Facing termination of his Richmond Hell Pizza franchise near Nelson, Seerat Singh went on the attack alleging Hell Pizza head office had manipulated delivery data that he was accused of fraudulently altering. It was all part of a head office campaign of bullying and intimidation designed to drive him out, Mr Singh complained.
The High Court allowed immediate termination of Mr Singh’s Richmond franchise.
Through their company DEVGNZ Ltd, Seerat Singh and Ajit Kaur paid $330,000 in 2019 for rights to the Richmond Hell Pizza franchise. Their franchise rights were renewed eighteen months later for a further five years after paying a $20,000 renewal fee. One year into the renewal and they were at logger-heads with head office over operation of their franchise. Mediation came to nothing. Primary issues were the level of customer complaints and marketing rebates payable for prompt pizza order deliveries. Hell Pizza franchise operators receive financial rebates as long as a specified level of home deliveries is achieved on time.
Hell Pizza head office suspected its Richmond franchise was falsifying customer order requests to set a delivery time later than the delivery time set by a customer, ensuring franchise records showed deliveries on time when in fact they were later than customers specified.
The High Court was told there can be legitimate reasons for altering expected delivery times; customers may ring after ordering, requesting a later delivery. A head office audit of the Richmond’s store data for a six month period through 2021 identified delivery times for 335 orders were manually altered at point-of-service by someone using Seerat Singh’s user ID. This rate of modification was seventeen times higher than the average for all Hell Pizza stores.
Mr Singh said head office also had access to his point-of-sale data. He alleged head office had made the changes; part of a plan to unlawfully terminate his franchise, he alleged. He also alleged head office had orchestrated a campaign of harassment with one instance of an individual attending at the store who hurled abuse and intimidated staff while claiming to know people at head office. Mr Singh refused to supply head office with shop CCTV footage which would have captured images of the incident. The footage had been erased, Mr Singh said.
Requests from head office for an explanation as to why quoted delivery times for so many orders did not match customer orders were met by Mr Singh’s allegation that it was head office who had changed the figures.
Justice Isac declined Mr Singh’s application for an injunction to block termination of his Richmond franchise. A franchise relationship requires trust and confidence between all parties, he said. If Mr Singh’s allegations are true, it is expected he would instead want the business relationship to come to an end and damages paid, Justice Isac said. It is open for Mr Singh to sue for damages.
DEVGNZ Ltd v. The Depths LP – High Court (10.12.21)
22.017