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Multiserv cheated us, say entrepreneurs

By unknown | Mar 01, 2010 | COMMENTS [ 0 ]

AFTER last week's publication about the challenges faced by an entrepreneur who claimed she had been unfairly treated by Multiserv , Consumer Line received other complaints from entrepreneurs about the company.

Ayanda Mtanase had complained that she was battling to recover R68000 she had paid to secure a Multiserv stall at Cavendish Glen in Kempton Park.

Since the complaint other aggrieved franchisees claimed they never got the stalls they were promised by Multiserv, a shoe repair, key cutting and dry cleaning chain.

Those who resold their stalls claimed they were still waiting for payment. Others claimed they were set up for failure and had not received any training from Multiserv as promised.

Some also claimed that Multiserv salesman Henk White inflated the monthly turnover of the stalls sold to them when the businesses were actually not viable.

Most of them claimed the contracts were one-sided and their outlets were never promoted by the company.

l Ntombifuthi Lubisi alleges that she was promised an outlet next to a Spar store at a Hammanskraal Mall. She paid a security fee in September 2008.

A year later she had not taken occupation of the outlet, but a salon had been opened on the spot promised to her.

She threatened to cancel her contract but was informed of the penalty clause - much to her surprise.

She still has no invoices to show she paid R300000, which included her rental fees.

lBusisiwe Ntombela claimed White told her he would arrange a loan for her. But when he had to process the contract he denied ever raising her expectations.

This led her to cancelling her franchise contract.

Two years ago Ntombela paid a deposit of R35000 after White had allegedly told her she would qualify for a loan that covered the franchise agreement of R257000.

He said White showed her three business sites. But she was not happy with the sites and opted for one at Flora Centre in Florida, Joburg.

That's when her troubles started.

"White demanded the full contract amount, making it impossible for me to own the shop," Ntombela said.

She faxed her cancellation letter to Multiserv in January and heard nothing from White until last month, when for the first time she was told about the penalty clause.

"He told me he would deduct a R10000 penalty fees, and only give me a refund of R22000," Ntombela said.

lAnna Radithalo said she had bought a 10-year franchise agreement from Multiserv in 2000.

Her contract was prematurely terminated and her wares later delivered to her house, where they have been collecting dust in the garage for the past five years.

She was granted rights to operate a Multiserv franchise in the Key West Shopping centre.

She said Multiserv concluded a lease agreement on her behalf with the landlord and she was billed monthly by Multiserv for rent fees.

Radithalo said she had no control over the renewal of the lease agreement since Multiserv was the lessee and responsible for all the rights and duties under the lease.

"Multiserv failed to renew the lease for the remaining five years and I was forced to vacate the premises," she said.

lThomas Sithole of Soshanguve said White placed him in an outlet he knew was not generating enough income.

Sithole paid R51000 for a franchise deal he was still going to locate around East Lynne in Pretoria.

He said White had told him he would make R20000 a month from the business.

"It took him about 20 months to get a stall and when that happened he dished out an outlet that could only generate R2000 a month," he said.

He cancelled the deal because he felt White had misled him.

lJason Baloyi said he invested more than R400000 on a Multiserv franchise deal in March 2008. He is scared he might lose his entire investment to Multiserv.

His first shop was situated in Newton Mall, Johannesburg. He paid a deposit of R57000 in March 2008.

But he only got his shop a year later.

He said White assisted him in obtaining a R290000 loan from Blue Finance for the deal.

Baloyi said the Newtown store operated for six months with the monthly income ranging from R3900 to R6465, whereas the projected income was between R29000 and R37500.

Baloyi said he complained to Multiserv about the income and the running costs, which were also higher than expected.

As a result he was transferred to President Square and "was once again given wrong information that it has a higher turnover", he said.

Baloyi said he paid about R60000 just to move from Newtown Mall to President Square.

This added to the debt he had on the operation at Newtowm Mall.

"I paid R30000 upfront in cash, which I was told is for the difference between Newtown Mall and President Square. The other R30000 was offered to me by Multiserv as a loan they said was for the outstanding Newtown Mall rental fees," he said.

Though he paid two months rental deposits at Newtown Mall before moving into the store, he said he had not yet received his refund from Multiserv .

He now owes the company R20300, which includes rental and other fees he accumulated at Newtown Mall.

"Apart from all this Multiserv expects me to pay the royalties though their operations and marketing support has been poor," he said.

"There is no Multiserv board outside President Square Mall that promotes my business."

He said Multiserv had sent him a final letter of demand to pay the debt.

"Otherwise legal action will be taken and I could lose my store," he said.

l Ntsizi November said he had to sell his franchise store because of the problems he was experiencing with Multiserv.

He has been waiting for the difference of his sales amount since 2008.

l Victor Mokoena of Pretoria said he was allocated a Multiserv outlet at Sunnyside Mall. His shop was closed when the mall was renovated.

"While he was placed at an alternative site Multiserv sold my stall to someone else without telling me," he said.

He cancelled the deal and demanded his R82000.

But Multiserv told him they would repay the amount in instalments of R4500 a month.

l Multiserv is aware of all these complaints.

White has promised to respond soon after completing investigations .


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