Bayan Khadem is so angry he has been forced to close down his Bakers Delight store, he left town to calm his nerves.
After four years of struggling to meet what he claims are massive overheads, Mr Khadem last Monday closed Bakers Delight at Pakuranga Plaza, one of the country’s oldest shops in the bakery franchise.
He has levelled criticism at the franchisor, citing inaccurate sales forecasts and interference during an attempted sales process.
“I bought four years ago and was promised we were going to make money. We lost money from day one,” Mr Khadem told the Times.
“I had no choice but to liquidate on Monday.”
He employed nine at the store.
“(The franchisor) projected $11,000 in weekly sales.”
He said in busy spells the store would peak at $14,000 per week and, when it was quiet, $9000.
From these weekly sales though, he would cough up 10 per cent to the franchisor, 30-40 per cent for ingredients and then still had to dig deep for wages and rent.
“All this and I haven’t ever made money.”
The Bakers Delight website shows a Mt Maunganui store is up for sale for an “initial investment” of $360,000. It says average weekly sales are “in excess of $14,000”.
Mr Khadem said his store is not the first to succumb to financial pressure and listed at least three or four others which he claims folded for the same reasons.
“I’m feeling relieved it’s finally over…it has been a battle with the franchisor,” he said.
“I had two buyers lined up last year but the franchisor…they dictated who I sold to and the price. They told me what my business was worth.”
Something was drastically wrong with the franchising model in NZ, he said, a model which could not simply be copied from the Australian marketplace where the chain originated.
“It has been very difficult to work with them as in promises,” he said.
“This is my life. You walk away with nothing.”
Bakers Delight country manager Xavier Barnsley says the company is always concerned when a franchise closes.
“I understand that it’s raw. There’s a high level of concern,” he said.
“We always try to support our franchisees.”
As to claims of interference during the sale process, he said: “We have a thorough and robust sales process we follow which takes into account the vendor’s interests, the purchaser’s interests and our interests.”
As to forecasts: “We don’t give franchisees forecasts. It’s impossible to give forecasts.
“We are always there to support our franchisees.”
As to the future of the Pakuranga store, most of the leases are held by the franchisor.
“Essentially we’re in breach of our lease (at Pakuranga Plaza),” Mr Barnsley said.
“It’s going to be a priority (getting a new franchisee in there). Hopefully it will happen soon.”
The Times has attempted contacting the liquidator Peter Jollands of Jollands Callander several times.
By: Nick Krause