After losing control of Wendy’s master franchise for New Zealand, Chang Xi is on the hook for $5.5 million. This followed Mr Xi’s failed attempts to break free of franchise rules by rebranding as Shake, Shed and Co.
Mr Xi’s spat with Wendy’s offshore head office become public mid-2018 when he encouraged a number of franchisees to join him in new operations branded as Shake Shed. Wendy’s sued. The High Court was told a deal was struck. This later fell apart. Mr Xi and his companies were ordered to pay Wendy’s some $5.5 million damages. Two months later, Heartland Bank appointed receivers. It has security over assets of Mr Xi’s companies. Receivers are looking to sell Wendy’s New Zealand operations as a going concern.
The High Court was told 24 Wendy’s branded outlets were trading. They are renting commercial space. The Receiverships Act holds receivers personally liable for this rent should they keep trading beyond fourteen days from appointment. The High Court gave receivers Colin Gower and Andrew Grace an extra fifteen working days grace, giving them extra time to keep outlets trading while they looked for a buyer.
re Cone Enterprises (New Zealand) Ltd – High Court (3.03.20)
20.047