'Little guy' 1, giant 0

By PAULA OLIVER

Fresh from a High Court victory over a corporate building giant, Steve McNally is looking forward to building his own business.

Mr McNally, a former PlaceMakers franchisee, ran into trouble when he decided to leave the building supplies firm late last year and launch his own business.

The new company, Hillside Building Supplies, was to use the same premises on the Auckland North Shore from which he had run the PlaceMakers store.

But just two weeks before he was due to open, PlaceMakers' parent company, Fletcher Distribution, took court action against him, claiming he was breaching a restraint-of-trade clause in his contract.

"We had already committed to the premises, and we had staff lined up who had left their other jobs," said Mr McNally.

"I felt personally responsible for the outcome."

His history with PlaceMakers went back 23 years, but came to an end shortly after Fletcher Distribution decided to close the franchise he half-owned and ran in Glenfield.

"The store was doing well but they felt that the concept was dated. They wanted more of a retail focus, rather than trade, which was a big part of our business," Mr McNally said.

Fletcher opened a much larger, new-concept store in Albany and Mr McNally eventually agreed to take up a management role in that store.

But it did not satisfy him, and when he heard that the old premises were available for rent, he got four partners together and set about recreating what he felt had been a successful concept.

"There was an element of the little guy against the big guy with respect to the court action," he said.

"They had far more resources than we did.

"We are just ordinary people who had mortgaged our houses to the eyeballs to get started."

Late last week in the High Court at Auckland, Justice David Morris ruled against Fletcher's attempted injunction. He told Mr McNally he was free to open his own store.

The judge found that the wording of the franchise contract was not wide enough to protect any PlaceMakers store outside the very premises the two were fighting over.

Mr McNally said he and his partners would let the market decide which was the better store.

"If we are good enough then we will survive.

"I still have respect for a lot of people at PlaceMakers, but we just wanted the right to trade."

His store will open on April 19 and employ 19 staff. He said it would focus on trade business.