Report 74 Business Practices Committee3. The complaints received |
The Committee received a number of complaints against Kilian. The following are some matters raised by them:
| a) | they did not receive the 30 percent stock as promised, |
| b) | Kilian avoided many attempts by them to meet him, |
| c) | the owner of a coffee shop informed a franchisee that Kilian gave him (the owner) the right to also sell the same coffee products and coffee machines in the area that the franchisee bought, and |
| d) | it appeared that no franchisee had "sole exclusivity" in any area and other franchisees were at liberty to distribute the products to wherever they choose. |
Eventually, when Kilian was approached by the franchisees about the infringement on the "sole exclusivity", he said that it "... slipped his mind" to inform his "previous" client base to refrain from selling in the areas of the new franchisees. He said that the previous client base could do so if they had the franchisee's permission, but then had to pay the franchisee a commission.
It appeared that his brother was the sole importer of the products and not Kilian, as he led the franchisees to believe. The brother admitted to a franchisee that he held the master franchise and he could grant franchises as he saw fit. He said that the franchises granted by him overrode any franchise sold by Kilian.
Two of the franchisees decided that they no longer wished to market the products and requested Kilian to cancel the agreement. They also demanded that he honour his "money back guarantee" He assured the franchisees that he would do everything in his power to resell their areas and refund their investments. He nevertheless handed a cheque of R5 000 to one of the franchisees. It was alleged by a franchisee that the bank did not honour this cheque because Kilian stopped payment of it.
The aggrieved franchisees called a meeting of all Simply Bellissimo franchisees to establish whether they were experiencing similar problems with Kilian. During the meeting it became known that this was the case. Several franchisees indicated that they had paid for the same area. Not once did he refund an "original" franchisee when he resold an area. Kilian allegedly told a complainant that he "...made mistakes" and "... let things get out of hand".