Two former Green Acres franchisees cannot mow lawns in competition with the home services company after it obtained an injunction against them.
Green Acres says it was successful in obtaining an injunction against former franchisees Garth Ruebe and Gwyneth Ruebe, which prevents them from providing lawn mowing services to the company's customers.
Green Acres said the injunction followed an arbitration under Queen's Counsel Barry Patterson. While this was confidential, the injunction - one of the awards from the arbitration - was entered as a High Court judgement.
"Mr and Mrs Ruebe operated a Green Acres sub-franchise in South Auckland from 26 January 2004 until 26 January 2014. When their sub-franchise agreement expired the Ruebes had a right to renew for a further ten year term, but chose not to exercise it," Green Acres said.
"Instead they removed Green Acres livery from their vehicle, changed their telephone numbers, handed back the Green Acres operations manual and set up their own business. They contacted the customers they had acquired while they were Green Acres sub-franchisees and offered to continue servicing them."
The company said the court order says it may apply for damages and costs.
Green Acres was founded in 1991 and has over 600 franchisees throughout New Zealand providing home and garden care as well as commercial cleaning.
Green Acres chief executive Logan Sears said the company brought the case to protect its brand, intellectual property and franchise agreement.
"Franchising is a major contributor to the New Zealand economy," Sears said. "It promotes independent business ownership and business excellence. But for it to function effectively franchisors must have confidence that their agreements can be upheld. I hope that this result has set a precedent that will provide some certainty for the franchising sector, " Sears said.
The Ruebes lawyer, Lawrence Ponniah, said his clients were average lawn-mowing contractors and weren't wealthy.
Green Acres were out to "make an example" of them, he said.
He said it was "naughty" of Green Acres to talk about the matter because proceedings in arbitration are confidential.
"It's very dangerous for me to even talk about it...they shouldn't be talking about the arbitration," Ponniah said.
"Even though we would like to comment, we can't," he said.