Men admit charges over franchise sales

Two men have pleaded guilty to obtaining payments by false pretences over the sale of carpet cleaning and water blasting franchises.

The pair were due to go before a jury trial in Christchurch District Court next week, but talks led to replacement of the charges and guilty pleas before Judge Brian Callaghan.

Stewart John Brown, 43, pleaded guilty to two representative charges involving six complainants, and Robert Llewellyn Parr, 55, admitted two charges.

During the pre-trial negotiations that settled the new charges, no summary of facts was finalised and no details were read out in court.

However, it is known from the depositions hearing that the Commerce Commission began making inquiries as a result of low returns for carpet cleaning and water blasting franchises.

An Aucklander told of paying $62,000 plus GST for the Clean Co franchise on the North Shore.

He told the hearing in October that from the material he received and the inquiries he made, he believed he could have made "somewhere around $80,000" in sales in the first year in a business with a very high profit margin.

But he described his dealings with Brown, of Christchurch, alleging he had not carried out obligations about radio advertising and Yellow Pages advertising under the franchise deal. Placement of product stands at 10 North Shore outlets was also unsatisfactory and all of them had to be moved at his own expense.

The police later took over the inquiry and took the matter to court. Brown originally faced nine charges of fraud and four of forgery.

Judge Callaghan remanded Brown and Parr on bail for sentencing on August 7. He asked for pre-sentence reports, and a report on Brown's suitability for home detention.

He also ordered victim impact statements for the sentencing, and a reparation report after noting that a reparation offer had been made.

- NZPA