Fraud Charges Over Franchise Sale

Nz Herald:

Low returns for carpet-cleaning and water-blasting business franchises led to Commerce Commission inquiries that resulted in two men facing fraud charges at a depositions hearing in Christchurch District Court.

Stewart John Brown, 43, was before the court yesterday on nine charges of fraud and four of forgery. Robert Llewellyn Parr, 55, of Horowhenua, faces a charge of obtaining by deception and one of fraud.

Aucklander Rodney Wardrop paid $62,000 plus GST for the Clean Co franchise on the North Shore.

He told the hearing that from the material he received and the inquiries he made, he believed he could have made “somewhere around $80,000” in sales in the first year in a business with a very high profit margin.

In fact, after being in business since early 2003, the best year’s sales had been $7000.

Mr Wardrop said Brown, of Christchurch, did not carry out obligations under the franchise deal to place radio advertising and a Yellow Pages advertisement.

He said placement of their product stands in 10 North Shore outlets was also unsatisfactory and had to be moved at his own expense.

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