Top Ten holiday park franchise is facing stiff trans-Tasman competition with Australian providers Tasman and Hampshire buying up New Zealand Top Ten sites. The High Court refused to block sale of Caron and Sean Steffert’s Top Ten Coromandel Holiday Park to Tasman.
The Stefferts franchise agreement with Top Ten runs until 2027. Sale of their Rings Road holiday park to Tasman is arguably in breach of their current Top Ten franchise deal, Justice Moore said. But the sale can proceed, he ruled. Top Ten’s remedy is to sue for damages, claiming breach of contract.
Top Ten Group currently franchises some 48 holiday parks. Generally, each park is in private ownership. Owners benefit from advertising under the Top Ten brand. While dressed up as a franchise, goodwill sits with the owners of each holiday park.
In economic terms, Top Ten operates as a marketing co-op. It has a contractual interest in each franchise holder’s business turnover. Holiday park owners pay a levy to Top Ten based on their short-term accommodation revenue.
The High Court was told two Australian-owned corporations have made inroads into the New Zealand market. In 2020, Tasman Tourism New Zealand Ltd scooped up three previous Top Ten franchises: Waihi Beach, Beachhaven and Christchurch. In 2023, Hampshire Holiday Parks Ltd acquired Queenstown, Kaikoura and Ohope.
When the Stefferts asked Top Ten in 2023 for release from its current contract, in preparation for sale of their Coromandel site to Tasman, Top Ten responded that it did not ‘approve’ the sale.
Lawyers’ letters followed.
The Stefferts say no ‘approval’ is needed. It is merely a question of how much they have to pay for release from their current Top Ten contract.
Top Ten responded with High Court applications to block the sale and a separate claim against Tasman alleging Tasman is liable in tort for allegedly inducing the Stefferts to breach their existing Top Ten contract.
In the first round, Justice Moore ruled the Stefferts’ sale to Tasman could go ahead.
Arguably, they are in breach of their Top Ten contract. It has a little over three years to run.
Top Ten indicated it would be seeking damages for cost of changing marketing materials which list Coromandel Top Ten plus recovery of three years’ lost income.
Top Ten Group New Zealand Ltd v. Tasman Tourism New Zealand Ltd – High Court (10.06.24)
24.145