NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies

Profits still flow despite Mad Butcher troubles

NZ Herald
17 Jul, 2015 01:55 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Some of Mad Butcher franchise owners are having trouble turning a profit.

Some of Mad Butcher franchise owners are having trouble turning a profit.

Mad Butcher owner Veritas Investments will continue earning decent profits from the butchery chain, even if some independent store operators are struggling, an analyst says.

Several former franchisees, who spoke on the condition of anonymity, told the Business Herald that a recent spate of store liquidations - eight since October 2012 - is the tip of the iceberg, a claim firmly denied by the franchisor.

Read also:
• Bad Blood: The Mad Butcher story
• Failure of four Mad Butcher stores 'coincidence'
• Mad Butcher's 40th store opens

Mark Devcich, head of research at Auckland investment manager Pie Funds, said the Mad Butcher had been a "consistent earner" for Veritas, whose other businesses include upmarket grocery retailer Nosh Food Market and pub operator the Better Bar Company.

"The franchisor [Veritas] doesn't see the same kind of fluctuations as the stores do," Devcich said. "Even if the stores are at break-even level, the franchisor can still earn a decent profit."

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

He said the Mad Butcher had been a "pretty stable" business.

"Pain at the franchisee level doesn't necessarily translate to the franchisor level," Devcich said.

Veritas, which purchased the Mad Butcher in 2013, said last month that it expected underlying profit for the group to rise by up to 28 per cent - to as much as $5.5 million - in the year to June 30, 2016.

Advertisement
Advertise with NZME.

The company expects to generate revenue of between $32 million and $34 million from the Mad Butcher in the same period.

However, on May 29 Veritas downgraded guidance for its last financial year, which ended on June 30, for underlying net profit of $4.3 million, down from a previous forecast of $5.3 million.

Veritas shares, which have fallen 50 per cent since hitting this year's high point on February 3, recently traded down 1c at 66c.

Devcich said it was difficult to get a picture, from the figures Veritas reports, of performance at the individual Mad Butcher store level. But he said it was common in franchise systems for up to a third of franchisees to be struggling.

Discover more

New Zealand

Do you want sparklers with that?

01 Nov 04:00 PM
Retail

Mad Butcher's 40th store opens

17 Nov 12:05 AM
Companies

Mad Butcher store failures 'coincidence'

07 Apr 12:04 AM
Companies

Why the knives are out at Mad Butcher

16 Jul 05:00 PM

"I think the big potential [with Veritas] is Nosh," he said.

Mad Butcher chief executive Michael Morton at the Mt Roskill store. File photo / Richard Robinson.
Mad Butcher chief executive Michael Morton at the Mt Roskill store. File photo / Richard Robinson.

Mad Butcher chief executive Michael Morton said claims of up to 12 stores being in financial distress were "just ridiculous" and stores that were struggling were not facing difficulties because of the size of the rebate collected from meat suppliers.

"If you're not making money, go and have a look in the mirror and you might find the problem," Morton said. "But nobody wants to admit that. They want to blame somebody else."

Meanwhile, a franchise expert said franchise disputes are relatively uncommon in New Zealand.

Franchise Association of New Zealand executive director Graham Billings said a survey conducted by Massey University two years ago had found only 1 to 2 per cent of franchises had been involved in disputes that had reached "a legal level".

If you're not making money, go and have a look in the mirror and you might find the problem. But nobody wants to admit that. They want to blame somebody else.

Mad Butcher chief executive Michael Morton

"Roughly 50 per cent of disputes are in fact triggered by the franchisor taking action against the franchisee for failure to comply with the requirements of the franchise," Billings said.

Advertisement
Advertise with NZME.

He said the association's complaints panel had dealt with three disputes so far this year, following one last year and eight in 2013.

The Massey University research suggested a similar level of disputes took place in Australia, which has much stricter franchise regulations than this country, Billings said.
He said some franchisees did not do enough due diligence before signing franchise agreements.

"Unfortunately a number of the complaints I've had from non [association] members are result of the fact they did not do due diligence in the first place."

Save

    Share this article

Latest from Companies

Premium
Retail

HelloFresh pleads guilty after ‘subscription traps’ tricked customers

Airlines
|Updated

Regional airline grounded for 10 days by Civil Aviation Authority

Premium
Banking and finance

'Firepower to help': Small business lender raises $200m capital for new loans


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from Companies

Premium
Premium
HelloFresh pleads guilty after ‘subscription traps’ tricked customers
Retail

HelloFresh pleads guilty after ‘subscription traps’ tricked customers

The devious policy targeted former customers but left a key detail out.

14 Jul 03:51 AM
Regional airline grounded for 10 days by Civil Aviation Authority
Airlines
|Updated

Regional airline grounded for 10 days by Civil Aviation Authority

14 Jul 03:12 AM
Premium
Premium
'Firepower to help': Small business lender raises $200m capital for new loans
Banking and finance

'Firepower to help': Small business lender raises $200m capital for new loans

14 Jul 03:00 AM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP