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NZ Post Franchises Could Derail KiwiBank

Sunday 6 Jan 2002

ACT Finance Spokesman Rodney Hide said today that the New Zealand Post Franchise revolt could derail NZ Post's KiwiBank.

"The 173 franchises hold the key to NZ Post keeping its costs low, providing the needed geographical reach and enabling seven-day extended-hours service. NZ Post have promised 300 outlets and 20 to 25 KiwiBanks opening a week, beginning in February. This isn't possible without the franchisees.

"The franchisees are independent of NZ Post and are made up of Books and More outlets, chemist shops, hardware shops and bike shops.

"The problem is that NZ Post is not prepared to compensate franchisees for the costs of running the KiwiBank. The franchisees must put in counters and back offices. NZ Post will pay half the renovation cost and provide the other half through an interest-free five-year loan. But the franchisees lose valuable retail space and must provide the staff and all other running costs.

"In return, they will be paid just 53 cents per KiwiBank transaction. Franchisees are now being paid $1.03 for every transaction they do as NZ Post agents for the Taranaki Savings Bank, without any of the hassles and expenses. They rightly see that NZ Post is proposing to rip them off.

"KiwiBank's own forecast shows a typical franchisee losing $5,320 after five years of work and an investment of $12,500. That is without any allowance for the cost of labour for counter transactions and other associated overheads.

"In a letter on 21 December to franchisees, NZ Post admitted it still hasn't finalised a draft of the contract. The contract is now promised to be delivered to every franchisee for review early this year. NZ Post hasn't settled how insurance will be handled or who will have to provide the needed extra cash and float.

"NZ Post has put enormous pressure on the franchisees to sign and have warned them against speaking out against the deal. KiwiBank can't stand proper scrutiny - once again NZ Post is moving to stamp down any informed debate.

"NZ Post and Jim Anderton have dismissed the revolt as just "one or two" dissatisfied franchisees. In fact, two-thirds of franchisees are seriously concerned about the viability of running a KiwiBank. They are also unhappy with the way NZ Post has handled the negotiations. NZ Post is bullying those that refuse to opt for full banking services. The franchisees are now seeking legal specialist help on the stance that NZ Post has adopted.

"The franchisees have banded together via e-mail and on the internet. There is a full-scale revolt underway and the revolt could well derail KiwiBank. It's a shame that Jim Anderton never listened to official advice that the Bank is a dog. That's the trouble with Jim Anderton - he never listens - and he is not listening now," Mr Hide said.

ENDS


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