demanded her money back.

After Consumer Line published Mtanase’s story, more people came forward to complain. Most of them said they did not get the stalls they were promised by Multiserv, a shoe repair, key cutting and dry cleaning chain. Those who decided to resell their stalls said they were still waiting for the difference of the sales amount due to them.

Others claimed they were set up for failure because they did not receive the training Multiserv had promised them.

Some also claimed that Multiserv’s Henk White inflated the monthly turnover of the stalls when the businesses were not viable . Most of them said the contracts were was one-sided and that their outlets were never promoted by the company.

Multiserv has responded to all but one complaint.

Andy Raouna of Multiserv said Mtanase only has herself to blame.

White said Multiserv gave Mtanase a cancellation agreement with costs incurred, but she chose not to sign it.

“The last correspondence from her attorney requested payment upon signature of the cancellation agreement, implied that she was satisfied with the offer. Our response was positive to this request. To date, we never received any further correspondence to finalise this deal,” he said.

Raouna said he was willing to meet Mtanase and settle the matter. He said Multiserv had the right to hold her to the agreement.

“She was given advice not to take a store that might not achieve the fiscal requirement she required,” he said.

Ntombifuthi Lubisi claimed that she was promised a Multiserv outlet next to a Spar store at a Hammanskraal Mall in Gauteng for which she paid a security fee in September 2008.

A year later, she had not taken occupation , but a salon had opened on the spot promised to her , Lubisi said. She has no invoices, which included her monthly rental fees, to show that she paid R300000 for the outlet, she said.

Multiserv said they were not to blame for Lubisi’s failure to secure a loan on time.

“Multiserv attempted to secure a specific site at the mall, but Lubisi had to first obtain finance . This process took eight months and the question is, should the landlord sit with an empty store until a tenant obtains finance?” Multiserv asked.

Multiserv said Lubisi is never at the store, she does not do stock control and does not implement or maintain Multiserv standards.

To which Lubisi responded that she received no training.

Busisiwe Ntombela claimed that White told her he would arrange a loan for her, but when he had to process the contract, he denied this. This led her to cancel her contract. Two years ago, Ntombela paid a deposit of R35000, she said.

Raouna said Multiserv is not a bank and can’t raise loans for clients. In this case, Ntombela herself had to apply through Umsobomvu, Raouna said.

He said Ntombela was shown various locations, adding: “She always arrived late for appointments, leaving me vulnerable in unsafe areas.”

Ntombela said that was the reason why she refused the business because the areas she was shown were not safe.

Raouna said they would offer a mediation session to remedy the situation.

Responding to Victor Mokoena’s complaint, Raouna said his complaint was resolved last year. But Mokoena said Multiserv offered to refund his R82000 in monthly instalments of R4500 until it was paid off.

Raouna said the reason that payments are made in instalments was because the proceeds of the sale are received monthly and Mokoena had accepted this.

Mokoena said they should not have sold his shop to someone who could not afford the full purchase amount.

As for Anna Radithalo, Raouna admitted that her lease agreement was not renewed “but the landlord at their first opportunity” installed an auto bank in the said location.

He also admitted that they helped transport her assets to her house because they could not secure a lease for her. He said they have tried to get her an alternative site and she had accepted.

But Radithalo said the offer was only verbal and they have not sent any written confirmation and the site they are talking about has not been constructed.

Raouna said Jason Baloyi had himself to blame for his failure. But Baloyi countered that he had invested more than R400000 on a franchise in March 2008. And he feared he might lose it .

He said White inflated returns, which he only learned about after occupying his shop.

“These figures were not even close to the estimated monthly figures disclosed by Multiserv before buying the franchise,” he said

Raouna said Baloyi was given marketing material, but he failed to utilise or hand out this material.

“ His staff can also be a factor. They dress in fur coats and artificial nails and do not wear protective gear as prescribed,” Raouna said.

He said Baloyi was also not using the prescribed Multiserv stock programme, which gives him more control of the stock in the store.

“Assistance was provided from Multiserv by putting a moratorium on the royalties due to them, however, this will no longer be the case,” he said, adding that they would take legal action against Baloyi for all outstanding money.

Multiserv did not respond to Ntsizi November, who told Consumer Line he has been waiting for the difference of his sales amount since 2008.

November said he sold his franchise store because of the problems he was experiencing.

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Risks: Blame the franchisee, Business model had never created adequate investor returns, Deposit money not refunded, Excuse du jour, False earnings claims, No franchisor support, Theft, South Africa, 20100308 No joy

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